Just In: Acquittal - Real Fraudsters were the Banksters!

Wed, Aug 27, 2014 - 4:12pm

Real estate flippers avoided criminal conviction because they argued, and persuaded the jurors, that the REAL criminals were the banksters!! No way!!!

“In an unprecedented trial, four people charged with mortgage fraud were acquitted Friday by a jury in Sacramento federal court after defense attorneys argued the real culprits are the so-called victim lenders.” https://www.sacbee.com/2014/08/22/6648529/sacramento-federal-court-jury....

Let’s do a little background.

We all know of the real estate boom, and bust, particularly in California, and specifically localized in massive numbers in California’s Central Valley. Essentially, some of us have correctly pointed out that the root cause of the onset of the bubble, were criminal bankers, beginning with Blythe Masters of JPMorgan, who conjured up the scheme of securitized finance for home mortgages. The scheme was simple: the big banks would write loans, using investor money, and none of the banks’ own money. Once the loans were made, the banks would in turn package a thousand loans or so, and bundle them up, then sell them as a whole to investors, as a security. Investors getting first dibs at repayment streams [upper tranches] were paid less interest, than investors who were last to be paid [lower tranches]. The whole theory was that out of the pool of the thousand home loans, not all would default and go bad. Since in the aggregate, most of the loan payments would be paid on time, then those investors at the upper tranches were not risking non-payment as compared to the investors and the lower tranches. The interest rates were balanced against this risk, and the securities were marketed and sold off to investors.

The problem, though, crystal clear to anyone with a brain, from the inception of the whole scheme, is in the incentive structure of the whole mess.

Not a single participant in the scheme had a single incentive to scrutinize the deal. The prospective home loan applicant, wanted a home, and inflated the income and other figures on the application. None of the bankers cared about the fake applications, because the bankers were only going to bundle the loans and sell them off, having no skin in the game and having massive incentives to get more and more loans bundled regardless of the underwriting standards or risk of default.

The investors at the upper tranches cared not. They were guaranteed first payment from the income stream. Their risk of loss was near zero. The lower tranch investors cared not either, as they were getting astronomically high rates of return, and on balance, the risk to them of defaulting payment streams was outweighed by the lucrative returns, much like unsecured credit cards. They figured there would be defaults, but the high interest rates made it, on balance, perfectly acceptable.

The various middlemen in all the transactions, like appraisers, real estate agents, escrow companies, and all the durable goods manufacturers filling all those new homes with shiny new appliances cared not one bit either. Local governments, always desperate for tax dollars, care not one bit either that the mortgage applications were filled with false incomes, and outright lies.

Then, of course, the incentive structure, understood as it was, created a new class of opportunists: the flippers and fraudsters.

These criminals, correctly realizing that there existed NO incentive by any of the participants to scrutinize mortgage applications, began scheming with straw buyers to flip properties.

In Sacramento, this type of fraud was particularly rampant.

Here is where the story gets fun.

The basic crime details are set out here:

“According to prosecutors’ filings, Charikov, a 42-year-old real estate agent who lives in West Sacramento, used straw buyers to purchase properties in a declining real estate market and then immediately resold them to another straw buyer at fraudulently inflated prices. To qualify for the mortgage loans, prosecutors contended, the defendants submitted fraudulent loan applications to lenders, falsely stating the straw buyer’s income, liabilities, and intent to occupy the home as a primary residence.

“The indictment alleges that Charikov recruited his loan officer wife, Romanishin, 32, of West Sacramento; Tuzman, 42, of Citrus Heights; and Talybov, 32, of Antelope, as straw buyers in transactions involving the sale and purchase of two West Sacramento properties in 2006 and 2007.

“After the first set of straw buyers obtained the proceeds from Talybov’s fraudulent purchases, they allegedly split the take with Charikov. Subsequently, Talybov defaulted on loans for both properties.

All four were charged with fraud that resulted in alleged losses to the lenders of at least $710,000. Charikov and Tuzman were also charged with laundering their ill-gotten gains.”

Got it so far? The United States Attorney, in a hard-hit part of California, used its massive massive, taxpayer-funded resources, and made the decision to charge the low-level fraudsters, and none of the bankers. No plea deals were reached.

Instead, in an act of incredible lawyering, the defense attorneys turned the case on its head by arguing the real criminals were the banksters! Unbelievable.

Remember, to prove fraud, one element is reliance. That means the banksters, who lost the $710,000, had to prove that they relied upon the statements in the loan application to lend the money. The criminal defendants showed that the loans would have been made anyway, whether the application information was true or completely false. Thus, there was no reliance, an essential element, and the jury acquitted the criminal defendants. Brilliant, simply brilliant, and my hat is off to those fine lawyers who advocated a winning position. It was a risky move, too, one that drew sharp objections from the prosecution:

“In this trial, U.S. District Judge Lawrence K. Karlton, over the government’s strenuous objection, allowed testimony meant to show that the lenders in the two transactions at issue – Aegis Wholesale Corp. and Greenpoint Mortgage Funding – didn’t care whether information on the applications was true or false. Under those circumstances, the defense argued, the information was not material because, either way, the loan would have been approved.”

As an aside, I am a bit miffed that the criminals got away with fraud, as this now sends a message that prosecuting low level fraud may not achieve the desired convictions. This now creates a MOPE problem for the Feds. That means those idiots and criminals in Washington have to dream up a new class of criminal defendants to pursue. Who knows what the next set of criminals will be? Maybe us bloggers who dare to challenge the government spin machine? Perhaps returning war veterans who dare to criticize the inept commander in chief? Stay tuned on this one.

Anyhow, back to the story.

In a statement given after losing a sure winner, the US attorney, Benjamin Wagner, did not mention his own office’s lack of pursuing the real criminals, the banksters:

“U.S. Attorney Benjamin Wagner, in a statement issued at The Sacramento Bee’s request, said:

“Criminal trials are inherently uncertain endeavors. We have had tremendous success in convicting scores of persons in mortgage fraud cases over the last several years, but it is unrealistic to expect that we will get the outcome we are seeking in every single case.

“We respect the criminal trial process, and accept the jury’s verdict in this case. It will not dissuade us from pressing forward in the many other mortgage fraud cases currently pending in this courthouse.”

What is telling here, is the UA attorney’s reliance on PAST success, attempting to foreshadow future success: “An acquittal in Sacramento federal court is rare, regardless of the charges. But with respect to mortgage fraud, it is virtually unheard of. There was little or no difference between the mail fraud charges against Yevgenity Charikov, Vitaliy Tuzman, Nadia Talybov and Juliet Romanishin and charges brought against hundreds of other defendants prosecuted by the U.S. attorney’s office in the Sacramento-based Eastern District of California. The office has often described the Central Valley as “ground zero” for mortgage fraud, and noted it has been a national pacesetter in pursuing the perpetrators.”

The winning defense attorney, naturally, highlighted the real issue:

““The big banks and other lenders made as many loans based on patently false information as they could, packaged them as securities and passed them up the chain to Wall Street’s investment and management bankers, who peddled them to an unsuspecting public,” said defense lawyer Tim Pori after the verdict.

“No bank executives have been prosecuted,” Pori said. “Sure, there have been multibillion-dollar settlements with some big banks, but none of their officers – the ones who really pulled the strings – will ever see the inside of a cell.”

“In the week when details of the United States government’s $16.5 billion civil settlement with Bank of America was disclosed, I hope the jury’s verdict causes the U.S. attorney’s office to readjust its priorities and investigate criminally the true culprits of our country’s financial collapse, the mortgage lenders’ officers who committed the real fraud – not those who allegedly lied on the industry’s ‘liar’s loans,’ ” said defense lawyer John Balazs.”

The star defense witness, none other than William Black, chimed in as well:

William Black, who boasts long academic and regulatory careers, was a key expert witness for the defense, again over Coppola’s objection. Black is an associate professor of economics and law at the University of Missouri, Kansas City, and the “distinguished scholar in residence for financial regulation” at the University of Minnesota’s School of Law.

His testimony purportedly connected the fraud in the Sacramento case directly to the lenders, and he explained to the jury why the false information on the applications had no bearing on lending decisions.

“This is the first time that the overwhelming fraud at the banks has been discussed in a criminal courtroom by the person with the greatest expertise on the issue, William Black,” said defense lawyer Toni White after the verdict.

“Prosecutors have refused to criminally prosecute the elite bankers responsible for the mortgage crisis that decimated our economy. The jurors heard shocking testimony from ‘control fraud’ expert William Black that regular people who got loans they were unable to pay back did not (defraud) the banks. The elite bankers commit the fraud while prosecutors look the other way and prosecute the wrong people.”

If Rand Paul wins the presidency, he could do no better than to appoint William Black as Attorney General. Will we see that?

Prepare accordingly.

About the Author


Aug 27, 2014 - 4:19pm

Jury refuses to convict

Kudos to Professor Black.

So, will the prosecutors in future prosecutions seek to prevent the case from reaching the jury, like in IRS cases?

Aug 27, 2014 - 4:23pm

Hey Cal, Did you ever comment on this?

Suspect's silence allowed as evidence at trial, court rules

After Richard Tom's car slammed into another vehicle at a Redwood City intersection in 2007, killing an 8-year-old girl and injuring her sister, he asked police if he could go home, then talked with them in the patrol car. One thing he didn't ask about - as the prosecutor repeatedly told the jury at his manslaughter trial - was the victims' condition.

Tom's conviction and seven-year prison sentence were overturned in 2012 by a state appeals court, which said the prosecution had wrongly taken advantage of Tom's right to remain silent in police custody.

But Thursday, a divided state Supreme Court established a different standard: Prosecutors can introduce evidence of a suspect's silence - even someone like Tom, who hadn't been questioned or advised of his rights. The exception is a suspect who has invoked those rights by telling police he won't discuss the subject.

Tom "needed to make a timely and unambiguous assertion of the privilege (against saying anything that might incriminate him) in order to benefit from it," Justice Marvin Baxter wrote for a four-member majority.

The court returned the case to the appellate court to decide whether Tom had told the police he wanted to remain silent - or, if not, whether evidence of his failure to ask about the victims was too prejudicial to present to the jury.

Tom's speeding car struck a car driven by Lorraine Wong, who was turning left onto Woodside Road from Santa Clara Avenue after stopping at a stop sign. Wong's 8-year-old daughter, Sydney Ng, was killed, and another daughter, 10-year-old Kendall Ng, was seriously injured.

There was no stop sign on Woodside, and Tom's lawyer argued that he had the right-of-way. But prosecutors said Tom was at fault because he was driving at least 67 mph, according to a prosecution investigator, on a road with a 35 mph limit. A defense investigator estimated his speed at 49 to 52 mph.

During final arguments to the jury, the prosecutor said one aspect of Tom's post-accident conduct was "particularly offensive - he never, ever asked, 'Hey, how are the people in the other car doing?' " That showed, the prosecutor said, that "he was obsessed with only one thing ... saving his own skin."

In a dissenting opinion Thursday, Justice Goodwin Liu said the prosecutor's comments were improper and might have influenced the jury's verdict that Tom had been grossly negligent, defined in the jury instructions as an "I-don't-care attitude."

Tom had served about three years of his sentence before being freed on bail following the 2012 appellate ruling.

His lawyer, Marc Zilversmit, said the court apparently is insisting that a defendant "invoke his right to remain silent about a question they never asked him."


Aug 27, 2014 - 4:35pm

Land of the free

So the flipper fraudsters get off scott free by implicating the banksters and the court agrees, but because the banksters are Too Big To Jail, everybody goes free and the lawyers make bundles and everyone goes home happy.....ain't Amurikah great, or what?

Aug 27, 2014 - 4:47pm

Great, CaL.

Just great.

ancientmoney kardnul
Aug 27, 2014 - 4:52pm

kardnul, LMAO!

"So the flipper fraudsters get off scott free by implicating the banksters and the court agrees, but because the banksters are Too Big To Jail, everybody goes free and the lawyers make bundles and everyone goes home happy.....ain't Amurikah great, or what?"


You hit the freakin' nail right on the FREAKIN' head! The justice system at work in 2014 ameriKa.

Mr. Fix
Aug 27, 2014 - 4:56pm

Oh! goodie, I've been looking forward to your post

I just love your well researched articles, as you expose the lawlessness overtaking our society.

Well worth the price of admission, and much much more.


California Lawyer,

I've been going through my inbox trying to find a past correspondence with you, referring to the possibility of a “silent title”, I think that was the term, and the MEARS scam, with all of the destroyed documentation, and you didn't think such a case would survive in court.

After searching 20 pages of correspondence, I can't find the conversation, (where did it go?),

But I was wondering since your exposé clearly shows that such a case might survive a trial, has your opinion on the matter changed?

There are literally millions of people drowning with mortgage payments in upside down houses that would really like to know.

If this became widely publicized, it could destroy the banks very quickly.

Oh yeah,


Aug 27, 2014 - 4:58pm

Great Job, Cal !

I love it when the rat-bastards get to hold the soiled end of the stick.



"Land of the free. Home of the knave".

Aug 27, 2014 - 5:02pm


I believe I did comment about that. If not, my comment is simple.

The Constitution strictly limited the power of the federal government, while expressly recognizing liberties of the citizenry, including, the 5th Amendment, extended to the States by the 14th Amendment, which supposedly mandates that the state cannot use evidence from one's own mouth to support a conviction. This right is known as the privilege against self-incrimination, also referred to as coerced confessions. If a suspect invokes the right to remain silent, we all know this as "taking the 5th," then the interrogator is not allowed to further inquire, or risks having anything said by the suspect excluded in court as a violation of the suspects 5th Amendment right to remain silent.

Unfortunately, as we see over and over again, the powers of the federal government are not strictly limited; rather, the courts "interpret" the constitution as providing the government with expanded powers. This same argument is applied in reverse as to individual rights as well. The courts strictly construe, or narrowly interpret the scope of individual rights as guaranteed by the Bill of Rights.

There is no further proof of this than the article you cited above. There is NO way that 20 years ago, any statements of the criminal suspect would have been allowed in front of that jury. Nowdays, the right to self incrimination basically does not apply.

The prosecutors have the ability to bring in all sorts of statements, and indeed silence as an admission of guilt! How's that for a bit of irony?

Remember, in this police state we live in, even if one keeps one's mouth shut, the prosecution will still argue that silence evidences consciousness of guilt.

This is the very same shill argument that the cops use in police brutality cases. They always claim that the victim provoked the officers, the officers were in fear for themselves, and had to use whatever force they are accused of using. Now, they just shoot multiple holes in the suspects, summarily executing them, and argue that the suspect reached for the gun and the officer was in fear for his safety.

See, if the perp has a gun, the officer claims he was afraid of being shot. If the perp is found to be holding a cell phone, or a pack of cigarettes, or just his finger extended, the cop shoots, kills, and claims the suspect was reaching for the cops' gun.

People, it is time to wake up. If one is confronted by the police, the goal is to NOT GET KILLED during the encounter!!!!! Do NOT forget this. We live in a police state. There is no such thing as justice. Stop deluding one's self otherwise.

Now, I am not just saying this because of the Ferguson, MO situation. This kind of violence is on the news regularly, all over the country, and in particular, here in So. Cal. Just last month, a nice family man was killed in Victorville. His heirs will get millions from this case, because there is no justification at all for the killing. Similarly, in this week's headlines, there is mention of cops swarming a Cal State campus because they found a menacing umbrella.

When there is NO REGARD for civil liberties, and the rule of law is malleable depending upon the person accused, there is no rule of law, and we are all at the mercy of the state. Be alert, and be careful.

One of my theories of survival is to become part of the system, so that the system cannot kill you. Volunteer as a ride-along cop, that is one way. Become a reserve deputy cop, or sheriff, that is another way. Or, as I do, represent cops free of charge as part of the effort to give pro bono legal work. Now, I am part of the system, and they will not view me as a threat.

Just my $0.02

Aug 27, 2014 - 5:06pm

Kardnul, exactly

Precisely my friend. You nailed it.

Look at the incentive structure of the prosecution effort. They took on CLEARLY guilty criminal defendants, but the judge allowed the kryptonite into the courtroom, defeating the prosecution's case.

Why has there NOT been a SINGLE prosecution of a SINGLE bankster? Not a one.

Certainly, someone knew of the fake paper, the fraud, the scheme, but still, no one has been charged?

Shocked, shocked there was fraud in the mortgage applications . . .

The powers that be are not about to let their praetorian guard turn on them. Remember that.

Aug 27, 2014 - 5:07pm

"the place to avoid"

Here's a BBC News article I bookmarked back in July as I wanted to post it up here when I returned.

This lady (the link to the article is at the bottom) didn't enjoy her visit to a restaurant, so said it was "the place to avoid" on her blog site.

It so happened that when conducting a search on the restaurant's name at Google, her blog post appeared in fourth position. The restaurant then took her to court because it was "unfairly hurting their business".

All she was doing was speaking her mind. She gave her opinion, that is all.

The judge fined her for the blog post.

This is an outrageous example of how free-speech is being destroyed. Firstly, all she did was speak her mind. Secondly it is GOOGLE, it is their algorithm, which made her post appear so high in the search results. It has nothing to do with her that her blog appeared so high in the rankings and was seen by so many people.

But Google aren't seen as the ones that are responsible for this, yet it's clear they are as it was Google that ranked the blog so high. She has no control at all over what the Google search engine did.

But most importantly, she was just speaking her mind. She was only giving her opinion.

Wow. Just look at the message, a creeping message. Don't criticise on the Internet. Keep your mouth shut, or you'll suffer consequences.

This is one of the most blatant examples of how freedom of speech is being destroyed that ever I've seen. Just ten years or so ago something like this would have been thrown out of court.

The implications go much further of course. Don't speak out against the government... you are being watched.


George Orwell was one of the greatest visionaries of all time.



Great post CaL!

Bill Black is one of the few who isn't afraid to speak out. You've reminded me of this...


Aug 27, 2014 - 5:08pm

Late 80s S&L crisis

The S&L crisis in the late 80s was tiny compared to the mortgage fraud of the 2000s. Something like 900 S&L executives were indicted and and over 700 were convicted. How many mortgage company executives have gone to jail this time? ZERO. Just pay a fine and Anthony Mozilo of Countrywide Mortgage (for one example) goes free. Didn't hurt that he got a sweetheart loan deal for Senator Dodd.

Aug 27, 2014 - 5:10pm

Fix: I cannot recall

If I do recall the gist, though, it is that because of MERS wholesale avoidance of local property recording offices, in the event of invalidation of any part of the MERS scheme, that would leave title clouded for many many properties.

I was hoping to do quiet title cases once MERS blows up. MERS is NOT invalidated in California yet. What we [upside down home owners] need is a collapse of the fake paper system. Then, when all of those criminal banksters are gone, and their records shredded, or destroyed, or "missing," then I can swoop in with a quiet title suit, putting the burden on the various--now defunct--lenders to prove up their interest in the property in question. If they cannot, then voila, title free and clear.

This type of case is not ready for the courts yet. Give it time. This verdict in Sacramento is a watershed moment. Watch other criminal defense lawyers do the same thing.

Aug 27, 2014 - 5:12pm

Thanks Mr. TF

Hey, I appreciate the shout out on yesterday's podcast. Many thanks. I'm here to help, and I do appreciate you knowing that.

Aug 27, 2014 - 5:21pm

Okay People, This is the One to Watch

Show me the Note is going to the top of the food chain, the CA Supreme Court.

From a friend:

"A few minutes ago, the California Supreme Court announced it granted the petition for review in Yvanova v. New Century Mortgage. The Court limited review to the following issue:

"The petition for review is granted. Briefing and argument is limited to the following issue (see Cal. Rules of Court, rule 8.516(a)(1)): In an action for wrongful foreclosure on a deed of trust securing a home loan, does the borrower have standing to challenge an assignment of the note and deed of trust on the basis of defects allegedly rendering the assignment void? Chin, J., was recused and did not participate. Votes: Cantil-Sakauye, C.J., Baxter, Werdegar, Corrigan and Liu, JJ."

What does this mean?

Simple. In California, there are two competing lines of cases. One line, the disfavored view, is that a homeowner has standing to challenge defects in the securitization process. Standing means having the legal right to assert a claim.

The other, majority view, is that as a debtor, but not a party to the securitization scheme, the debtor has no standing to allege defects in the process; thus, in any claim of wrongful foreclosure claiming that the lender cannot prove ownership of the note based on inadequate transfer of the note, or in failure to comply with the pooling and servicing agreement, the debtor is shit out of luck. What the court is saying, is in essence: "too bad for you debtor, no free house. Even if THIS particular bank that is foreclosing on you has no right to do so, well too bad, because you owe the money to someone, and whoever that "someone" is can sort it out later after this bank, with no proof of ownership of the note, takes the house from you."


Which argument carries the day? Who knows. Odds are that Glaski, the minority view, goes down in defeat. But, since Glaski was not ordered depublished, perhaps the Supreme Court is leaning towards the side of homeowners?

At the end of the day, the Court will always rule to keep the bureaucracy intact. How this affects that concept is unknown, so we get to wait and see.

Aug 27, 2014 - 5:36pm

Speaking of corruption in the courts...

Another news item I'd bookmarked and which may not have surfaced over the pond.

Yup, pay enough and you get all charges dropped.


F1 boss Bernie Ecclestone pays to end bribery trial

A German court has agreed to end the bribery trial of Formula 1 boss Bernie Ecclestone in exchange for a $100m (£60m) payment from him.


If found guilty, he could have faced a 10-year jail term and the end of his decades-long dominance of motor racing.


Aug 27, 2014 - 6:04pm

William Black

Is this William Black associated with Black's Law Dictionary?

Great article. Amazing that people who did wrong can be found not guilty because someone else, who enabled them to do wrong, did more wrong. And they will not be charged.

What kind of country do we live in?

NW VIEW California Lawyer
Aug 27, 2014 - 6:07pm

@ C.L.

A great case to follow:

If the banks win, they will not need to worry about past robo signing nor who owns the note, nor spending any funds to look for a trail of past resale's of the notes. Oh happy day.

If the homeowner wins, thousands will immediately inquire for proof from the bank as to the chain of sales of the notes. Then without that proof, mortgage payments will dry up quickly and ten thousand new attorneys will have employment for decades. You know, "if you want a payment, call my attorney". The banks will win in the end, who else?

Aug 27, 2014 - 6:22pm

Dr J

No, William (Bill) Black has nothing to do with the law dictionary. He was a regulator who saw what was going on in the sub-prime mortgage crime and other gov't criminal goings-ons and has been speaking out ever since.

See the vid I posted above.

Aug 27, 2014 - 7:30pm

The Protocols of Zion

"Through our National Bank, the Federal Reserve, we extend Book Credit - (which we create from nothing) - to all local banks. Thus, we bring industry management and labor into our debt, and then pit management against labor, so they will never unite and attack us, and thereby usher in an industrial utopia."

Harold Rosenthal; The Protocols of Zion.

Aug 27, 2014 - 7:42pm

Bil Black

AC/DC did a song about him

acdc-big balls


Aug 27, 2014 - 8:08pm

Then there is this Stat: Eye-Popping

This was emailed to me from a colleague. It was from a published source, I believe, but I did not get a link to it, so I am posting it unattributed at the moment:

"Two hundred sixty-three thousand.

Of all the numbers that have been batted around about the legacy of Bank of America's ill-fated Countrywide acquisition since the bank's big Justice Department settlement last week, that's the one to keep in mind going forward.

Brian Moynihan & Co. have attacked with gusto B of A's delinquent-loan portfolio in recent years, much of which came from the 2008 acquisition of Countrywide. But even after all that work — the chargeoffs, the loans sales, the renegotiations — the bank still has 263,000 delinquent loans on its books.

B of A has estimated that it will get back to a normal level of delinquent loans within two years, but that may be optimistic. Most of the loans it has left probably cannot be sold, and working out problem loans — especially those at the bottom of the barrel — is notoriously slow and labor intensive, analysts say.

"In later stages, the numbers are harder to move down," said Chris Mutascio, an analyst at Keefe, Bruyette & Woods.

Such a daunting challenge are fresh reminders of what everyone has known for years: Bank of America's purchase of Countrywide Financial in 2008 was a bad deal.

Estimates of exactly how bad have varied, but the Charlotte, N.C., bank has pegged total losses from the ill-fated acquisition at more than $63 billion over the past six years. That tally includes its purchase price, mortgage repurchase claims, litigation and settlements, loan-loss provisions and chargeoffs on residential loans and home equity lines of credit.

It's hard to find any silver lining — much harder than even JPMorgan Chase's acquisition of Washington Mutual, which was a big reason for its $13 billion settlement agreement with Justice last year but still gave the bank a big presence on the West Coast.

B of A can't even take satisfaction in the retail network it gained. It acquired 1,000 field offices from Countrywide, but it has since had to shut down many of them.

Countrywide "has been all cost and zero benefits" for B of A, said Isaac Boltansky, a policy analyst at Compass Point Research & Trading.

B of A also received a $1.5 trillion servicing operation, including a portfolio of nine million loans, but the cost to service the legacy loans has far exceeded revenues because of the portfolio's high delinquency rates, analysts say."

Aug 27, 2014 - 8:28pm


Well we have our organic garden and the crop is huge and wonderful. We planted four tomato plants, however, about forty came up on their own from last year. We are swimming in organic tomatoes. The neighbors and the kids are also filled up on our crop. The beans are nine feet high and a huge crop.

Here is the problem: The wife planted some squash. They are growing very well. I asked the wife to make my yearly favorite sandwich tonight. Fried baloney with fresh organic tomatoes on toast. It was really good until she slipped in one of those organic, baked, stringy squashes. I knew then that squash seeds would not be in my bug out bag.

Fred Hayek
Aug 27, 2014 - 8:36pm

Ho-ly 5hit!!! They used Bill Black as their expert witness!?!

I love those lawyers! I love them. Forget the quote from King Lear. Amend it to, first kill all the lawyers who only defend the big shots.

I say again.




What a fvcking awesome strategy! Bill Black is a good public speaker and knows this crap inside out, forwards, backwards and upside down. Yer damn right the prosecutor didn't want to have Bill Black testify. I'd love to see footage of the prosecutor trying to cross examine him. That would be hopeless and priceless.

Aug 27, 2014 - 8:43pm

All hail the Attorney General of Turdville

This is such a stellar article and summary- it really is a privilege to have our own legal expert keeping track of these things and interpreting their import for us. Thank you CL!

Aug 27, 2014 - 8:43pm

Harvey's Up (TFMR)

Harvey's Up! https://www.tfmetalsreport.com/comment/622752#comment-622752

  • Mark O'Byrne (GoldCore): Gold is now trading above its 200 moving average of $1284, and the gold price remains relatively strong despite a stronger dollar, rallying equity market indexes, and a relative easing of geopolitical tensions. The gold/silver ratio is currently 66.10, near its one year high showing silver remaining very good value versus gold. Gold investors hurting from prices within 1% of a two-month low can find solace from the historical record and research and showing gold performs best in September. A Bloomberg chart shows bullion averaged gains of 3% each September over the past 20 years, beating next best month November, when prices rose an average 1.8% according to Bloomberg based on a market update by GoldCore. We covered gold’s seasonality and gold’s best performing months here. Buying increases with India’s festival period, which runs from late August to October and is followed by the wedding season. At these times, bullion is bought for part of the bridal trousseau or in jewelry and bar form as gifts from relatives.
  • Ted Butler: Just this [past] week for example, the technical funds sold and the commercials bought more than 30 million oz of silver futures, an amount close to what the U.S. mines in a year and the U.S. is in the top ten of silver producing countries. It is not possible that the concerted one-week sale of the equivalent of such an amount of metal not to have been the primary influence on price. Over the past four weeks, the technical funds have sold to the commercials, 105 million oz of silver contracts, or three times what the U.S. produces in a year. What difference could it make what else may be going on in the world or in the metals world if such massive amounts are being transacted in full view? The world's gold, silver and copper producers, consumers and investors have been shut out from the price discovery process at the hands of large speculators plunging into and out from derivatives positions on the Comex. Not only is this preposterous, it's illegal. Most responsible for this sorry state of affairs is the crooked CME and CFTC.
  • Richard Russell: Today it finally happened: I received an advertisement from a firm featuring a scare I've been waiting for. There are two ways for the government to handle its outrageous debts. The first is reneging, as per Argentina, but this is unthinkable. The second way is via inflation -- inflate enough and your debts appear to shrink. Ah, but there's a third way, and it's confiscation of wealth. Don't think this is impossible, because governments will do whatever they have to remain in power. How about confiscating all individual wealth above $200,000, for which the government will give you stubs, which will say IOU. This will be a switch on the 1933 confiscation of gold. This time it may be confiscation of cash. Finally, something new to worry about."
  • Bruno de Landevoisin (StealthFlation): Under the imposition of StealthFlation, the Velocity of Money lies dormant while increasing Inflationary risks build below the surface. Much of the supposed economic activity generated today is not being driven from the the bottom up by the healthy deployment of excess savings naturally created from genuine self-sustaining productive economic activity at the fundamental level, but rather in an unnatural fashion, force fed from the top down via the easy street ZIRP/QE induced debt financing incessantly being encouraged by our misguided megalomaniac monetary authorities. Perhaps even more malignant, the largest capital market of them all, namely the U.S. bond market has been put down by the Fed’s activist zero bound anesthesiologist. Thus, the utterly comatose American treasury market is no longer facilitating the natural growth of traditional savings income streams generated via secure interest bearing accounts and prudential savings products throughout the financial system’s depository structure.
  • Lawrence Williams: Grant Williams of "Things That Make You Go, Hmmmmm" in his analysis comes up with total Chinese gold holdings, based on Koos Jansen’s figures, of somewhere close on 15,000 tonnes. However there is an implication here, if I am reading his data correctly, that all this is effectively held by the People’s Bank of China (PBoC – China’s Central Bank), which seems to disregard the significant part held by Chinese citizenry – although as other observers have pointed out, if any country could relatively easily confiscate citizens’ gold holdings for the greater good, China, with its centralised economy, would be top of the list. Grant Williams also noted in his newsletter, all the other BRICS nations have also been expanding their gold reserves. In part this may also be a move to diversify away from, and thus reduce reliance on, U.S. dollar related treasuries in their foreign exchange reserves given most see the recent enormous U.S. Quantitative Easing programmes as ultimately weakening the value of the U.S. currency. But it may also represent moves to have a bigger say in global currency re-evaluation when, not if, this happens at some time in the future. The global economic board game is a complex one and the West needs to ensure it is keeping up with what is happening in the emerging World order which seems to believe that gold holdings, if not the total answer, will be an important contributor to what develops.
  • Bill Holter: It was pretty clear in 2012 that QE was not working and not the answer, we should have collapsed then. Were they to have allowed this thing to go over the cliff in 2009, we would be in a real recovery already but no, bailing wire and chewing gum has been used to keep the charade going. So back to "when," when do the wheels fall off? If I knew this I would have told you five years ago and not written again until 30 days before the "date." All I can say is that the U.S. has obviously lost power and prestige internationally and recent displays of a "lack of respect" may very well be a sign. A "sign" that the plug will be pulled soon. The U.S. I believe fully understands this which is why the desire to get a war, any war started as soon as possible. I have thought over the last 5 years that a complete financial crash could have taken place at any time. In hindsight with 20/20 vision I still believe the same thing. At any time for any variety of reasons our markets and banking systems could have seized up. The Fed (and Treasury) have done anything and everything they could to forestall it ...and I believe we had foreign "help." You must wonder where this "help" will come from going forward as our ability to purchase goods and deliver gold ends? My answer to the question remains the same, our markets and banks can close for an extended and unscheduled holiday on any given day and for any number of possible causes.
  • Andrew Hoffman: We have for some time highlighted how Shanghai silver inventories started plummeting following the blatant April 2013 New York paper raids commencing one day after Obama had a "closed door meeting" with the top TBTF bank CEOs. Steve's last update showed that 90% of said inventory had been depleted through July; but per below, August has seen still steeper declines. Another 29% of inventory was withdrawn in the past three weeks alone, leaving a measly 103 tonnes left worth just $65 million - or $69 million, when incorporating the record high 6% premium over fraudulent London prices. No, that's not a typo; just $69 million of silver remains on the world's largest physical delivery exchange care of an accelerating run catalyzed by Cartel naked shorting. Given the world experienced major silver shortages in 2008, 2011 and 2013, I'm not sure how much more loudly we can emphasize that silver is the "financial world's Achilles Heel" - and thus, extremely likely to see additional more dramatic shortages in the coming years - perhaps, as soon as next week's Comex options expiration.
  • Nathan McDonald: In the coming months, the power of the West will slip once more. For over a century, the gold market has been traded and settled in the West. That is about to change. Competition is coming to town. Inside sources state that the Shanghai Gold Exchange is set to launch next month. Shanghai intends on becoming an international trading hub for gold. The ramifications of this are yet to be seen, but it stands to completely change the gold market. Bloomberg reports: The Shanghai Gold Exchange plans to start bullion trading in the city’s free-trade zone on Sept. 26, according to three people with knowledge of the matter. The gold contract will be priced and settled in yuan and the infrastructure is in place for trading to start in the third quarter, Xu said in June. The zone will have a vault capable of holding 1,500 metric tons of gold, which can either be imported into China or be in transit to other markets, Xu said.” The Chinese, unlike people in the West, appreciate the value and protection that gold offers. Their affinity of the yellow metal can only be rivaled by that of India.
  • Stewart Thomson: Given the stunning Indian and geopolitical price drivers now in play in Iraq, Syria, and the Ukraine, I think gold could charge beyond $1325, and on towards the $1347 and $1390 area highs. Silver, which is perhaps better referred to as “gold on steroids”, looks even better. Pleaseclick here now. The price stoker sits at an incredibly oversold level of about 10, and is now flashing a crossover buy signal, as it bursts above a key minor trend line. My suggestion to silver enthusiasts, is to be long and strong! Rising food prices can create huge institutional liquidity flows into gold. Commerzbank agricultural market analysts are amongst the best in the business. To view their current analysis of the wheat market, please click here now. Please click here now. That’s the latest COT report for wheat. The commercials (aka the “banksters”) are net long the wheat market, while the hedge funds are net short! Is wheat on the verge of soaring higher, and will that produce sizable institutional liquidity flows into gold? I think so. In the big picture, India is the most important price driver for gold. The news coming out of the land of the “titans of ton” is now very bullish. Please click here now. While about one third of the entire population of India has no electricity, that state of affairs is changing very quickly. As Indian citizens get access to the internet, they are rushing to buy gold in online accounts. Over the next couple of years, I expect this online buying will go “off the charts”.

All this and more on...

The Harvey Report!



Mr. Fix
Aug 27, 2014 - 11:35pm

@ Flyinkel:

I'm thinking about it.

Safety Dan
Aug 27, 2014 - 11:41pm

Off Topic - From Ag1969 in DOTS abt 9/11/14

On Monday, I learned retired United States Air Force Lieutenant General and FOX News military analyst Thomas McInerney had issued a dire warning regarding terrorism directed against the United States. The former commander of the 11th Air Force appeared on the FOX News Channel last Saturday, and told viewers:

On the 7th of September, a major news network and a major publishing network are going to put out a book, and it’s going to be earth-shattering of what’s happening and what happened. And, the fact is, we may even see on 9/11/14 MH370 resurface again. We should be prepared for anything. We should go to DEFCON 1- which is our highest state of readiness- and be prepared as we lead up to 9/11.

When pressed for more details about that September 7 date, McInerney said he couldn’t elaborate. He did add:

It is going to be extremely important, and America should take notice. We are less safe today than we were 6 years ago. General Mike Flynn, the director of DIA who’s retiring now, has pointed out that they have almost doubled the radical Islamic organizations in the last 6 years, and probably a 30 percent increase in the force structure.

Lt. General McInerney Warns of New 9/11 Event

Safety Dan
Aug 27, 2014 - 11:42pm

@ Dr Fix

Please see DOTS for info on links

Aug 27, 2014 - 11:46pm

Financial war . . .

" Whether you realize it or not, this war has been red hot for some time, and will soon come to a head. There’s actually more to gain or lose here, than most people can wrap their heads around, and the results of this conflict will change the world forever.
In partnership with Russia and others, China is stacking so much gold, at such an amazing speed, that the world has never seen its like before. "


Safety Dan
Aug 27, 2014 - 11:55pm

From Nana in the Dot Thread

MOST COMPREHENSIVE POST EVER: Head Of Pentagon Intelligence: List Of Purged Military High Officers Is ‘Terrifying’…


All I can say is, Wow.

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