Author Archives: Drewbert

Banks committed wide spread mortgage fraud – 2

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…….. and still are committing it.

Despite assuring everyone that they’ve stopped the practice, the Recorder of Winnebago County Illinois Nacy McPherson, reports that she is still receiving foreclosure filings that appear to have been “robo-signed” 

 

McPherson’s office sampled a small number of foreclosure documents in her office and found hundreds of apparent forgeries.

“‘Linda Green’ is on documents as vice president of Wells Fargo. She’s (on other documents as) vice president of (Mortgage Electronic Registration Systems Inc.). She is vice president of Optical Mortgage Co. as well, and all of the signatures are completely different,” McPherson said. “Another name to take notice of is ‘Pat Kingston.’ She or he has several different titles. Lately, (the lenders or document providers) haven’t been using ‘Linda Green’ as much. There’s a new set of fake names. ‘Brian Blaine’ is the vice president of Chase Mortgage Bank. He is vice president of Washington Mutual Bank. He is vice president of Nations Credit Financial Services Corp. He’s vice president and attorney in fact for IndyMac Federal Bank.”

The Banks, meanwhile, are trying to negotiate an out of court settlement with the US-DOJ while not acknowledging any wrong doing with a side of immunity from future prosecutions.

I think I’ve seen this movie before…

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Except for that little dust up starting in 1938, the last time something in Austria fell, it started a World War. Fitch Ratings joined S&P and Moody’s in downgrading Hungary’s sovereign debt to junk level. Hungary rejected all bids at an auction of 12-month Treasury bills worth 40 billion forint ($186 million) after getting bids for only 22.8 billion forint. However, the concern is not for Hungary, but for neighboring Austria whose banks have a $226 billion exposure to the debt of former Soviet bloc countries. If Austrian banks fail, then… So it begins.

Real world example of why High Speed Rail is better than flying – 2

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A reader writes in reply to my earlier article on why high speed rail is better than flying:

That DB fare is not at all connected to the cost of running the train. DB is far more subsidized than Amtrak is. [PDF warning] DB reports profits of about $1.94 per train mile while the railroad is receiving $36.78 in public funding. When public funding is taken into consideration, DB Train Operations actually cost the German government $34.88 per train mile. Similarly, passenger rail operations in the other five European countries cost their governments between $13.77 to $27.78 per train mile.

I make no claim that DB less subsidized than Amtrak. However, the report he linked is comparing apples to bratwursts. The level of service isn’t even comparable between Amtrak and DB. On Amtrak the speeds are slower, on older equipment that is close to worn out in stations that are mostly falling apart.

The one flaw in that study that immediately jumps out at me however is that they compared all of DB to just the Amtrak NEC and corridor services. However, DB operates all of the local trains as well as freight. So to have a proper comparison, the study should have also included NJTransit Rail, SEPTA’s Rail (not the subway, trolly, and bus services), MARC, Long Island RR, Metro North, Chicago’s Metra, Chicago’s South Shore, etc etc.

If rail in the US were operated like in Germany, than all of those other companies I mentioned would be part of Amtrak rather than their own entities. Take THOSE subsides into account and the operational subsidy will be much closer and the resulting disparty in service levels and quality will appear that much more drastic.

Today in the Free Market 5 – Drugs kill M’kay

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Big Pharma and the FDA have both known for years that certain asthma drugs can cause death. However what is most startling how. These drugs can actually cause and worsen an asthma attack.  The drugs marketed as Symbicort, Advair, and Serevent all carry warning labels saying “cause an increased risk of death from asthma problems.”.  Each year over 4,000 people die from complications caused by these drugs, which is higher than the number of people who die from asthma!

But Advair alone brought in over $5 billion for its manufacturer,  GlaxoSmithKline, so it remains available.

Another example of why high speed rail is better

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Some more real world examples of how high speed rail would be better than flying:

I flew PIT to PHL on Tuesday. I left my house 5:30am, arrived at the airport at 6:00am, checked no bags, and got to my gate just as they were announcing my boarding zone for my 7:00am flight. Basically, I was as time efficient as possible. We landed on time at 8:26 am. After some taxiing and making it to our gate, I finally get out to the SEPTA terminal to get myself into center city. After a short 10 minute wait, I board the rail train at 9:13am and arrive in center city at 9:35. A very efficient 3 hours and 35 minutes.

But wait. It is only about 300 miles from my house to CC Philly. At 75 mph most of the way, that means I can drive the same distance in about 4 hours and never have to take my shoes off. In fact, I know for certain that I can do the trip in 4 hours 30 minutes with just one stop along the way for food, gas, and bathroom, as I’ve done that very trip many times.

Additionally, if I had to check luggage, I would have needed to be at Pittsburgh airport 30 minutes earlier than I had been per airline requirements, putting flying squarely in line time wise with driving.

Now lets look at some hypotheticals:

Hamburg Germany to Frankfurt Germany is ALSO 300 miles apart. DeutscheBahn can do that run in…… 3 hours 36 minutes!

 

Click to embiggen:

DeutscheBahn Hamburg to Frankfurt schedule

DeutscheBahn Hamburg to Frankfurt schedule

 

But here is where DB has an advantage. On the run between Hamburg and Frankfurt, the train makes 3 additional stops to pick up and drop off passengers. That is an opportunity for additional revenue that US Airways doesn’t have. On a similar run between Pittsburgh and Philly I see a potential for 3 intermediate stops as well: Altoona, Harrisburg, and Lancaster.

Now we get down to cost:
My round trip flight to PHL was $190 dollars
You can see in the graphic that a one way ticket on DB is 69 € which works out to about $94. Times 2 = $188

However, DB also offers something called a Bahncard 25 for a cost of 57 Euro. The card allows you to book fares at 25% off for a full year. Just two round trips between Hamburg and Frankfurt more than pays for the cost of the card and any additional trips are available at the 25% off rate.

Now add in the fact that rail is far more comfortable, there is an on board cafe, power outlets, tables, large bathrooms, substantially larger carry on size limits, and the case for high speed rail is just far more compelling than anything the airlines could offer.

Today in the Freemarket – 4: Whirlpool Misses Earnings

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Whirlpool misses its analyst estimated (made up) Q3 earning per share goal of $2.68 per share instead checking in at $2.35 despite sales rising 2% to $4.6 billion. Because of this, Whirlpool CEO Jeff Fettig announced the company would lay off 5,000 workers in North America and Europe.  End of year earnings estimates were also revised downward to $4.75 to $5.25.

Whirlpool is only going to make between $363 million – $401.1 million in profit for 2011, so naturally, American workers will have to suffer.

I appear to have misplaced the press release where Whirlpool’s executive team taking any pay cuts. Whirlpool’s five top paid executives make a cumulative $28.6 million a year.  But I’m sure it will turn up somewhere…..

Do No HARP – 2

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Further reading into the President’s new and improved HARP program to help troubled, underwater homeowners refinance into lower interest rate mortgages that we touched on yesterday reveals even more gooder goodness for the banks and further proof that this is a bank bailout and not a stimulus.

The first part, and this is a biggie, is that those new mortgages with their shiny new interest rates also magically convert into recourse mortgages instead of non-recourse.  That is, with a traditional mortgage today, if you default on the mortgage and the bank forecloses on your property, any deficiency between the auction price of the home and the remaining balance of the loan is eaten by the bank.

By converting these mortgages (which are already vastly underwater mind you) into recourse loans, that balance will now follow you around for all eternity or until bankruptcy court. Anyone who agrees to one of Obama’s new mortgages instead of going into foreclosure and living in the house rent free for 18 months needs to have their head examined.  Anyone who does this needs to realize that they have just signed their entire life away to the bank.

The next part is no less serious, but is more of a direct gift to the banks and only affects you as a taxpayer rather than a homeowner.

FHFA moved to protect lenders from having to buy back loans if underwriting problems are later found. “Of all the barriers, this may be the most significant,” said Gene Sperling, director of the White House National Economic Council.

Basically, the banks can keep right on going with their sloppy and fraudulent mortgage writing procedures and not suffer any consequences from their actions. When the mortgage fails, the bank doesn’t suffer, we the taxpayers do.

Thankfully, so few people will qualify for these new regulations and hopefully those who do will be told by you, dear reader, that doing this is such a terrible idea that the overall impact of Obama’s new mortgage plan on the taxpayers will be minimal.