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Today there is discussion of the Great Financial Crisis mortgage fraud along with film clips from the new film "The Big Short".
Articles about events, conflicts and disease around the world
Disputes at Paris climate talks push conference into weekend (Al Jazeera) French Foreign Minister Laurent Fabius of the host country is aiming for a final draft Saturday, saying 'there is still work to do'. High-stakes climate talks aiming to craft a global accord to combat climate change stumbled Friday with China and many other nations refusing to yield ground, forcing host France to extend the international summit by a day to overcome stubborn divisions. The difficult talks will continue as diplomats try to overcome disagreements over how — or even whether — to share the costs of fighting climate change and shift to clean energy on a global scale. See also next article.
The Latest: China: Rich nations must bear more climate costs (Associated Press) China is standing firm at the Paris climate talks on its demand that rich countries should bear a greater burden than developing ones in reducing emissions and helping countries cope with global warming. Liu Zhenmin, deputy chief of the Chinese delegation, told reporters Friday the issue is "at the core of our concern for the Paris agreement". He said he wants different rules for different countries "clearly stipulated" in a deal that may be finalized Saturday. Econintersect: Fine Mr. Liu. Then China has the second largest assessment for expenses, based on GDP. And, if based on PP (purchasing power) GDP, China has the largest bill.
Oil Investors Are $240 Billion Poorer a Week After OPEC Call (Bloomberg) Investors around the world have seen $240 billion wiped off the value of oil companies in the week since OPEC sent crude prices plunging to a seven-year low by abandoning its output limit. Companies producing, refining, piping and exploring for oil, along with those that provide them with services, had a market value of about $3.72 trillion as of Friday, compared with $3.96 trillion on Dec. 3, the day before the Organization of Petroleum Exporting Countries’ meeting in Vienna. Exxon Mobil Corp., the world’s biggest oil company, has lost $11 billion of its value and PetroChina Co. more than $17 billion, according to data compiled by Bloomberg.
Dow and DuPont, two of America’s oldest giants, to merge in jaw-dropping megadeal (The Washington Post) Two of corporate America’s oldest institutions, chemical giants Dow Chemical and DuPont, will merge into a $130 billion behemoth — and then split again into three companies — in one of the largest megadeals of the year, the companies said Friday. Since their founding in the 19th century, both companies have invented and sold some of the most transformative discoveries in modern chemistry, changing how our homes are built and painted and how our food is grown and stored. Their innovations include a sweeping variety of now-ubiquitous chemicals, including the Kevlar in bulletproof vests and the Teflon in nonstick pans, as well as chlorine, Saran Wrap and Ziploc bags. The resulting company, DowDuPont, will be split within two years:
DowDuPont, will be split after 18 to 24 months via tax-free spin-offs into three independent, public companies focused on agriculture, including seeds and pesticides; materials, including coatings, plastics and industrial chemicals; and specialty products, including chemicals key to the electronics, biosciences and health industries.
House clears stop-gap spending bill (The Washington Post) The House on Friday passed a stop-gap spending bill that will give Congress until the middle of next week to complete a deal on a year-end appropriations package needed to fund the government. The measure passed in a voice vote after minimal debate. The Senate passed the legislation by voice vote on Thursday. House Appropriations Committee Chairman Harold Rogers (R-Ky.) said that the funding extension will last through Dec. 16 and he hopes it will buy enough time to finish the negotiations.
“There are some who contend that it does not benefit African-Americans to get them into the University of Texas where they do not do well, as opposed to having them go to a less-advanced school, a slower-track school where they do well. I’m just not impressed by the fact the University of Texas may have fewer [black students]. Maybe it ought to have fewer.”
Republican voters on Trump: no compassion, no problem (Associated Press) Republican voters don't think Donald Trump is likable. They don't think he's compassionate. And many don't consider him particularly honest. But he's overwhelmingly viewed as decisive and competent. And that's what matters most — at least for now — to Republicans. A new Associated Press-GfK poll finds that 8 in 10 Republican registered voters call Trump very or somewhat decisive. That's top in the field for the businessman, whose blunt style was featured for years on reality TV. At the same time, it finds much resistance to him from the country at large. The poll was taken before he called for a ban on Muslims coming into the United States and does not reflect the furor that has turned some leading Republican figures, at least, against him.
Junk Bonds Are Tanking and Icahn Says Meltdown `Just Beginning' (Bloomberg) A day after a prominent Wall Street firm shocked investors by freezing withdrawals from a credit mutual fund, things only got nastier in the junk-bond market. Prices on the high-risk securities sank to levels not seen in six years and, to add to the growing sense of alarm, billionaire investor Carl Icahn said the selloff is only starting.
'Missing' China tycoon found amid swirling rumors of graft probe link (Al Jazeera) Billionaire Chinese entrepreneur Guo Guangcheng, who has styled himself on the US investor Warren Buffett, has been found, after reports he had gone missing caused his companies to halt share trading. In a statement late on Friday night, Fosun International said its founder and chairman was "currently assisting in certain investigations carried out by Mainland judiciary authorities". See also next article.
"Guo is one of the high-profile Chinese entrepreneurs and this incident will raise eyebrows among foreign regulators, as Fosun has been aggressively expanding its global insurance footprint. But it is too early to say how this incident will impact Fosun's operations."
Kabul attack: Taliban target embassy district (BBC News) Taliban militants have attacked a foreign guesthouse in Kabul's embassy district, causing several casualties. Initial reports suggested that the Spanish embassy was under attack, but Spain's prime minister Marian Rajoy denied this. He later added that one Spanish police officer died in the attack. The Taliban say their fighters detonated a car bomb in the Sherpur area and were currently inside a building there. This is the latest in a series of audacious raids by Taliban fighters on high-profile targets in Afghanistan.
Afghan Taliban: Mullah Mansour's battle to be leader (BBC News) Following the announcement of Omar's death in July, Mullah Mansour was quickly installed as the new Amir ul-Mumineen, Commander of the Faithful. The decision was initially opposed by some of Mullah Omar's followers. In this report from late September, Afghan Taliban sources said they had put aside disagreements and rallied around their new leader Mullah Akhtar Mohammad Mansour. The intensification of Taliban attacks since then would support the September report.
Canada welcomes first planeload of Syrian refugees (Al Jazeera) After months of promises and weeks of preparation, the first Canadian government planeload of Syrian refugees landed in Toronto on Thursday, aboard a military aircraft met by Prime Minister Justin Trudeau. Trudeau was elected to a surprise majority in October promising to accept more refugees more quickly than the previous Conservative government. Econintersect: Should the Statue of Liberty be moved north to the Gulf of St. Lawrence? Let's remind Americans of the inscription on Lady Liberty, a poem by Emma Lazarus:
Give me your tired, your poor,
Your huddled masses, yearning to breath free,
The wretched refuse of your teeming shore,
Send these, the homeless, tempest tost to me,
I lift my lamp beside the golden door.
2007 Mortgage Fraud Report (Federal Bureau of Investigation) The FBI submitted annual reports on mortgage fraud for several years before the Great Financial Crisis. The reports were based primarily on information provided by banks in SARs (suspicious activity reports. It turns out that SARs covered only a small fraction of actual fraud; much of the fraud was committed by the financial institutions themselves, and that remains largely unprosecuted to this day. See other citation today about the new movie, "The Big Short".
Mortgage fraud continues to be an escalating problem in the United States. Although no central repository collects all mortgage fraud complaints, Suspicious Activity Reports (SARs) from financial institutions indicated an increase in mortgage fraud reporting. SARs increased 31-percent to 46,717 during Fiscal Year (FY) 2007. The total dollar loss attributed to mortgage fraud is unknown. However, 7 percent of SARs filed during FY 2007 indicated a specific dollar loss, which totaled more than $813 million.
Finally, Wall Street gets put on trial: We can still hold the 0.1 percent responsible for tanking the economy (Thomas Frank, Salon) This article describes the mortgage crisis as primarily the fault of mortgage originators and mortgage securitization financiers, aided and abetted by the executives of the largest banks. At the heart of this story is a court case in California where the defense successfully proved financial fraud was not committed by mortgagors induced by mortgage issuers to sign "lairs loans" paper work. Why? Because they were compensated for writing mortgaes and securitizing them, not for the quality of the mortgages for repayment. The perverse incentives built into the system created the crisis. The "liars" were often victims of a Pied Piper system to which they were susceptible because of their financial naivety. See also Federal Court Acquits Four Charged with Mortgage Fraud (GEI News).
The Tea Party regards Barack Obama as a kind of devil figure, but when it comes to hunting down the fraudsters responsible for the economic disaster of the last six years, his administration has stuck pretty close to the Tea Party script. The initial conservative reaction to the disaster, you will recall, was to blame the crisis on the people at the bottom, on minorities and proletarians lost in an orgy of financial misbehavior. Sure enough, when taking on ordinary people who got loans during the real-estate bubble, the president’s Department of Justice has shown admirable devotion to duty, filing hundreds of mortgage-fraud cases against small-timers.
The Alchemy of Securitization (John Lounsbury, GEI Analysis) The securitization process put purely junk mortgages into AAA-rated securities based on the assumption that only 1% (the historical limit) would default. When several times that previous limit occurred AAA-rated securities defaulted.
Other Economics and Business Items of Note and Miscellanea
7 Surprising Things That Go Bad Over Time (MoneyTalksNews, MSN Lifestyle) Here are seven classes of goods used everyday in every home that go bad over time. Some have explicit "use by" dates on the packaging and others do not.
A true crime story and a madcap comedy, a heist movie and a scalding polemic, “The Big Short” will affirm your deepest cynicism about Wall Street while simultaneously restoring your faith in Hollywood.
Econintersect: We are sure we will not miss this movie and expect to enjoy it, but even before seeing this I expect to be sickened by the realization that this tragic-comedic piece has a despairing punchline - and that the joke is on all of us.
To Democrats, Donald Trump Is No Longer a Laughing Matter (The New York Times, MSN News) Until Monday, when Donald J. Trump proposed a ban on Muslims entering the United States, Hillary Clinton could hardly keep herself from laughing at the mention of his name. “I’m sorry, I can’t help it,” she told ABC News on Sunday, letting out a giggle that made advisers squirm. She is no longer laughing. Hillary is now treating Donald as a serious candidtae worthy of considered debate.
College sports’ fastest-rising expense: Paying coaches not to work (The Washington Post) Golden parachutes await newly unemployed coaches in the lucrative world of major college sports, a phenomenon recently retired football coach Steve Spurrier once called “hitting that lottery ticket”. Severance pay is the top-rising expense for athletic departments at some of America’s largest public universities, according to a Washington Post review of thousands of pages of financial records from schools in the five wealthiest conferences in college sports. And it's not as if the huge severance packages were being paid by profitable programs. Many run big deficits.
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