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A disturbing news story this morning: radioactive water is found outside the plants. There is no way to stop this water from entering the environment. Water retrieval is hampered by the fact that all holding tanks for radioactive water waste are full. The water seeping into a trench outside the Number two reactor at Fukushima Daiichi nuclear plant in northeast Japan had a . . . → Read More: Radioactive water outside of Fukushima plant And in the posts today there was a confirmation of what I had read: the workers were walking in their own street shoes covered with plastic booties. This is criminal. The workers should have the best protective clothing that Japan can provide, including waterproof and chemical proof boots. These things should have been on-site. Daily Yomiuri Online reported that Tokyo Power company (TEPCO) knew of a leak in the Number 3 reactor at Fukushima Daiichi prior to sending repair workers into the area. Most startling was the fact that the presence of the leak was not shared with workers pulling a power line into the damaged reactor, who last week walked through radioactive water pooled on the . . . → Read More: TEPCO sent workers down into basement without telling them it was ‘hot’ The WSJ had an blog article today on the economic cost of the earthquake in Japan. Disaster modeling company Eqecat estimates a total insured loss from the earthquake and tsunami to be $12 billion to $25 billion. The estimate includes losses from the effects of earthquake shaking, ensuing tsunami and fires, and losses to car, marine, life, and personal accident insurance. By contrast, . . . → Read More: Japan losses may go up to $35B Bloomberg reports that it seems finally jail terms are being given for mortgage fraud. Though reading between the lines it seems this guy was an originator who falsified mortgage documents that he passed on to Fannie. It isn’t clear if consumers were caught up in this fraud as well. The former president of a New Jersey-based mortgage company has been sentenced to 14 . . . → Read More: NJ Man sentenced to jail time in mortgage fraud scheme Dr. Philip Neches has an analysis at the Huffington Post of the Bank of America (BAC) announcement that they will separate 1.3 million of their mortgages into a new entity. This is a “good bank / bad bank” strategy. Bank of America will now try to resolve the loans that it places in the bad bank at low impact on its own balance sheet. I wonder how it is going to do this. IF the entity becomes separate from BAC they could take out a short on it though… or they could securitize the entity in tranches and sell off the more toxic stuff to some idiots. If they could buy a AAA from some supine rating firm, then they could get a good price for the securities. Does this sound familiar? . . . → Read More: Legacy entity slieght of hand at Bank of America One must wonder if banks have totally escaped the possibility of being regulated by states. I was pondering the current Irish problem, the amount owed to banks outside of Ireland shows the immense set of dominos that could fall in Europe. A sovereign default would not have as great an impact, as a risk-flaring contagion impacting countries’ primary financial entities, whose assets account in some cases for multiples of host GDP. It seems to me that the regulators of the banks are in some ways more influential than the Ministers of Finance. They potentially have sway over multiples of GDP assets. But can they avoid ‘capture’ by the mentality of the banks and provide regulation that can contain risk? . . . → Read More: Can banks be regulated by nation-states? So what I postulated in an earlier post, that the banks have positive incentives to foreclose and not to modify loans has now been said in House testimony by Adam J. Levitin Associate Professor of Law Georgetown University Law Center (thanks to James Kwak Baseline Scenario for alerting us to this): The servicing problems stem from servicers’ failed business model. Servicers are primarily . . . → Read More: House Committee hearings on foreclosure-gate Clear and uncontested property rights are the foundation of the housing market. If these rights fall into question, that foundation could collapse…the housing market could experience even greater disruptions than have already occurred, resulting in significant harm to major financial institutions…. a Wall Street bank [could] discover that, due to shoddily executed paperwork, it still owns millions of defaulted mortgages that it thought it sold off years ago, it could face billions of dollars in unexpected losses. . . . → Read More: Congressional Oversight Panel sounds alarm on Forclosure-gate Delong’s Apologeia says: what we needed more of in the run up to the Great Recession was more NINJA loans peddled by unscrupulous mortgage ‘originators’, what we need now is more foreclosures, what we need now is more QE2 money creating asset bubbles in foreign economies via the carry trade… What we need now in short is whatever the princes of Wall Street (and other people in the know) deem will pay outsized rewards. OMG . . . → Read More: Brad Delong’s Apologeia |
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