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Qtec
12-26-2012, 08:34 AM
http://www.youtube.com/watch?v=CaXNqGgIc-g&feature=player_embedded




Karma is a bitch. Just ask Glenn Hubbard.

A few months ago, the Dean of Columbia's business school was a leading economic advisor to Mitt Romney and a rumored (perhaps even consensus) candidate for the Treasury Secretary job.

Now Romney's out of the presidential picture and Hubbard – well, he's just yet another grasping jobholder who's been exposed as a paid mouthpiece in a court proceeding.

Anyone who's seen the movie Inside Job will recall the stupendously angering scene in which Hubbard pissily snaps at his interviewer for asking about his outside relationships with the financial services industry.

Transcript: Glenn Hubbard's Deposition

In the movie, renowned filmmaker Charles Ferguson pointed out that, among other things, Hubbard had co-authored a paper with former Goldman chief economist William Dudley in which he praised credit derivatives as having improved the "allocation of risk" and helped produce "enhanced stability." It was fair to ask how much Goldman's "Global Markets Institute" had to pay one of the Ivy League's leading minds to endorse the giant daisy chains of credit default swaps and collateralized debt obligations that led to the crisis – it was quite a coup, after all, like getting the Dean of Harvard Medical School to pose in public smoking a pack of Kools.

Anyway, when asked if he did consulting work for big banks, Hubbard refused to answer. And when asked if he just didn't remember who was writing checks to him when he wasn't overseeing the education of American youth, he fumed.

"This isn't a deposition, sir," he hissed. "I was polite enough to give you time, foolishly I now see. Give it your best shot."

Again, there's just nothing like karma. If your answer to a perfectly sensible question is going to be, "Screw you, this isn't a deposition," exactly how long do you think it'll be before you end up actually getting deposed? And forced to answer, under oath, just how much your opinions cost?

A couple of years, as it turns out.

Hidden among the reams of material recently filed in connection with the lawsuit of monoline insurer MBIA against Bank of America and Countrywide is a deposition of none other than Columbia University's Glenn Hubbard. And boy, is it a wild deposition. It's like Inside Job, only Hubbard has to answer the questions he doesn't want to answer. Reading it is like watching a man try to avoid breathing in a gas chamber.

At issue here is the fact that Hubbard testified on behalf of Countrywide in the MBIA suit. He conducted an "analysis" that essentially concluded that Countrywide's loans weren't any worse than the loans produced by other mortgage originators, and that therefore the monstrous losses that investors in those loans suffered were due to other factors related to the economic crisis – and not caused by the serial misrepresentations and fraud in Countrywide's underwriting.

In other words, the Dean of the Columbia University business school testified that the fact that Countrywide claimed to have conducted thorough due diligence when in fact it was pressuring underwriters to approve 60 to 70 mortgage applications a day and failing to verify any income levels or other key information (to say nothing of the outright falsification of such data, which also went on on a mass scale) – he testified that these issues were irrelevant.

Investors in Countrywide loans, he reported, in specifically rebutting MBIA's claims of fraud, were probably victims of macroeconomic factors, among other things the expansion of lending guidelines by "the government-sponsored entities," i.e. Fannie and Freddie. You know, that old saw.

So how much does it cost to get the Dean of Columbia Business School to say that Countrywide customers weren't injured by fraud? Well, MBIA's lawyer, Phillipe Selendy of Quinn Emmanuel, asked Hubbard that very question:

Read more: http://www.rollingstone.com/politics/blogs/taibblog/glenn-hubbard-leading-academic-and-mitt-romney-advisor-took-1200-an-hour-to-be-countrywides-expert-witness-20121220#ixzz2GASfZGdX
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In the paper published by Goldman, the authors take issue with Warren Buffett, who as early as 2002 had warned that these "derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal." Buffett argued that " ... huge-scale frauds and near frauds have been facilitated by derivatives trades."

Not so, said Hubbard and Dudley, siding with then-Fed Chairman Alan Greenspan. "This use of derivatives leads to improved economic performance," they wrote, insisting, "The capital markets have also acted to reduce the volatility of the economy. Recessions are less frequent and milder when they occur."


Buffet,


The derivatives genie is now well out of the bottle, and these instruments will almost certainly multiply in variety and number until some event makes their toxicity clear. Central banks and governments have so far found no effective way to control, or even monitor, the risks posed by these contracts. In my view, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are
potentially lethal


You guys got lucky because...,


Mark the name of R. Glenn Hubbard, the man who will make your life miserable if Mitt Romney is elected president. Unless, that is, you happen to be one of the swindlers who has profited mightily from the nation's economic pain.

Hubbard is the ideological hit man instrumental in justifying the mortgage derivatives bubble that caused the Great Recession during the George W. Bush years. He now serves as Romney's key economic adviser and is the front-runner to be the next Treasury secretary should the Republican win.

Another link.

http://crooksandliars.com/susie-madrak/romney-advisor-got-1200-hour-testify-




Q


He also testified for Countrywide.


45. As part of the abandonment of underwriting guidelines, Countrywide Financial and Countrywide Home Loans knowingly: (1) loaned billions of dollars to borrowers who could not afford to repay the loans; (2) approved loans for borrowers who made gross misstatements in their loan applications regarding their income and ability to pay, often with the assistance and encouragement of Countrywide Home Loans’ employees and brokers; and (3) approved borrowers who otherwise did not satisfy the basic risk criteria for prudent and responsible lending that Countrywide Financial and Countrywide Home Loans claimed to use.

46. Countrywide Financial’s and Countrywide Home Loans’ practice of loosening
underwriting standards to provide loans to borrowers with poor credit met the goal of generating huge volumes of loans to sell off quickly to the secondary mortgage market.

Soflasnapper
12-26-2012, 10:49 AM
A complete hack that now anyone can see through. Can't sympathize, and instead will say it is a fine result that he is not in the halls of power spreading manure on mushrooms in the basement (i.e., spreading Mitt's bs in economic briefings or white papers).

Qtec
12-27-2012, 03:52 AM
A complete hack that now anyone can see through. Can't sympathize, and instead will say it is a fine result that he is not in the halls of power spreading manure on mushrooms in the basement (i.e., spreading Mitt's bs in economic briefings or white papers).

This something that remains taboo on the MSM.


Buffet hits the nail on the head.


Unless derivatives contracts are collateralized or guaranteed, their ultimate value also depends on the
creditworthiness of the counter-parties to them. But before a contract is settled, the counter-parties record
profits and losses – often huge in amount – in their current earnings statements without so much as a
penny changing hands. Reported earnings on derivatives are often wildly overstated. That’s because
today’s earnings are in a significant way based on estimates whose inaccuracy may not be exposed for
many years.
The errors usually reflect the human tendency to take an optimistic view of one’s commitments. But the
parties to derivatives also have enormous incentives to cheat in accounting for them. Those who trade
derivatives are usually paid, in whole or part, on “earnings” calculated by mark-to-market accounting. But
often there is no real market, and “mark-to-model” is utilized. This substitution can bring on large-scale
mischief. As a general rule, contracts involving multiple reference items and distant settlement dates
increase the opportunities for counter-parties to use fanciful assumptions. The two parties to the contract
might well use differing models allowing both to show substantial profits for many years. In extreme
cases, mark-to-model degenerates into what I would call mark-to-myth.

I can assure you that the marking errors in the derivatives business have not been symmetrical. Almost invariably, they have favored either the trader who was eyeing a multi-million dollar bonus or the CEO who wanted to report impressive “earnings” (or both). The bonuses were paid, and the CEO profited from his options.Only much later did shareholders learn that the reported earnings were a sham.


Another problem about derivatives is that they can exacerbate trouble that a corporation has run into for
completely unrelated reasons. This pile-on effect occurs because many derivatives contracts require that
a company suffering a credit downgrade immediately supply collateral to counter-parties. Imagine then
that a company is downgraded because of general adversity and that its derivatives instantly kick in with
their requirement, imposing an unexpected and enormous demand for cash collateral on the company.
The need to meet this demand can then throw the company into a liquidity crisis that may, in some cases,
trigger still more downgrades. It all becomes a spiral that can lead to a corporate meltdown.

Basically, the risk wasn't shared, more like passed on to the ultimate investor, ie pension funds etc.

IMO this is the greatest fraud and example of unadulterated greed in the history of the modern world. They make Ponzi look like a shoplifter.

Q

Gayle in MD
12-29-2012, 11:07 AM
This something that remains taboo on the MSM.


Buffet hits the nail on the head.



Basically, the risk wasn't shared, more like passed on to the ultimate investor, ie pension funds etc.

IMO this is the greatest fraud and example of unadulterated greed in the history of the modern world. They make Ponzi look like a shoplifter.

Q

Yes, and the whole Libor scam.

None of them in jail!

Repulsive!

One lucky strike, Romney Lost! What a complete crook hs is!

I don't know how these thieves can stand themselves. If I thought for one moment that I had stolen from people, and ruined the lives of so many victims, I could not enjoy amnything about my life.

BTW, Love the new pic of Yag!