Independent Fiduciary Consultant, Economics and Financial Ethics

One who intends to leave others better off for his having existed.

10/22/14

Chris Martenson; "It is the Fed’s very own policies that are driving the expansion of the wealth gap."

"Either [Federal Reserve Chair] Yellen thinks we cannot be trusted with the truth (worrisome), or the Fed is clueless as to how its own policies operate (scarier).

The academic name for the Fed’s current policy is financial repression. But a more apt name would be “Throw granny under the bus,” because the program boils down to taking from savers and fixed-income recipients and transferring that purchasing power to other entities.

The cornerstone element of financial repression is negative real interest rates, of which the Federal Reserve is the prime architect and owner.

From the start of the Fed’s post-crisis intervention through 2013, the total cost of these negative real interest rates was over $750 billion just to savers alone. The loss of income to fixed-income investments (such as bonds held in pensions and money markets) was even larger.

...That loss of income and purchasing power didn’t just vanish.

It was transferred from pocket A to pocket B.

It magically appeared again in record Wall Street banking bonuses, in shrinking government deficits (due to lower than normal interest rates), in rising corporate profits (mainly benefiting the already rich), in record stock buybacks (ditto), and in rising wealth inequality.

...when the Fed buys financial assets with printed money and — by definition — drives up the price of those assets, it cannot then act mystified why the main owners of financial assets have grown wealthier...

...Yellen has created the wealth gap by printing money

In a speech at the Federal Reserve Bank of Boston, Yellen said steady growth in inequality over the past several decades represents the most sustained rise since the 19th century. Living standards for most Americans have been “stagnant,” while those at the very top have enjoyed significant wealth and income gains, she said.

...Yellen listed four factors that can influence economic opportunity: investing in education for young children, making college more affordable, encouraging entrepreneurship and building inheritance.

...She just blamed the victims. According to Yellen, if people are finding themselves getting poorer what they need to do is stop scrimping on their kids, become an entrepreneur and go back in time and have rich parents somehow. This statement of hers calls for pitchforks and torches. Without a shred of decency, she has shifted all blame from the Fed to the victims. How corrupt or morally adrift does someone have to be to blame the victim? In a criminal case this would be used as evidence of sociopathic if not psychopathic behavior...

Yellen did not address in her prepared text whether the Fed has contributed to inequality.

...In a more evolved society than ours, Yellen would have been immediately booted from the stage, and the president would already be asking for her resignation. Sadly, she remains safely in charge, and utterly tone deaf.

We don’t need more lectures from her on our perceived failures to spend enough on our kids, have enough entrepreneurial talent, or have rich parents. What we need is a return to the level playing field that originally made this country great."

Chris Martenson

http://www.marketwatch.com/story/the-fed-is-deliberately-stealing-from-savers-2014-10-22?page=2

10/21/14

"How much do central banks need to inject to keep the stock market from crashing?

"The rolling 3m combined liquidity injection
 by the Fed, the ECB, the BoE and the BoJ,
plotted against the rolling 3m change in spreads.

While the relationship is not perfect
liquidity flows across asset classes and across borders,
and there are announcement and confidence effects
in addition to the straightforward impact on net supply
...it's the liquidity injections, not fundamentals, 
which we would argue has been the major driver of markets for the past few years.

Very roughly, the charts suggest that zero stimulus
would be consistent with 50bp widening in investment grade,
or a little over a ten percent quarterly drop in equities.

...it takes around $200bn per quarter 
just to keep markets from selling off."

Citi's Matt King

http://www.zerohedge.com/news/2014-10-21/magic-number-revealed-it-costs-central-banks-200-billion-quarter-avoid-market-crash






10/16/14

From; NC District 59 Representative Jon Hardister To; NC Treasurer's Office "pertaining to 401(k) and 457 plans"

Dear NC Treasurer's Office:

Recently I met with Mr. George Hartzman, who is one of my constituents in Guilford County. He informed me that he has been trying to obtain information from the NC Treasurer's office pertaining to 401(k) and 457 plans. In our meeting, the concerns that Mr. Hartzman raised related to this issue appeared to be valid.

Attached is a list of questions that Mr. Hartzman has requested a response to. I would respectfully request that you provide us with an answer to these questions at your earliest convenience.

Also, please note that I have copied Mr. Hartzman on this correspondence.

Thank you for your time. I look forward to hearing from you soon.

Best regards,

Rep. Jon Hardister
NC House - District 59
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Information request for the North Carolina Treasurer's office on North Carolina's 401(k) and 457 plans.

Please provide an explanation of the 2013 replacement of the Small Mid Cap index fund with an annual cost of 0.166% in North Carolina 401(k) and 457 GoalMaker portfolios to five managers in North Carolina Small/Mid Value and Small/Mid Growth Funds, averaging about 0.8395%, or more than five times more.

Please provide an explanation of the 2013 replacement of the International Index Fund with a total annual cost to participants of 0.184% in North Carolina 401(k) and 457 GoalMaker portfolios to two managers in the International Fund charging 0.684%, or more than three times more.

Please provide a detailed, itemized analysis of commissions charged to North Carolina's 401(k) and 457 plan participants for individual trades in North Carolina's Small/Mid Value, Small/Mid Growth and International Funds for 2013, and a description of how the trade commissions were accounted for within the fee matrix.

Please provide an estimate of the current annualized total of fees as a percentage of assets and in dollar terms, charged to North Carolina employees for North Carolina's 401(k) and 457 plans.

Please provide an annualized estimate of the current non-investment related fees stated in dollars per participant being charged each North Carolina 401(k) and 457 plan participant.

Please provide a detailed analysis of fees as defined under "Other Investment Expenses" as a percentage of assets and in dollar terms, paid for by North Carolina 401(k) and 457 plan participants in 2013, including an unbundled accounting of payments to whom and how much they received for what and when, within itemizations of "ongoing legal, accounting, auditing, custody, reporting, compliance, and other miscellaneous expenses".

Please provide a detailed analysis of fees as defined under "Administrative Fees" as a percentage of assets and in dollar terms, paid for by North Carolina 401(k) and 457 plan participants in 2013, including an unbundled accounting of payments to whom and how much they received for what and when, within itemizations of "costs of audits, legal and consultant services, and other Plan expenses".

Please provide a detailed analysis of fees as defined under "Recordkeeping Fees" as a percentage of assets and in dollar terms, paid for by North Carolina 401(k) and 457 plan participants in 2013, including an unbundled accounting of payments to whom and how much they received for what and when, within itemizations of "fees associated with Prudential’s maintaining" individual accounts, "such as recording and tracking your contribution amount and investment activity".

Please provide an explanation of why North Carolina's 401(k) plan's Stable Value Fund, as of 3/31/14, charges 0.308% for Investment Expenses, Recordkeeping and Administrative Fees, while the Investment Management Fee of 0.135% is less than a third of the 0.443% total fees charged to participants.

Please provide an explanation of why North Carolina's 401(k) and 457 plan Stable Value Funds Administrative Fees, 0.054% and 0.052 respectively as of 3/31/14, are more than double the Administrative Fees for the rest of the fund lineup, which are charged 0.025%

Please provide an estimate of the current annualized total of fees paid to Galliard Capital Management, a wholly owned subsidiary of Wells Fargo, as a percentage of assets and in dollar terms charged to North Carolina employees in North Carolina's 401(k) and 457 plans.

Please provide an estimate of the current annualized total of fees Wells Fargo receives as a percentage of assets and in dollar terms charged to North Carolina employees in North Carolina's 401(k) and 457 Stable Value Funds.

Please provide a total of the number of filled positions within the North Carolina Treasurer's office assigned to manage the state's 401(k) and 457 plans, along with budgeted positions that remain unfilled by current, active employees.

George Hartzman
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Sent to;

brad young@nctreasurer
tsersboard@nctreasurer
lgersboard@nctreasurer
mary.buonfiglio@nctreasurer
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Guilford County, Asheville, Greensboro and Winston Salem Retirement Plan Fee Comparisons and Rip Off

http://hartzman.blogspot.com/2014/10/guilford-county-asheville-greensboro.html

ICMA US Stock Fund Expense Comparison; Guilford County and Winston Salem; 0.94% Difference

http://hartzman.blogspot.com/2014/10/icma-us-stock-fund-expense-comparison.html

ICMA Target Date Fund Expense Comparison; Greensboro, Durham and Guilford County

http://hartzman.blogspot.com/2014/10/icma-target-date-fund-expense.html

Would most employee retirement plan investors prefer $121,040 after three years or $117,068?

http://hartzman.blogspot.com/2014/10/would-most-employee-retirement-plan.html

City of Durham VT PLUS Stable Value Fund Expense Ratio = 1.11%; Orlando, Florida, Same Fund = 0.58%

http://hartzman.blogspot.com/2014/10/city-of-durham-vt-plus-stable-value.html

Jacksonville, North Carolina employee fees for the same 457 plan fund compared to Orlando, Florida's

http://hartzman.blogspot.com/2014/10/jacksonville-north-carolina-employee.html

Some Wells Fargo Employee 401(k) plan Fund Expense Ratios as of 3/21/2013

Wells Fargo Stable Value Fund Expense Ratio = 0.20%

http://hartzman.blogspot.com/2014/10/some-wells-fargo-employee-401k-plan.html

On North Carolina State's 401(k) and 457 "GoalMaker" Target Date Funds

http://hartzman.blogspot.com/2014/10/on-north-carolina-states-401k-and-457.html

North Carolina State 401(k) replaced index funds with higher cost actively managed accounts in 2013

http://hartzman.blogspot.com/2014/10/north-carolina-state-401k-replaced.html

"Investors pay exorbitant [401k] investment fees"

http://hartzman.blogspot.com/2014/09/investors-pay-exorbitant-401k.html

North Carolina State 401(k) plan; Galliard is owned by Wells Fargo

http://hartzman.blogspot.com/2014/10/north-carolina-state-401k-plan-galliard.html

"NC Pension Accused of Pay-to-Play Violations"

http://hartzman.blogspot.com/2014/10/nc-pension-accused-of-pay-to-play.html

A Few Observations on Share Classes and Wells Fargo Stable Return Fund

http://hartzman.blogspot.com/2014/06/a-couple-of-observations-on-share.html

10/15/14

Wells Fargo Compliance Officer Charged With Altering Document

"...SEC v. Prado, Civil Action No. 12-CIV-7094 (S.D.N.Y. Sept. 20, 2012); see also U.S. v. Prado, Case No. 13-mg-2201 (S.D.N.Y. Sept. 13, 2013).

...the [Securities and Exchange Commission brought an action against Wells Fargo for failing to establish and enforce procedures to prevent the misuse of material, non-public information. In the Matter of Wells Fargo Advisors, LLC., Adm. Proc. File No. 3-16153 (Sept. 22, 2014).

Now the Commission has instituted an administrative proceeding against a former Wells Fargo compliance officer for altering a record produced to the staff in connection with its investigation of the broker. In the Matter of Judy K. Wolf, Adm. Proc. File No. 3-016195 (October 15, 2014).

Ms. Wolf was a compliance consultant for Wells Fargo Advisors prior to her termination in June 2013. In 2009 she drafted the firm’s policies and procedures governing how “look back” reviews would be conducted. Ms. Wolf was the sole compliance officer conducting these reviews. Most of her reviews closed with “no findings.” A log of those inquiries was maintained, although it did not specify the reason for terminating the inquiry.

On September 2, 2010, the day the Burger King deal was announced, Ms. Wolf began a look back review of the trading surrounding the deal. She concluded that: 1) Mr. Prado and his customers represented the top four positions in Burger King securities firm-wide; 2) Mr. Prado and his customers purchased Burger King stock within 10 days of the announcement; 3) Mr. Prado and his customers each had profits that exceeded the $5,0000 threshold specified in the look back review procedures; 4) Mr. Prado and Burger King were located in Miami; and 5) Mr. Prado, his customers and the acquiring company were all Brazilian. News articles about the event were not printed and included in the file despite a provision in the procedures requiring this step. The review was closed and therefore not forwarded to the branch manager. Supervisors at Wells Fargo did not learn about the review until two years later when the SEC filed its insider trading action against Mr. Prado.

In July 2012 the Commission requested as part of its on-going investigation, that Wells Fargo produce its compliance files relating to Mr. Prado. Although the production was eventually certified as complete, it did not include Ms. Wolf’s file. When a second request was made in January 2013, that file was included in the production. Ms. Wolf’s log stated “09/02/10 opened 24% higher@$23.35 vs. previous close of $18.86. Rumors of acquisition by a private equity group had been circulating for several weeks prior to the announcement. The stock price was up 15% on 9/1/12 [sic], the day prior to the announcement.”

Ms. Wolf provided contradictory testimony during the investigation. Initially, she testified that the file had not been altered. She claimed that the date of 9/1/12 in the sentence quoted above was a typo. In addition, Ms. Wolf stated that the news articles were a primary reason for closing the file. Later Wells Fargo produced documents indicating that the Burger King log entry had been altered on December 28, 2012. A prior version of the log was produced that did not contain the sentence quoted above along with the metadata.

Following her termination from Wells Fargo the Commission took Ms. Wolf’s testimony a second time. During the testimony she admitted altering the log.

The Order alleges violations of Exchange Act Section 17(a) and the related rules. The proceeding will be set for hearing."

http://www.secactions.com/wells-fargo-compliance-officer-charged-with-altering-document/
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Section 17(a)

It shall be unlawful for any person in the offer or sale of any securities or any security-based swap agreement by the use of any means or instruments of transportation or communication in interstate commerce or by use of the mails, directly or indirectly—

(1) to employ any device, scheme, or artifice to defraud, or

(2) to obtain money or property by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; or

(3) to engage in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon the purchaser.
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Janus and the Scope of Section 17(a)(2)

One of the most hotly contested questions in Section 17(a) litigation is what level of responsibility a defendant must have for a misstatement to be liable under Section 17(a)(2). In Janus Capital Group, Inc. v. First Derivative Traders 6, the U.S. Supreme Court held that the only party that may be held liable for a false or misleading statement under Rule 10b-5(b) is “the person or entity with ultimate authority over the statement, including its content and whether and how to communicate it.” The question with respect to Section 17(a) is whether Janus’s “ultimate authority” standard applies to misstatement liability under Section 17(a)(2) as well.

...In SEC v. Kelly, the court reasoned that, “[a]lthough the language of subsection (2) of Section 17(a) is not identical to that of subsection (b) of Rule 10b-5, both provisions have the same functional meaning,” in that “[t]o succeed on a misstatement claim under either Rule 10b-5(b) or Section 17(a)(2), the SEC must prove that the defendant made materially false statements or omissions.” 9

Section 17(a)(2) imposes liability on anyone who directly or indirectly obtains money or property by means of a misrepresentation or omission, including those who profit legally, i.e. through bonuses or pay raises.18

A third question that comes up in litigation involving Section 17(a) is what distinguishes a misstatement claim under Section 17(a)(2) from a claim for scheme liability under Section 17(a)(3). Courts have generally adopted the rule from the Rule 10b-5 context that, to state a claim under Section 17(a)(3), the SEC must allege a deceptive scheme or course of conduct that goes beyond any misrepresentations alleged under Section 17(a)(2).26  Indeed, in the context of private litigation, it is well established that “[c]laims for engaging in a fraudulent scheme and for making a fraudulent statement or omission are ... distinct claims, with distinct elements,” 27 and that the same set of facts may give rise to liability under both subsections only where the defendants allegedly both made misrepresentations and “undertook a deceptive scheme or course of conduct that went beyond the misrepresentations.” 28

http://kvn.com/news/news-items/Section-17-a-of-the-Securities-Act-of-1933-Unanswered-Questions-

Ebola Math

"The most elemental mathematical issue is the transmissibility of the virus.

68% of transmissions occur in the first week of an infection, 26% in the second week, and 5% in the third week. Whether or not you survive, you will not get re-infected (or that is the theory). Of course dead bodies are infectious, but there is a belief that people learn pretty quickly how to avoid infection from a dead body.

According to the literature, every infection naturally causes an additional two, but as people learn, the rate of infection declines. Using the published rate of the existing pandemic progression, I calculate that the infection rate is currently 1.66...

If the rate (called R0 in the literature) remains at 1.66, the number of new infections will double every 3 weeks.

There is a belief that only 20% of the population is naturally immune to Ebola, and with an exponential pandemic, 70% of the remaining 80% of the population [may] eventually die.

That process [according to present math] would be complete – worldwide – about June of next year.

The population [would] drop in half [if the math becomes a reality].

...The mathematically critical point for the virus is when R0 crosses below 1. At this point the infection rate stops growing, and starts fading. If we can get R0 down to .3, the pandemic will end in 3 months, although the death toll may still double in that period. Even if we could get the number down to .8 immediately, we would limit the death toll to 24,000 (6 times the [most likely purposefully low reported] total so far).

...The model used in the CDC spreadsheet involves a calculation of what percent of patients who are infectious have been properly isolated. If R0 is naturally 2.0, then it is sufficient to isolate more than 50% of infectious people. We need to assume that some people will hide, or be scared and careless. We also need to assume that some people will be unaware that they are infectious because waiting until you are symptomatic is somewhat late in the process, which is why the CDC will try to track down potentially exposed people and quarantine them prior to the onset of symptoms.

...controlling R0 requires a modestly functioning society, and is even better if the pandemic is small enough to still be manageable by our CDC or military. But beyond some breaking point for the society, R0 will rise again. But what chance is there, that we will lose control of the pandemic in western societies?

...even without hospital beds, we can isolate far more than half of the outstanding cases of Ebola in any western country, so that small numbers of infections will likely never grow exponentially.

The possible hole in the logic is the assumptions that only small number of infections will arrive here. There are only so many airplanes that arrive each day, so that in itself is not a threat to overwhelming our infrastructure.

[One] potential risk is panic migration across a border. So if Mexico were to lose control of the Ebola battle through extreme mismanagement, it could break our natural defenses...

However there are no such limitations in Africa, and it is entirely possible that panic in Africa could keep R0 above the critical level, and the virus could cut the population of the continent in half.

...So the estimate of how bad it can get depends heavily on how quickly R0 can be lowered. The worst case estimate is probably in the range of half the population of Africa. But the working worst case estimate is about a million. In the latter estimate, the presumption is that the population figures out by itself how to quarantine the sick, and the pandemic burns itself out, without much help from the west."

http://www.nakedcapitalism.com/2014/10/bob-goodwin-laymans-guide-mathematics-ebola.html

Wells Fargo Litigation Delays

"3. Wells Fargo Advisors LLC – the brokerage wing of Wells Fargo & Company (WFC - Analyst Report) has been slammed with a fine of $5 million by the Securities and Exchange Commission (SEC). The SEC alleged that the brokerage unit failed to maintain sufficient controls to prevent an employee from insider trading based on private information of a customer.

The SEC also alleged that Wells Fargo made unreasonable delay in producing related documents in course of the SEC’s investigation and provided “an altered” document related to a compliance review of the broker’s trading.

...The company also violated laws that make necessary for broker-dealers and investment advisers to produce correct documents and records to the SEC in due time.

Notably, Wells Fargo has accepted its wrongdoing..."

http://www.zacks.com/stock/news/148589/Bank-Stock-Roundup-Litigation-amp-Restructuring-Continue-Citi-BofA-Wells-Fargo-in-Focus
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"Wells Fargo caused what the plaintiffs termed a “seven-month delay” by seeking Fifth Circuit review after the trial certified two collective action classes — one comprised of Walls Fargo home mortgage consultants and one made up of Wachovia Corp. consultants — in August. The appeals court denied Wells Fargo's petition in March. Wells Fargo acquired Wachovia in 2008.

...The court initially approved a 90-day notice period, but before the notice form for potential plaintiffs could be approved, Wells Fargo lodged its Fifth Circuit petition, resulting in a stay.

The detour to the Fifth Circuit “wasted valuable judicial resources” and made it tougher to dispatch effective notice to potential opt-ins, some of who moved or changed phone numbers, the plaintiffs argued..."

An attorney for Wells Fargo was not immediately available.

Wells Fargo is represented by David Jordan, Lindbergh Porter, Philip Ross and April Love of Littler Mendelson PC.

...The case is In re: Wells Fargo Wage and Hour Employment Practices Litigation (No. III), case number 12-20605, at the U.S. Court for Appeals for the Fifth Circuit."

http://www.law360.com/articles/442694/consultants-get-longer-notice-period-in-wells-fargo-ot-mdl
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"Wells repeatedly engaged in scorched earth tactics:

While every litigant has a right to pursue appeal, Wells Fargo’s style of litigation was particularly vexing. After agreeing at trial to the initial injunctive relief in order to escape a punitive damage award, Wells Fargo changed its position and appealed. This resulted in:

"1. A total of seven (7) days spent in the original trial, status conferences, and hearings before this Court;
2. Eighteen (18) post-trial, pre-remand motions or responsive pleadings filed by Wells Fargo, requiring nine (9) memoranda and nine (9) objections or responsive pleadings;
3. Eight (8) appeals or notices of appeal to the District Court by Wells Fargo, with fifteen (15) assignments of error and fifty-seven (57) sub-assignments of error, requiring 261 pages in briefing, and resulting in a delay of 493 days from the date the Amended Judgment was entered to the date the Fifth Circuit dismissed Wells Fargo’s appeal for lack of jurisdiction;
47 and 4. Twenty-two (22) issues raised by Wells Fargo for remand, requiring 161 pages of briefing from the parties in the District Court and 269 additional days since the Fifth Circuit dismissed Wells Fargo’s appeal."

The above was only the first round of litigation contained in this case…

The judge also describes Wells’ “reprehensible” conduct:

"Wells Fargo has taken the position that every debtor in the district should be made to challenge, by separate suit, the proofs of claim or motions for relief from the automatic stay it files. It has steadfastly refused to audit its pleadings or proofs of claim for errors and has refused to voluntarily correct any errors that come to light except through threat of litigation. Although its own representatives have admitted that it routinely misapplied payments on loans and improperly charged fees, they have refused to correct past errors. They stubbornly insist on limiting any change in their conduct prospectively, even as they seek to collect on loans in other cases for amounts owed in error.

Wells Fargo’s conduct is clandestine. ...Wells Fargo simply stopped communicating with Jones once it deemed him in default. At that point in time, fees and costs were assessed against his account and satisfied with postpetition payments intended for other debt without notice. Only through litigation was this practice discovered. Wells Fargo admitted to the same practices for all other loans in bankruptcy or default. As a result, it is unlikely that most debtors will be able to discern problems with their accounts without extensive discovery….

...The burden of extensive discovery and delay is particularly overwhelming. In this Court’s experience, it takes four (4) to six (6) months for Wells Fargo to produce a simple accounting of a loan’s history and over four (4) court hearings. Most debtors simply do not have the personal resources to demand the production of a simple accounting for their loans, much less verify its accuracy, through a litigation process.

Wells Fargo has taken advantage of borrowers who rely on it to accurately apply payments
and calculate the amounts owed. But perhaps more disturbing is Wells Fargo’s refusal to voluntarily correct its errors. It prefers to rely on the ignorance of borrowers or their inability to fund a challenge to its demands, rather than voluntarily relinquish gains obtained through improper accounting methods. Wells Fargo’s conduct was a breach of its contractual obligations to its borrowers. More importantly, when exposed, it revealed its true corporate character by denying any obligation to correct its past transgressions and mounting a legal assault ensure it never had to.

Society requires that those in business conduct themselves with honestly and fair dealing. Thus, there is a strong societal interest in deterring such future conduct through the imposition of punitive relief…."

The word “predatory” is not adequate to describe Wells’ conduct. The bank is not simply willing to steal from consumers, via blatant, institutionalized violations of its own agreements on mortgages and later on bankruptcy plans. It has absolutely no respect for the law, whether it be contracts or court procedures. It’s a band of marauders that our society treats as legitimate because the perpetrators wear suits and can afford to hire lobbyists. And the Federal government and state attorneys general are certain to have emboldened Wells and its brethren by rewarding them rather than treating them like the criminals they are.

http://www.nakedcapitalism.com/2012/04/judge-rules-wells-fargo-engages-in-reprehensible-systemic-accounting-abuses-on-mortgages-hit-with-3-1-million-punitive-damages-for-one-loan.html
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"The series of dispositive motions, voluminous discovery, preparation for trial, two-week bench
trial, post-trial briefing, and appellate proceedings amply demonstrate the resources both the parties and the courts have already expended, all of which would be undone if arbitration is now required. The prejudice to Gutierrez and the class stemming from Wells Fargo’s invocation of arbitration five years into this litigation—time, expense, delay and uncertainty—is apparent. See Nat’l Found. for Cancer Research v. A.G. Edwards & Sons, Inc., 821 F.2d 772, 776 (D.C. Cir. 1987) (“To give [defendant] a second bite at the very questions presented to the court for disposition squarely confronts the policy that arbitration may not be used as a strategy to manipulate the legal process.”).

...Far from facilitating streamlined proceedings, sending this case to arbitration post-appeal would be wholly duplicative and lead to further delay and expense for both parties.

http://www.consumerfinancelitigation.com/uploads/file/Gutierrez%20v_%20Wells%20Fargo.pdf
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The declarations submitted with this application, describing the experiences of 97 New
York homeowners, show that Wells Fargo has not abided by its agreement. The Bank has
engaged in widespread breaches of its most basic obligations under the consent judgment that
have harmed and continue to harm thousands of New York families. Indeed, within the last few
months, the Monitor of the consent judgment announced that Wells Fargo had repeatedly failed
to comply with a key timing provision of the 2012 settlement.

The Bank has continued to subject homeowners to Kafkaesque delays and obstructions in
the loan modification process. The documents submitted herein show that the Bank made
repeated demands that one homeowner provide additional information in support of his
application for a loan modification over the course of a seven-month period. Most of the
information required from the homeowner by the Bank had either been provided with the initial
submission (such as the homeowner’s tax return for 2011) or related to trivial matters that could
have no impact on the decision whether or not to grant a loan modification (such as the demand
for a “letter of explanation” concerning a $2 amount listed on one paystub).

Many New York homeowners were similarly required by the Bank to retrieve and resubmit documents that they had already provided with their original applications months earlier. Often, the Bank’s demands for documents were cryptic and confusing, if not entirely unintelligible to the average homeowner.

...Homeowners routinely submitted modification applications that they understood to be complete, did not hear back from the Defendants for prolonged periods of time, and were then frequently delayed by requests for materials or information that were included with prior submissions...

The Bank has also subjected homeowners to repetitive and wasteful court appearances
and provided them contradictory and inaccurate information. These abuses and delays have led 
to more than frustration for homeowners; they have caused the fees and interest owed by 
homeowners to grow, making it harder by the day for the homeowners to obtain modifications 
that would allow them to become current on their loans and avoid foreclosures.

...The end result of this pattern of misconduct was the unlawful delay, or denial, of 
homeowners’ requests to modify their mortgage loans – and potentially save their homes. See 
Elizabeth Lynch Decl. (“Lynch Decl.”) ¶¶ 14-15 (Lasky Ex. 3).3

...Wells Fargo made repeated additional requests for application-related materials, oftentimes because the documents that Mr. Baig submitted previously had “expired” as a result of the Bank’s delay. See Mirza Baig Decl. ¶ 12.

Finally, at a May 17, 2013 settlement conference, the court overseeing Mr. Baig’s case required the Bank to make a decision on the application by June 7, 2013. See id. ¶ 14. The Bank ignored this deadline and instead requested additional materials from Mr. Baig on June 20, 2013, two weeks after the court-ordered deadline to render a decision on the application. See id.

...borrowers who are fortunate enough to have their loans modified end up owing more than they otherwise would have if not for the Bank’s delays. See, e.g., Marie Larose Decl. ¶ 10 (Cohen Ex. 57); Mirza Baig Decl. ¶ 15 (Cohen Ex. 13).

For other borrowers, the increased arrears that result from Wells Fargo’s delays can price
them out of eligibility for a loan modification. Although there are variations between the several
different loan modification programs available to borrowers, for each of the programs the greater
the amount of arrears that the servicer must capitalize into the proposed modified principal
balance, the less likely it is that borrowers will qualify for a modification under the program’s
parameters. See Lynch Decl. ¶¶ 31-41. Accordingly, Wells Fargo’s delays in the loan
modification review process cost homeowners money and hurt their chances to qualify for a loan
modification program. See id. ¶¶ 40-41.7

Borrowers are not the only individuals who bear the costs of the Bank’s delays. Wells
Fargo’s non-compliance with its NMS obligations requires housing counselors and legal services
attorneys to expend endless hours resubmitting loan modification materials that have either been
lost by the Bank or have become “stale” as a result of the Bank’s delays. See Lynch Decl. ¶¶ 51-
52. The Bank also squanders judicial resources through an excessively protracted foreclosure
settlement process that is the product of the Bank’s continued piecemeal requests for additional
documents and prolonged decision-making process. See id. ¶ 53.8

Wells Fargo often delayed the conversion of a New York homeowner from a trial to a
permanent modification for a prolonged period of time, despite the borrower’s compliance with
the terms of the trial period plan.17 All told, among NYAG’s sample of 97 borrowers, there were
at least 11 violations of this servicing standard.18

 Wells Fargo benefits from its own delays, as interest and fees that may be recovered upon foreclosure continue to be assessed on borrowers who are struggling to modify their mortgage loans. See California Monitor, The “Complete” Application Problem: A Solution to Help Homeowners and Banks Work Together (June 19, 2013), at 6 (Lasky Ex. 15) (noting that “banks have no incentive to hasten loan modifications to be complete,” as the “more fees accumulate—if a property will be foreclosed ultimately—the higher profits a servicer can earn”).

http://www.ag.ny.gov/pdfs/NMS%20MOL.pdf

"Empire Fed manufacturing missed expectations by the most since June 2010 as New orders collapsed."

http://www.zerohedge.com/news/2014-10-15/empire-fed-manufacturing-plunges-biggest-miss-over-3-years

10/14/14

ICMA Target Date Fund Expense Comparison; Greensboro, Durham and Guilford County

City of Greensboro T Rowe Price Target Date Fund Expense Ratios;


City of Durham proprietary Target Date Expense Ratios;


The Vantagepoint Funds are distributed by ICMA-RC Services LLC, a wholly owned broker-dealer subsidiary of ICMA-RC and member FINRA/SIPC.

Guilford County proprietary Target Date Expense Ratios;


ICMA US Stock Fund Expense Comparison; Guilford County and Winston Salem; 0.94% Difference


The Vantagepoint Funds are distributed by ICMA-RC Services LLC, a wholly owned broker-dealer subsidiary of ICMA-RC and member FINRA/SIPC.

There are two Vantagepoint 500 Stock Index Funds.

Vantagepoint 500 Stock Index Fund 1 - Total expenses = 0.41%

Vantagepoint 500 Stock Idx II - Total expenses =  0.21%

Guilford County Total Expenses for Vantagepoint 500 Stock Index Fund = 0.97%
.
.
Winston Salem Total Expenses for non-ICMA proprietary Vanguard 500 Index Fund = 0.05%


Winston Salem's employees pay 0.94% less for the same thing.

North Carolina 401(k) and 457 Plan Total Expenses
for North Carolina Large Cap Index Fund = 0.166%

10/13/14

Major US Financial Institutions Leverage Ratios

Major US institutions leverage ratios One simple chart to explain the defining problem of our times
http://www.sovereignman.com/finance/one-simple-chart-to-explain-the-defining-problem-of-our-times-15211/

"VIX since Jan 2010: Anything left in the bag?"

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#pic.twitter.com/QKmdbrxzKg

Guilford County, Asheville, Greensboro and Winston Salem Retirement Plan Fee Comparisons and Rip Off

From Guilford County;



Guilford County has 65 participants in its ICMA 457 retirement plan.

$16,304 divided by 65 participants = $251 per participant per year.

The cost to each participant could be about $75 per year, or about 70% less.
.
.
The City of Asheville's $2,603,682 plan with 106 participants costs about $202 per participant per year.

The cost to each participant could be about $75 per year, or about 70% less;

.
.
The City of Greensboro, with about $87,898,314 million and 2,781 participants instead of Asheville's $2,603,682 and 106 participants, pays a much higher $266 per participant per year.

The cost to each participant should be less than $75 per year, or more than 70% less;



The City of Winston Salem, who went with ICMA in 2012 with $19,933,124 and 1,029 participants, only pays $91 each per year.

.
.
Would most employee retirement plan investors prefer $121,040 after three years or $117,068?

http://hartzman.blogspot.com/2014/10/would-most-employee-retirement-plan.html

City of Durham VT PLUS Stable Value Fund Expense Ratio = 1.11%; Orlando, Florida, Same Fund = 0.58%

http://hartzman.blogspot.com/2014/10/city-of-durham-vt-plus-stable-value.html

Jacksonville, North Carolina employee fees for the same 457 plan fund compared to Orlando, Florida's

http://hartzman.blogspot.com/2014/10/jacksonville-north-carolina-employee.html

Some Wells Fargo Employee 401(k) plan Fund Expense Ratios as of 3/21/2013

Wells Fargo Stable Value Fund Expense Ratio = 0.20%

http://hartzman.blogspot.com/2014/10/some-wells-fargo-employee-401k-plan.html

On North Carolina State's 401(k) and 457 "GoalMaker" Target Date Funds

http://hartzman.blogspot.com/2014/10/on-north-carolina-states-401k-and-457.html

North Carolina State 401(k) replaced index funds with higher cost actively managed accounts in 2013

http://hartzman.blogspot.com/2014/10/north-carolina-state-401k-replaced.html

"Investors pay exorbitant [401k] investment fees"

http://hartzman.blogspot.com/2014/09/investors-pay-exorbitant-401k.html

North Carolina State 401(k) plan; Galliard is owned by Wells Fargo

http://hartzman.blogspot.com/2014/10/north-carolina-state-401k-plan-galliard.html

"NC Pension Accused of Pay-to-Play Violations"

http://hartzman.blogspot.com/2014/10/nc-pension-accused-of-pay-to-play.html

A Few Observations on Share Classes and Wells Fargo Stable Return Fund

http://hartzman.blogspot.com/2014/06/a-couple-of-observations-on-share.html