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-------- Original Message --------
Subject: USA: 4yr - 8.6 Million Foreclosure Projection
Date: Tue, 14 Apr 2009 08:45:27 -0700
From: "Stephen M. Apatow" <s.m.apatow@humanitarian.net>
To: Emergency Food and Shelter National Board Program <efsp.email@uwa.unitedway.org>


Dear Colleagues:

According to the Center for Responsible Lending, 2.4 million foreclosures are projected for 2009 and 8.1 million over the next 4 years.

As we enter the first phase of this projected 4 year crisis, people on the grassroots household level across the United States are not receiving assistance:
  • Real unemployment is currently at 15.6 percent (WSJ) with 1 out of 6 now unemployed or underemployed.  
  • 1 out of 5 mortgages that are upside down with negative equity and 40% of all mortgages eligible for a loan modification.
  • The New York Times ( 3 April 2009) reported Bankruptcies rose to nearly 6000 a day in March or one every 13 seconds. 
  • The size and scope of the homeless crisis and tent cities across the United States has prompted a call for FEMA and the Red Cross to activate disaster shelters in every state.
States are increasing taxes and exploiting predatory hyperinflated home valuations (property taxes) to meet their budgets, while families crash.  The level of assistance to the household level, is equivalent to our leaders saying, we will say a prayer for you, implementing economic measures that will deepen the crisis further.  A national Presidential disaster declaration (economic) was called for a year ago when we entered the recession/depression and contingencies were set forward for emergency economic stabilization.

The paper "The Pricing of Investment Grade Credit Risk during the Financial Crisis (Joshua D. Coval: Harvard Business School, Jakub W. Jurek: Bendheim Center for Finance, Princeton University, and Erik Stafford: Harvard Business School, March 30, 2009) provides the following conclusions regarding systemic risk analysis (Dollars and Sense, 8 April 2009):

* Many banks are now insolvent. "...many major US banks are now legitimately insolvent. This insolvency can no longer be viewed as an artifact of bank assets being marked to artificially depressed prices coming out of an illiquid market. It means that bank assets are being fairly priced at valuations that sum to less than bank liabilities."

* Supporting markets in toxic assets has no purpose other than transferring money from taxpayers to banks. "...any taxpayer dollars allocated to supporting these markets will simply transfer wealth to the current owners of these securities."

* We're making it worse. "...policies that attempt to prevent a widespread mark-down in the value of credit-sensitive assets are likely to only delay—and perhaps even worsen—the day of reckoning."


Leaders are calling for 100% transparency, clearing and neutralization of unregulated derivatives that facilitated the global market collapse combined with a G-192 debt relief strategy to address the derivatives clearing variable.  One view of the shadow banking system is that if the trade was unregulated, with no capitol base to back the instrument, then the transaction represented fraud and should be treated under the umbrella of a criminal investigation.

 According to "Banks Lose $836 Million in First Derivatives Loss" (27 March 2009):

-- five banks accounted for 96 percent of the $200 trillion in derivatives contracts held by U.S. banks...
-- JPMorgan remained the largest user of derivatives among its competitors, with $87.4 trillion in notional value, more than Bank of America and Citibank combined...
-- Goldman Sachs held $30.2 trillion in derivatives at the end of the fourth quarter, OCC said.
--  About 97 percent of JPMorgan’s trading in the fourth quarter occurred in the over-the-counter market, with Bank of America at 94 percent and Citigroup at 98 percent.


Leveraged borrowed money from the central banks (the G-192 Y2K remediation infusion), flowed directly into the stock and commodities markets in conjunction with revocations of the protections afforded by the Glass-Steagall Act of 1933 and the Commodity Futures Modernization Act of 2000.  Today, the central bank money, being infused to stabilize the global markets following the resultant 2 market crashes, is once again being leveraged for facilitate further systemic destruction:

Stimulus plans and near-zero interest rates in developed economies are boosting investor confidence in emerging markets and commodity-rich nations with interest rates as much as 12.9 percentage points higher. Using dollars, euros and yen to buy the currencies of Brazil, Hungary, Indonesia, South Africa, New Zealand and Australia earned 8 percent from March 20 to April 10, that trade’s biggest three-week gain since at least 1999, data compiled by Bloomberg show. -- Carry Trade Comeback Means Biggest Gains Since 1999, Bloomberg, 14 April 2009.

For a list of foreign exchange or Forex Trading Platforms allowing trades at 100:1 to 400:1 leverage, visit the MetaTrader Forex Brokers directory.

The IMF has been allocated $1 Trillion for humanitarian aid to address the damage caused by a $400 Trillion + central bank leveraged market challenge, hyperinflation, etc., etc....

Emergency economic stabilization and recovery for every household in the United States and on the grassroots level in 192 member countries of the United Nations is a priority focus of Humanitarian Resource Institute.


Looking forward to your guidance....

Stephen M. Apatow



Humanitarian Resource Institute
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Stephen M. Apatow
President, Director of Research and Development, Humanitarian University Consortium Graduate Studies Center for Medicine, Veterinary Medicine and Law

 
Tel: (203) 668-0282
Internet: www.humanitarian.net
Email:
s.m.apatow@humanitarian.net


Note: This is the orginal article.

UPDATE:G20: Systemically Key Institutions, Mkts Need Regulation: Wall Street Journal, 2 April 2009

LONDON (Dow Jones)--The Group of 20 developed and developing nations said Thursday all systematically important institutions and markets should be regulated, and urged members to complete the implementation of the Basel II capital framework.

"We have agreed that all systemically important financial institutions, markets and instruments should be subject to an appropriate degree of regulation and oversight," the G20 said in an annex to the communique following its summit Thursday.

The group said hedge funds or their managers must be registered and will be required to disclose "appropriate information on an ongoing basis to supervisors or regulators," including on their leverage.

The group called on all G20 countries to "progressively adopt" the Basel II capital framework, which hasn't been agreed by the U.S. among others.

The G20 endorsed the Financial Stability Forum's recommendations on reducing procyclicality of accounting rules and also endorsed new principles on pay and compensation, which aim to ensure compensation structures are consistent with "long-term goals and prudent risk-taking."

These principles should be integrated into risk management guidance by the coming fall, the G20 said.

The group also called for "the standardization and resilience" of credit derivative markets, mainly through the establishment of regulated central clearing counterparties.

It called on the industry to develop an action plan on standardization by autumn 2009.

However, the group of leading economies also said international standards on capital levels shouldn't be changed until the global economy recovers.

"Until recovery is assured the international standard for the minimum level of capital should remain unchanged," it said. "Once recovery is assured, prudential regulatory standards should be strengthened."

The G20 said compensation arrangements, including bonuses, should properly reflect risk and companies should disclose such information to make sure stakeholders are adequately informed.

"Payments should not be finalized over short periods where risks are realized over long periods," it said.

The G20 also agreed that action should be taken by the end of the year to reduce the complexity of accounting standards for financial instruments and make significant progress towards a single set of global accounting norms.

The G20 said it would promote the standardization and resilience of credit derivative markets and called for fair value accounting framework to be reaffirmed.

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