Hedge fund managers steal our money and our homes

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There's enough here to house everyone

I wrote a blog a few weeks ago about hedge funds buying up foreclosed properties.  The particular hedge fund in this instance was McKInley Capital Partners of Oakland. CA McKinley’s partner in crime is Och-Ziff Capital Management Group LLC of New York.

Daniel Och is a principal at Och-Ziff and Forbes describes him as it does all these coupon clippers as a “self made” man.  Ochs net worth according to Forbes is $3.6 billion and according to Wikipedia he received total compensation of almost one billion dollars in 2008,  $918,939,482 to be exact.   I was in Vallejo California this evening which reminded me about it this issue as the source of my blog, the Wall Street Journal reported that one man who lost his home through foreclosure was now renting it back off these coupon clippers.

But get this. Daniel Och who is somewhat of a philanthropist and all round nice guy is Vice Chairman of a charitable organization he helped found that is described as fighting poverty in New York City. The name of his little venture is the Robin Hood Foundation.  It’s sickening when you think about it.  It is the actions of Och and others like him that cause poverty in New York City.  As a friend called it tonight, the “Robbing Hood Foundation.”

There is no such thing as “self made” it’s a ridiculous concept.  These parasites are getting richer off of people’s misery.  The government should take all these properties that have been stolen and put their owners back in them with mortgages that reflect their present value: a home should not be an investment, it is human shelter. People are paying these coupon clippers interest on loans that are worth twice what their home is.  And we should reject this notion that people have “lost” their homes. They have not “lost” their homes, they are still there.  Bankers and speculators like Och have stolen their homes from them.

Meanwhile banks we bailed out to the tune of $14 trillion are waging court battles against federal and state officials seeking penalties from them for dodgy mortgage deals. These officials want $20 to $25 billion from Bank of America and JP Morgan after long running investigations in to the banks’ foreclosure practices.  The banks are refusing to give any money unless they get complete immunity from mortgage related claims. “They want to be released from everything including original sin,” says one US official.

Over the course of the housing boom, the moneylenders raked in billions, and before that trillions more.  Anyone that pays a mortgage sees that for years the principle hardly changes as they make sure they get heir interest.  But the banks want to hand over $25 billion and be free of any threats from lawsuits or claims as the morass of dodgy deals are uncovered.  As they sold packages of mortgage debt throughout the world, many banks still have no idea who the formally legal owners of many of these homes are.

And we are supposed to believe social services and public sector pensions are wrecking the economy.

** Afternote
Last year, when I spoke at OEA bank demonstrations and wrote press releases, I put the total amount of the big bank / Wall Street bailout at "nearly $14 trillion", most of it coming from the Federal Reserve bank. I got those figures from the Real Economy Project of the Center for Media and Democracy. Well, most of the bailout provided to the banks did come from the Fed, but  I was mistaken about the amount. It was bigger.

The first-ever audit of the Federal Reserve bank shows that the Fed provided the financial sector with $16 trillion. That's bigger than the U.S. Gross Domestic Product. It's more than $50,000 per U.S. citizen. It is 20 TIMES the size of Obama's "stimulus package".

Let's look at the austerity drive in this context. The banks have managed to morph their private debt into public debt, thanks to Paulson, Geithner, and especially to Bernanke and the Fed. They've transferred it onto our backs. Austerity is their attempt to get working and poor people to pay it off.

Jack Gerson