Chris Whalen & Jonathan Weil On 'State Of The Banks, Questionable Accounting At Wells Fargo'

Lizard Buffett: Wells Fargo's largest shareholder.

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Chris Whalen on Bloomberg Radio earlier today with Tom Keene and too-big-to-fail loathing columnist Jonathan Weil.  Excellent discussion.

Click HERE for Audio

Related stories:

Wells Fargo Just Fired A Man For Stealing A Dime In 1963

Wells Fargo Wrongfully Forecloses On Same Home TWICE

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Recently from Whalen:

'Bank Of America Will Split Into Pieces Soon'

'What Did Bob Rubin Know About LIBOR Fixing?'

Whalen & Ritholtz: "The Big 4 Banks Have To Cheat To Hide Their Insolvency"

Comments

[DailyBail]

Shipper Uses Gut in $11 Billion Bet That Worst Streak Since ’70s Is Ending

http://www.bloomberg.com/news/2012-09-09/ship-magnate-uses-gut-in-11-billion-bet-worst-since-70s-ending.html

[DailyBail]

Fed Stuck at Zero Into 2015 Seen in Swaps, QE Odds Reach 99%

http://www.bloomberg.com/news/2012-09-10/fed-stuck-at-zero-into-2015-seen-in-swaps-qe-odds-reach-99-1-.html

[DailyBail]

Don’t Let Libor Bankers Police Themselves

http://www.bloomberg.com/news/2012-09-10/don-t-let-libor-bankers-police-themselves.html

[DailyBail]

Bernanke Has Already Told Us: More Stimulus Is Coming

http://www.bloomberg.com/news/2012-09-10/bernanke-has-already-told-us-more-stimulus-is-coming.html

[DailyBail]

Number of children living in NYC homeless shelters hits 19,000.

http://www.nydailynews.com/new-york/number-children-city-homeless-shelters-hits-19-000-teen-francheska-luciano-living-shelter-a-living-hell-article-1.1155123#ixzz26417ByVS

Teen Francheska Luciano said living in shelter is like a living hell

[DailyBail]

LONDON (CBS DC)- A recent study found that those who participate in illegal file-sharing are not flying under the radar, but rather are closely monitored within hours of engaging in suspect activity.

http://washington.cbslocal.com/2012/09/10/study-majority-of-file-sharers-are-heavily-monitored/

[DailyBail]

Barclays boss vows to be quick and bold in reform plan

http://www.reuters.com/article/2012/09/10/us-barclays-ceo-idUSBRE8890ZQ20120910

[LiberatedCitizen]

Here's Why You Should Expect Fed QE3 Thursday

snip

"In other words, the Fed is no longer looking for data to justify further easing. That was the story last spring. Now the Fed is checking the data to see if the data undermines the already established case for further monetary accommodation"

in full
http://www.cnbc.com/id/48990587

Thanks A holes I guess it's only the stock markets that matter

Are You Better Off? Take a Look at the Stock Market

http://www.bloomberg.com/news/2012-09-10/are-you-better-off-take-a-look-at-the-stock-market.html

Because the elderly and prudent sure don't

As Low Rates Depress Savers, Governments Reap Benefits

http://www.cnbc.com/id/48981774

[Cheyenne]

In light of Wells Fargo's recent admission that it created 1.5 million fake bank accounts, it looks like Mr. Whalen's charge of questionable accounting at Wells Fargo was on the (funny) money.

But the real questions about the latest control fraud at Wells Fargo come to us courtesy of Catherine Austin Fitts (h/t Jesse at Cafe Americain), who poses a short and trenchant series of questions:

http://solari.com/blog/unanswered-questions-about-wells-fargo/

Foremost among CAF's concerns is this:

"Are phony account mortgages from Wells Fargo among the $1.763 trillion of mortgage-backed securities on the Fed’s balance sheet?"

How's that for a Friday morning eye opener? Think about the implications if the answer to that question is yes.

Needless to say, the odds that any Wells' executives get indicted are zero. Relatedly, anyone wanna lay odds that Elizabeth Warren--whose track record of opposing a Fed audit speaks volumes--isn't ultimately an instrumentality of the banksters?

[pitchfork]

Cheyenne,

I've been skeptical of the "empty MBS" claims in the past. What I just don't understand is where the money comes from to service the fake mortgages. Or, if the money never comes, how is this accounted for? Does the servicer then just claim that the loans went into default? Or do the purchasers of the MBS just shrug their shoulders when the securities underperform?

Regardless, millions (!) of fake accounts/loans is effing serious. I was under the impression that it was just a few local branches whose managers were gaming the system for bonuses or whatnot.

Anyone?

[Cheyenne]

The empty MBS claim is very real. Not all of them, but a whole lot more than the banks let on.

When Ms. Fitts left the gov't as the Assistant Secretary of Housing at HUD, she developed software to track mortgage money flows in all 3100+ counties in America. When she came out and asked why there were houses in south-central LA that had 10 mortgages a year on them, the government came after her company and its Community Wizard software with a vengeance, wiping out her wealth (most of which, presumably, she'd garnered during her years at Dillon Read).

And two months before Lehman went down, various MBS were shown to be selling at 5 cents on the dollar. Do you know of anyone whose home value declined by 95%? I don't.

As for trying to track money flows, there are a few problems inherent in your enterprise. First, mark-to-market acctg died in April 2009. Second, we have the vast rehypothecation game. Third, and most importantly, once you let criminals take over the system, there's no end to their lies or their crimes. You can't even trust the most basic financial reports anymore. And who has the power to print money? Oh, yeah, the criminal Fed, which is running a Ponzi scheme to prop this fucker up.

The 1.5 million fake accounts is the tip of the iceberg, you may rest assured.

In another thread, it was skinflint who said of the Wells Fargo case:

"This is exactly the same scheme that, I think PNC bank and maybe HSBC pulled when the laundered billions for drug cartels. I would bet that this is the reason for these fake accounts. Pay some dupe to open an account, say a bank teller, then start the process of washing money til it's clean. Jesus."

http://dailybail.com/home/cbs-news-censors-bill-clinton-saying-hillary-frequently-has.html

In response, I pointed him to an absolutely horrifying interview this year with a former HSBC veep John Cruz. He says phantom accounts are typically opened, used to process illicit money transfers, then closed. The purpose of this, he says, is to erase the audit trail.

If that's correct, then NO ONE really knows what's going on, and this system is well past the point of no return. Anyway, here's the interview:

http://www.youtube.com/watch?v=R5Y4UGPQTLg

[pitchfork]

Thanks, Cheyenne. I saw that comment and skimmed the Cruz interview. Somehow, I was thinking he was at Wells Fargo -- it had to be Wells Fargo, because surely this wasn't happening at 2 separate giant banks, right?

Somewhat unrelated, I missed it earlier this year when it emerged who, exactly, the FCIC recommended for prosecution. As you probably know, Robert Rubin was on the list. On the few occasions I've had the chance to talk to regular people and get in deep enough to mention the FCIC (which they had never heard of, of course), I always mentioned Robert Rubin as someone who was probably or at least should have been on the FCIC's list for prosecution. It's nice to be vindicated just a little.

I had lunch today with an accountant (not mine, she just happens to be one) and she was talking about a small business client who, when she (the business owner) couldn't quite reconcile her books, just put the missing figures into a discretionary account, attributed it to various fees or costs and called it a day, which is "illegal" per my accountant friend. What occurred to me is that if small-business lady were working on Wall St., nobody would know the difference or care. Only ordinary, small business people have to worry whether something is "illegal" or not.

[pitchfork]

I mean who cares about the "law"? More like LOL.