27 April 2010
Humanitarian Resource Institute
Phone: (203) 668-0282
Url: www.humanitarian.net
HRI Legal Resource Center
Url: www.humanitarian.net/law
Financial Crimes: Mortgage Fraud - OTC Derivatives
G-192 Stabilization and Recovery
As the global economic crisis deepens, hunger and
malnutrition
are likely to increase. Reduced incomes and higher unemployment mean
the purchasing power of the poor diminishes. Already, more and more
people are finding food is out of reach. -- Dossier: Global
Food Crisis
In Depth: World Food Program. [1]
Half of earths most severely impoverished populations are currently in
the midst economic humanitarian emergency. Hyperinflation
attributed
to commodity futures trading, following the repeal of regulatory
oversight
of OTC derivatives, [2] has devastated humanitarian operations.
Following
the collapse of the global financial markets in 2008, regulatory
controls
were not coordinated for financial markets, facilitating the flow of
emergency
central bank funds back into speculative trading through unregulated
OTC
derivatives.
In the context
of oil, the impact of speculative trading estimates range from around
$10 to $30 a barrel. If
prices are $10 a barrel higher than dictated by supply and demand,
producers are earning an extra $6 billion a week globally, or more than
$300 billion a year. [3] If $30 to $50 a barrel, producers
are earning an
extra $18 to $24 billion per week globally, or more than $900 billion
to
$1.5 trillion a year. A realistic projection of $50 a
barrel
attributed to speculative trading, with oil at $83.50 per barrel, is
drawing
$ 1.5 trillion from global humanitarian operations or the global
recovery
($1,500 Billion or $1,500,000 Million). Oil companies across the
United
States have noted the critical need for a return to futures trading
of
contracts "with delivery only," eliminating the speculative casino
trading
of futures contracts (today with emergency central bank money through
OTC
derivatives).
Our next focus of concern encompasses the use of mortgage instruments,
at the center of criminal predatory lending, mortgage and appraisal
fraud, as the asset base of securities in the OTC derivatives market.
In the
context of the United States housing market alone, the collapse of home
values
is directly associated with 6 million foreclosoures, [4] with 7-9
million
additional instruments eligible for modification. [5] Since the
OTC
derivatives market is directly viewed as the vehicle that facilitated
the
collapse of the global financial system, there is an immediate call for
revaluation
of all OTC derivatives based on fair market value of these instruments
associated
with financial crimes.
Based on the size and scope of the financial crimes that facilitated
the collapse of the global financial system, a request has been
presented for tools to accommodate restructure on the country, state
and municipal levels. [6]
References:
1. Dossier: Global Food Crisis In Depth: World Food Program. Url: http://www.wfp.org/global-food-crisis-in-depth
2. Davos: World Leaders Called to Emergency Action: Humanitarian
Resource Institute, 20 January 2010. Includes Nobel Laureates asked
to request financial market intervention by leaders in UN countries:
Humanitarian Resource Institute, 13 January 2010. Financial Market
Legitimacy Critical for Sustainable Global Recovery: Humanitarian
Resource Institute, 5 January 2010. Url: http://www.unarts.org/news/gsteagall_152010.html
3. Financial speculation seen boosting oil price: Reuters, 27 April
2010. Url: http://www.reuters.com/article/idUSTRE63Q1FJ20100427
4. Yes, Regulators Can Stop Foreclosures: The Nation, 10 December 2009.
Url: http://www.thenation.com/doc/20091221/kaufmann
5. HopeNow: Url: http://www.hopenow.com
6. IBAHRI: Government Debt: Default Projections: Humanitarian Resource
Institute, 18 February 2010. Includes IBAHRI: G-192: Scope of Global
Debt Crisis in Focus: Humanitarian Resource Institute, 10 February
2010. Url: http://www.unarts.org/news/ibahri_2102010.html
Looking forward to feedback, guidance and immediate assistance for UN
member countries.
Stephen
M. Apatow
Founder, Director of Research & Development
Humanitarian Resource Institute
Humanitarian University Consortium Graduate Studies
Center for Medicine, Veterinary Medicine & Law
Phone: 203-668-0282
Email: s.m.apatow@humanitarian.net
Internet: www.humanitarian.net
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