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.
S.M.Apatow
###
|
