Baltimore: Not taking it from the Banks (Photo credit: Wikipedia)

From the Guardian:

A little over two years ago, Stephanie Rawlings-Blake had never heard of Libor. The mayor of Baltimore had plenty of other things to keep herself occupied. Elected in 2010, she was dealing with the aftermath of a financial crisis that had left her city with the budget deficit of $120m and the cost of cleaning up the worst two-day snowstorm in the city’s history. And then she found out the credit crunch had come back to take another bite out of the city’s finances.

Baltimore is lead plaintiff in a class action lawsuit that alleges that banks including Barclays, Bank of America, HSBC, JP Morgan and UBS conspired to fix a set of key interest rates – the London Interbank Offered Rate, or Libor – costing the city millions in the process. So far, the Libor scandal has played out mostly under the radar in the US. But now it is gaining traction in Washington, and Baltimore’s suit is putting a human face on a scandal legal experts predict could end up being the most costly of the credit crisis.

Firefighters, services for the elderly, school programmes – all these and more are being cut as a direct result of the actions of colluding bankers, Rawlings-Blake claims.

According to the court documents, Baltimore bought “tens of millions of dollars worth of interest-rate swaps” during the period when the alleged fixing took place. The suit, filed with top Washington law firm Hausfeld, alleges that between August 2007 and May 2010 the defendants conspired to suppress Libor below the levels at which it would have been set had they accurately reported their borrowing costs. Those manipulations had “severe adverse consequences” for Baltimore and others, according to the suit. Other cities are watching carefully and a raft of litigation is expected in the US.

The city had no choice but to fight, said Rawlings-Blake. “We are faced with closing fire companies, closing recreational centers … We have services that have been cut year after year; services that people depend on. Opportunities for young people, the cleanliness of the city: everything is affected by the budget,” she said.

“We can’t afford to leave money on the table,” she said.

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by Marian Wang: A few months after he buried his son, Francisco Reynoso began getting notices in the mail. Then the debt collectors came calling.

“They would say, ‘We don’t care what happened with your son, you have to pay us,’” recalled Reynoso, a gardener from Palmdale, Calif.

Reynoso’s son, Freddy, had been the pride of his family and the first to go to college. In 2005, after Freddy was accepted to Boston’s Berklee College of Music, his father co-signed on his hefty private student loans, making him fully liable should Freddy be unwilling or unable to repay them. It was no small decision for a man who made just over $21,000 in 2011, according to his tax returns.

“As a father, you’ll do anything for your child,” Reynoso, an American citizen originally from Mexico, said through a translator.

Now, he’s suffering a Kafkaesque ordeal in which he’s hounded to repay loans that funded an education his son will never get to use 2014 loans that he has little hope of ever paying off. While Reynoso’s wife, Sylvia, is studying to be a beautician, his gardening is currently the sole source of income for the family, which includes his 18-year-old daughter Evelyn.

And the loans are maddeningly opaque. Despite the help of a lawyer, Reynoso has not been able to determine exactly how much he owes, or even what company holds his loans. Just as happened with home mortgages in the boom years before the 2008 financial crash, his son’s student loans have been sold and resold, and at least one was likely bundled into a complex Wall Street security. But the trail of those transactions ends at a wall of corporate silence from companies that include two household names: banking giant UBS and Xerox, which owns the loan servicer handling the bulk of his loans. Left without answers is a bereaved father.

The risk of cosigning on Freddy’s loans seemed to have been worth it when he graduated in May 2008 and began looking for a job in the music industry. He was on the way back from a job interview on the evening of Sept. 4 when he lost control of his car and it rolled over. Freddy’s family learned of his death the next morning.

The grief was relentless; the debt collectors, ruthless. By law, debt collectors must go through a debtor’s attorney if one has been hired, but even after Reynoso hired an attorney, he said they continued to call him every day, several times a day, for about a year and a half: “I would tell them to call the lawyer. And they would still say, ‘The lawyer doesn’t owe us. You’re the one who owes us. You’re the one who has to pay us.’”

Meanwhile, Reynoso was still reeling: “I was crying for him every day,” he said.

The question of to whom Reynoso’s debts are actually owed 2014 and who has the authority to forgive them 2014 is a mystery that thus far neither Reynoso nor his lawyer has been able to solve.

One of Freddy’s student loans was cancelled after his death without a problem: his federal loan. That’s because the government cancels student loans if a student dies.

But the bulk of Freddy’s loans were private student loans, which typically offer less favorable interest rates and fewer consumer protections. Only a few private student lenders offer debt discharges in the event of the borrower’s death, though public outcry over specific cases has swayed lenders to grant occasional death discharges.

But for the Reynosos, just figuring out whom to appeal to has been an exercise in futility. Working with a law firm, Francisco Reynoso sent copies of Freddy’s death certificate to any company that sent paperwork about the loans. He remembers being told by at least one company that they’d call him to work out a solution. But no one ever did, he said, and the bills kept coming 2014 each time larger than the last with more interest, more late fees.

“We sent out death certificates to all of them,” said Dolores Orozco-Serrano, a legal administrator with Borowitz & Clark, the bankruptcy law firm handling the Reynosos’ case. Only the federal loan was discharged. “Everyone else was not cooperative at all.”

Freddy Reynoso’s private loans were originated by two companies 2014 Bank of America and Education Finance Partners. Neither company still holds onto them. ProPublica tried to find out who did.

First, the Bank of America loan: Almost as soon as Bank of America originated it, the loan was sold to a Boston-based company called First Marblehead, once one of the biggest securitizers of student loans. But nowhere in the paperwork sent to the Reynosos and reviewed by ProPublica does the name First Marblehead appear. Instead, the Reynosos have received paperwork emblazoned with the logo of National Collegiate Trust. That’s the name First Marblehead gave to bundles of loans that it turned into Wall Street securities and sold to investors. Was Freddy’s loan bundled into a security? And if so, who owns it now? First Marblehead has not returned repeated requests for comment.

Freddy Reynoso’s other loans followed an even more complicated path 2014 and one tainted by scandal. Education Finance Partners, the private student loan company that originated the largest portion of Freddy’s student debts, reached a $2.5 million settlement agreement with the New York Attorney General’s Office in 2007 to settle charges that it had paid colleges across the country to steer students toward its high-interest loans. And Berklee College of Music, Freddy’s alma mater, was one of the schools singled out in that investigation for accepting the improper payments. Berklee College of Music spokesman Allen Bush acknowledged in a statement to ProPublica that the school accepted a total of $23,000 from Education Finance Partners between 2005 and 2007, but said that “all of these funds were deposited into a financial aid account and disbursed through a need-based grant system to current Berklee students.”

Education Finance Partners, Freddy’s lender, never admitted any wrongdoing. A year after the settlement, the company declared bankruptcy.

But who holds Freddy’s loans now remains a mystery. The company’s archives 2014 now kept by a company called Loan Science 2014 show that his loans were scooped up by the Swiss bank UBS in October 2008. But the entire portfolio changed hands again in 2009. “That 2009 sale was private, it was bound by a confidentiality agreement and, therefore, we’re not in a position to disclose the identity of the purchaser,” wrote a UBS spokesman in an email.

One possibility: Freddy’s loan may have been among those acquired by the Swiss National Bank, Switzerland’s equivalent of the U.S. Federal Reserve, when it bailed out UBS. (See our sidebar.)

Reynoso and his lawyer don’t even know exactly how much he now owes, but it appears to be well into the six figures. The loan that Bank of America originated is clear: At the end of March, the balance was around $7,400, according to Mike Reiber, a spokesman for PHEAA, a company that once serviced that loan. (With the loan in default, it now resides with First Marblehead, Reiber said.) But the other, much larger portion of Reynoso’s debt remains murky. A 2009 lending disclosure document indicates that through Education Finance Partners, UBS extended nearly $160,000 in credit to Freddy Reynoso, and projected that if he made all payments as scheduled, the loan for his music education would end up costing him $279,000.

Seemingly the only party who knows 2014 and is obligated to tell Reynoso 2014 about this debt is the servicer, ACS Education Services.

Citing privacy reasons, ACS declined to disclose any specifics about the loans to ProPublica, even with Reynoso’s full consent. Three weeks ago, Francisco Reynoso himself sent a letter to ACS asking who currently holds the loans, but he has received no response.

ACS is a subsidiary of Xerox, so ProPublica put in several calls there. Given more than a full week to respond, Xerox’s corporate communications team has yet to provide a response to queries about when Reynoso can expect basic information about his son’s loans, including the amount he owes and the name of the company that now owns the debt.

Even with the help of a lawyer, Reynoso’s options are limited. Unlike most kinds of debt, private student loans are not dischargeable through bankruptcy, though Sen. Dick Durbin, D-Ill., is leading an effort to change that. So for the time being, Reynoso’s hope hinges on a narrow provision in the bankruptcy code called a hardship discharge. The bar for proving “undue hardship” is high, but Reynoso still hopes for the best as he waits for a ruling from the bankruptcy judge. As he puts it: “I’m in the hands of God.”

This article was originally published on ProPublica

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Did Kenneth Lewis, former Chairman of Bank of America mislead shareholders? (Photo credit: Wikipedia)

by Cora Currier: When Bank of America announced it was buying Merrill Lynch in September 2008, bank execs told their shareholders that the merger might hurt earnings a touch. It didn’t turn out that way. Losses at Merrill piled up over the next two months, before the deal even closed. Yet the execs kept painting a prettier picture to shareholders — even though it turns out they knew better.

As the New York Times detailed this morning, a brief in a new lawsuit filed in federal court in Manhattan recounts sworn testimony and internal emails in which execs admitted to giving bad information to shareholders and that they had worried about the legal ramifications of doing so.

According to the filing, Bank of America’s then-CEO Kenneth Lewis admitted in a deposition that what he told shareholders about the financials of the merger was “no longer accurate” on the day they approved it.

We’ve pulled out the most revealing parts of the suit, which tell the story of how the deal went down.

On Sept. 15, 2008, Bank of America announced its agreement to buy Merrill Lynch. In the press release announcing the deal and other presentations, Bank of America said it would cause a 3 percent decrease in earnings in 2009, and that by 2010 the deal would break even or do better.

In October, concerns started to emerge about Merrill’s financials. As it became clear the company was going to lose $7.5 billion that month, one exec emailed another the numbers with the message “read and weep.”

Merrill kept losing money in November. Late that month, Bank of America ordered Merrill to sell off assets to try to stabilize its finances:

Forcing Merrill to down-size (p. 18)

After current Bank of America CEO Brian Moynihan admitted in a deposition that this sale meant the deal was less valuable to shareholders:

Impact of Merrill’s down-sizing (p. 21)

On Dec. 1, Bank of America issued a $9 billion debt offering. Publicly, they said this was “for general corporate purposes.” But private communications showed that they were trying to raise money to cover Merrill’s losses:

Debt offering (p. 24)

Bank of America’s then-treasurer, Jeffrey Brown, wrote in emails just before the shareholder meeting that they needed to disclose that the Merrill losses were behind the debt offering. He also testified that he told other execs they could be committing a criminal offense by not disclosing the losses:

Treasurer’s concerns (p. 24)

Possible criminal offense (p. 26)

On Dec. 5, Bank of America shareholders met to decide whether to approve the merger. They questioned Lewis about the financial impact of the deal, and he reassured them:

Shareholder meeting (p. 27)

That day, shareholders voted to approve the merger.

In his deposition for the lawsuit, Lewis said that what he told them was not accurate. Bank of America had already revised their numbers to reflect Merrill’s losses:

“They were different” (p. 29)

Just days after the deal was approved, on Dec. 12, a law firm for Bank of America prepared documents making the case that they could back out of the merger, based on Merrill’s new financial woes:

Backing out of the merger (p. 31)

On the 17th, Lewis took that argument to then Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke, who, according to the lawsuit, were stunned by Merrill’s losses:

The government’s response (p. 32)

According to the suit, Lewis raised the possibility of a bailout then:

Possibility of a bailout (p. 32)

But it wasn’t until January that shareholders — and the public — learned how bad things were. Bank of America stock dropped precipitously, and taxpayers ultimately padded the bank’s bailout funds with an extra $20 billion to cover the losses. The SEC has actually already settled its own charges against Bank of America over misleading shareholders on the deal. The bank paid $150 million — and didn’t admit any wrongdoing.

Bank of America didn’t comment to the Times on the new lawsuit, and didn’t immediately respond to a request for comment from us.

This article was originally published on ProPublica.

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Exclusive: Sgt. Robert Bales stands accused of murdering 17 Afghan civilians, a crime that some trace to the financial pressures his family faced back home. However, to the rich financial swindlers, the ruining of Bales’s family – and many others – is just another day’s work, writes Mark Ames.

——

By Mark Ames: This past Thursday, a Modesto, California, man whose house was in foreclosure shot and killed the Sheriff’s deputy and the locksmith who came to evict him from his condominium unit. Modesto authorities responded by sending 100 police and SWAT snipers to counter-attack, and it ended Waco-style, with the fourplex structure burning to the ground with the shooter inside.

It’s not surprising that this should happen in Modesto: Last year the Central California city’s foreclosure rate was the third worst in the country, with one in every 19 properties filing for foreclosure.  The entire region is ravaged by unemployment, budget cuts, and blight — the only handouts that Modesto is seeing are the surplus military equipmentstocks being dumped into the Modesto police department’s growing arsenal.

The shooter who died was 45 years old and he appears to have lost his condominium over a $15,000 home equity loan he took out almost a decade ago, owed to Bank of America. The condo was sold at an auction for just $12,988 to a shady firm, R&T Financial, that doesn’t even have a listed contact number. Too much for the former security guard, who barricaded himself in the condo which had been in the family for decades. He refused to walk out alive.

These “death by foreclosure” killings have been going on, quietly, around the country ever since the housing swindle first unraveled. Like the story of the 64-year-old Phoenix man whose daughter and grandson were preparing to move in with him after losing their home to foreclosure — only to get a knock on his door surprising him with an eviction notice on the house he’d owned for over 30 years. Bank of America foreclosed on him despite his attempts to work out a fair plan.

We now know that the same banks that had been bailed out over their subprime fraud disaster were, by the time this happened, headlong into another criminal scheme, this time foreclosure fraud. The fraud was effected both illegally and in bad faith on a scale so vast it’s hard not to think that it was carried out by some marauding foreign army.

Anyway, the old man grabbed a .357 and a beer, walked outside into a sea of Phoenix cops and snipers, and fired his gun off until they cut him down in a hail of bullets.

Sometimes the “losers” in this class war make it easier on everyone else by killing themselves and setting themselves on fire as they’re being evicted, as one Ohio couple recently did. Others class war “losers” aren’t as cooperative, like a Florida man who was gunned down by police after he set his foreclosed townhouse on fire last year.

It’s exactly the sort of lopsided class war that Warren Buffett first officially acknowledged in 2006: “There’s a class war, all right, but it’s my class, the rich class, that’s making war, and we’re winning.”

Buffett is right to call it a one-way war, in both a metaphorical sense and in a literal sense, given the endless wars being waged for over a decade now, wars that are tied to the class wars at home.

Murdering Afghan Civilians

Nothing illustrates the interlinking between the class war at home and the imperial wars abroad more starkly than the example of Staff Sgt. Roger Bales, the Army sniper accused last month of killing 17 Afghan civilians, mostly women and children.

The Army is trying to pin it all on Sgt. Bales’s supposedly deranged mental state, but their version of events contradicts what the victims and eyewitnesses in the village have been telling the few reporters who have had a chance to actually interview them. They’re saying that they saw several American soldiers participating in the massacre, as well as a helicopter.

Whatever the case, whether alone or with others, most people familiar with the case agree that for some reason, Sgt. Bales “snapped.”  Invariably they’re over-psychologizing why he “snapped” — the military has blamed it on everything from his supposedly troubled marriage, to strain or stress, to an alleged alcohol bender.

Less well-known or discussed is what happened to Sgt. Bales on the other front: the class war front. Three days before his shooting rampage, the house where Bales’s wife and two children lived in Tacoma, Washington, put up for a short sale, $50,000 underwater. This was exactly what Sgt. Bales and his wife feared might happen if the Army forced him into a fourth battlefield deployment.

The last time Sgt. Bales deployed — to Iraq in August 2009 — Bank of America foreclosed on the family’s rental property, a duplex that his wife had bought in 1999 that was also underwater. Within months of BofA taking their duplex, Sgt. Bales’s Humvee hit an IED and flipped over, causing brain and head injuries. On a previous deployment to Iraq, Sgt. Bales had one of his feet partially blown off by a bomb.

Before being deployed to Afghanistan last year, he and his wife had been assured that the Army wouldn’t force Sgt. Bales, a highly-decorated hero who’d already sacrificed his physical wellbeing and his family’s financial health, back into combat.

Bales and his wife were planning their future as a career military family, on bases far from any combat zone, working up the Army’s pay scale year by year. But then in March 2011, a year before Sgt. Bales’s massacre, they were shocked and hurt by the Army’s decision to deny him his standard promotion to Sgt. First Class, which came with a much-needed pay hike.

(Last year, President Barack Obama’s Joint Chiefs of Staff chairman, Adm. Michael Mullen, said many of the austerity cuts would fall on soldiers’ pay and benefits rather than slashing weapons programs and force levels, which he called the “relatively easy” thing to do.)

When Sgt. Bales learned he wouldn’t get his promotion, his wife wrote on her blog: “It is very disappointing after all of the work Bob has done and all the sacrifices he had made for his love of his country, family and friends.”

Kathilyn Bales comforted herself with the assurances they’d been given that at least her husband wouldn’t be sent back into combat again — at least the family would be going together to one of the many non-warzone bases around the world. She wrote: “Who knows where we will end up. I just hope that we are able to rent out the house so we can keep it. I think we are both still in shock.”

Then came the real shock: the Army sent Sgt. Bales back into the war zone, into Afghanistan. His wife would have to deal with the more than $500,000 in mortgage debts on her own.

It was all timed perfectly: Last December, the month Sgt. Bales was deployed to Afghanistan, one of the subprime loans worth $178,000, taken out in 2006, was timed to “reset” to as high as 10.8 percent interest, and call in its first full payment.

Joe Krumbach, former president of the Seattle Mortgage Bankers Association, reviewed this loan and the others sold to Sgt. Bales’s wife while he was in Iraq, and denounced them as “unconscionable.”

He told the Seattle Times, “The margins on these loans are disaster waiting to happen” and admitted that mortgage lenders deliberately targeted military families like the Bales family, swindling them into signing onto far pricier refinancing loans “that benefited lenders and mortgage brokers” at the expense of vulnerable military families, as well as minorities and low-income borrowers.

Another local real estate businessman who specializes in short sales agreed, telling Businessweek that “we set them up.”

“It’s not an unfamiliar story, but it’s sad,” said Richard Eastern, a co-founder of Bellevue, Washington-based Washington Property Solutions, which negotiates short sales. “We’re going to send you off to war but we’re going to foreclose on your home.” He said many lenders offered loans they knew borrowers couldn’t repay. “And it’s not just soldiers, it’s everybody. We set them up.”

The extent to which mortgage lenders and banks deliberately preyed on American military families is made clear by this little-known fact: the Tacoma region, home to Fort Lewis-McChord, the largest base in the Western United States and home to 100,000 military personnel and family, suffered one of the worst predatory subprime loan epidemics in the country, an anomaly in the state of Washington. According to Richard Eastern’s firm, roughly half of all home sales in that region are either foreclosures or short sales. As early as 2007, the Wall Street Journal singled out Tacoma as one of the nation’s worst affected regions from subprime plunder.

Who’s at Fault?

So who did this? Who, in the class war equation, waged and “won” this class war on Sgt. Bales’s family, and so many other military families? What are their names? Where are they now?

As a matter of fact, there is a name: Paramount Equity Mortgage. And there is a name: Hayes Barnard, the CEO and co-founder of Paramount Equity. He lives in Roseville, California. In many ways, the story of the “winner” in this class war story is the most revealing, and enraging part of all.

Paramount Equity was founded in 2004, and quickly spread across the Western states, issuing some $8 billion in loans. Paramount Equity’s subprime predation really took off in 2006, right after the Bush Administration’s Department of Housing (HUD) and the FHA qualified Paramount Equity government insurance on its mortgages.

Almost immediately, Paramount Equity flooded the Tacoma region’s radio airwaves with deceptive ads hard-selling refinancing loans, featuring the voice of CEO Hayes Barnard promising the lowest rates, the most honest dealing, giving his personal guarantee.

However, a raft of fraud and deception charges followed. In 2008, the Washington State Department of Financial Institutions announced it was charging Paramount Equity Mortgage with deceptive lending practices and revoking its license.

Paramount stood accused of charging and collecting unearned fees, charging consumers to buy down interest rates without actually reducing the rate, failing to make required disclosures and making state and federally-required disclosures in a deceptive manner.

“Paramount failed to make proper disclosures in almost every loan we reviewed,” said Deb Bortner, director of DFI’s Division of Consumer Services. “Washington [state] has many licensed mortgage brokers who comply with the law. In today’s market, we simply do not need a mortgage broker engaged in deceptive conduct doing business in this state.”

The state’s charges also singled out Hayes Barnard for “engaging in a deceptive advertising campaign.”

As is so often the case, there’s far too little reported specifics on the actual nature of the fraud and deception. Sometimes you have to look in the comments sections on real estate or legal blogs from the affected region. Like this comment left on a marketing blog posting calling out Paramount Equity’s “lies”:

“I apologize if this is maybe a little off topic. I refinanced with Paramount back in 2004. Come 2009, my loan adjusted and I was left with no choice but to walk away with my 3 kids and stay at home wife. I had to rely on credit cards the last couple of years, even charging a couple mortgage payments.

“We ended up filing ch. 7 and we are now renting and have ZERO (if not worse) credit. Today (Sept. 27, 2011) an auditor came to my door and gave me some info and verified other info regarding B-of-A filing a PMI [private mortgage insurance] claim. Sorry so long winded….

“One of the docs he showed me was of my stated income which was double …  DOUBLE my income at the time. I NEVER would put myself into such a situation and lied. I honestly believe the number was changed and it was burried [sic] in an inch of docs I had to sign and I just didn’t see it.

“I’m not claiming complete innocence, because after all, I DID sign everything and agreed to the loan (which I didn’t know was a negative amortization loan. Hell, I didn’t even know what that meant). Now, we’re stable, but my financial future and creditworthiness is screwed. I barely got a $500 limit credit card at 17%.

“Do I have any type of recourse here? I’m not frivolous, but I am at a loss. In fact … I LOST everything. Thanks in advance.”

These sorts of stories can be found everywhere, and they repeat themselves over and over. And what’s most galling of all is that these plundering crooks preyed on those most vulnerable — military families suffering from the chaos of war, minorities, low-income people — to generate their fast riches, backed with government guarantees.

Getting Off Easy

For all the swindling and destruction, including the “unconscionable” exploding loans Paramount Equity foisted on Sgt. Bales’s wife while he was off fighting in Iraq, the state of Washington settled in 2009 with what can only be described as a wrist-massage: A fine of a mere $392,000, no admission of guilt.

Paramount even got to keep its license to operate. This, despite the incredible admission in the signed consent that “Paramount admits that during the relevant time period, Paramount did not maintain books and records.”

This is what a lopsided class war looks like: The financial fraudsters, the One Percenters, fleece the unsophisticated locals like 19^th century Europeans plundering far-away aborigines.

One victim of Paramount commented bitterly on the settlement:

“We have not one, but TWO ugly loans which are breaking us from good ol’ Paramount Equity Mortgage. …. The citizens who signed these toxic documents are suffering EVERY DAY and losing their homes because Matt and Hayes need to make their yacht payment.

“Our financial lives, that took 30 years to build, have been crushed because of the deception that occurred in their office (where no employee appeared to be over 40 years of age) I remember asking at the closing table, ‘Does anyone have gray hair in this building??!!’ It was unnerving. The parking lot looked like a BMW Sales Lot. …

“Soon, I intend to stop crying about our mortgages, as I have been doing over the last THREE YEARS… And Washington State Department of Financial Institutions: SHAME ON YOU. Shame on you.”

Two “ugly loans” from Paramount Equity are what broke Kathilyn and Roger Bales.

The end result: Hayes Barnard and Paramount Equity Capital are doing better than ever. In 2009, Hayes Barnard was named “Entrepreneur of the Year” by the Roseville Chamber of Commerce, the wealthy Sacramento suburb where Paramount Equity Mortgage is headquartered. In 2010, the Sacramento Business Journal honored him as one of Sacrament’s “40 under 40” leaders.

The big payoff came last year, when one of the world’s largest infomercial firms, Guthy-Renker, bought a “significant equity position” in Hayes Barnard’s company. You might know Guthy-Renker as the company that makes all those annoying Tony Robbins infomercials and Susan Lucci skincare infomercials.

Guthy-Renker’s also owns an equity stake in RealtyTrac, the leading foreclosure intelligence source. That’s good news for Hayes Barnard, because it means he’ll be able to wet his beak on the aftermath of the subprime plunder by getting first dibs on the best foreclosure deals. It’s a win-win.

In this degenerate 21^st Century version of America, Hayes Barnard exemplifies everything that the current system rewards. In the anti-meritocracy we live in, the sociopaths and crooks are the “winners.” Being a “winner” means you get quoted adoringly in a Sacramento Business Journal Q&A, spouting out the blackest of unintentional black humor:

“As a younger professional, what is the biggest challenge you face?

“As a young professional, the biggest challenge I face is finding the right balance between raising my three children all under 3 years old, being a supporting husband and leading my team as a CEO of three companies. … Achieving true success is to give, give, give and help as many people as you can while leading for your family, employees and community.”

That’s how the class war “winners” rub it in on the rest of us — especially their victims. How can you function after reading such self-serving drivel, particularly if you’re one of the victims?

As for the “losers” in this class war: Sgt. Roger Bales’s wife and children are ruined. They have no home; they only own debts to the tune of hundreds of thousands of dollars, debts owed for life to the Hayes Barnards of this country. The “winner” — the swindler — is a community hero.

As for Sgt. Bales – whom the Army accuses of “snapping” for no good reason, accusing him of being a drunk, or of mental weakness, incapable of handling his marriage or the stress of combat – he might even be put to death. He now sits in Fort Leavenworth military prison, charged with the murder of 17 Afghan civilians.

The way the One Percenter “winners” see this story, it’s all proof that the system is working perfectly.

As the National Journal reported, “Nearly all of National Journal’s National Security Insiders agree that the military justice system can conduct a fair trial for Staff Sgt. Robert Bales.”

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Molly Katchpole, 22 years old, took on Bank of America over its ridiculous debit card fee and won. Just goes to show what happens when people decide to stand up to power. From the Guardian:

I called on Bank of America to back off the new debit card fee, knowing that if Bank of America did, the other banks would, too. I was unprepared for the outpouring of support I got online from others who felt the same way. I never thought of myself as an activist before this, but suddenly, thousands of people were signing my petition each hour – sometimes, up to 40,000 per day.

In the end, more than 300,000 people from all walks of life had joined the campaign. And what is even more awesome, it has inspired dozens of other people to start their own campaigns against their banks. Those 300,000 voices brought unimaginable pressure on Bank of America. Brian Moynihan, Bank of America's CEO, was forced to answer to us on national television. The other big banks, facing an outpouring of customer outrage, were eager to ditch their fees and avoid the same public pummeling Bank of America got. Once Bank of America stood as the last major national bank considering such a fee – and the primary object of American consumers' anger over outlandish banking fees – it had no choice but to stand down.

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Matt Taibbi suggests ‘Occupy Wall St’ add another very specific policy to their agenda; get people to pull their money out of Bank of America:

When it comes to commercial banking, Bank of America is as bad as it gets.

The markets, of course, have lately come to agree, as B of A has lately been downgraded again to just above junk status. The only reason the bank is not rated even lower than that is that it is Too Big To Fail. The whole world knows that if Bank of America implodes – whether because of the vast number of fraud suits it faces for mortgage securitization practices, or because of the time bomb of toxic assets on its balance sheets – the U.S. government will probably step in to one degree or another and save it.

The government’s patronage of the bank was never clearer than in recent weeks, when B of A quietly decided to move trillions of dollars (trillions, not billions) in risky Merrill Lynch derivatives contracts off Merrill’s books and onto the books of the parent/retail arm, Bank of America.

This decision was done at the behest of counterparties to those transactions, who wanted those contracts placed under the aegis of Bank of America, whose deposits are insured by the FDIC. The move was made, according to reports, so that Bank of America could avoid posting $3.3 billion in collateral to satisfy the company’s creditors. In other words, Bank of America just got You the Taxpayer to co-sign as much as $53 trillion worth of dicey derivative contracts.

This essentially means that Bank of America gets to gamble lots of money and never risk losing it – a classic example of crony capitalism at its ugliest. The public has unwittingly signed on to bail them out if it all goes pear shaped, and given the complete lack of serious regulatory policy coming from the White House and Fed, it’s almost a given that it will.

Taibbi argues that pulling your money out of BofA will send a powerful message to Washington that this type of behaviour is no longer acceptable. The public cannot allow the banks to hoodwink them into paying for their gambling addiction any longer, and the best way to do this is to cut their funding directly.

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