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Covering up

For the mortgage industry tax cheating! Via Naked Capitalism:

As established readers know, we’ve been writing since mid 2010 about the widespread, possibly pervasive, failure of mortgage securitization originators to convey the notes (the borrower IOU) to securitization trusts as stipulated in the deal documents, well before the robo signing scandal broke. This abuse matters because the transaction procedures were designed carefully to satisfy certain legal requirements, among them rules contained in the 1986 Tax Reform Act regarding REMICs, or real estate mortgage investment conduits, which required that the securitization trust receive all its assets by 90 days after closing and that all assets conveyed to the trust have to be “performing”, as in not in default. Failure to comply with the rules is a prohibited act and subject to taxation at a rate of 100%, and additional penalties may apply.

Now, with the Federal government under enormous budget pressure, shouldn’t the authorities be keen to go after tax cheats? The headline of a Reuters article, “IRS weighs tax penalties on mortgage securities,” would suggest so. But don’t get your hopes up. The lesson is don’t jump to conclusions when big finance is involved.

Go read if your stomach can handle it.

Psst, Allen? You’re not the boss of us

Allen West thinks he’s still in the military, and we all have to follow his orders:

BOCA RATON, Fla. — Police escorted a number of people out of a town hall meeting Wednesday night. It’s the second night in a row that Congressman Allen West held what became a heated event.

“I think they are a bunch of jerks,” said Anne Dion after police walked her outside. “That’s what I think about getting asked to leave.”

Trouble was brewing even before the event started. Sign-carrying protesters were asked to leave private property.

U.S. Rep. Allen West, R-District 22, warned the crowd about lashing out.
“You see a lot of media cameras, and the media is here because they want to see a show,” he said.

The warning did not stop supporters and critics from turning up the volume.

“I don’t care who’s yelling at me, cursing at me, or whatever,” said West. “You are still in America.”

“I feel like the country is going down the tubes, and it we don’t have somebody that does something about it, we are all in trouble,” said Karl Hotaling, a supporter.

During the public question segment, medicare proved to be a controversial topic.

“I don’t think medicare should be eliminated,” said David Torgersen, a protester. “I think it should be there when people need it.”

Life during wartime

The war on working people, I mean. Hey, thanks to all the people who voted for the truly awful Gov. Corbett here in Pennsylvania:

In a pre-School Reform Commission budget briefing, Philadelphia School District Chief Financial Officer Michael Masch said that to close a $629 million budget gap, the district must lose about 16 percent of its workforce – 3,820 jobs. That includes a reduction of 1,260 teaching jobs, or about 12 percent of the teaching force. The district says there will be a loss of 650 noontime aides, nearly 400 custodians, more than 180 counselors and 51 nurses would also face job loss. Still, it’s not yet clear how many layoffs that will mean, because an early retirement offer has been made to employees, and we don’t know how many folks will take advantage of that.

The district will also lose full-day kindergarten. It’s going to a half-day program, as was in place years ago. Kindergarten is actually not mandated by the state – though everyone offers it, Pennsylvania doesn’t require children to attend school until age 7 in Philadelphia, and even older in the rest of the state. That doesn’t mean that cutting K is a good idea, but it’s possible because it’s not required.

The teachers’ union has already come out condemning cuts to kindergarten and early childhood education. (PFT says that 1,000 fewer children will get early childhood services next year.) Jerry Jordan, PFT president, said: “We are outraged by the short-sighted and indiscriminate cuts the school district is making to balance its budget. Targeting pre-school programs that are proven to prepare youngsters to be successful in school is unconscionable.” Jordan, in a news release, said the district’s Comprehensive Early Learning Centers will close entirely.

The district will also be cut – but not eliminate – transportation, special ed, summer school, art and music budgets. Class sizes, for the most part, will go up to contractual limits – 30 students in K-3, 33 in grades 4-12. The central office budget will be cut by a whopping 50 percent – it will lose 430 jobs. Instrumental music and the district’s athletics program both stay, with trims. (Though both are vulnerable, Masch pointed out – if anything gets worse, both instrumental music and athletics would have to go.)

And you’ll never guess — they want to reopen the teachers’ contracts!

Smell the crazy

Redundancy: Calling Orrin Hatch a liar


Last year, Sen. Orrin Hatch proposed drug testing as a condition of unemployment benefits – and gave one of his typically strident lectures on the deficit. Yet he turns down millionaires who want to pay more taxes!

So the Patriotic Millionaires, a group that includes several dozen people in the highest tax bracket, first tried unsuccessfully to convince elected officials to let the Bush tax cuts expire. No dice.

Then, right before Obama was to announce his budget proposal, they took a different approach. Via Justin Elliott in Salon:

“For the fiscal health of our nation and the well-being of our fellow citizens, we ask that you increase taxes on incomes over $1,000,000,” the group writes in a new letter to Obama, Harry Reid, and John Boehner. “We make this request as loyal citizens who now or in the past earned incomes of $1,000,000 per year or more.”

Last year, Obama signed a bill to extend the Bush tax cuts after originally proposing that the two highest tax rates return to 36% and 39.6%, up from the Bush tax cut levels of 33% and 35%.

One of the signatories of the new letter, film and television producer Linda Gottlieb, explained her participation to me this morning: “For me to be sitting and hoarding my money is insane,” said Gottlieb, whose producer credits include “Dirty Dancing” and who now teaches at NYU’s Tisch school. “We all give to charity, but that’s not the same as creating a more equitable society.”

Gottlieb said she has been upset by the experience of her grandchildren, who attend a New York City public school where arts education has been cut and parents have had to organize an auction to try to fill the gaps. She added that raising taxes on the wealthiest people would be an important way of reducing the deficit.

“For rich people to moan and groan — nobody likes to pay increased taxes — but it’s not going to change your life in any important way,” she said. “What it can do is help your country.”

Now, I’m sure you’re familiar with what a truly awful weasel Orrin Hatch is. (Remember when he wanted people on unemployment to be drug tested?) How do you suppose the ranking Republican on the Senate Finance Committee responded? By mocking them!

“We hear this quite a bit from rich Democrats. ‘Please tax us more,’ they say. Well I know a lot who don’t say that, I’ll tell you that.
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72 known dead, many missing

4-27-11 Tornado Tuscaloosa, Al from Crimson Tide Productions on Vimeo.

Massive natural disasters like this are only one reason why it’s a really stupid idea to have a national spending cap, or to cut government services. The federal government will step in (as it should) with all kinds of aid to help the victims of this huge disaster, and it’s going to cost money — which, as tea lovers like to point out, doesn’t grow on trees. This is why we don’t cut FEMA, or aid to first responders, or highway crews, or any of the hundreds of necessary services that are on the chopping block right this minute — because when you need them, you really need them:

BIRMINGHAM, Ala.— A wave of tornado-spawning storms strafed the South on Wednesday, splintering buildings across hard-hit Alabama and killing 72 people in four states.

At least 58 people died in Alabama alone, including 15 or more when a massive tornado devastated Tuscaloosa. The city’s mayor said sections of the city that’s home to the University of Alabama have been destroyed and the city’s infrastructure is devastated.

Eleven deaths were reported in Mississippi, two in Georgia and one in Tennessee.

News footage showed paramedics lifting a child out of a flattened Tuscaloosa home, with many neighboring buildings in the city of more than 83,000 also reduced to rubble. A hospital there said its emergency room had admitted at least 100 people.

“What we faced today was massive damage on a scale we have not seen in Tuscaloosa in quite some time,” Mayor Walter Maddox told reporters, adding that he expected his city’s death toll to rise.

The storm system spread destruction Tuesday night and Wednesday from Texas to Georgia, and it was forecast to hit the Carolinas next and then move further northeast.

Around Tuscaloosa, traffic was snarled Wednesday night by downed trees and power lines, and some drivers abandoned their cars in medians. University officials said there didn’t appear to be significant damage on campus, and it was using its student recreation center as a shelter.

Maddox said authorities were having trouble communicating, and 1,400 National Guard soldiers were being deployed around the state.

So far

As we know, the nuclear power plants in the path of last night’s megastorm were shut down properly and are running on backup generators. We were lucky.

Angel dance

Band of Joy, Robert Plant’s latest band:

Massive tornadoes in Alabama

Tuscaloosa apparently flattened by this F5 tornado that is heading to Cherokee County in Georgia. Take cover if you’re in the path:



Video streaming by Ustream

The view from Versailles

He’s apparently still under the illusion that this is about facts, and not disaster capitalism. Eugene Robinson:

What is it about the word “jobs” that our nation’s leaders fail to understand? How has the most painful economic crisis in decades somehow escaped their notice? Why do they ignore the issues that Americans care most desperately about?

Listening to the debate in Washington, you’d think the nation was absorbed by the compelling saga of deficit reduction. You’d get the impression that in households across America, parents put their children to bed and then stay up half the night sifting through piles of think-tank reports on the kitchen table, trying to calculate whether there will be enough in the Social Security trust fund to pay benefits beyond 2037.

And you’d be wrong. Those parents are looking at a pile of bills on the kitchen table, trying to decide which ones have to be paid now and which can slide. The question isn’t how to manage health care or retirement costs two decades from now. It’s how the family can make it to the end of the month.

President Obama gives signs of beginning to perceive this disconnect. His Republican opponents, not so much.

Two new polls, both released last week, tell the story. A New York Times/CBS News survey found that four out of 10 respondents believe the economy is getting worse — up from three out of 10 last October. Economists insist that things are improving; obviously, not so that anyone would notice.

A worrisome 70 percent of those surveyed said the country is heading in the wrong direction. Bad news for Obama is that the poll found his approval down to 46 percent; good news, as far as the president is concerned, is that his most visible GOP antagonist, House Speaker John Boehner, has an approval rating of just 32 percent. Clearly, Americans are not excessively pleased with their leaders.

A Washington Post/ABC News poll found greater pessimism about the economy than at any time in the past two years — possibly because of the sharp hike in gasoline prices, which 71 percent of respondents said had caused financial hardship.

Yet if you followed the debate in Washington, you wouldn’t hear much about the cost of keeping the minivan on the road. All that Americans care about, you’d have to assume, is the national debt and its long-term evolution. If you listened carefully, you’d conclude that the solution — cutting federal medical and retirement benefits — was basically settled, and that the only question is whether to do it with a scalpel or a chain saw.

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