Woman Deceased in 1995 Continued to Robo Sign Till at Least 2010 – Yves Smith – How, may you ask, can a woman who has been dead since 1995 continue to sign documents in 2010? Normally, one would hazard to guess that stamps with her signature on them were still in use (this is more common than you would think in foreclosure land). That would be plenty troubling. But this little account comes from the debt collection realm, a cesspool of bad practices. Here, the credit card company Providian (acquired by WaMu in 2005) had employees signing affidavits in the name of Martha Kunkle for over a decade. Debt collection agencies continued to use these bogus affidavits. From the Wall Street Journal:
Dead Soul Is a Debt Collector – WSJ – Martha Kunkle has come back to life. She died in 1995. Yet her signature later appeared on thousands of affidavits submitted by one of the nation’s largest debt collectors, Portfolio Recovery Associates Inc., in lawsuits filed against borrowers. Some regulators complain that the use of Ms. Kunkle’s name reflects an epidemic of mass-produced, sloppy and inaccurate documentation in the debt-collection industry. Large debt collectors such as Portfolio Recovery Associates and publicly traded rivals Encore Capital Group Inc. and Asset Acceptance Capital Corp. frequently buy delinquent accounts in bulk. Information about each debt sometimes is little more than a line in a spreadsheet with the borrower’s name and amount owed, according to lawyers who represent borrowers. As of Sept. 30, Portfolio Recovery Associates had $91.5 million in revenue from lawsuits it won, or 34% of its overall revenue. In 2008, Judy Montoya, an employee at Portfolio Recovery Associates, testified in a debt-collection suit filed by the company that its "legal specialists" sign as many as 200 affidavits a day. The company’s spokeswoman said such employees sign an average of 100 affidavits a day and are guided by "a very rigorous set of policies and procedures." Ms. Montoya couldn’t be reached to comment.
Why Does Brian Sack Interact With Goldman’s "FX Committee"? – Following the release of Bill Dudley’s daily schedules from the beginning of 2009, through September 30, 2010, there have been some amusing, if not very surprising, disclosures. Among them: Dudley’s penchant to meet with Jamie Dimon, Vik Pandit and, of course, former boss Lloyd Blankfein. Other meetings include Sullivan and Cromwell chairman, and the banking cartel’s personal chief attorney H. Rodgin Cohen. Those are to be expected: after all Dudley has to conduct the New York Fed policy exactly in accordance with Wall Street’s expectations, and per Wall Street’s recommendations. What is a little more surprising is that on February 9, 2009, Bill Dudley hosted a lunch roundtable with hedge fund SAC Capital… Where it gets a little confusing is why Dudley had to have two informal meetings with the man who singlehandedly determines US fiscal and monetary policy: Goldman’s Jan Hatzius, first on March 11, and then, less than a month later, on April 6, both times as the Pound and Pence. And where it gets downright bizarre, is trying to explain why Bill Dudley on June 11, 2009, had to bring over one still unknown Brian Sack, now pervasively known as the head of the Fed’s Open Market Operations Committee, to not only walk over to Goldman Sachs for a meet and greet (as opposed to Goldman coming over to the NY Fed), but specifically "introducing Brian Sack to the Goldman FX Committee" between 4:00 and 4:30 PM on that day. Just which of Brian’s myriad functions is the one that requires the participation of Goldman’s FX team? Last time we checked, purchasing bonds and MBS in POMO operations had little if any impact on Goldman’s FX trading flow…
Initial Claims Print At 388K, Far Lower Than Expectations Of 418K, Non-Seasonally Adjusted Claims Jump To 521K – And the year end seasonal divergence starts: while seasonally adjusted claims came at 388,000, a 34,000 drop from the prior week, and 30k below consensus, it is the Non-Seasonally adjusted number which probably provides a far better indication of what is happening: and at 521,834 it was a 24,879 increase from last week’s 497k. Additionally, the 99 week cliff continues impacting more and more claims recipients: a total of 150k people dropped from EUCs and Extended claims. Lastly continuing claims increased on a Seasonally Adjusted basis by 57K to 4.128MM even as the actual NSA number declined. Lastly, last week’s slightly better than expected print of 420k has been revised to what would have halved the number to the expectation of 424k. We will soon chart how in 2010, the BLS revised upward (i.e. adversely) almost 100% of its initial claims data in the subsequent week.
Chicago PMI Surges To 68.6 On Expectations Of 62.5, Highest Since July 1988 – Even as economists were expecting a contraction in December from the November print of 62.5 to 61.0, the Chicago PMI climbed to 68.6 in December, an unprecedented 15th consecutive month surge and the highest reading since 1988! In terms of specific indices: Production reached its highest levels since October 2004; New Orders improved to 2005 levels; Employment reached its highest level in more than 5 years; Priced Paid accelerated to its highest point since July 2008. And while inventories and "prices paid" demonstrate that the prevailing weakness across inventory accumulation and margin pressures as seen in other diffusion indices persist, there was strength in most verticals. Then again, as the PMI is a B-tier indicator at best, it is unlikely that the Fed will actually look at it in determining whether or not to end its monetary stimulus.
At 4.86%, The Fannie 30 Year Fixed Mortgage Is Back To 7 Month Highs – To all who have been following the recent rout in both the 10 year and the mortgage market, today’s most recent jump in the 30 Year Freddie Fixed-rate mortgage, which at 4.86%just hit a 7 month high, will not come as a surprise. To Ben Bernanke, however, this is a flashing red sign, that QE2 is only working for Wall Street: its primary function of creating imaginary wealth in the form of additional home equity is not only failing, but the recent jump in mortgage rates by 1%, has had the indirect impact of forcing home prices to drop by another 10%. Look for this to hit Case Shiller data in March-April when today’s near-5% mortgage rates diffuse through the marketplace. Robert Shiller describes it best: "Optimism is fading from the housing market." QE3 should promptly abort any last traces of anything even remotely resembling a housing recovery.
Floyd Norris Repeats “Big Banks Are Necessary/Desirable” Canard – Yves Smith – Aargh, can someone please acquaint economists with the economics of banking? Consider the embarrassing premise of a piece by Floyd Norris of the New York Times: The message is that big international banks are desirable, and that little banks should properly grow up to be bigger banks. Hogwash. Big banks are LESS efficient on a cost basis than small banks. Every study of banking ever done in the US has found that once a certain, not all that large size threshold has been achieved, banks exhibit an increasing cost curve, which means they are more expensive to operate per dollar of assets. So why do banks strive to get bigger? It’s VERY simple. Bank CEO pay is strongly correlated with the size of the bank. So bank leaders find gobbling up other banks to be a very attractive activity. And the selling bank’s cooperation is assured because the sale triggers payouts to the top brass.