Juggling Dynamite

The second segment in this series aired last night on PBS. It is an excellent series, showing the value of investigative reporting versus the infotainment, cheer-leading so frequently aired today. Here is a direct link to the first hour May 1. I believe that this series clearly lays out the culprits, and the failures of the bankers and Bush administration. But is also lays much at the feet of the Obama Administration who have failed to effect the prosecutions and reforms needed. After all he swept to power on a campaign of change, and promptly protected and rewarded the usual suspects of the status quo.

Watch Money, Power and Wall Street: Part Three on PBS. See more from FRONTLINE.

The final chapter (2nd hour of last night) is also excellent and offers some important insight on the role of investment banks in creating the credit crisis in Europe and a legitimate impulse behind the Occupy movement. Here is a direct link.

Watch Money, Power and Wall Street: Part Four on PBS. See more from FRONTLINE.

Once a sleepy brokerage firm dealing with financial products like corn futures and pork bellies, MF Global appeared to be rejuvenated when Jon Corzine — a Marine, former senator, former governor, one of Wall Street’s top bankers and a man on the shortlist to succeed Treasury Secretary Tim Geithner — joined as CEO in 2010.

But last October, with the financial crisis still fresh, MF Global failed spectacularly, filing for bankruptcy after a $6.3 billion bet on European sovereign debt went bad. The firm’s downfall reveals lessons not learned and the danger of the revolving door between politics and finance, as FRONTLINE’s Martin Smith reports on today’s Marketplace.  Here is a direct link.

Good segment on the Housing Market last night on CBC. Worth a watch. Here is the direct link.

Main supports to this bubble have been the usual suspects of artificially suppressed interest rates and government (taxpayer) underwriting of lender risk through Canada Mortgage and Housing Corporation. Canadian lenders use the EMILI automated application program to qualify buyers on line.

Informal surveys of current practices reveal that an estimated 90% of all mortgage applications in Canada over the past few years have been done through this on line system and generally with no physical appraisal, no tax returns to verify income (only pay stubs) and no verbal confirmation of employment. At the same time mortgage broker/dealers incented by commission have the capacity to tweak square footage, house amenities, property taxes, even income/assets/debt servicing to get the deal done. And although lenders do get the odd CMHC audit, in most cases CMHC never sees supporting documentation. All of this suggests that the amount of mortgage “abuse” and fraud in Canada over the past few years may well be higher than was experienced in the US housing market leading up to its bubble bursting. This is a major negative for Canadian consumers, our economy and we tax payers who have unwittingly underwritten upcoming losses through CMHC.