“Inside Job” won the 2011 Academy Award for best documentary on Sunday night. The film’s director used his acceptance speech to delivery pointed criticism of Wall Street and the financial industry.

The Oscar buildup featured speculation about whether Banksy, a mystery man of the street-art world, might show up for his awards entry, “Exit Through the Gift Shop.” If he was at the Oscars, he did not declare himself.

But it was the topic on most people’s minds the last two years, the economy, that resonated among Oscar voters.

“Inside Job” director Charles Ferguson subjected Wall Street players, economists and bureaucrats to a fierce cross-examination to depict the economic crisis as a colossal crime perpetrated on the working-class masses by a greedy few.

His film examined the financial crisis of 2008. His speech lamented the lack of accountability three years later.

“Forgive me, I must start by pointing out that three years after our horrific financial crisis caused by financial fraud, not a single financial executive has gone to jail, and that’s wrong,” Ferguson said.

Read more and watch video here

Bachmann Moves to Repeal Dodd-Frank Finance Law

Henry J. Reske, Newsmax

Rep. Michele Bachmann, R-Minn., has introduced legislation to repeal the massive and widely criticized Dodd-Frank financial reform measure that President Barack Obama had signed into law. Bachmann, who made the move shortly after being sworn in for her third term, assailed the law protecting Wall Street at the expense of taxpayers.

“I’m pleased to offer a full repeal of the job-killing Dodd-Frank financial regulatory bill,” Bachmann said. “Dodd-Frank grossly expanded the federal government beyond its jurisdictional boundaries. It gave Washington bureaucrats the power to interpret and enforce the legislation with little oversight.”

The Dodd-Frank Wall Street Reform and Consumer Protection Act, which Obama signed into law in July, represented the most extensive overhaul of financial regulations since the Great Depression. The law, which was named for its two sponsors, former Sen. Chris Dodd, D-Conn., and Rep. Barney Frank, D-Mass., was passed along party lines in response to the financial crisis that began in 2007.

Among other things, the law created new agencies, such as the Financial Stability and Oversight Council, the Office of Financial Research, and the Consumer Financial Protection Bureau, all endowed with sweeping regulatory and enforcement power over financial institutions. The law also gave regulators new powers to pursue fraud and conflict of interest.

Read more on Newsmax.com: Bachmann Moves to Repeal Dodd-Frank Finance Law

Lawsuit alleges the bank took extreme measures to defraud investors, and now JPMorgan may be on the hook.

Former Bear Stearns mortgage executives who now run mortgage divisions of Goldman Sachs, Bank of America, and Ally Financial have been accused of cheating and defrauding investors through the mortgage securities they created and sold while at Bear. According to e-mails and internal audits, JPMorgan had known about this fraud since the spring of 2008, but hid it from the public eye through legal maneuvering. Last week a lawsuit filed in 2008 by mortgage insurer Ambac Assurance Corp against Bear Stearns and JPMorgan was unsealed. The lawsuit’s supporting e-mails, going back as far as 2005, highlight Bear traders telling their superiors they were selling investors like Ambac a “sack of shit.”

News of internal whistleblowers coming forward from Bear’s mortgage servicing division, EMC, was first reported by The Atlantic in May of last year. Ex-EMC analysts admitted they were sometimes told to falsify loan-level performance data provided to the ratings agencies who blessed Bear’s billion-dollar deals. But according to depositions and documents in the Ambac lawsuit, Bear’s misdeeds went even deeper. They say senior traders under Tom Marano, who was a Senior Managing Director and Global Head of Mortgages for Bear and is now CEO of Ally’s mortgage operations, were pocketing cash that should have gone to securities holders after Bear had already sold them bonds and moved the loans off its books.

Mike Nierenberg, who ran the adjustable-rate mortgage trading desk at Bear and is now the head of mortgages and securitization for Bank of America, was a key player ensuring the defaulting loans Bear was buying would move off their books right after they bought them, with little concern for the firm’s due diligence standards. He was joined in this scheme by Jeff Verschleiser, his peer and Senior Managing Director on the mortgage and asset-backed securities trading desk and head of whole loan trading. He is now an executive in Goldman Sachs’ mortgage division.

Read more here

Bank of America, mired in scandal and facing potential losses over its alleged mishandling of mortgages, now says it will be able to fully leave its taxpayer bailout behind.

Whether the nation will soon escape its own bad experiences with Bank of America — not least, a spate of allegedly unfair and improper foreclosures — remains an open question.

The country’s largest bank by deposits, B of A has one final task to complete before it can shake off the influence of the bailout program known as the Troubled Asset Relief Program: It still must raise $3 billion in additional capital as a reserve against future losses, even after repaying its $45 billion TARP bailout. According to a Financial Times report, the bank has told the Federal Reserve that, by selling various assets, it will be able to reach the $3 billion goal by the end of the year.

But even if the bank follows through on that pledge, its future remains uncertain, and that poses myriad risks for a still weak American economy. As a major source of finance in virtually every sector of commercial life — directing loans to small businesses, and mortgages to homeowners — Bank of America’s willingness to extend credit influences the vigor of the broader economy.

And whatever the strength of the bank’s balance sheet, its starring role in the national foreclosure crisis has reinforced questions about whether its taxpayer-financed rescue has delivered adequate dividends for ordinary people.

After admitting that it employed “robo-signers,” who approved thousands of foreclosure documents without even reading them, the bank temporarily halted its foreclosures nationwide, and it now faces a federal rackteering lawsuit. Reports emerge regularly of the bank’s botched foreclosures –New York Times‘ Joe Nocera recently told the story of an elderly woman who almost lost her home through the bank’s sheer sloppiness. As evidence mounts that the mortgage company Bank of America owns didn’t properly transfer crucial documents when it sold mortgages to be transformed into securities, investors are demanding their money back. To top it off, WikiLeaks could soon unearth further examples of the bank’s questionable practices.

As experts estimate that banks may be forced to buy back $179.2 billion worth of securities, troubles for the industry are far from over.

Read more here

Are Americans ready to give up government guaranteed loans?

More than half of all mortgages in the U.S. are guaranteed in some way by the U.S. government. Those guarantees have helped lower borrowing costs for homeowners, and they’ve allowed more Americans to access long-term, fixed-rate loans.

Those loans have been embraced by consumers because they provide stability of payment, but they were also devised in the wake of the Great Depression to create a forced-savings mechanism that helped homeowners build equity.

Fannie Mae and Freddie Mac play a key role in making the 30-year, fixed-rate loan available by purchasing loans from banks, which don’t want to keep loans on their books for 30 years. Fannie and Freddie then sell those loans to investors as mortgage-backed bonds, providing guarantees against losses when loans default.

Without the government guarantee, investors would likely charge a higher rate for such loans, and they’d require tougher lending standards. That would limit the number of borrowers who might be able to access long-term, fixed-rate loans. Many might instead opt for loans with shorter terms or with adjustable rates.

Of course, those guarantees have been very expensive. The government’s support of Fannie Mae and Freddie Mac will end up costing taxpayers tens, or even hundreds, of billions of dollars. The companies were thinly capitalized, and when mortgage defaults rose, the firms had to be rescued by the government.

Today’s WSJ notes that the dilemma facing policymakers is this: how do you protect taxpayers, and get the government out of the mortgage market, without destabilizing the fragile housing sector. If Fannie and Freddie are eliminated, “the problem is, what do you replace them with?” says Andy Laperriere, a senior managing director at ISI Group Inc.

Read more here: http://blogs.wsj.com/developments/2010/11/05/abolishing-fannie-easier-said-than-done/

The other morning while I was eating my eggs and venison hash, I was watching reruns of The Sopranos on the A&E network.  It was the episode when the whole crew decides that it may be time to do an intervention with Christopher about his heroin addiction after he killed Adrianna’s dog by sitting on it.  The intervention then escalated into a Quentin Tarantino version of The Waltons.

While watching this mayhem unfold, I began to realize that greed is as much of an addiction as cigarettes, drugs and alcohol.  The actions of Wall Street over the past 25 years could be classified as an addiction.

A generation of Wall Street hot shots drew inspiration from characters from movies, namely Gordon Gekko from Wall Street and Tony Montana from Scarface both of which were written by Oliver Stone.  Unfortunately, what these Gordon Gekko or Tony Montana wannabes took away from these morality plays was not the morality, but the sin.  They took Gordon Gekko’s line of, “Greed is good” a little too seriously.

Unlike these hotshots, I paid attention to Sister Margaret in 3^rd grade catechism when she waved her yardstick while grilling into our heads with her Gaelic accent that greed, as one of the seven deadly sins, could be as addicting as alcohol or drugs.   Like a drug or alcohol addiction, the addiction doesn’t become noticeable until after the party is over and the person stumbling around intoxicated breaking furniture and lampshades really isn’t all that funny.

When the party of the housing market ended in 2007, Wall Street like an addict attempted to keep the party going only to make a bigger mess.  Then proceeded to blame everyone but themselves for the mess.

First, they blamed the mortgage brokers who sold their products for them and the public and the mainstream media bought it.  Wall Street was so convincing that this crisis was the fault of unscrupulous mortgage brokers that Consumer Law Specialists like Elizabeth Warren bought into it.  Job postings on Monster.com and in newspapers across the US actually read, “Former mortgage brokers or loan officers need not apply.”

Then Wall Street blamed the appraisers and the real estate agents.  Now, three years later, it’s the ‘deadbeat’ homeowner.

So before Wall Street can make total buffoons out of themselves by claiming demonic possession or being poisoned by alien anal probes, I think its time to dust off a copy of the Twelve Step Program from when I attended an AA meeting about ten years ago and was asked not to come back.

As I began reading the pamphlet, I was amazed at how relevant this is this really is to the way Wall Street is acting.

• Step 1 – We admitted we were powerless over our addiction – that our lives had become unmanageable
• Step 2 – Came to believe that a Power greater than ourselves could restore us to sanity
• Step 3 – Made a decision to turn our will and our lives over to the care of God as we understood God
• Step 4 – Made a searching and fearless moral inventory of ourselves
• Step 5 – Admitted to God, to ourselves and to another human being the exact nature of our wrongs
• Step 6 – Were entirely ready to have God remove all these defects of character
• Step 7 – Humbly asked God to remove our shortcomings
• Step 8 – Made a list of all persons we had harmed, and became willing to make amends to them all
• Step 9 – Made direct amends to such people wherever possible, except when to do so would injure them or others
• Step 10 – Continued to take personal inventory and when we were wrong promptly admitted it
• Step 11 – Sought through prayer and meditation to improve our conscious contact with God as we understood God, praying only for knowledge of God’s will for us and the power to carry that out
• Step 12 – Having had a spiritual awakening as the result of these steps, we tried to carry this message to other addicts, and to practice these principles in all our affairs

But before Wall Street can begin their Twelve Step Program. We as a society need to do an intervention and that won’t be easy considering we have been enabling Wall Street for more than a generation.   Americans individually have morphed into all five children from Charlie and the Chocolate Factory. As long as we were getting plasma TVs and overpriced McMansions we turned a blind eye to their uncontrollable desire for greed.

Tough love is why I was asked not to return to AA.   Apparently, at AA, it’s not okay to tell a recovering alcoholic to be a real man and to quit whining about his problems and then proceeded to ask him if he needed a feminine hygiene product.  Although the AA people weren’t amused, the guy later approached me in the parking lot, shook my hand and thanked me for opening his eyes.  Wall Street needs some tough love.  A tough love intervention is the only way to get Wall Street under control.  Wall Street must be brought under control and as Americans we have an obligation to save it from it’s own demons and uncontrollable desires.

ON June 27, 2006, Countrywide Financial, the nation’s largest mortgage lender, was about to close its books on a record-breaking six-month run. The housing market was on fire and Countrywide’s earnings were soaring. Despite all the euphoria inside the company, some executives noticed that Angelo R. Mozilo, the company’s brash and imperious chief executive, seemed subdued.

At a town hall meeting that day with 110 of the company’s highest-ranking executives in Calabasas, Calif., Mr. Mozilo sat alone on a stage, fielding questions and offering rosy predictions about his company’s prospects. But then he struck a sober note in response to a question from one of his colleagues.

The questioner wanted to know what, if anything, worried Mr. Mozilo, according to a participant.

“I wake up every day frightened that something is going to happen to Countrywide,” Mr. Mozilo said.

A year and a half later, that day arrived. In January 2008, Countrywide, the company he had built from a two-man mortgage operation into a lending behemoth, had to sell itself to Bank of America at a bargain price because it was being smothered by losses tied to a mountain of sketchy loans.

Yet almost until the moment Countrywide was taken over, Mr. Mozilo was publicly buoyant about its ability to ride out the mortgage crisis. Privately, however, he occasionally offered a gloomier assessment of Countrywide’s prospects and practices, according to e-mail and interviews.

What Mr. Mozilo, now 71, knew about Countrywide’s problems, and precisely when he knew it, was what eventually led the Securities and Exchange Commission to file civil securities fraud charges against him last year. And on Friday, in the Los Angeles courtroom of John F. Walter, a federal District Court judge, representatives for Mr. Mozilo and for two of his top lieutenants — David Sambol, Countrywide’s former president, and Eric Sieracki, the company’s former chief financial officer — settled those charges.

As part of the settlement, Mr. Mozilo and his co-defendants didn’t admit to any wrongdoing. But Mr. Mozilo agreed to pay $67.5 million in a penalty and reparations to investors and is permanently banned from serving as an officer or a director of a public company. Mr. Sambol is paying $5.52 million in a penalty and reparations and agreed to a three-year ban from serving as an officer or director of a public company. Mr. Sieracki agreed to pay a $130,000 penalty.

Read more here: http://www.nytimes.com/2010/10/17/business/17trial.html?src=busln