IMF's Lagarde Lauds Janet Yellen, After Urging US Federal Reserve to Communicate More, FOIA Questions

By Matthew Russell Lee

UNITED NATIONS, July 2 -- When the International Monetary Fund's Christine Lagarde introduced Federal Reserve chair Janet Yellen to give the first Michel Camdessus Central Banking Lecture on July 2, she did not repeated whatshe said only two weeks earlier, that the Fed should communicate more frequently. 

  In laying out lessons learned from the subprime financial meltdown of 2008, Lagarde did not question the role of the Federal Reserve in failing to take action on the predatory lending by the Big Four banks, or the pooling and pitching by investment banks of predatory mortgages by Ameriquest, New Century, et al.

  So what, really, was learned?

 On July 2, Lagarde compared central bankers to mountaineers, and told Yellen, "Janet, you may not be surprised to know that when you give your press conferences a group of passionate staff here at the IMF get together to watch you live on screen. I am told they even bring pop corn to the meetings!"

  Back on June 16 the IMF assessment was that

"Enhancing the Fed’s communication toolkit would be a natural evolution that could help temper the likelihood of market volatility along the exit path. This could include scheduling press conferences by the Fed Chair after each FOMC meeting (to provide a more frequent, structured environment to explain the committee’s evolving thinking). It could also involve publishing a quarterly monetary policy report, that is endorsed by the FOMC and which conveys more detail about the majority view of the FOMC on the outlook, policies, and the nature of uncertainties around the baseline. Such a report may also convey dissenting views on the FOMC as well as broader information on how the FOMC thinks about policy reactions in plausible, non-baseline scenarios. Finally, the FOMC could provide greater clarity about how financial stability considerations figure into its monetary policy calculus."

  She might have added: the Fed can and should do better under the Freedom of Information Act, on which in full disclosure Inner City Press has litigated with the Fed. Then again, at least the Fed accepts that it is covered by FOIA - the United Nations doesn't (see below).

  While the IMF is more frequently taking Press questions online, we note for example that a repeatedly asked question about whether the IMF includes Western Sahara in Morocco's data has been stonewalled, including the days Lagarde was in Rabat.

  Lagarde was asked who she favors in the World Cup and said she was "delighted to see French team did as it did." Well, that's some transparency.

The UN also has a position on the US Federal Reserve, it emerged on May 21, at least a position favoring new Fed chair Janet Yellen over her predecessor Ben Bernanke.

  Inner City Press asked Pingfan Hong of the UN Department of Economic and Social Affairs about DESA's mid-year update of the UN World Economic Situation and Prospects, which called on the Fed to communicate more clearly as it tapers away from quantitative easing -- does the UN favor an audit of the Fed, and what of the impact on tapering QE on emerging markets? Video here.

  Pingfan Hong recounted that an IMFC meeting he attended, Yellen admitted to negative impacts on emerging markets, which he said Bernanke obfuscated by claiming positive impacts too. (Bernanke now is speaking at $250,000 dinners, so criticism from DESA may not concern him.)

  Inner City Press also asked Pingfan Hong about the WESP's call for the implementation of IMF quota reform -- was this really related to the IMF's ability to lend to Ukraine, and what are its economic impacts?

  Pingfan Hong replied that it is more of a “long term” issue, but that countries should follow through on what they commit to. What about democracy, though? And what about democratizing the Federal Reserve? We'll have more on that. Watch this site.

   

US Nominees as Ambassadors to Norway & Argentina Bungle, State Department Spins, Sends Later - To Some

By Matthew Russell Lee

UNITED NATIONS, February 7 -- How are US ambassadors selected? The current nominee as US ambassador to Norway George Tsunis called a member of the ruling coalition a "fringe" party; the nominee for Argentina Noah Mamet has never even been to the country.

State Department spokesperson Jen Psaki, when asked, hearkened back to past non civil servant ambassadors like Walter Mondale and Pamela Harriman. She said, "We work closely with ambassadors."

 (Previously, Inner City Press covered the nomination as Ambassador to the Netherlands of a notorious subprime lender. Money talks.)

Earlier in the February 7 briefing, Reuters had given Psaki advice on how to improve State Department security. This continued on Argentina, intervening to defend Mamet's failure to visit Argentina (or apparently read) during the one year his nomination has been pending.

In response, Psaki said she would send something "to all of you afterward." She said the same thing recently about Sri Lanka and Inner City Press, which closely covers that country, e-mailed her to ask that it also receive whatever was sent out and be put on the list. The answer was yes -- but no information ever arrived.

In New York, the US Mission to the UN did not respond to a Press question about the Free Syrian Army appearing in a UN report as recruiting and using child soldiers, despite having asked that the question be put in writing. Instead, the Mission emailed out to some statements about Samantha Power and Pussy Riot.

  It's understood that advocacy is a major part of their job. But isn't answering questions, and providing access on an equitable basis, also part of the mandate? We'll see. Watch this site.

   

As US (Samantha) Power Nears UN,CFR's Haass Spins "Responsibility to Respond," Nothing on Sri Lanka, Sudan or Subprime

By Matthew Russell Lee

UNITED NATIONS, June 10 -- Twelve stories about the UN Monday night, Council on Foreign Relations president Richard Haass doggedly urged that US foreign policy pivot from the Middle East to Asia. 

  But what about Africa? What about human rights and anti-genocide, the calling card of US President Obama's nominee for US Ambassador to the UN, Samantha Power? Video here.

  Those were the questions Inner City Press asked Haass, before the session at the International Peace Institute ends so he could sell and sign copies of his book, "Foreign Policy Begins at Home."

  Haass answered that while "humanitarian intervention" could be be one element of foreign policy, "others take priority." He said that the Responsibility to Protect, announced at the UN "eight years ago," could not pass today and said he had "one word -- Syria." (Actually, the word should be Libya.)

  He said he is "not an expert" on Africa - but even on Asia, on which Inner City Press asked about Sri Lanka and Myanmar, he did not answer.

  Referring to his book, he said he'd coined a replacement for R2P -- the "Responsibility to Respond." This seemed more than a little circular. But it was time to sell and sign books.

  Afterward a well placed attendee put Haass in context in this way: he replaced Leslie Gelb at CFR as as something of an acceptable Republican, one who had quietly been opposed to the invasion of Iraq and could not abide the "yahoos" working with Bush II.

  Now it seems Haass is more interested in US domestic politics, specifically "entitlements." It seems a strange focus for the head of the Council on FOREIGN Relations -- but then again, Haass has been there ten years. Perhaps it's time to more on. 

  He joked that he was in the "next generation" of Bush I advisers, after James Baker - and that he'd join any movement in which he could be the next generation. Just as he said "one word -- Syria," here's one acronym: AARP.

  There were other jokes to begin the program: moderator Warren Hoge called Haass the rare Republican on Martha's Vineyard, and recalled Haass praising a butterfly leg of lamb, but writing off the praise to diplomacy. Haass revisited the praise on Monday night, saying it was in fact pretty good (adding that he is now a vegetarian. Ba-dum-dum.)

  Other questions ranged from hand-wringing about the Decline of the West, or only of the United States, to asking why Haass cares so little for the Middle East. (He predicted a "dark time," but opined that Russia's involvement in Syria is nothing like the "Great Game" going on in Asia.)

  Earlier on Monday, Inner City Press wrote about Haass dismissal of Edward Snowden as "not a whistleblower." When asked by an earlier questioner about matters cyber, Haass called Snowden "reprehensible." We couldn't disagree more -click here.

  We'll close with this: if Haass is so focused on domestic US policies, his analysis of the decline in US growth will have to take into account the subprime meltdown beginning 2008. What have been the foreign policy implications of the harm the US inflicted globally through predatory lending? But that's another book, or series of stories. Watch this site.

In Post Subprime Circus, Hedge Funds Paulson & Carlyle Gun for Fannie, Raj Date Cashes In, Mel Watt as a Chip

By Matthew Russell Lee

Following the Money, June 7 -- Even as the predatory lending meltdown continues to reverberate, from HSBC's scam foreclosures to Wells Fargo's discriminatory follow-through on the buildings that it's seized, from Wall Street to Washington the games continue.

  Hedge funds that profited on the way down from the collapses, for example Paulson & Company, the Carlyle Group's Claren Road Asset Management and Perry Capital, are now buying up the preferred shares of Fannie Mae with a eye to taking it private.

  They are buying in the markets, with little disclosure or oversight, and lobbying in DC. Also in the mix is James Millstein, "fixer" of AIG, now ready to cash in through, what else, Milstein & Company.

  On the other side, Fannie Mae has become a grab-bag, with fees imposed on mortgages for entirely unrelated government goals. Who wouldn't want such a pinata?

  Meanwhile a former Deutsche Banker who went to the Consumer Financial Protection Bureau, Raj Date, has now left to start his own firm to make money off the crisis. Fenway Summer, he spins it. He's said to advise McKinsey & Company too. The fox, it turns out, was watching the hen house.

 Inner City Press previously dueled with Carlyle's spin-machine on Jay Powell's nomination to the Federal Reserve Board, here.

A nomination floated that please Obama's base, Mel Watt for FHFA, turns out to be trading chip, and Watt to be more pro industry even that the man in place. He represents Bank of America's district, the same Bank of America targeted for Wells-like disparities. The White House has been pitching: Mel because of who he is could do things that others could. Viewed through this PRISM, can you hear me now?

And so: what's been learned? Very little. As the song goes, it's all about the money. Watch this site.

HRW Names 2 Investment Bankers as Chairs, From Bogota to S&P, Conflicts?

By Matthew Russell Lee

UNITED NATIONS, April 22 -- Who does Human Rights Watch work for? On Monday HRW named two new co-chairs of its board of directors, and even after the financial meltdown and despite the overlap of HRW's work on international financial markets, both are investment bankers.

  Could this be a conflict of interest? Separately, why have both co-chairs be from the same (financial services) industry? The same industry as HRW's main funder, so recently (and inaccurately) eulogized by Reuters?

  The first list co-chair is Joel Motley of Public Capital Advisors, the website of which brags of its expertise in “international financial markets.” They have an office in Bogota, Colombia. Couldn't these be a conflict?

  The second listed co-chair is is Hassan Elmasry of Independent Franchise Partners, listed as a top 10 owner of the S&P rating agency. 

  This while questions swirl around the credit rating agencies' role in the subprime global financial meltdown which has harmed social and economic rights worldwide. Conflict? What safeguards are in place?

  Inner City Press has repeatedly asked HRW to at least summarize what issues its Ken Roth raised to UN Secretary General Ban Ki-moon. For example, did Roth and HRW raise to Ban the issue of the UN dismissing claims it brought cholera to Haiti? 

 The UN's planned use of drones in the Democratic Republic of Congo and now Cote d'Ivoire?

  HRW replied that it would not even summarize the issues, in order to maintain access. Then Inner City Press was taken and remains off the distribution list of HRW's canned comments, though it covers the UN.

  Not for nothing, but could HRW be raising, even indirectly, issues of its investment banking co-chairs or “international financial markets”? This is why they should answer such questions. Watch this site.

In 2012 Subprime Lending Disparities Continued at Key Bank, Suntrust and US Bank, Denials at TD, Regions and Others as Fed Lax

By Matthew R. Lee

SOUTH BRONX NY, April 7, 2013 -- In its second study of the just-released 2012 mortgage lending data, Inner City Press and Bronx-based Fair Finance Watch have found that a range of regional banks including KeyCorp, US Bank NA and SunTrust Mortgage continued with high cost loans and disparities by race and ethnicity in denials and higher-cost lending.

  2012 is the ninth year in which the data distinguishes which loans are higher cost, over a federally-defined rate spread of 1.5 percent over Treasury bill yields.

The just released data show that KeyCorp confined African Americans to higher-cost loans above this rate spread 2.51 times more frequently than whites in 2012, Fair Finance Watch has found. 

  KeyCorp denied the applications of African Americans 1.76 times more frequently than those of whites.

  KeyCorp confined Latinos to higher-cost loans above the rate spread 1.53 times more frequently than whites in 2012, the data show. It denied the applications of Latinos 1.44 times more frequently than those of whites.

  SunTrust Mortgage confined African Americans to higher-cost loans above this rate spread 2.50 times more frequently than whites in 2012; for Latinos its disparity was 1.50.

  US Bank NA confined African Americans to higher-cost loans above this rate spread 1.74 times more frequently than whites in 2012; for Latinos its disparity was 1.97. There are some irregularities in US Bank NA's data that Inner City Press will be further raising.

“Even after the bailouts, lending disparities grew worse and not better," said Fair Finance Watch. "Regulatory laxity, at least on fair lending, has continued despite the financial meltdown caused by predatory lending."

  In 2012, Toronto Dominion or TD Bank denied the applications of African Americans 1.75 times more frequently than those of whites. For both PNC and Regions the disparity for African Americans was 1.57.

  "The Federal Reserve is becoming more and more bank-friendly, including with recent Freedom of Information Act appeal denials by Governor Jay Power, formerly a hedge funder and Deutsche Bank official Jay Powell. It remains unclear if the Consumer Financial Protection Bureau will get to this problem," Fair Finance Watch continued. "The disparities in the 2012 mortgage data of these banks further militate for aggressively watchdogging and breaking up these banks."

Instead, the Fed allowed the creation of a fifth mega-bank in Capital One when it acquired ING DIRECT and the subprime assets of HSBC. In 2012, Fair Finance Watch has found, HSBC denied the applications of African Americans 1.34 times more frequently than those of whites.

Also in 2012, fully 9.93 percent of Capital One's morgage loans to African American were higher cost loans, versus 7.61 percent of Capital One's loans to whites. To Latinos, the percentage was even higher: 10.31 percent.

And so Fair Finance Watch and Inner City Press have re-doubled watchdogging. Last week it studied the 2012 lending of the “Big Four” -- Citigroup, JPMorgan Chase,Bank of America and Wells Fargo.

The data show that Citigroup confined African Americans to higher-cost loans above this rate spread 2.09 times more frequently than whites in 2012, Fair Finance Watch found.

Citigroup confined Latinos to higher-cost loans above the rate spread 1.83 times more frequently than whites in 2012, the data show.

For JPMorgan Chase, the disparity for African Americans in 2012 was 1.7; for Bank of America it was 1.61; for the largest of Wells Fargo's many HMDA data reporters, the disparity for African Americans in 2011 was up to 2.32.

Challenged by the groups in 2012 and still pending are applications by Customers Bancorp and by M&T, to acquire Hudson City Savings Bank.

Regulators had allowed Hudson City in 2011, for conventional home purchase loans in the New York City Metropolitan Statistical Area, to make 765 such loans to whites and only FIVE to African Americans (and only 44 to Latinos). Meanwhile, Hudson City denied the applications of African Americans 3.21 times more frequently then those of whites.

In March 2013 Inner City Press and Fair Finance Watch began a challenge to Investors Bancorp's application to acquire Roma. In the NYC MSA in 2011 for conventional home purchase loans, Investors Bank made 220 such loans to whites, and only TWO such loans to African Americans. Its denial rate for Latinos was FIVE TIMES higher than for whites.

 On April 5, Investors Bancorp announced it will try to also acquire $300 million Gateway Community Financial Corp - this also will be opposed, on the current record.

The Home Mortgage Disclosure Act required that the 2012 data be provided by March 31, following March 1 joint requests by Fair Finance Watch and Inner City Press. Several banks still did not provide their data by the deadline, despite confirming receipt of the request. Further studies will follow: watch this site.