Opinion

Felix Salmon

Citigroup under pressure

Felix Salmon
May 26, 2010 21:14 UTC

Morgan Stanley did its job: it managed to sell 1.5 billion of the government’s shares in Citigroup for a total of $6.2 billion, or just over $4.13 a share. That’s a good price, compared both to today’s close of $3.86 a share and to Treasury’s cost basis of $3.25 per share. Still, there’s another 6.2 billion shares outstanding, which is quite a big overhang, especially now that Citi has admitted stealing from cemeteries, and looks like it’s doing some pretty egregious book-cooking at quarter-end:

citiborrow.tiff

Citi refused to comment on these numbers, but they’re big, and they look very bad. And a source involved in selling down Treasury’s stake in the bank seems to have come down with a severe case of bearishness, wondering if Treasury shouldn’t simply offload a massive stake to Qatar at a discount to the market price:

“If we dribble the shares into the market on a secondary basis, that may be the safest [strategy]. But it may not be the most economic. There are a lot of structural headwinds.”

Needless to say, buying bank stocks at the same time as big sovereign wealth funds has not proved to be a winning strategy in recent years.

Citi was trading at $5 a share last month, which means that it’s already seen 22% of its market cap obliterated in the past few weeks. It’s a low-priced and volatile stock which still, inexplicably, hasn’t gone ahead with the reverse stock split that everybody’s been waiting for, and until that happens it’s going to remain a stock for traders rather than investors. If I was at Treasury, I’d be nervous right now: it’s politically very hard for Treasury to sell its stake at any price below $3.25 a share, and the market, as any trader knows, tends to be drawn magnetically to exactly the state of affairs that you least want.

So well done to Morgan Stanley for getting that big initial tranche out the door. Selling the rest of the stake is going to be hard, and it’s going to be nigh-on impossible if Treasury now expects to be able to get $4.13 a share or higher.

COMMENT

No two ways about it. Treasury should be like everybody else with their wits about them, dumping paper tigers Citi and BofA en masse, before it’s too late.

Trust the Captain!

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When a blogging award isn’t for blogging

Felix Salmon
May 26, 2010 19:52 UTC

Jim Prevor, a self-described “proud finalist for the Gerald Loeb Awards for Distinguished Business and Financial Journalism for work that originated online”, sets me straight on the new blogging award:

There is no Loeb category for blogging. The category is entitled “Online Commentary and Blogging” and the criteria is “excellence in analysis and commentary that originates online” — so if George F. Will decided to give up his Washington Post gig and, instead, post his column online every Tuesday and Thursday — he would be eligible. There is no requirement to have a blog or be a blogger.

The new category is obviously a response to changes in the media whereby many respected publications don’t have the page count to carry all the great stuff they could publish, so they publish it online…

The pieces I was nominated for had nothing to do with the Blog and were three articles, exactly identical in form and substance to the kind I have had published in the print version of The Weekly Standard, except for reasons of space and timeliness, the editor ran them online.

This is, actually, precisely my point. If Prevor’s work is “exactly identical in form and substance” to the kind of stuff that might otherwise have appeared in print, then shouldn’t it be competing with that content, for the Commentary award, rather than being ghettoized in an award which seems to care more about the medium than the message?

Prevor and I agree that he’s no blogger. But here’s the thing: there’s no point in having a whole new award if it’s not for blogging and is just for commentary — there’s a perfectly good commentary award already. If there is going to be a new blog for online content, it should recognize stuff which could only be online. That’s why I thought the award would go to blogs (as opposed to individual blog entries), and would award bloggers (as opposed to someone whose day job is to be the editor of a stable of fresh-food trade mags such as PRODUCE BUSINESS magazine).

Francine McKenna, another finalist for the award, says she believes that the nomination “was a first-attempt to recognize work like mine”. But the fact is that if she doesn’t win, then the award will not go to work like hers. She’s the only full-time blogger on the list, and she’s also the only one of the nominees who is truly independent: her nomination, uniquely of the four, was not submitted on her behalf by an established print publication.

One of the great things about the internet is that it’s a natural home for sites like McKenna’s, which are good at filling niches which print publishers have neither the ability nor the inclination to address. But if the Loebs wanted to create a prize for sites like McKenna’s, they did a very bad job of it, judging by the four finalists.

COMMENT

Not that I don’t wish Felix, or his video clips, well and fully anticipate ways of him Attaining Great Things (even, if be it must, blogger awards) on the basis of sheer merit alone…

But before I became the “Charlie Rose” of anything, I’d prefer someone to shoot me. Dead.

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Congestion charging and biketopia

Felix Salmon
May 26, 2010 18:50 UTC

Matthew DeBord thinks that my Wired article about Charles Komanoff is really all about turning Manhattan into “biketopia”. He couldn’t be more wrong. Yes, Komanoff himself is a big advocate of biking. And yes, at the margin, having less traffic in midtown would help in terms of being able to create more bike lanes. But biking is not a big part of Komanoff’s spreadsheet at all: instead, it’s all about public transit. Buses become free, subways become cheaper, and the overwhelming majority of New Yorkers — the people who get into Manhattan by some means other than private car — become better off.

DeBord thinks that New York is already “transitopia” — but the fact is that its transit system can be improved greatly through the implementation of a congestion charge, which would unsnarl traffic for buses and would provide new money for buses, subways, and local trains.

Debord says that New Yorkers don’t want to get rid of gridlock: “many people have decided that they’d rather live with it than have, for example, Michael Bloomberg tell them when they can and can’t affordably drive into Midtown”, he writes. But check that link: the “many people” in question are, essentially, Shelly Silver and his small band of dysfunctional Albany politicians. It’s worth remembering that it’s already pretty much impossible to affordably drive into Midtown: here, for instance, are the rates posted at my favorite parking garage, across the street from Reuters. All of them are higher than Bloomberg’s proposed congestion charge.

parking.jpg

What’s more, there were two big problems with the congestion charge as proposed by Bloomberg. The first was that Manhattanites benefited unduly: since they have many fewer cars, they got all the benefits of faster traffic while bearing only a small proportion of the total fees. Under Komanoff’s plan, Manhattanites — who take the overwhelming majority of yellow-cab journeys — would pay a taxi surcharge, making things more equitable.

The second problem with Bloomberg’s congestion charge is that it didn’t directly benefit most New Yorkers. If they ever drove into Manhattan, they would pay more, but they would never save anything, since the plan didn’t reduce transit fares. Komanoff’s plan of course is very different, and especially benefits residents of Queens and the Bronx who take a lot of buses, which would always be free. (The huge advantage of making buses free is that it eliminates long lines and waits at the farebox.)

DeBord accuses Komanoff, me, and “the other sons of Jane Jacobs” of wanting a “place where we just won’t be able to do the car thing anymore”. That simply isn’t true: Komanoff likes to say that he doesn’t want a car-free New York, he wants a car-fee New York. Yes, we would like to see fewer cars making through-trips through Manhattan without even stopping, and many fewer trucks doing that. Right now, such through trips account for 40% of all car trips in the central business district, which is crazy.

But Komanoff’s plan is most emphatically not about pedestrianizing New York or turning it into some kind of Dutch-style biketopia where cars are all but absent from the city center. It’s just about making life better for all New Yorkers — even the drivers, who no longer need to suffer the frustrations of gridlock, and who can get to their destination in a much more predictable amount of time. There’s a lot of people who would pay good money for that.

COMMENT

Oh, you did write “central business district”, not Manhattan. So presumably this is people driving from Brooklyn or Queens to the Holland and Lincoln Tunnels, respectively, which is more what the statistic sounds like to people.

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What they study at Chicago Business School

Felix Salmon
May 26, 2010 15:34 UTC

According to Matthew Gentzkow and Jesse Shapiro, in a short paper (pdf) they’ve written about the news diets of media figures, about 61.9% of the news I consume is conservative. That makes my news diet more conservative than 78% of internet users, and 88% of media figures.

Michael Lewis, by contrast, gets a 50-50 share of conservative/liberal news, which makes his diet very liberal by both internet and media-figure standards. And Tyler Cowen’s news diet is more liberal still.

I have no idea why I come out so conservative. The paper scores me based on this, which includes nothing more conservative than the FT and the WSJ. Maybe that suffices.

(Via Tyler)

COMMENT

Which WSJ ?

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Basel III: Grounds for optimism

Felix Salmon
May 26, 2010 14:15 UTC

If you’re not a central banker and don’t even know any central bankers, chances are that you’ve never heard of Global Risk Regulator, a trade publication in London. But right now it’s very much worth paying attention to them, because their sources in and around Basel are unsurpassed. And it turns out, reading the cover story from their latest issue — which they’ve been nice enough to put online for free — that the central bankers seem to have the upper hand, right now, in the fight with the bankers.

Basel Committee chairman, Nout Wellink, who is also head of the Dutch central bank, and other regulators, have indicated that they will look closely at aspects of the proposed reforms that are causing most concern to bankers. But those in the industry expecting a delay in designing the regulatory framework, or that the recently-completed impact study would lead to an extensive re-write of the proposals – described by some bankers as “punitive” and “excessively conservative” – look likely to be disappointed.

The author, Melvyn Westlake, also has a handy one-sentence summary of what exactly Basel III is:

The proposed measures – dubbed Basel III – initially issued on December 17, include tighter definitions of Tier 1 capital, the introduction of a leverage ratio, a framework for counter-cyclical capital buffers, measures to limit counterparty credit risk, and short and medium-term quantitative liquidity ratios.

The banks are up in arms about all this, mainly because it will reduce their profitability and return on equity. But they can’t say that, so instead they’re falling back on the trusty old warhorse of “it will decrease lending”. The Basel technocrats, happily, seem unconvinced, although they have gone so far as to commission an official macroeconomic impact assessment to help counter the spin coming from the bank-lobby types at the Institute of International Finance. The IIF, of course, is already pushing as hard as it can:

Although the IIF’s own impact assessment is not yet complete, the Dallara letter says the initial results are “sobering.” They suggest that, “even in a scenario reflecting only the main proposals emerging so far from the Basel Committee – and not other, national initiatives – there would be a significant adverse impact on employment and growth in the US, extending over several years.” There would be a “more substantial effect in the Euro area,” the policy letter suggests, “reflecting the greater relative importance of banks in the region’s economy. Japan, whose banks were not directly involved in the crisis, would also be materially affected by the proposed changes.”

The impacts worldwide would be exacerbated by regulatory changes that go beyond the core Basel proposals, Dallara adds.

The problem is that all this noise coming from the IIF comes with zero credibility, because it’s the IIF’s job to say these things, whether or not they’re true. It’s also worth noting the “significant adverse impact on employment and growth in the U.S.” that the financial sector has already caused, over the past few years. The first order of business has to be to try to prevent that from happening again, even — especially — if it means a lower chance of another debt-fueled bubble. As Westlake puts it:

It is also clear that some modest reduction in growth during upswings in the business cycle would be acceptable to regulators if the proposed capital and liquidity framework also produced greater financial stability. If the cumulative 0.5% to 1.0% reduction in growth estimated by Dutch central bank economists is the price for getting a really resilient banking system, “that price is not too high,” Basel Committee chairman Wellink told the Financial Times newspaper in early May.

Regulators in the U.S. and Britain have expressed similar sentiments.

As a significantly positive financial reform bill makes its way through Congress and towards the president’s desk, then, it seems that there’s a good chance that it will be met with an equally positive set of new regulations coming out of Basel. None of these things is ever perfect, of course. But the big hole in the Senate bill is that it has very little to say on questions such as bank size and capital ratios and liquidity; it seems that Basel III is almost perfectly designed to fill that gap.

COMMENT

Agree with the above comment – the banking issues have arisen from a series of failures which have in aggregate caused a systemic crisis of global proportions.

Many reasons – all valid contributors – sourced in the good old USA and supported by some European banks – need to be addressed: non-recourse lending for housing, honeymoon interest rates, lack of accountability in selling debt (through securitization) with inappropriate reward structures, CDO structures to slice and dice securitized debt so it is even less transparent with even lower accountability, rating agencies that rated it inappropriately, investment banks who gamed the rating system by hiring rating agency insiders, regulators who were asleep / unable to view issues in full context and to top it of OTC CDS’s growing to epic proportions to supposedly insure us all from catastrophy (OTCs resulting is an ever greater pool of exposure due to the need to enter a counteracting trade to cancel a position – with both positions remaining “live” like grenades – No doubt even more factors.

And the response? Tighten GLOBAL capital adequacy requirements for ALL banks. Forgive my cynisism however this appears to be be a one dimensional solution which helps level the playing field globally for all banks so we can all pay the price – as I sure we all know tighter regulation adversely impacts smaller banks more than large due to compliance costs, typically harder to obtain funds and more expensive etc and will have a greater impact in faster growing regions like Asia where institutions will need more capital to support future growth without this impediment. A suggestion that greater adequacy requirements will not slow down lending growth in ludicrous – it is a form of deleveraging.

How about some more targeted solutions for the problems – ban non-recourse loans for mortgages (so borrowers are more prudent), address issues of accountability (and reward) associated with securitization/CDOs, address rating agency issues, establish exchange traded mechanism for CDSs and maybe as per George Soros place some controls on whom can use them (look to limit the possibility of insured parties acrually wanting a failure!

Some thoughts to start with – Basel 3 seems well and truly removed from the key issues and also the jurisdictions which need to be fixed

How about -

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Counterparties

Felix Salmon
May 26, 2010 04:02 UTC

JPMC removes its “overweight” rating from National Bank of Greece. How did that work out? — Jeff Matthews

Retail investors are trading options again. This can’t end well — Bloomberg

Max Abelson’s BankSimple profile — NYO

“Nashville has twice as many degree-holders as its population density would predict. Detroit has less than half.” — Extraordinary Observations

What if They Closed 42d Street and Nobody Noticed? — NYT

COMMENT

“Retail investors can learn to earn profits when using options. Despite your belief that they can’t.”

They CAN, but on average, WON’T.

“…ignores all the evidence that options reduce the risk of investing.” When done properly by knowledgeable traders. Retail investors who are trading options will generally not be knowledgeable traders.

“I agree that the majority are under-educated and use options to gamble, but it does not have to be this way.” Your optimism aside, while it doesn’t have to be this way, it WILL be this way. That’s Felix’s problem with it. A pessimist is an optimist with experience.

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Skymeter’s congestion pricing solution

Felix Salmon
May 25, 2010 22:47 UTC

My Wired article about Charles Komanoff went through a lot of editing, as you might expect for a story in the June issue of a magazine which starts with a lunch in December. And sadly, one of the big bits which ended up on the cutting-room floor was the stuff about Skymeter, a Toronto-based company which gets a brief shout-out at the end of the piece, and whose chief scientist, Bern Grush, has a great blog devoted entirely to congestion pricing.

The idea behind Skymeter is that they use what they call financial-grade GPS: devices in your car which are much more accurate than the GPS devices found in navigation devices or cellphones. They can tell where you are to within a few centimeters, and once you can do that, all manner of possibilities open up in terms of charging not just to get into a city center, but rather to charge by the mile or by the minute on specific streets. Raise prices where congestion is worst, keep them low where it isn’t a problem, and solve lots of other problems at the same time — like easy charging for parking (you just park your car on the side of the road and pay for however long it’s parked there) and for pay-by-the-mile insurance. Or transform the economics of something like Zipcar, which currently just charges by the hour even when charging by a combination of hours and miles would make more economic sense.

A GPS-based congestion-pricing system makes an enormous amount of sense: no gantries to build, and no weird artifacts like the ones you’d get in New York if you just charged everybody driving south of 60th Street. That’s the way to charge lots of money to drive on Avenue D, and no money to drive around downtown Brooklyn: it’s silly. And the technology is already up and running: Germany and the Slovak Republic are using GPS devices on trucks, and Singapore has announced it’s going to install it on all motor vehicles at some point. What’s more, the European Union is heavily invested in it, now that it’s spent $4 billion on a new GPS satellite network called Galileo.

Skymeter has done a very good job of making sure that it addresses privacy issues very carefully: essentially there aren’t any, and it’s easy to wipe all history of where you’ve been when you pay your bill. (Of course, you can keep that history for your own records if you like.) The company is also careful on the billing front: the system is designed so that where there are errors — and there will always be errors — they will be in favor of the driver, not the tax collector.

Skymeter devices wouldn’t even need to be mandated: you just make them so desirable that everybody wants one, because they make things like insurance and parking so much easier and cheaper. In theory, lots of things are possible: you could even pay people not to drive on a certain day if you wanted. And you make life hard on cars without the devices, by charging them large tolls to cross bridges, and lots of money for parking — that kind of thing.

The main problem with Skymeter right now is the up-front cost of manufacturing and installing the devices, but that’s coming down rapidly, and I’m pretty sure that eventually we’re all going to live in a world where our auto-related expenditures are paid automatically, and a dynamic system of congestion prices keeps traffic speeds up. (The devices can even give you a big rebate if it takes you longer than say 15 minutes to get across town.) It’s all a bit sci-fi, but I believe it both can and will happen at some point. I just don’t know when.

COMMENT

Speaking of sci-fi connections, the reference to Skynet is perhaps a bit disturbing.

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The Max Keiser U-turn

Felix Salmon
May 25, 2010 17:11 UTC

In 1995, Shearson Lehman options trader Max Keiser had a dream — a dream of creating a futures exchange based on movie box-office grosses. It was a dream which lasted at least through 2007, when he gave an interview to Trader Daily’s Robert LaFranco, wistfully talking about what might have been.

“We were going to change the way Hollywood worked,” says Keiser today. “It was an industry ready for change.” …

“I suddenly looked at the movie industry like Michael Milken viewed the bond market. The original business plan of HSX was an exchange for predictive products that would lead to re-monetizing the industry and breaking up the Hollywood cartel. Using this platform we would allow many, many, many more people to have access to funds.”

LaFranco explains some of the history of the Hollywood Stock Exchange, going back to 1999:

Although Keiser and Burns were still enamored of the notion of building a real futures exchange, their new investors dismissed the idea outright; they were, instead, eyeing an IPO. HSX built up a staff of about 100, more than a third of them in public relations and marketing, and the company went to great lengths to generate awareness, drive traffic and boost ad dollars — the favored revenue model of the day.

“I was outvoted,” Keiser grumbles today. “It was gut-wrenching. The board bailed on me and my vision.”

You can imagine my surprise, then, when I saw Keiser’s vision being eviscerated in The Big Money by… none other than Keiser himself!

Hollywood is based on hype, and a derivative of hype is zero, Keiser argues. “This could be the Enron of 2011 or 2012,” Keiser warns. He adds with sarcasm, “Let’s take the fantasy of Hollywood and mix it with the fraud of Wall Street. That’s a winner. You’re mating two species of egomaniacs.” …

Keiser points to the popular phrase “Hollywood accounting,” a euphemism for the opaque and often dishonest ways of keeping the books to maximize studio profits. “They’re going to take an industry famous for its false accounting, and create a derivative on that!” Keiser said.

So here’s a question for Heidi Moore, the author of the TBM piece: what accounts for Keiser’s astonishing volte-face? (And, what on earth does “a derivative of hype is zero” mean?)

Moore’s article, with Keiser’s interview at its core, is scathing about the pretty benign prospect of box-office futures, asking silly questions like this:

Why does anyone think we can effectively regulate movie star futures if we had to bail out AIG?

The point, of course, is that we don’t need to effectively regulate movie star futures, since they’ll be traded on an exchange and will pose no systemic risk. Heidi finishes her piece with an open question, asking if we should be scared by this nascent market — a market, incidentally, which will almost certainly be killed by the financial-reform legislation. (Blanche Lincoln, whose sister is a Hollywood film director opposed to box-office futures, added movie grosses to onions as the two things that futures can’t be traded on.) The fact is that there’s really nothing to be scared of at all: if you don’t play in the market, no harm can befall you.

But I really do wonder why Keiser has now turned so vehemently on his former business model.

Update: Lots of reactions to this! Max Keiser himself came first, pointing to a YouTube video in which he says, while sporting a bad facelift in front of a picture of palm trees and the Hollywood sign, that what changed was the Commodity Futures Modernization Act and the repeal of Glass-Steagal. But both of those came long before 2007, when he gave his interview to Robert LaFranco.

Cynic, in the comments, speculates that what really changed was that Keiser’s investment in HSX went to zero and that he founded a new company, Kinooga, which would compete with these new contracts for business.

And Heidi responds at TBM, saying that bespoke derivatives caused lots of problems, and ignoring the fact that exchange-traded derivatives caused no problems at all. Putting derivatives on exchanges doesn’t stop people from losing lots of money on those exchanges — but it does insulate any systemic effects of those losses, which are borne by the bettor and not by society more generally.

The fact is that box-office futures are no more a financial innovation than onion futures would be. Futures markets  have been around for millennia, there’s nothing innovative about them. They’re just very handy and useful things to have.

Update 2: In the wake of a more-heat-than-light tweetfight last night, Heidi has left another comment here.

COMMENT

It’s correct to consider the underlying assets and the economic stakeholders of those assets.

Currently, these stakeholders include just those in the movie pipeline who benefit from box office earnings – movie studios, theaters, etc. These derivatives will allow them to hedge out risk that an unforeseen event – a snow storm for example – will negatively affect their cash flows and thus their ability to monetize their product.

Considering that it takes around 2 years for a movie studio to see a return on their investment, it would be of no surprise to me if Investment Banks start offering to finance these assets. Imagine if, just in the same way that the mortgage bond industry blossomed, banks starting enabling institutional investors to purchase these box office cash flows in advance, providing movie studios with their invested capital plus return on investment much sooner. This would enable studios to produce more movies, growing the movie industry at an exponential pace in just the way the mortgage industry grew.

At that point, a rather concentrated industry starts to appear more ‘systemic’, and the loss of cash flows or the abuse of information in trading the derivatives starts to affect more individuals.

Now, despite my comparison to the growth of the mortgage business and it’s penetration of our economy (thus considerably ‘systemic’), these box office assets are, from a risk perspective, incomparable to mortgage assets. Mortgages usually have incredibly high durations – 20 to 30 years – and their cash flows (and the potential loss of those cash flows) can span then entire life of an investment portfolio. Movie investments have a duration of 1-2 years per movie (longer, I suppose, to make a Lord of the Rings trilogy). As such, a crash in the movie industry – think Popcorn Plague or a large scale power outage on memorial day weekend – will work itself through the investment pipeline quickly. Thus, even if it’s systemic, it’s not going to last the summer. And even in a recession consumers are willing to take their kids to see the latest Pixar flick.

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The sleazy world of predatory debt buyers

Felix Salmon
May 25, 2010 15:12 UTC

NEDAP has an extremely important new report on a particularly evil and sleazy part of the predatory financial universe: debt buyers. These institutions make hundreds of millions of dollars by suing people in low-income neighborhoods, often without properly serving them with notice that they’re being sued. When the alleged debtor doesn’t show up for court, the debt buyers get a default judgment, and start attaching bank accounts and garnishing wages. Often they do this successfully even when the debt is not legitimate.

The debt buyers are massively profitable, despite the fact that they have almost no legal leg to stand on:

When debt buyers purchase debts, they become legal owners of those debts, but obtain very little information about them. Debt buyers usually receive an electronic file that includes only a person’s name and social security number, last known address, the amount allegedly owed, the charge-off date, and the date and amount of the last payment. The portfolio does not include documentation of the debt, such as the governing contracts and account statements. This information is insufficient to ensure that the debt buyers collect the correct amount from the correct person. Debt portfolios are regularly sold on an “as is” basis, without consideration for whether collection of the debts in the portfolio is legal.

Debt buyers’ ability to obtain additional documentation from the original creditor is extremely limited: they may purchase the right to request such documentation in a limited number of cases, or they may not have access to any supporting documentation at all. If the debt is resold to another debt buyer, obtaining such documentation becomes even more difficult, as most second and subsequent sales of debt portfolios do not include any direct access to the additional documentation from the original creditor, which means that those debt buyers almost certainly lack the documentation needed to support lawsuits filed against people whose names appear in their portfolios.

The report makes a number of very sensible recommendations, including a ban on debt buyers filing lawsuits if they don’t have any evidence which proves the debt is owed. More generally, something has to be done to rectify the enormous asymmetry in sophistication and legal ability between the two sides here: as the report says, “many people sued are pressured into unfair and unaffordable settlements that leave them in a worse position than if they had ignored the lawsuits”.

This entire industry couldn’t exist, of course, if it wasn’t for the banks, which tacitly condone this behavior by selling debt buyers utter garbage debt. So while going after the debt buyers themselves is obviously the first order of business, it’s also worth putting pressure on the banks to stop dealing with them. I wonder which bank might like to be first in denouncing these gruesome parasites.

Update: I should add that the report was not just the work of NEDAP: it was co-written with the Urban Justice Center, with help from attorneys at the Legal Aid Society and MYF Legal Services.

COMMENT

Federated Capital has sued me and got a (Fraudulent Appraisal of over $28K for the alleged debt) Summary Judgment for the paper thay paid peanuts for. They were made aware that I am Judgment Free, yet they plunged on. I appealed the canned junkdebt lawyer crap they used and the appeals court ruled in my favor. FedCaps attorney offered to settle for $2500. Shows you what they have in it including fees for their attorney. I am pressing on with jury trial. These people don’t even try to collect on their judgments, they have been Frauduently Appraised and inflated the victims cant pay and never will some have left the county. Why do they spend time on this? Could it be that they like the recent mortgage scammers are packaging and selling theses fraudulently apprasied judgments to unsuspecting dips here and overseas? I have stated so in my briefs to Appeals and lower court so it is in the on line record for all to see and I have reported to securities and exchange. This will be the next mortgage melt down.

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