Mount Moriah, "The Letting Go"
Tuesday, February 26, 2013
Sunday, February 24, 2013
Tuesday, February 19, 2013
Sunday, February 17, 2013
--Farley Mowat, writing home from the Italian front, December 1943
Thursday, February 14, 2013
His finger was on the trigger.
She was the lure.
Princess Irina Alexandrovna, the beautiful niece of the Russian Tsar, was not yet nineteen when she married one of the richest men in Russia, Felix Yusupov. The two were honeymooning when World War I broke out. Detained by Kaiser Wilhelm II, they had to pull strings in Berlin to get back into Russia, now at war with Germany.
The war could not have gone worse for Russia, which suffered from shortages of food and equipment--and from the indecisive leadership of the monarch, Nicholas II. The Tsar listened less to his ministers than to his German-born wife, Alexandra, who in turn had come under the influence of a faith-healer, Grigori Rasputin. By December 1916 Rasputin had become a lightning rod for widespread criticism of an isolated and insensitive autocracy. Even members of the Imperial family felt that it was time for him to go.
Yusupov was among a core of conspirators who hatched a plan to assassinate Rasputin. The problem was drawing Rasputin away from the protection of his home and his followers. The solution: offering him a late-night introduction to Irina, whom he had never met.
For the peasant courtier from Siberia, it was Goodnight, Irene.
Rasputin: poison and bullets were not enough.
Tuesday, February 12, 2013
Sunday, February 10, 2013
Wednesday, February 6, 2013
For spawning the global financial crisis, the big Wall Street banks have gotten off easy. So far. No criminal cases have been brought against high-level executives, who continue to collect their annual seven-figure bonuses. And civil complaints against their firms have seldom resulted in admissions of wrongdoing. Federal prosecutors have been content to cut deals with the banks, extracting vigorish of pennies on the dollar. For the banks, it is like buying immunity. They settle, then resume business.
That may be about to change. Let's review the news flow:
The New York State Supreme Court is currently overseeing a settlement reached in 2011 in which Bank of America agreed to shell out $8.5 billion to settle claims regarding the securitizing and servicing of sketchy home loans. Now three Federal Home Loan Banks have filed new documents alleging further abuses in loan-modification practices. In particular, BofA is believed to have imposed losses on investors in first mortgages while improperly protecting second liens held by the bank on the very same properties. The Court is free to evaluate these new claims and may decide that $8.5 billion in restitution is not enough. (story)
A U.S. District Court in New York has ordered Flagstar Bancorp Inc. to pay $90.1 million to Assured Guaranty Ltd., a bond insurer, in a contract dispute over loans underlying $900 million in mortgage-backed securities (MBS). In the grand scheme of things, $90.1 million sounds like a small number. But it represents 40% of Flagstar's net income for 2012. More importantly, it is almost 78% of the amount sought by Assured. The biggest banks face similar litigation over representations and warranties and are not reserving anything close to 78% for received and potential putback claims. If 78% becomes the new rule of thumb, watch out. (story)
Congress will investigate a settlement reached last month by the Office of the Comptroller of the Currency (OCC) and the Federal Reserve that ended the Independent Foreclosure Review process for eleven of fourteen mortgage servicers. To get out from under IFR, the eleven banks (including all the biggies) agreed to pay $9.3 billion to indemnify and forgive eligible borrowers. Congress may decide that $9.3 billion is insufficent. (story)
The U.S. Department of Justice has filed civil fraud charges against Standard & Poor's, the nation's largest credit-ratings agency. The DOJ's lawsuit alleges that investors, among them federally insured financial institutions, lost at least $5 billion on collateralized debt obligations (CDO) "for which S&P issued inflated ratings that misrepresented the securities' true credit risks." The DOJ had offered to settle for $1 billion plus an admission of guilt. Fearing that such an admission would open the floodgates for other complaints, S&P declined to settle. State prosecutors and the Securities and Exchange Commission (SEC) are also circling. The banks that sold the CDOs are hoping to avoid joint and several liability for the rigged ratings. (story)
Barclays has set aside another $1.6 billion for legal costs. (story)
RBS has just been fined $612 million for rigging interest rates, less than UBS but more than Barclays for the same offense. The DOJ extracted a guilty plea on this one. (story)
Who's next? Among the European banks, Deutsche Bank. In the U.S., Citigroup and JP Morgan Chase are under investigation. (story)
The hits will keep on coming.
Tuesday, February 5, 2013
Monday, February 4, 2013
The bill that introduced a New Normal.
One hundred years ago yesterday (as ZeroHedge reminds us), the 16th Amendment to the U.S. Constitution was formally ratified, legalizing a tax on personal income. Ever since, this taxing authority has served as collateral (and stimulant) for the federal government's borrowing. Also in 1913, Congress created the Federal Reserve System as a lender of last resort. Coincidence?
Put one and one together and decide for yourself.
Sunday, February 3, 2013
--Paul Singer, Elliott Management
Friday, February 1, 2013
"Americans Rip Up Retirement Plans"
And from ZeroHedge:
"But perhaps an even more disturbing trend is the conversion of America into a gerontocratic worker society, where the bulk of jobs are handed out to those 55 and over, which puts all young workers, not to mention college graduates, at a major disadvantage relative to far more experienced older workers, who are willing to work for less as they scramble to compensate for retirement shortfalls, and which prevents the natural rotation of the US labor force from older to younger."