CAPSTONE MORTGAGES: DOZENS OF FAMILIES MADE HOMELESS EVERY WEEK
Capstone Mortgages: the appalling Lehman legacy that each week throws dozens of families out of their homes
Each week secretive mortgage company Capstone turns to the courts to seek possession of scores of borrowers' homes.
Financial Mail on Sunday estimates that while Capstone administers mortgages representing under 0.5% of the UK's mortgage market, it is responsible for 10% of repossessions. This shocking disproportion is perhaps one reason why there are unconfirmed rumours that the Financial Services Authority is investigating the company.
Statement: There is plenty to worry about at Capstone, in addition to its apparently brutal haste in forcing borrowers to court. Look at the mortgage statement, above, issued by Capstone this year to a client with a £148,000 loan. What you will quickly see (click on the image to enlarge it) is a litany of unitemised, unexplained and apparently arbitrary charges applied on top of interest due.
The charges are described vaguely as 'legal costs' and 'arrears management fees', etc, and they vastly inflate the sums owed by the borrower - on which further interest is to be charged.
This single page of statement, from February 2010 to September 2010, includes sundry charges totalling over £6,000. There are no fewer than three billings for 'legal costs' of more than £1,400 each.
Aggressive Capstone has tried to take possession of this borrower's property four times, based primarily on arrears built out of these charges. It has failed. But Capstone's record-keeping is so inexplicable, error-ridden and opaque that it is not clear precisely who is owed what, and the borrower, quite rightly, won't take Capstone's word for anything. Nor is the borrower prepared to pay thousands of pounds of legal costs for what he claims was never a legitimate case for possession. The dispute is currently with the Financial Ombudsman Service.
A THIRD OF BRITAIN STILL BELONGS TO THE ARISTOCRACY
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DELIBERATELY NO MENTION OF THE QUEEN WHO OWNS ONE SIXTH OF THE LAND MASS OF THE WORLD
More than a third of Britain’s land is still in the hands of a tiny group of aristocrats, according to the most extensive ownership survey in nearly 140 years.
In a shock to those who believed the landed gentry were a dying breed, blue-blooded owners still control vast swathes of the country within their inherited estates.
A group of 36,000 individuals – only 0.6 per cent of the population – own 50 per cent of rural land.
Their assets account for 20million out of Britain’s 60million acres of land, and the researchers estimate that the vast majority is actually owned by a wealthy core of just 1,200 aristocrats and their relatives.
The top ten individual biggest owners control a staggering total of more than a million acres between them.
These figures have been uncovered by the ‘Who Owns Britain?’ report by Country Life Magazine, thought to be the most extensive survey of its type undertaken since 1872.
The top private landowner, not just in Britain but Europe, is the Duke of Buccleuch and Queensbury, whose four sumptuous estates cover 240,000 acres in England and Scotland.
But while his land is the most vast, it is not the most valuable, as the net worth depends on how much is farmland, as well as the value of the property and sporting and heritage activities on it.
The world economy is doomed to spiral downwards until we do 2 things:
1.outlaw government borrowing
2. outlaw fractional reserve lending.
Banks should only be allowed to lend out money they actually have and nations
do not have to run up a "National Debt". Remember: It's not what backs the money,
it's who controls its quantity.
FORECLOSUREGATE EXPLAINED: BIG BANKS ON THE BRINK
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Scandal is spreading across Wall St. like a very bad case of poison ivy. A rash of fraudulent home foreclosures has exposed some of the nation's biggest banks to an even worse condition ... bankruptcy.
Until late 2007, the money boys on Wall St. made a bundle in the housing market. After the bubble burst, they were just itching to cash in on the down side, calling in all those bad loans they made and selling off millions of repossessed homes. According to RealtyTrac, Inc., which compiles such data, lenders foreclosed on 3.2 million properties in the last three years, 288,000 in the last quarter, the highest number on record.
But evidence came to light, first in New York, then Florida, Maine, Ohio, and other states that lenders were taking shortcuts to speed up foreclosures. Law firms hired so-called "robo-signers," some of whom have admitted in depositions that they routinely signed off on thousands of foreclosure papers they had never read and sometimes forged signatures of notary publics who were not present.
"Why don't we have Mickey Mouse sign the thing, instead of having a human being sign it? I mean it becomes meaningless," New York Supreme Court Judge Arthur Schack told PBS "Newshour."
Legally meaningless maybe, but not without consequence for hundreds of thousands of Americans who have been evicted from their homes, many of whom have no jobs, and who were snookered into sub-prime mortgages in the first place.
In the wake of mounting public outrage, attorneys general of 50 states and the District of Columbia have launched a joint investigation into what financial writers are calling "Foreclosuregate." Industry spokespersons have downplayed the controversy surrounding foreclosure mills and "robo-signers." Bank of America and JP Morgan Chase are conducting internal reviews of thousands of foreclosures, but say they believe all the underlying facts in their foreclosures are true and that any potential issues will be quickly addressed.
However, Bank of America and GMAC stopped foreclosures in all 50 states and Chase stopped them in the 23 states where a judge must approve foreclosures. Other lenders like PNC Financial and Litton Loan Savings followed suit in what amounted to a national moratorium on foreclosures. But it only lasted a couple of weeks. Bank of America and GMAC have since started up foreclosure suits again despite the bad press, pressure from bondholders and even the Federal Reserve, which wants big lenders to start buying back the bad mortgages on which they are trying to foreclose.
"The bottom line is not that those properties won't be repossessed. They simply won't be repossessed as quickly," said Rick Sharge, vice president of RealtyTrac. But others predict that if GMAC and Bank of America stick to their guns, they just might go down in smoke.
"This is not simply a glitch in paperwork," wrote Iowa Attorney General Tom Miller, who is heading up the states' joint investigation into the mortgage paper fraud mess.
"This was an industry wide scheme designed to defraud homeowners," Florida attorney Peter Ticktin told The Associated Press.
Ohio Attorney General Richard Cordray filed a lawsuit against lender GMAC in October that aims to stop sales of all repossessed homes foreclosed with robo-signed documents and to reverse judgments on those foreclosed homes that have not yet been sold. In addition, the suit seeks damages for homeowners and a $25,000 fine for every fraudulently filed court document.
In Kentucky, Heather McKeever filed a class action lawsuit against GMAC on behalf of homeowners there alleging the giant lender, a recipient of $16 billion in federal bailout money, violated the RICO Act. "This is organized crime by people in suits but it is still organized crime," she said.
If other states file similar lawsuits like those in Ohio, Kentucky and Mississippi, it could mean billions of dollars in damages and fines, criminal perjury prosecutions of "robo-signers" and disbarment for the lawyers who filed the fraudulent papers. Some analysts say the potential liability of major banks is so large, another financial crisis is a real possibility.
The fraud allegations raise the question of who actually owns the bad loans. If banks cannot show an unbroken chain of title from the original borrower to themselves, they have no legal right to foreclose. At least that's the argument defense lawyers are making.
"When they tried to industrialize the loan securitization market, which is really what they did, they tried to automate everything they could. They started digitizing loan documents and shredding originals.... and, of course what that means is, we have no clue who owns what," foreclosure expert Walter Hackett told PBS "Newshour."
Hackett turned into a consumer advocate after nearly three decades on the inside. He knows exactly where to bite the hand that used to feed him. And he was referring to a private database lenders have relied on for years to track loans that would be bundled into investment vehicles called mortgage-backed securities (MBS), which are traded back and forth between investors daily.
To collect fees from those trades, Wall Street relies on the Mortgage Electronic Registry System (MERS), which had three million loans listed in its database in early 2001. Today, it has more than 62 million and virtually all of the home loans made in the US since 2005. But since MERS is essentially Excel spreadsheets shared between bankers and brokers, it is really just a bunch of numbers. MERS was designed to make money out of the mortgage market, not parse exactly who owes what to whom.
One foreclosure expert estimates that just 6 to 7 percent of the loans made in the last three years can produce properly recorded title transfers from borrower to final lender. Legally assigning, or recording title transfers was much too slow and cumbersome for the fast-paced trade in MBS, so most banks just ignored those requirements, according to testimony, analysts and consumer advocates like Hackett. On many mortgages, the loan owner's name was routinely left blank, the titles never recorded and title transfer fees not paid.
Banks invented an investment vehicle in 1987 called REMICs (Real Estate Mortgage Investment Conduits) to allow them to profit from MBS trading. A Real Estate Mortgage Investment Conduit is what the name implies - an empty pipe that allows banks to collect fees as trustees of MBS' without owning any of the assets that back them. It also allows them to avoid taxes and title transfer fees since they only pass through titles to property held as collateral for the MBS' they sell.
But this is clearly a convenient fiction for huge consumer lenders like Bank of America and GMAC, which are trying to have things both ways. REMICs were a real sweet deal for banks until the bottom fell out of the housing market in 2007, triggering the worse recession in 75 years. Banks soon found themselves going to court to repossess property they had been claiming for years they never owned.
They hired foreclosure mills to retroactively produce documents showing the chain of ownership ended with them. In many cases, foreclosure mills provided affidavits of lost mortgage notes attempting to prove banks' control of mortgages in hopes of winning a favorable judgment.
Banks are in a big pickle. If they can prove they own the title to properties they want to foreclose on, they are liable to the IRS for unpaid taxes and penalties. If they don't, the are liable to be sued by bond holders for lack of due diligence in the bundled mortgages they sold to investors.
This is good news for homeowners facing eviction, and there has been an increase in the number of contested foreclosures in Florida, ground zero of the foreclosure scandal.
Both Bank of America and GMAC got billions in federal bailouts, so playing hardball with borrowers when the Obama administration put up an additional $75 billion to persuade banks to refinance troubled loans may jeopardize their "too big to fail" status in Washington.
Housing Secretary Shaun Donovan told reporters in Washington last Wednesday that the federal government would act soon to force banks to offer loan modifications for mortgages backed by the Federal Housing Administration. (How many?)
Meanwhile, investigations are underway not only by the states' attorneys general, but also by federal banking regulators, the US Justice Department and the Securities Exchange Commission. A number of lawsuits have been filed in Ohio, Kentucky, Mississippi, and other states, and all this attention may force banks to renegotiate their loans with more affordable terms for borrowers.
But banks are not heading down that path, instead, they are redoing questionable foreclosure papers they hope will pass muster in court.
"There has been an attempt by some of the major services to indicate there are no problems," Iowa Assistant Attorney General Patrick Madigan, told The New York Times.
"We're not at the end of this process. We're at the beginning," he said.
Only time will tell how the foreclosure scandal plays out. Federal regulators say their investigation won't be completed before the end of the year. And several foreclosure experts agree with Madigan that the fight over foreclosures is just beginning.
LLOYDS TSB BANK CHARGES £1,700 IN FEES FOR GOING 8p OVERDRAWN
They were only overdrawn by 8p. But that trifling amount has left Angela Hannibal and Wayne Green with more than £1,700 in bank charges – and may even cost them their home.
Miss Hannibal, 21, who has just had a baby, opened a basic current account with Lloyds TSB when she was 15.
When she was 18, that was upgraded to a ‘silver’ account which offered her travel insurance, mobile phone insurance and breakdown cover for an £8 monthly payment.
But in January 2009, after the monthly service charge was taken out, Miss Hannibal was left with an unauthorised overdraft of 8p and was told she would have to pay the bank a charge of £170.
Struggling with bills and rent, the 21-year-old offered to pay the bank back at a rate of £30 a month. But she has had to pay a series of further unauthorised overdraft charges – at about £170 a time.
In total, the couple, whose daughter Ashlyn was born two weeks ago, have repaid £1,000 in instalments. But they still owe £700 – and the debt is rising at a rate of £10 a day.
Miss Hannibal, of Colchester, Essex, said yesterday: ‘Apparently I went 8p overdrawn in January 2009 and since then the charges have just mounted and mounted.
'I was completely shocked when they asked me to pay £170 back. I was scraping around and set up a payment plan and have been using my wages to try and keep up with the payments. It’s led to real financial hardship for us, especially with a new baby.’
Furthermore, Mr Green, 23, was made redundant from his job as a builder in August.
And the couple have been ordered to leave their three-bedroom home because of the rent arrears.
Mr Green explained: ‘Because we have been paying so much to Lloyds and now I have lost my job, we have been struggling to keep up our rent and council tax payments.’
But although she was already in debt with the bank, Miss Hannibal said staff offered her a credit card.
The office clerk, who earns about £950 a month, said: ‘I didn’t really want it but they said I could cover the payments.
‘Because of the pressure of paying back these charges, Wayne losing his job and having a baby, I ran up a bill of £500 which I’ve just managed to clear.’
The couple said they have visited the bank nearly every week to try to find a solution but had been unable to resolve the problem.
Mr Green said: ‘It’s a ridiculous situation. We are paying back the money, and I took in £150 and £200 when I’d been paid, but every couple of months they would charge us again.
‘It just spiralled from there. We don’t understand why they keep charging us. We went in and spoke to people but they didn’t seem to know either.’
Miss Hannibal added: ‘Every time I go into the bank I’m normally in there about three hours. I talk through the situation with people but at the end of the day they cannot do anything to help. They don’t seem willing to help me.’
Before Mr Green lost his job, the couple said they came within about £30 of clearing their overdraft but were again hit with another overdraft payment which plunged them deeper into the red. Mr Green said: ‘It seemed like they realised we were close to paying up and so they decided to make us pay more.’
Miss Hannibal said she had written to the bank to complain. She added: ‘It should be against the law to charge such high charges. I’ve had to pay more than £1,000 for an 8p overdraft, it’s ridiculous.’
Lloyds TSB replied by letter that an investigation by the Office of Fair Trading had led to a hearing about charges at the Supreme Court in November 2009. It said: ‘We consider our unarranged overdraft fees to be fair and don’t believe there is any basis on which they could be successfully challenged.
‘As a result we won’t be upholding your complaint or be providing a refund of these fees.’
But a spokesman for the bank said: ‘We are sorry for the distress that this has caused and we are working with Miss Hannibal to resolve this.
'We always work closely with any customer who is facing financial difficulty. We have been in close contact with Miss Hannibal to help her manage her finances, including waiving a number of fees.
'Where additional charges have accrued on the account it has been as a result of continued use of the unplanned overdraft facility. We are making contact with Miss Hannibal again to discuss her situation, what steps can be taken to resolve it and how we can work together.’
COPS REFUSE TO PROTECT HOMEOWNERS WHILE THEY ARE PROTECTING SQUATTERS
London businessman: Squatters have violated my life law must protect us
A businessman left homeless after squatters took over his house today called for a change in the law to protect property owners.
Connan Gupta, 40, who had been staying with his sister, returned from a holiday to find at least 10 squatters, believed to be Italians, at his £700,000, five-bedroom home in Camberwell two weeks ago. But despite calling police, he was blocked from his home for a fortnight. The squatters, who claimed they were students unable to pay living costs in London, changed the locks and refused to let him in.
It comes after a string of London properties have been occupied by groups claiming “squatters' rights”.
Most recently, a gang of squatters took over an empty police station in Leytonstone days before it was due to be sold. The group of about 20 men and women set up home in the station in the first week of October and stayed for seven days.
Mr Gupta, who runs a hotel with his parents in Paddington, only reclaimed his house after contacting his local MP, Tessa Jowell. Despite trashing the property, none of the squatters was arrested, and Mr Gupta said he has been told chances of prosecution are minimal.
Squatters cannot be charged with breaking and entering if a building is left unsecured.
Mr Gupta said he wanted the Criminal Law Act 1977 to be clarified to make homeowners more fully aware of their rights in relation to squatting.
Currently a homeowner whose house has been taken over — known in law as a displaced residential occupier — can ask police for help in removing the inhabitants.
But the law only allows them to be prosecuted for trespass if they refuse to leave. He thinks the law should be more explicit.
He said: “It absolutely needs to change. Squatters know more about the law than most people. Even the police don't seem to know what they can do. As a homeowner you need to understand that this is a possibility, that it can happen to anyone. It needs to be clearer. It should be changed so that homeowners have more power.”
He added: “This feels like more of a violation than if I'd been the victim of a burglary. They've broken things, gone through all my personal paperwork and clothes. My personal life has been completely interfered with.
“I found drug paraphernalia when I got into the house. The door is badly damaged and they broke the locks on the window. They've soiled the beds.
“I'm still distraught about this. I'm not sleeping. I'm scared to go out of my house in case they come back. At 4.30am yesterday I was woken up by someone trying to enter the property. Thankfully they ran away but it is terrifying. I'm a prisoner in my own home.”
Police officers moved six of the group from the property on Friday. They claimed not to have caused the damage and said they did not know where the occupants were.
How the law stands
Squatting itself is not a criminal offence. But it is illegal to get into a property by breaking in or damaging windows and doors. Squatters could be arrested even if the damage is minimal, and using utilities without contacting the suppliers is also illegal.
A homeowner can ask police to move squatters out of their home immediately without having to obtain an eviction order from the courts. Section 6 of the Criminal Law Act 1977 says that anyone with deeds to a property — or tenancy agreement if leasing — can request that police remove trespassers if they refuse to leave when challenged.
However, it is illegal for a landlord to force their way back into the property while there is someone inside.
Parties, riot police and art collectives: Past squat battles
* Eight Romanian squatters took over a family home in Tottenham in May, throwing parties and installing their own satellite dish. They demanded £3,000 from the owner to go but left when threatened with arrest for breach of peace.
* Residents in a suburban street in Herne Hill in south London launched a petition to let squatters stay in May after they spent a year renovating an empty building and set up a weekly free cinema club.
* Riot police were pelted with bricks and bottles as they evicted more than 2,000 teenagers from an illegal Facebook party when squatters took over an empty £30 million property in Park Lane in February.
* Julian and Samantha Mosedale reclaimed their home in Tottenham after a three-week battle to evict a group of Romanian travellers who moved in last Christmas during building work.
* An art collective known for squatting in mansions and embassies took over a £100 million building in Mayfair last December.
If you lived in a third world country like Africa and the local news was telling you 'there is no money and the country is bankrupt' , you would likely look around and see everyone living in tin shacks
and think, yes they are right, there is NO money and in this country everybody is universally poor.
However if you look at two of the richest countries in the world , Britain and America and read and listen to their corporate rags who state that 'there is NO money and we are ALL in this together' , you might then look around and see properties and pockets of wealth that are unbelievable, with penthouses selling for tens of millions and vast estates where the ruling gentry bask in a form of wealth few can comprehend. You may also see vast estates with millions living on the edge and scraping a living on the dregs meted out by a political elite who primarily operate for that ruling class.
You have to ask yourself how truthful are the reports of NO MONEY? How truthful are reports that 'WE ARE ALL IN THIS TOGETHER' ? Presently in the UK we have a political mafia made up of multi-millionaires telling the country, via their corporate media propaganda network, that there is no money while seemingly oblivious to that fact that we can see and are not as stupid as they seem to think we are and can recognise their limousines, fast cars , luxury yachts, sumptuous mansions and the tropical islands the ruling classes frequent to hide their wealth in the many tax dodging havens they have created to continue to bluff us into believing there is NO MONEY.
What is even more incredible is that there are many sheeple who believe this utter nonsense
and regularly pop up on the BBC agreeing that pushing more and more of the population into
utter poverty is the right direction to go. It clearly shows how expert the media's psychological
programming has been on a brainwashed population who are convinced these ruling mobsters are telling the truth.
A revolution is long overdue to overthrow these dangerous and devious bastards who have been getting away with
absolute MURDER for way to long.
RASH OF REPOSSESSIONS IS A CLEAR SIGN OF AMERICAN BANK FRAUD
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The subprime mortgages fiasco that led the American economy and then everyone else into a tailspin was, it is now obvious, based on fraud.
Banks mis-sold dodgy deals, in many cases foisting viciously unfair loans — very cheap at first, incredibly expensive later, please don't read the small print — on perfectly respectable borrowers who easily qualified for standard mortgages they could now still be affording.
Then the banks — sometimes the same ones, sometimes Wall Street operations with a taste for the complex — parcelled up packages of the loans, misrepresented them to investors and sold them as secure bonds paying juicy rates of interest.
Much of this was corrupt as daily revelations in the US press are now making clear.
Back when all this started, there was an attempt in certain quarters to blame the victims for recklessly taking out mortgages they could not afford. Oh, and Bill Clinton, for introducing laws that aimed to stop banks' bias against black borrowers. It would be impossible for anyone paying even the slightest attention honestly to make that case now.
The duped borrowers are having their house repossessed at an extraordinary rate by banks that can't even find the paperwork which proves the original mortgage came from them.
Here is the Associated Press from a few days ago: “In an effort to rush through thousands of home foreclosures since 2007, financial institutions and their mortgage servicing departments hired hairstylists, Walmart floor-workers and former employees on assembly lines and installed them in foreclosure expert' jobs with no formal training… In depositions… many of those workers testified that they barely knew what a mortgage was.”
Nearly a dozen major banks and hedge funds, anticipating quick profits from homeowners who fall behind on property taxes, are quietly plowing hundreds of millions of dollars into businesses that collect the debts, tack on escalating fees and threaten to foreclose on the homes of those who fail to pay.
The Wall Street investors, which include Bank of America and JPMorgan Chase & Co., have purchased from local governments the right to collect delinquent taxes on several hundred thousand properties, many in distressed housing markets, the Huffington Post Investigative Fund has found.
In many cases, the banks and hedge funds created new companies to do their bidding. They gave the companies obscure, even whimsical names and used post office boxes as their addresses, masking Wall Street's dominant new role as a surrogate tax collector.
In exchange for paying overdue real estate taxes, the investors gain legal powers from local governments to collect the debt and levy fees. At first, property owners may owe little more than a few hundred dollars, only to find their bills soaring into the thousands. In some jurisdictions, the new Wall Street tax collectors also chase debtors over other small bills, such as for water, sewer and sidewalk repair.
Some states allow the investors to tack on as much as 18 percent interest and a passel of legal fees and other charges. When property owners fail to make full payment, the investors can sue to foreclose - in some states within as little as six months.
In June, Bank of America snatched up liens on properties in Florida owned by low-income residents and nonprofit public interest groups, including a Salvation Army shelter, a preschool and a wildlife rescue group involved in the Gulf of Mexico oil spill cleanup, the Investigative Fund found in its examination. Bank of America also bought liens on properties of the wealthy, including a professional basketball star with the Los Angeles Lakers, Lamar Odom
Some observers of the financial services industry said they were surprised to learn that banks, some of which received billions of dollars in taxpayer-funded bailouts in recent years, were rushing to profit from homeowners having trouble paying their tax bills.
"This is not how I'd like to be making my money," said James Cox, a Duke University School of Law professor who specializes in corporate and securities law. "I would find it personally distasteful to foreclose or press a claim against individuals, many of whom have lost their jobs and are in tight economic straits."
Five big banks involved in the industry, known as tax lien investing, collected a total of more than $106 billion in bailout money through the government's Troubled Asset Relief Program, known as TARP.
Over the last year, Bank of America, which received $45 billion in these taxpayer funds in 2008 and 2009, has bought liens on properties in scores of municipalities in at least a dozen states. Bank of America repaid the government in 2009.
Still, noted Cox: "There's no bailout for people struggling to pay their taxes."
Years ago, the big banks left the buying of tax liens largely to local real estate specialists and small-time investors. These days, banks and hedge funds, stung by the failure of many speculative investments, see tax liens as a relatively safe option that can yield returns of around 7 percent.
Some banks also are packaging tax liens as securities - in a similar way to how unpaid home loans are securitized - and selling them to investors.
If mortgage holders fail to pay overdue taxes, an investor could waltz off with a home worth hundreds of thousands of dollars for the price of paying the owner's tax bill. Most homeowners eventually pay their debt.
Put it all together and it is makes for a solid investment, said Lloyd McClendon, an owner of realauction.com in Plantation, Fla., one of several companies that conducts online auctions in Florida and other states.
"There's an awful lot of new, big money in the sales this year," said James Powell, a longtime Florida investor who remembers a time when local investors flocked to live auctions at courthouses. Typically, they would bid for liens by holding up paddles. Powell is still one of the few in the liens business who makes purchases using his own name.
But the smaller investors, noted Powell, have been overtaken by well-heeled banks and funds that now bid online, and in volume.
Banks and hedge funds usually buy the liens through online auctions that permit them to bid in bulk, and they can use any name they want.
The giant Bank of America, for instance, has bid in Florida tax lien sales using colorful names such as Bennu, LLC, named after a mythical bird said to be the soul of the ancient Egyptian sun god. It also has bid as Osprey, LLC, and Ecru, LLC, named after the French word for a pale brown color.
Fortress Investment Group, a hedge fund run by former Fannie Mae chief Daniel Mudd, has bought tax liens under 17 different corporate names. Some evoke tranquil, bucolic settings, such as Pleasant Valley Capital, LLC and Travis Farm Investments, LLC.
Representatives of several prominent banks and hedge funds contacted by the Investigative Fund, from JPMorgan to Bank of America and Fortress Investment Group, declined to comment for this article.
Some banks purchased liens directly; others financed investment groups that did so. For example, Wells Fargo lends to a liens buyer. Deutsche Bank invests through a subsidiary. And BankAtlantic, based in Fort Lauderdale, is a longtime tax certificate investor in several states, buying liens under the names of several subsidiaries.
Though several mortgage lenders, including JPMorgan, recently suspended foreclosures amid concerns that some may have been done improperly, the slowdown is not expected to apply to foreclosures stemming from unpaid taxes.
The Investigative Fund identified major tax lien purchasers, many for the first time, through a computer-assisted analysis of more than 300,000 liens, municipal, corporate and court filings and other documents obtained from local government officials in four states and the District of Columbia. The Investigative Fund then traced these purchasers to the major financial institutions that oversaw them, invested in them, or lent money to their operations.
Business 'Needs Scrubbing'
Local governments, faced with tight budgets and the challenges of collecting debt from property owners, strongly endorse online auctions because tax collectors can easily and rapidly recoup millions of dollars. Miami-Dade County, for instance, took in more than $374 million in June 2009 from the sale of about 60,000 local property tax liens.
Tax collectors defend the practice by pointing out that property owners can avoid added fees or the risk of losing homes by paying their bills on time. The threat of losing property often compels tardy homeowners to pay off just before the deadline; without severe penalties many people would simply ignore their obligations to pay property taxes, collectors say.
Some two dozen states and the District of Columbia allow tax sales, which spare the governments from added expenses of hiring their own debt collector, or foreclosing and becoming a landlord. Local governments generally require minimal identification - for instance, a Social Security number. They allow bidders to choose whatever names they wish, and don't check to see if bidders are using multiple identities.
The few investors willing to talk about the tax lien business with the Investigative Fund argue that they are playing a vital role in helping cash-strapped local governments plug holes in budgets and, in some cities, helping rehabilitate older buildings. That returns the properties to the tax rolls, and can help revive beleaguered neighborhoods, they say.
"Budget-challenged cities are using the proceeds from their [tax lien] sale as an important source of funding," said Gabriel Boehmer, a spokesman for Wells Fargo Bank, which lends to companies that buy tax liens.
Critics aren't so sure. "If your only goal is to maximize your rate of return, this is a nice industry," said Frank Alexander, a law professor at Emory University with expertise on tax sales. "The question becomes: Do you mind being a vulture and preying on people?"
Alexander argues that when local governments privatize tax collection duties they "wash their hands of all responsibility" for ensuring property owners are treated fairly.
In Cleveland, officials are beginning to express concern about the consequences of trusting the new tax collectors. Cuyahoga County canceled this year's tax sale amid alarm that previous ones had contributed to an upsurge in home foreclosures and further decay in already marginal neighborhoods. "With the economy the way it is now, we won't have a tax sale for at least one year," said Robin Thomas, Cuyahoga County's chief deputy treasurer. Her aim: To buy homeowners in Cleveland "a little more time" to get caught up with their property taxes.
Despite national reform efforts that have focused on debt collection, from credit cards and payday lenders to checking account fees, the fairness of tax sales to homeowners remains largely a local, unregulated matter. A new consumer protection bureau created by Congress has no explicit authority to watch over local tax sales.
"There is no oversight at all," said District of Columbia Attorney General Peter Nickles, who is suing a tax lien investment firm for charging homeowners what he alleges are exorbitant fees to get their homes out of hock.
In a separate matter, the U.S. Department of Justice's antitrust division is investigating allegations of possible tax-sale bid rigging in two states. The ongoing probe began in Maryland, where three men pleaded guilty to criminal charges earlier this year. A federal grand jury in New Jersey has subpoenaed records from several major tax lien investors, including a JPMorgan subsidiary, and a Virginia company that serviced the Bank of America tax lien portfolio in Florida this year. No charges have been brought in the New Jersey investigation.
Said Nickles of the tax lien business: "This is one of the areas that really needs a good scrubbing."
Small Debts Grow Fast
Tax sales routinely place home ownership in jeopardy over relatively small sums, sometimes just a few hundred dollars, the Investigative Fund data analysis of hundreds of thousands of liens records shows. For instance, more than two of every five liens sold earlier this year in 31 Florida counties and in Maricopa County, Arizona (Phoenix), were for unpaid taxes of less than $1,000; more than 90 percent were less than $5,000. Results were similar in Toledo, Ohio.
Some jurisdictions such as Baltimore toss in unpaid water bills and other municipal fees of $250 or more. In May, the Investigative Fund reported how an unemployed former mental health counselor with four children named Vicki Valentine lost her home even though the mortgage had been paid in full. She had owed $362 on an overdue water bill when investors took over and added thousands of dollars in legal fees she couldn't afford. (In response, city officials are seeking statewide legislation that would prohibit the sale of tax liens of less than $750.)
WHAT DOWNTURN? AS DEMAND FOR B.A. £4,500 FIRST CLASS SEATS SKYROCKET
DON'T BELIEVE THE HYPE AND PROPAGANDA .THE PEOPLE TELLING US THEIR ISN'T ANY MONEY
ARE THE SAME ONES LIVING OPULENT LIFESTYLES. WE HAVE HEARD FROM VARIOUS SOURCES THE RICH
ARE GETTING MUCH RICHER ON THE BACK OF A FACADE OF AUSTERITY
It is the ultimate upgrade. Passengers are paying more than £4,500 for a seat in British Airways' new first class cabin.
The airline gambled in February by spending £100 million on its flagship brand at a time when demand for first and business class seating was weak.
But BA says it has been delighted with the number of travellers prepared to pay nearly 10 times the price of a seat in economy.
A spokesman said: “Customer satisfaction ratings have gone through the roof. People cannot wait for the new cabin to be rolled out across our long-haul aircraft.”
So far the new cabin has been introduced on 11 aircraft, including Boeing 777s and 747s, and will eventually be carried on 75 aircraft. The cabin holds 14 passengers and includes bigger seats, electronic blinds and a 15-inch in-flight entertainment screen.
The BA spokesman said: “We have contemporised first class and created an intimate private jet experience onboard. We have resisted gadgets and gimmicks and focused instead on simplicity and quality.
“Every feature has been carefully considered and researched to ensure we are giving our customers what they want.
“People are prepared to pay top dollar for the right sort of luxury and comfort. We feel we have tapped into a successful market.”
You even get a pair of pyjamas
From the moment you enter British Airways' new first class cabin you realise you are about to experience something unique.
Traditional porthole windows have been replaced with an electronic glass screen operated by a switch. When open, it allows a view out of two portholes. When closed, it changes colour.
The new seat is easy to turn into a bed, the angle of recline controlled by a dial, not buttons. At 6ft 3in, I stretched out comfortably with plenty of elbow room.
There's enough space at your feet for a bag. Add a glass lamp and a large foldaway tray table that tucks away in a side shelf and it's like being in a luxurious hotel. There is even a personal closet so you can hang up your jacket.
A champagne cocktail is served on taking your seat and you have your own attendant. The meal is served whenever you want — dinner choices might include braised lamb osso bucco and risotto Milanese with broccoli and butternut squash, washed down with Marmesa 2007 pinot noir from San Luis Obispo in California.
Pyjamas and a turn-down service are provided, and crew ask if you will want waking for a full English breakfast. Or you can sleep to within 40 minutes of landing and wake to coffee and croissants.
It was the best rest I have had on a plane, with a level of comfort and service second to none. The only problem is the price ...
On the 8th of October, as the IMF and World Bank meetings got underway, an estimated 300 protesters took to the streets, carrying "chains of debt" to the IMF and World Bank, maching with them to the White House-and finally draping the paper chains over the White House Fence and getting away with it!
THE LONDON FINANCIAL MAFIA AND THEIR CREDIT CRUNCH SCAMS
DONT BELIEVE THE PROPAGANDA THERE ISN'T ANY MONEY. THE FINANCIAL MAFIA ALONG WITH THEIR POLITICAL
MAFIA FRIENDS ARE FOOLING US ALL WHILE THEY LINE THEIR POCKETS WITH THE COUNTRY'S BILLIONS.
City's £7bn bonus boys are back with boom in fast cars and lap dancing clubs
A boom in hedonistic “greed is good” spending is sweeping through London after two years of recessionary restraint.
The return to “flaunting it” comes as the cinematic symbol of Eighties excess, Michael Douglas's amoral trader Gordon Gekko, returns to screens in Wall Street: Money Never Sleeps.
West End stores, clubs and restaurants say they have been astounded by the sudden spike in guilt-free spending in recent weeks on a scale that would have been unthinkable even six months ago.
A spokesman for Selfridges said: “The range and style is more obvious' or ostentatious than a year or two ago. Stuff is just flying off our shelves. There are a lot of £1,000-plus shoes being sold in our new Shoe Galleries.”
Particularly popular are Alexander McQueen Loki'ankle boots at £2,195 a pair and Christian Louboutin Margot platform shoes costing £1,575.
It follows the disclosure yesterday by fashion and luxury goods group Mulberry that sales had rocketed by 79 per cent in the past 10 weeks with its £695 Alexa bag particularly sought-after.
Andrew Hawes, managing director of Bollinger UK, said it was currently impossible to get enough of its £120 a bottle Special Cuvée into Britain because demand is so strong.
He said: “There was a time when people certainly didn't want to be seen with an expensive bottle of champagne — but we're past that phase now.”
Both Bugatti and Ferrari have sold out of their latest models and Louis Vuitton is building a new factory to cope with demand — much of it from London.
The spending boom is being fuelled by the prospect of a second consecutive year of bumper bonuses in the City — an estimated £7 billion will be handed out this winter — combined with a record influx of high-spending Arabs.
The imminent return of a rejuvenated Savoy, complete with £38,000 of gold leaf in its new Beaufort Bar, after a sumptuous makeover is also being seen as a sign that it is acceptable to be rich again.
Even City traders' Tottenham Court Road lap dancing hangout Spearmint Rhino, which fell heavily out of favour during the credit crunch years, is back in vogue.
Vice-president John Specht said: “We sold out of Cristal champagne last night and that stuff costs £395 a bottle. Six City guys come in and drop £5,000 to take the VIP area for the evening.
“A few nights ago we had four guys from the Middle East who bought £20,000 in chips for dances and drinks. After service charges they spent £24,000. It's shocking, it's back to the days of five or six years ago. Those sort of customers are starting to come back, there's been a huge increase just in the past five or six weeks.”
Karen Jones, editor of Citywealth magazine, said London was being helped by France's burka ban with many wealthy Arabs boycotting Paris this summer. “That makes a huge difference as the Saudis who came to London before Ramadan spent an average of £30,000 each.”
She added: “They will easily spend £5,000 or £10,000 a night on the casino tables at Les Ambassadeurs (in Park Lane) or treat their friends with the best champagne as Scott's.
“The Arabs absolutely love the British and they must have the best of everything. That means shoes from Harrys and home stuff from Thomas Goode (both in Mayfair).”
RICH LIST BRITAIN WITH 284,317 MILLIONAIRES AND THATS BEFORE COUNTING PROPERTY
A LIST THAT DOESN'T COUNT THE BILLIONAIRES, INEQUALITY AT IT BEST WHEN YOU COME TO THE UK.
'Rich list Britain': UK is home to 284,317 millionaires... and that's before they count the value of their homes
The UK is home to more than 250,000 millionaires who are collectively worth £1.28 trillion, not including their main residences, research indicated today.
An estimated 284,317 people have assets worth more than £1 million, according to CoreData Research UK.
The average level of wealth among millionaires is £4.5 million, but the country is also home to a number of ultra-high net worth individuals who have assets worth more than £30 million.
Fifty-five per cent of all UK millionaires have assets valued at between £1 million and £2 million.
The group found that the majority of millionaires' assets are held in shares at 34.2 per cent, while 32.2 per cent is invested in property and 13.2 per cent is held in cash.
Just over five per of their money is invested in physical items, such as antiques, collectables and art.
Craig Phillips, principal of CoreData Research UK, said: 'Some may argue a large number of millionaires reflect a clear disparity in a society.
'However, many of Britain's modern-day wealthy are self-made and have become so through creating and running successful businesses, which bodes well for the economic health of the nation.'
Facebook's Mark Zuckerberg is valued at $6.9bn in Forbes rich list, jumping above Steve Jobs and Rupert Murdoch
Facebook’s 26-year-old co-founder Mark Zuckerberg has jumped above rival and Apple CEO Steve Jobs and News Corporation owner Rupert Murdoch in the latest Forbes magazine rich list, released yesterday.
Zuckerberg is ranked No.35 in the list, which values the richest Americans, leaving Jobs (42nd) and Murdoch (38th) trailing in his wake.
The New York-born social networking guru is estimated to be worth $6.9billion (£4.4billion), based on his shareholding in Facebook, which boasts 500million members worldwide.
Zuckerberg’s was the largest relative increase in the list, as he more than tripled his fortune which was valued at $2billion last year.
Fellow Facebook co-founders Dustin Moskovitz and Eduardo Saverin join the list with fortunes of $1.4billion and $1.15billion, respectively.
Born eight days after Zuckerberg, 26-year-old Moskovitz is the world's youngest billionaire.
Zuckerberg, however, is still some way behind Bill Gates, founder of Microsoft, who was named the richest person in the US for the 17th year in a row with an estimated worth of $54billion (£34.4billion), up $4billion from last year.
In second place on the list was investor Warren Buffett, worth $45billion (£28.7billion), up $5billion.
Oracle founder Larry Ellison's net worth was unchanged, in third place, at $27billion (£17.2billion).
Christy Walton, heir to Walmart founder Sam Walton's fortune, was in fourth place with $24billion (£15.3billion), up $2.5billion.
In stark contrast to the 2009 Forbes 400 list, 217 of the tycoons are now worth more than they were a year ago. Just 84 of the billionaires had a decrease in wealth.
In 2009, a whopping 314 members of the exclusive club had experienced a decrease in their wealth.
The top 10 gained $24.9billion. The same group had shed almost $40billion last year.
The total wealth of the group is up eight per cent, beating the Standard & Poor's 500 index, which measured a stock market increase of just 1 percent, Forbes said.
The Forbes 400 are worth a combined $1.37trillion, compared with $1.27trillion last year.
The price of admission to the list is back up to $1billion from 2009 when $950million was enough to make the top 400. There are no new entries or drop-offs in the top 10 but the list shuffled.
The Koch brothers, heads of energy and manufacturing giant Koch Industries, now rank above three other members of the Walton family and New York Mayor Michael Bloomberg, founder of news and information company Bloomberg LP, who round out the top 10.
The oldest tycoon on the list is David Rockefeller Sr., 95, worth $2.4billion.
Media magnate Oprah Winfrey comes in at No130 and is one of 42 women on the list.
Automobile heir William Ford Sr. made the list for the first time since 2005, at the 385th spot with $1billion after Ford Motors Co's stock rose 50 percent and hit a five-year-high.
California is the state with the most billionaires - 83 - among them No332 Meg Whitman, worth $1.2billion, the Republican candidate for governor of the state in November elections.
The full Forbes 400 list can be seen at www.forbes.com/Forbes400
AMERICAN TOP 10 RICHEST
1. Bill Gates, Microsoft, $54billion
2. Warren Buffett, Berkshire Hathaway, $45billion
3. Larry Ellison, Oracle Corp, $27billion
4. Christy Walton and family, Wal-Mart, $24billion
5. Charles Koch, Koch Industries, $21.5 billion
6. David Koch, Koch Industries, $21.5 billion
7. Jim Walton, Wal-Mart, $20.1billion
8. Alice Walton, Wal-Mart, $20billion
9. S. Robson Walton, $19.7billion
10. Michael Bloomberg, Bloomberg LP, $18billion
Britain's banks are using homebuyers as cash cows, according to new research revealing the mark-up on our mortgages is the highest in the Western world.
The difference between what British banks pay for funds and what they charge homeowners is more than twice that in the U.S., France or Germany.
British banks add 2.5 percentage points to the cost of the money they borrow before lending it out, while U.S. banks add just 0.85 points.
This ‘homebuyers tax’ means that on the average £150,000 loan, borrowers in Britain pay £120 more a month on their mortgage than those in the U.S.
Findings by consultancy Autonomous Research used official rates, such as Bank of England base rate, as a fair comparison across countries.
Yesterday, Money Mail looked at swap rates — which banks use to buy money from each other. We discovered banks were paying 1.4 per cent to borrow money, but typically charging 3.72 per cent to lend to homeowners — a difference of 2.32 percentage points.
Last night, Lloyds TSB was charging 3.79 per cent for a two-year fixed rate. Natwest and Santander were offering 3.19 per cent.
This will be a hard pill to swallow for thousands shut out of the market by a shortage of cheap deals and tough lending rules.
And it threatens to derail house prices. Economists Capital Economics predict prices could nosedive by as much as 23 per cent over the next two years, wiping £39,000 off the value of the average home.
Figures from the Council of Mortgage Lenders show how the amount of money loaned to homeowners in August was the lowest for a decade. It plunged to £11.4 billion from £13.3 billion in July — a fall of 14 per cent.
‘It’s increasingly evident that banks are using mortgages as a way of repairing their balance sheets,’ says Michelle Slade, from data researcher Moneyfacts.
‘Everyone understands higher risks could have led to bigger mortgage mark-ups than in the past, but that doesn’t mean home loans should be treated as a cash cow.’
Lloyds Banking Group, which is 41 pc owned by the taxpayer, posted a loss of £6.3 billion last Statesyear. But it returned to profitability in the first six months of this year, making £1.6 billion.
Despite this, in 2009 the amount of money it lent to homeowners fell by a whopping 55 per cent, from £78 billion to £35 billion.
While the cost of mortgages for buyers with big deposits has fallen, those who need larger loans are still being shut out. The cheapest deal for a first-time buyer is 4.99 per cent — ten times the Bank of England base rate.
Even the mortgage industry trade body admits there is a problem.
‘There are a few more loans available for those with small deposits than a year ago, but it is still comparatively difficult to access credit,’ says economist Bob Parnell of the Council of Mortgage Lenders.
Autonomous Research says the margins — the difference between the official borrowing rate and what banks charge on mortgages — in Britain have risen from an average 0.19 points between 2004 and 2007 to 2.5 points now.
Lenders blame the increased cost of borrowing but critics suggested they were bolstering their balance sheets.
The lack of new mortgages has left the property market on the brink. Things could get worse as:
- A £300 billion credit black hole is set to stifle new lending next year;
- A DROUGHT of funds and lack of competition could reduce the number of cheap new deals;
- TOUGH new rules threaten to shut thousands of borrowers out of the best rates;
- ESTATE agents are left with huge numbers of unsold properties on their books;
- JOB worries persuade potential movers to stay put;
The Council of Mortgage Lenders insists funding mortgages is not as simple as what lenders pay for funds.
Banks face increased costs because some borrowers are still on older, low-cost, cheap loans; red tape costs more; and there is a need to bring in funds to build reserves.
Robbed by the banks WE own: As interest rates are held at 0.5% for the 18th month in a row, overdraft rates soar to 19% at taxpayer-funded RBS and NatWest
Banks are ‘fleecing’ their most cash-strapped customers by charging record overdraft rates.
These hit a new high last month, averaging 19.1 per cent, despite the Bank of England keeping interest rates at a 300-year low.
The worst offenders were NatWest and Royal Bank of Scotland, part of the RBS group in which the taxpayer holds an 84 per cent stake.
Both charged overdraft rates on a range of current accounts of well over 19 per cent.
The August average is 38 times higher than the base rate of 0.5 per cent, which means the banks are cashing in every time one of their customers falls into the red.
If account holders exceed their overdraft limit they face further penalties in the form of fees and even higher rates.
The idea that banks are profiting from the money troubles of their customers will anger many, who feel that they would not be in the red but for the recession caused by the banks’ reckless behaviour.
In addition, margins on other services such as credit cards, loans and mortgages have soared while high street banks have enjoyed a surge in profits to £15billion in the first six months of the year.
The overdraft details were released on the day the Bank of England decided to keep the base rate at the record low for the 18th consecutive month.
Last night Eddy Weatherill, of the Independent Banking Advisory Service, said banks are ‘fleecing their customers’.
He said: ‘Banks have been allowed to increase their margins despite the bank rates being so low. There is no incentive for them to do otherwise.
‘The level of profiteering is completely out of control. Nothing about it is fair or reasonable.
We face reduced incomes and increase household bills and yet again the banks are compounding our misery. We bailed them out but they have no qualms about making matters worse in our hour of need.
‘The Government should introduce a cap on the rates. But instead it protects the banks at our cost.’
The average overdraft rate of 19.1 per cent was identified by financial information firm Moneyfacts. It is the highest figure since records began in 1995.
In addition to the low base rate, the interbank lending rate known as Libor – the rate at which banks borrow from each other – is hovering at around 1.5 per cent. This highlights the size of the profit margin on overdraft interest.
Michelle Slade of Moneyfacts said: ‘Overdrafts customers are an easy target for banks.
‘While the majority of customers use an overdraft as a buffer facility, some have no alternative but to push their overdraft to the limit every month.
‘It is those customers that will be hit hardest by increases, which will only serve to make a bad financial situation worse.’
Andrew Hagger, money analyst at Moneynet.co.uk, said: ‘The timing is not good for the public. In fact, it couldn’t be worse. People are already facing hard times due to job losses, pay freezes and cuts in hours.
‘Now is when they need to rely most on their overdraft. Banks are exploiting them.’
The Bank of England is under pressure to launch a new round of quantitative easing, pumping billions of pounds into the financial system.
To date it has issued an extra £200billion in the hope it will be loaned on fair terms to consumers and businesses.
However, there are concerns that the banks are lending the cash out at extortionate interest rates to boost their profits.
They may to do this because the Government has not sought to put a cap on their profit, and the recession has created a constant supply of customers with no option but to go into the red.
The Bank of England’s decision to hold the base rate at 0.5 per cent comes against the background of concerns of a double-dip recession and the impact of massive public spending cuts to be announced by the Government next month.
Many analysts believe that the only way the UK economy can be protected against falling back into recession will be for the base rate to be held at 0.5 per cent for years to come.
Andrew Goodwin, senior economist at the Ernst & Young ITEM Club economic forecasting group, said: ‘Assuming that the Government tightens fiscal policy as planned, we expect bank rate to remain at 0.5 per cent for several years.’
There was better news for those hoping to take out a mortgage, with rates on tracker deals with a 25 per cent deposit falling from 3.72 per cent in July to 3.55 per cent in August.
Five-year fixed rate deals also got cheaper, dropping from 5.24 per cent to 5.1 per cent
THE HIDDEN WEALTH OF THE RICHEST 1% OF AMERICAN BILLIONAIRES
Including or excluding the so called "couch potatoes", Americans take in more information than they ever have. Newscasters such as Ted Koppel, Dan Rather, Tom Brokaw, Robert McNeil, and Jim Lehrer are as well known to this generation as Walter Cronkite was to previous generations. Not only do people watch their favorite newscasters regularly, they read mountains of newspapers and magazines as well.
Because the American media claims to be the freest in the world, few have reason to suspect that their mass media information is being very carefully controlled and colored. The shocking truth is that the American public is being purposely kept in the dark about many vital realities. For example are you aware that:
THE RICHEST 1 (ONE) PERCENT OF AMERICANS possess more wealth than
THE COMBINED WEALTH OF THE BOTTOM 90 (NINETY) PERCENT.
Despite how incorrect that statistic may first appear, there is definitely no error or misprint involved. Not only that, the full significance of the above statement is rather difficult to instantly appreciate, so we'll take a moment more to consider its implications.
Because the richest 1% prefer to associate almost exclusively with members of their own social and economic standing, few members of the bottom 90% of Americans have ever even met a millionaire let alone a billionaire.
Consequently if you belong to the bottom 90%, you can think of the wealth of the richest 1% as :
more wealth than the combined assets of every American you have ever met, plus all the assets of every American you would be likely to meet on a trip that took you through every single city and town in the nation!!
If you haven't been thinking of the rich and their wealth in quite that light, I suggest you begin to, because that information is only the tip of the iceberg of information being actively suppressed by the so-called freest media on the planet. Many references will be made throughout the book to the bottom 90%, so it is appropriate that we try to define the group a little more precisely.
Since the average person in the West considers himself or herself a member of the middle class, logic as well as popular opinion would suggest that half or more of the population fits into it. Initially then, let's arbitrarily consider that American society is comprised of 60% middle class, 20% lower class, and 20% upper class. Because the combined middle and lower economic classes only account for 80% of the population, the bottom 90% of society must also include half of the so-called upper class as well!
This means that the bottom 90% is comprised of:
1) Every member of the middle class
2) Every member of the lower class
3) Half the members of the wealthy upper class
So now our original statistics can be interpreted to mean that:
THE RICHEST 1 (ONE) PERCENT of Americans own more wealth than:
1) ALL of the wealth of ALL of the MIDDLE class
2) ALL of the wealth of ALL of the LOWER class
AND ADDED TO
3) ALL of the wealth of the bottom HALF of the UPPER class
If you are surprised or shocked, don't feel bad. The elite have gone out of their way to ensure that you didn't know it. Nevertheless, my initial choice of (20%, 60%, and 20%) to represent the upper, middle, and lower class population percentages was arbitrary, so if you think the arbitrary percentage breakdown of society was at fault, I welcome you to run your own idea of the class percentages through the preceding model. No matter what figures you choose, the bottom 90% of society would still have to include ALL of the lower class, plus ALL of the so called middle class, plus a portion of the upper class. The staggering significance of the wealth of the richest 1% will not alter. Go ahead and try it.
The Hidden Wealth of the Next Richest 9%
Up to this point, we have referred only to the richest 1% and the bottom 90%. However, sandwiched in between those two groups is another wealthy minority, the next richest 9% . Let's now find out how that group fares economically. You may be stunned to learn that:
THE NEXT RICHEST 9 (NINE) PERCENT also possess more wealth than THE COMBINED WEALTH OF THE BOTTOM 90 (NINETY) PERCENT
As unbelievable as it sounds, there are two minority groups, not just one, that own more assets than the bottom 90%. These two statistics alone should leave little doubt that the bulk of the wealth in America is owned by a very small minority of super rich individuals. This reality contrasts so drastically with the "equal opportunity", "equal prosperity" concepts fed to the bottom 90% and the world at large, that statistics such as these have had to be suppressed. Again, there is no misprint. The only deceit involved is that the bottom 90% have been purposely kept in the dark about wealth distribution realities.
Hidden Permanent Prosperity For The Rich
If you were unaware of the severity of wealth distribution inequities, then you are probably in for an even bigger surprise to learn that the rate, at which the economic elite are getting richer, is simply astounding.
Statistics published in Forbes magazine's annual survey of America's billionaires expose this little known but shocking reality.
In 1982 there were 13 billionaires; in 1983....15; in 1984....12; in 1985....13; in 1986....26; in 1987....49. Note carefully that prior to 1986 the number of American billionaires had averaged around 13. Then the Reagan administration drastically altered the wealth distribution patterns by introducing new tax legislation favoring the top 1%. In 1986 the number of billionaires DOUBLED, and by 1987 the number of billionaires had virtually QUADRUPLED to 49!! By 1988, there were 68 individuals or families that each had net wealth in excess of $1,000,000,000. By 1989, the number had risen precipitously to 82. And by 1990, the Forbes survey reported the staggering total of 99!! With favorable tax laws in place, the super rich can enjoy bonanza years even during recessions!! The tax laws that allowed this to happen are still in place, and will remain in place till enough people get sufficiently concerned to insist that they be changed.
Excerpted from the electronic book: Feudalism ... Alias American Capitalism
It's quite simple. Thinkers who believe in freedom are not generally billionaires or captains of industry. Most billionaires (regardless of the rags-to-riches image that is so popular) became billionaires because of inherited money---not ambition, merit, or any struggle to survive. For example, Donald Trump, who cultivates the rags-to-riches imagery, got his "start in the business world" as a New York City slumlord buying buildings with trust fund money inherited from his Dad. Most of the super-rich and powerful made their money the old-fashioned way: They inherited it. There are exceptions, but not many.
Contemplate the dynamics of the above. Dynasties do not rabblerouse for Liberty. They work to protect their own assets instead, and they naturally gravitate toward guildism and currying favor with government. They cultivate cartels. They make friends with even richer people at the Country Club. They rub elbows that normal people not only can't rub, but lack the spare time in the day to rub. The peasants are too busy at the end of the day balancing their checkbooks or foraging groceries at Walmart.
The business tycoon has lots of spare time to socialize in powerful circles, because this is the business of the tycoon--who already has money and is struggling not to make himself rich, but to stay rich. Such a person will naturally support big government, because big government is a wellspring of resources--a teat, in other words, from which the tycoon potentially derives nourishment.
Government is also a potential means to eliminate competition. If a corporation invents a better mousetrap that is revolutionary and spends millions developing it, what better way to prosper than to hire a politician to ban the old-fashioned kind with the snappy spring that people baited with cheese?
And the business tycoon is too insulated in his concerns to worry about what happens to the masses. Worry about a world war? It would never affect his family, even if the draft were reenacted. Worry about abuse of civil liberties at airports? He has his own Lear jet. Worry about getting tazed by a cop? He dines with the Police Commissioner at banquets, and they are on a first-name basis. Worry about Income Taxes? He pays two accountants and a lawyer to deal with that. Worry about the price of oil or gasoline? He is invested in energy commodities on Wall Street. Worry about the United States collapsing into bankruptcy? His corporation has its home office in Dubai.
It's not that there is some secret master plan of rich people plotting to destroy things and the human race. It's that it is natural for the rich and government tyrants to share the same hog trough. They take care of their own concerns and ignore those of 99% of the population. They spin the world, and the rest of us saps are just holding on for dear life, praying that we can maintain centrifugal gravity after they screw up its orbit.
Occasionally, human nature being what it is, the Rich will run afoul of the very ignored peasants and end up losing their heads. Unfortunately after such revolutions, the end product seems to be even more war, national sacrifice, and centralized dictatorship.
To find real solutions, I propose that we figure out ways to advance freedom without affecting the hog trough, pro or con. The rich and powerful are consistently out of touch. Let them stay that way while populist solutions are developed around them. Libertarianism is grassroots populist be default, because Tyranny is the opposite by default.
LONDON'S £140m PENTHOUSE FLAT AS SUPER-RICH BUY 'TROPHY PROPERTIES'
DONT BELIEVE THE CREDIT CRUNCH HYPE, THE SUPER RICH ARE GETTING RICHER ON THE BACK
OF A MASSIVE FINANCIAL SWINDLE
A London penthouse flat is set to be sold for more than £140 million as super-rich international buyers snap up “trophy properties” in the capital, the Standard reveals today.
The two-floor apartment at the One Hyde Park development in Knightsbridge features bullet-proof windows, an air purifying system and a panic room.
The flat, possibly the most expensive in the world, is believed to cost more than £6,000 a square foot compared with the Kensington and Chelsea average of £1,214 and capital wide average of £450.
The price illustrates the stark differences between how the super-prime and mainstream residential markets in the capital are faring. International buyers are still investing in London, attracted by the weakness of the pound, as many Londoners pull out of the market.
Trevor Abrahamson, of estate agent Glentree Estates, said: “This is a huge price but it's not surprising. In the last six months we have sold more trophy properties than we have in the last two years. One minute there was an over supply and then there was a shortage. Prices are high.
“London has recovered much better than other prime markets around the world. It draws buyers from the most eclectic range of destinations and it will always be seen as the capital of capitals financially and culturally.”
One Hyde Park, next door to the Mandarin Oriental Hotel, features more than 80 flats in four linked towers designed by architect Lord Rogers.
The complex includes spas, squash courts and a private wine-tasting facility. Everyone on site will have access to a private underground passage to the hotel and 24-hour room service from the hotel, where Michelin-starred chef Heston Blumenthal is opening his first London restaurant.
It is understood that SAS-trained guards and iris scanners provide extra security to the apartments, which are due to be completed in October.
Surrey-born property tycoons, brothers Christian and Nick Candy, manage the development through their company Candy & Candy.
Christian Candy's CPC Group bought the One Hyde Park site for £150 million in 2004. It used to be occupied by a rundown Fifties office block called Bowater House.
The highest proportion of buyers of the flats so far are from Europe, making up a third of all buyers. A quarter of buyers are Middle Eastern. The average price of a flat is £20 million.
Once One Hyde Park is completed and all the buyers have paid up, the whole block will be one of the most expensive residential locations in the world. Houses rather than flats tend to achieve the highest prices in London.
Lakshmi Mittal bought his first property in Kensington Park Gardens in 2004 for around £60 million but is now worth over £150 million.
Next to London, the most expensive flats are to be found in New York, where before the 2007 crash a triplex penthouse in The Pierre hotel, overlooking Fifth Avenue and Central Park, was on the market for $70 million.
Asia's most expensive apartment was sold in June 2008 for $28.8 million, an 80th floor penthouse minutes from Hong Kong's central business district. In Sydney a penthouse with views of the harbour and Opera House sold for 20 million US dollars.
A studio flat in Cedar Close, West Dulwich, is under offer with estate agent Stapleton Long for £55,000. The retirement property, only available to the over-55s, is believed to be the joint cheapest in London. The other bargain basement is a studio flat in South Norwood.
British Gas made operating profits of £585m for the first half of 2010, up 98% on the same period last year.
Sam Laidlaw: "This is a much bigger group than we had a year ago"
The company, which supplies gas to more than half of the country's households, won new customers and benefited from the cold winter.
Gas use was 8% above 2009, and the company has added 400,000 more residential customers since then.
However, watchdog Consumer Focus said such a jump in profits would "sound alarm bells".
British Gas, which now supplies almost 16m households, said the almost doubling in profit was thanks to a greater number of customers using more power, alongside an ongoing programme of cost cuts which this year should see another £100m in savings.
British Gas's parent company, Centrica, also saw a big increase in profits, up 65% to £1.56bn.
Its chief executive, Sam Laidlaw, told the BBC: "This is a much bigger group than we had a year ago - a 40% increase in the size of the group as a result of the acquisitions that we did last year."
He said that energy prices had fallen by almost a fifth over the past year after the company cut prices three times.
"Customers' bills, despite the very cold winter, were actually lower this year than they were for the corresponding period last year, and that's because we've reduced our prices three times in the last twelve months by some 17%."
Mr Laidlaw hinted that, near term, price rises were unlikely: "This is a competitive market, so we can't give any signals, but our position has always been to lead the market down and try to delay any price increases as long as we can."
Wholesale energy prices are less than half their peak level reached in 2008, although suppliers have other costs that they have to pay as well as the "raw" energy price.
But the consumer watchdog, Consumer Focus said it was worried that prices would rise further.
Audrey Gallacher, head of energy policy at the organisation, said: "We are concerned that energy firms may actually raise prices this winter. With only small price cuts for customers in the last two years, despite wholesale prices being half what they were at their peak and beginning to fall again, customers will rightly be outraged if this happens."
British Gas's managing director, Phil Bentley, said that prices would have to rise, but over a longer time frame: "Probably unit prices per unit will go up. We're not saying over the next year, but in the long term, it absolutely will."
Looking ahead to the full year, the company said the lion's share of the profit had already been made.
Its statement said: "Overall, we expect the full-year results for 2010 to be heavily weighted towards the first half of the year."
It added, though, that its full-year results would be in line with what the market was expecting.
No one in the freedom movement today disputes that the Federal Reserve is the source of many of our economic woes. Where disagreement arises is in defining the precise nature of the Fed and the source of its capacity to create the harm it does. Many who support gold money and free enterprise claim that the Federal Reserve is a "private corporation" run by capitalist mega-financiers. This I believe to be mistaken.
The Federal Reserve, in my opinion, should not be classified as a private corporation. It should be termed a government-run fascist cartel. There are several important reasons for this. For example, all nationally chartered banks in the Federal Reserve system are forced by the government to join the cartel. Bernanke and his board of governors are appointed by the President and approved by the Senate. The Federal Reserve came into being because of an act of Congress, and it can be altered or legislated out of being at anytime by Congress.
These factors are not how private corporations are created or operated. The Fed entails government involvement in a massive way. Without the special monopoly privileges legislated by Congress that sustain the Fed, it disappears.
Moreover, the great bulk of the profits of the Reserve Banks are turned over to the federal treasury. As John McCormack explains in a Liberty magazine article: "[H]olding shares in the Fed is not a very profitable activity. Dividends to member shareholders are limited to 6% of nominal capital (hardly a great rate of return) and all Fed revenues above this amount (invariably vastly greater sums) are returned to the U.S. Treasury. In 1994, for example, total dividends to member banks amounted to $212 million while the Treasury received $20.5 billion, 97 times as much." [Liberty, March 1996.]
Government is thus a full partner in the Federal Reserve System. And a business entity with the government as a full partner is not a private corporation.
Courts Create a Fallacy
Much of the reasoning behind the mistaken notion that the Federal Reserve is a private corporation lies in court cases such as LEWIS vs. United States on June 24, 1982. In that case, the 9th Circuit Court ruled: "We conclude that the [Federal] Reserve Banks are not federal...but are independent, privately owned...corporations...without day to day direction from the federal government."
There are numerous cases like this where the courts have ruled that the Reserve Banks of the System are privately owned and controlled corporations. The mistake made here by those who support the notion of a "private Fed" is that because the courts declare something to be so, it somehow makes it so. This, of course, is a fallacy. Judges only interpret the law; they do not make the truth. Truth is something we discover through identification of the facts of reality and coherence with the laws of logic. Men find the truth through a process of synthesizing reason, experience and intuition.
What then are the facts of reality and the laws of logic in this case? They are as follows: A private entity in the marketplace is the opposite of a public entity. It is a free entity without monetary support and monopolistic privilege granted to it by government. It is an entity that is operating in a laissez-faire environment. To the extent that government intervenes into and controls, regulates, manipulates, or monopolizes an entity's market policies, then that entity is no longer private or free. It becomes statist / collectivist (i.e., socialist / fascist) to some degree or another. How much government involvement there is will determine how collectivist the entity becomes.
For example, Exxon Corporation is considered a private corporation. So let's compare it to the so called "private" Federal Reserve corporation. Does Exxon have its CEO and board of directors appointed and confirmed by the government? No, but the Fed does. Are 97% of Exxon's profits turned over to the federal Treasury? No, but the Fed's profits are. Can Exxon be voted out of existence tomorrow by Congress? No, but the Fed can. Therefore despite what our courts maintain, the Fed is not a private corporation; it is a government run cartel.
The fact that the courts define the Fed as "private" is the way that tyrannical ideologues pull the wool over the people's eyes. This is done to make the people think we are still a free, "private" enterprise country. This is how they smuggle us into corporate statism, i.e., economic fascism -- by getting the intelligentsia of the country to buy into their redefinition of words. The courts are run by statist judges, and the schools are run by statist professors -- all pretending that we are still a "free" enterprise system. In fact, many of them actually believe their own warped logic. It's the way they were taught, and they lack the intellectual rigor to investigate the fallacies of their assumptions. They ritualistically use the term "private" because it conveys the image of "free." But private in this instance is in name only. If a private entity does not have control over its operations, its profits, and its policies, then it is no longer private; it is public, and socialist or fascist to some degree or another.
HEDGE FUND MANAGER COMMITS SUICIDE TO AVOID ARREST OVER £249 PONZI SCHEME
A former hedge fund manager shot himself on a Spanish beach to avoid being arrested over an alleged £249million Ponzi scheme.
Dieter Frerichs, a German national who was once the managing director of K1 group funds K1 Global and K1 Invest, ran into the sea after police startled him while sunbathing at a house in Palma, Majorca.
The 72-year-old took a gun with him, which failed to fire the first time as it had become wet.
Mr Frerichs managed to discharge it on a second attempt and he died later in hospital, local reports said.
The financier was due to be extradited after a ruling by a Madrid court following a request by prosecutors in the German city of Wurzburg.
Prosecutors wanted to question Mr Frerichs over the workings of K1 hedge fund group.
Spanish police first arrested Mr Frerichs in April, but he was conditionally released.
He was the fourth suspect in what authorities claim was a ploy to defraud investors led by the self-taught hedge fund manager Helmut Kiener, who has been detained in a Würzburg jail since last October.
A spokesman for the prosecutor's office said yesterday that K1 had been used to 'help defraud thousands of private investors and several leading banks of a total sum in excess of £249m'.
Prosecutors claim that Mr Kiener paid for a lavish lifestyle – including property in Florida and private aircraft – using money which he had secured through pledges to place it in funds which in turn invested in hedge funds.
He denied any wrongdoing last autumn. K1 Global and K1 Invest, both based in the British Virgin Islands, filed for liquidation after Mr Kiener's arrest.
Authorities believe that British bank Barclays is just one of the victims of the alleged Ponzi scheme, and could have lost millions.
If it were not documented, you might not be able to believe it:
On Wednesday, June 9th, Paulette Cooper was invaded by a team of nine:
* two Court Bailiffs
* two locksmiths
* three Police Officers
* one Court Manager
* one man from HBOS
Three police officers attended. One in particular thought that it was all very
amusing as she stood by and let the bailiff’s locksmith break into Paulette’s
property in Lincoln! Police Offer "just doing what they're told"
All of the police refused to either do their job or give their names.
At this point I again spoke to the woman who is the Lincoln County Court Manager and I asked her how many illegal possessions they do each week? She declined to answer the question. I then said to her that the documents that the Court she was in charge of had served were not the correct legal documents in order to allow a possession. She then said that the court had been issuing these same unlawful documents since she had been there FOR THE LAST TEN YEARS!
I suggested that she go to the library and look in the White Book at the correct civil procedure. I also told her that she was a party to an illegal breaking and entering and trespassing and showed her the copy of the correct legal documents for a possession but she would not stop the locksmith from breaking into my property.
I also showed the three police officers the same document from the White Book, which shows the correct legal proceedure was not being adhered to, they stood there and refused to prevent the breaking and entering and trespassing. One of them even thought it was funny!
So nine people knowingly broke the law on my premises today!
Paulette’s case is one of four cases that we have presented to the Secretary of State The Rt Hon Dr. Vincent Cable MP as well as the Lord Chancellor – as the most glaring examples of what is going on all over the country.
She sent this letter to the Guardian about her traumatic experience.
The shameful exploitation of bereaved families has been laid bare in a damning new report.
Ruthless: Banks and will-writers are fleecing bereaved families.
This backs up evidence gathered by This is Money's sister title, Money Mail, into the high charges banks and some will-writing services make for executing even the simplest estates.
Distraught families can also be targeted by unregulated firms offering probate services for eye-watering fees.
When someone makes a will, they appoint executors to sort out their estate when they die.
Banks and specialist firms are offering cheap wills, having themselves appointed executor and then charging tens of thousands of pounds for executing the estate.
Yet most estates can be dealt with by friends and family - with the help of a solicitor for more complex issues - for a fraction of the cost. consumer group Which? sent eight undercover researchers to make 42 visits or calls to solicitors, specialist will-writers and banks around Britain.
The researchers used a simple scenario. They posed as divorcees with two children aged over 18 who wanted to leave everything to them 50/50 and had assets of £270,000 - below the inheritance tax threshold of £325,000.
The Which? report found banks will charge on average £10,830 - around double the £4,759 charged by will-writers and £5,199 by solicitors for sorting out an estate.
The most expensive is Barclays, charging an average of £13,395 on a £270,000 estate.
This includes 4.5% of the first £100,000 of the estate, 3.5% of the next £400,000, 1.5% of the remainder, plus £400 for each beneficiary and £75 for each asset.
Lloyds Banking Group, including Halifax/Bank of Scotland - which was not investigated in the Which? report - is also hugely expensive.
Our research discovered it charges 4% of the first £500,000 of the estate, 3% on the next £500,000 and 1.5% on any amount above that. This works out at £10,800 on a £270,000 estate.
Readers have also complained about the high charges levied by specialist probate firms such as ITC Legal Services. One reader says he was quoted £20,000 to handle the £500,000 estate of his aunt, almost four times the charge he was eventually quoted by a solicitor.
An estimated 90,000 people a year find themselves forced into accepting executors specified in their relatives' wills. Customers can be lured by cheap - or even free - will-writing services. HSBC, for example, charges just £75 to write a single will.
The catch is that the bank will appoint itself as either sole or joint executor of the will and force bereaved relatives to pay through the nose for probate services when the customer dies.
Undercover researchers at Which? were not told this upfront when they phoned up to make an appointment. in three of the four visits, the HSBC salesman mentioned there would be fees for administering the will, but no one suggested the customer's relatives could do it.
Taxpayer-supported Royal Bank of Scotland and Lloyds Banking Group also appoint themselves as executor. it is not compulsory to name Barclays as executor, although the will form recommends appointing a professional executor such as Barclays. Solicitors came out of the survey rather better, with none recommending naming their firm as executor.
They all suggested the children - the beneficiaries of the will - were best placed to be chosen. It is usually possible to force firms to step down from their role as executor, but they are not legally obliged to do so. Adam Walker, from independent probate broker final Duties, says: 'some firms will fight tooth and nail if you ask them to renounce probate duties.
'But in most cases a company will back down. The problem is most people who have just lost a loved one accept what they're told and go along with it, even if they're being ripped off.' earlier this month, Money Mail revealed how registrars, GPs, hospitals, churches and funeral homes are all handing out official looking leaflets advertising the Bereavement advice centre, which appears to offer free, independent advice.
But those who call the free helpline or visit the website are directed towards ITC legal services. The firm then sends a salesman to a bereaved person's home.
Lack of protection
A major concern over will-writing and probate services is the lack of protection for customers if things go wrong.
Those who deal with banks might be ripped off. But at least they have the protection of the independent disputes arbitrator the Financial Ombudsman Service. Similarly those given duff advice by their solicitor can go to the Solicitors Regulation Authority. But if you're dealing with a 'specialist' will writer or probate firm, there is very little you can do.
Astonishingly, will-writing and probate is not regulated. Firms that offer these services need no training or qualifications. Most reputable firms are members of trade body the Institute of Professional Will Writers, which has its own code of conduct, but membership is voluntary.
WHAT CREDIT CRUNCH? BUY A SUPERYACHT AND GET A SUPERCAR THROWN IN FREE
The Strand Craft 122, at £17m, comes with a custom-made supercar capable of 233mph
As far as slogans go, it's not the snappiest: "Satisfying the new demands expressed by the market and, above all, surprise them".
But that is the motto being deployed by Swedish superyacht builder Strand Craft to market this phenomenal looking 122ft-long boat.
At least the surprise element is spot on: the boat, of which only six will be built, will come with a free supercar thrown in, one that can drive straight out of a garage built into the back of the boat.
And it doesn't seem the £17m asking price has deterred buyers, with Strand Craft reporting that five potential owners have already been lined up.
Kurt Strand, Strand Craft's founder, told the Daily Mail: "We have had a lot of interest from all over the world, specifically the Middle East. It was designed for luxury and for people who want the best.
"The custom-made supercar is the best feature, both the boat and the car are very high performance and the boat is very fast."
Fast is right - with 14,000hp on tap, the Strand Craft 122 should hit 50 knots, say its builders.