How Many Lies Can the WSJ Pack into a Chart on Liar’s Loans?

Posted on February 3, 2016 by | 4 comments

William K. Black
February 3, 2016     Bloomington, MN

This is the second article in my series prompted by the Wall Street Journal report that “big money managers” want to bring back “liar’s loans.”  Given that the best study of liar’s loans during the crisis found a fraud incidence of 90% — this is a startling proof of how openly addicted to fraud the “big money managers” remain.  It demonstrates some of the terrible costs of the Department of Justice’s refusal to prosecute the fraudulent loan originators’ controlling officers.

In this installment I lay out briefly the lies that the banksters made, and continue to make, about liar’s loans and why those lies are so harmful.  The WSJ chart on liar’s loans faithfully repeated those lies as if they were revealed truth.  The chart is shown below.  Let us count the lies.

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For US Democracy: There Is Only One Choice

Posted on February 3, 2016 by | 8 comments

Real Fiscal Respomsibility, Vol. II Cover
We need big, big changes in the United States. Many of them will require the Federal Government to spend unprecedented amounts, including deficit spending to enable us to solve problems that have languished, creating needs, for many, many years.

How can we get these changes legislated through a political system that has been increasingly less responsive to most people over the past four decades. There’s only one way that will work without revolution.

We need a movement for change powerful enough to replace the present establishment of House and Senate legislators and presidents wanting to preserve their way of looking at how to do things, with another group that has concluded that change is desperately needed and must be accomplished come what may, whatever the cost in long established customs and traditions in both Houses of Congress and among the vested political and communications elites in the Washington, DC/New York “village.” But not just any changes will do. Continue reading →

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Lenders’ Lies about Liar’s Loans and “Rigorous Underwriting”

Posted on February 2, 2016 by | 5 comments

William K. Black
February 2, 2016     Bloomington, MN

It is time to break out one of our two family rules again – it is impossible to compete with unintentional self-parody.  How fraudulent is finance even now?  The Wall Street Journal reports that “big money managers” want to bring back “liar’s loans.”  I am trying to write much shorter columns, so there will be many columns in this series because the WSJ article so beautifully exemplifies the lies that the industry and the media told about liar’s loans before and after 2008.

Spoiler alert:  liar’s loans, as the name admits, are pervasively fraudulent.  Only fraudulent lenders make liar’s loans as a regular business practice.  These home loans make the officers wealthy through the “sure thing” of the “fraud recipe” for “accounting control fraud.” The WSJ, of course, ignores these facts and presents instead falsehoods provided by fraudulent officers.

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The Bank Whistleblowers United – Who are We, and Why are We Trying to Help Implement Real Banking Reform?

Posted on January 31, 2016 by | 5 comments

[revised – Michael Winston’s bio added]

At this time (January 29, 2016), we consist of four founding members:

Gary Aguirre
William Black
Richard Bowen
Michael Winston

Our bios are listed at the end of this post.  We share a number of common experiences.  They explain why we came together to try to implement real reform.  Continue reading →

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The Bank Whistleblowers United Campaign Funding Plan: Say “No” to Contributions from Financial Felons

Posted on January 31, 2016 by | 3 comments

In order to restore the rule of law, we ask every candidate for the nomination of their party for the presidency to pledge that they will not take contributions from any financial firm (or contributions above $250 from their officers) that the United States or its agencies have, after investigation, charged with committing the legal elements of fraud.  That list includes virtually all of the largest banks in the U.S. and Europe and Freddie and Fannie.  Indeed, most of these financial giants have admitted that they conducted massive frauds.

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Money and Banking Blog – Part 4: Monetary Policy Implementation

Posted on January 30, 2016 by | 12 comments

By Eric Tymoigne

For convenience, I have put the balance sheet of the Fed below. Post 2 examined the balance sheet and Post 3 provided important information about the meaning of reserves and other basic concepts and their relation to the balance sheet of the Fed. Now let us look at monetary-policy implementation.

1

What does the Fed do in terms of monetary policy and why? Continue reading →

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An Explanation of the Bank Whistleblowers United 60-Day Plan

Posted on January 30, 2016 by | 6 comments
  1. On Day One, the President directs each relevant federal financial agency to restore a superb criminal referral process, the criminal referral mandate, and criminal referral coordinators, at every federal financial agency. Local and state police forces rarely investigate sophisticated financial frauds.  That work is done overwhelmingly by roughly 2,000 FBI agents in the white-collar section.  That means that we have roughly two FBI agents per industry.  Those numbers mean that FBI agents don’t “walk a beat” – they only come when they receive a criminal referral alerting them to a likely fraud.  It also means that they cannot possibly have more than a few agents with expertise in the particular industry.  There is one other key fact to keep in mind – corporations don’t make criminal referrals against their own CEOs for obvious reasons, even though frauds led by CEOs cause by far the greatest harm of any form of fraud.

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Announcing Our Name Change to “Bank Whistleblowers United”

Posted on January 30, 2016 by | 3 comments

William K. Black
January 30, 2016    Bloomington, Minneapolis

Well, this is slightly embarrassing.  Gary Aguirre, Bill Black, Richard Bowen, and Michael Winston came together to form a pro bono effort by bank whistleblowers to restore the rule of law on Wall Street.  As a placeholder in the drafting process, I called us the “Bank Whistleblowers’ Group” and that name survived the drafting process and was announced yesterday by me on New Economic Perspectives (NEP).  Michael Winston deserves credit for suggesting that we call ourselves “Bank Whistleblowers United” – a name that everyone in our pro bono group prefers.  We’ve changed the documents posted yesterday on NEP that make public our initiatives to reflect our new name.  The “announcement” document I posted yesterday has been changed to reflect the new name and I used the opportunity to make a few edits as well.

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Announcing the Bank Whistleblowers United Initial Initiatives

Posted on January 29, 2016 by | 28 comments

William K. Black
January 29, 2016     Bloomington, Minnesota
Revised January 30, 2016

I am writing to announce the formation of a new pro bono group and a policy initiative that we hope many of our readers will support and help publicize.  Gary Aguirre, Bill Black, Richard Bowen, and Michael Winston are the founding members of the Bank Whistleblowers United.  We are all from the general field of finance and we are all whistleblowers who are unemployable in finance and financial regulation because we spoke truth to power and committed the one unforgivable sin in finance and in Washington, D.C. – being repeatedly proved correct when the powerful are repeatedly proved wrong.

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Tax Credits and Dollars—Playing Charades with Low-Income Housing

Posted on January 28, 2016 by | 5 comments

By J.D. Alt

Here is what the HUD.GOV website says about the status of low-income housing in America: “Families who pay more than 30 percent of their income for housing are considered cost burdened and may have difficulty affording necessities such as food, clothing, transportation and medical care. An estimated 12 million renter and homeowner households now pay more than 50 percent of their annual incomes for housing. A family with one full-time worker earning the minimum wage cannot afford the local fair-market rent for a two-bedroom apartment anywhere in the United States.”

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