Faces Of Foreclosure

For the past year of dealing with my lender for a loan modification on my home, too often I wake up with bizarre questions (and equally bizarre images in my mind). Today’s question: What falls under the FBI’s definition of organized crime. Of course I am thinking of the white collar criminals running free in America.

And here are the relevant definitions:

Criminal Enterprise: The FBI defines a criminal enterprise as a group of individuals with an identified hierarchy, or comparable structure, engaged in significant criminal activity. These organizations often engage in multiple criminal activities and have extensive supporting networks. The terms Organized Crime and Criminal Enterprise are similar and often used synonymously. However, various federal criminal statutes specifically define the elements of an enterprise that need to be proven in order to convict individuals or groups of individuals under those statutes.

The Racketeer Influenced and Corrupt Organizations (RICO) statute, or Title 18 of the United States Code, Section 1961(4), defines an enterprise as “any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity.”

The Continuing Criminal Enterprise statute, or Title 21 of the United States Code, Section 848(c)(2), defines a criminal enterprise as any group of six or more people, where one of the six occupies a position of organizer, a supervisory position, or any other position of management with respect to the other five, and which generates substantial income or resources, and is engaged in a continuing series of violations of subchapters I and II of Chapter 13 of Title 21 of the United States Code.

Ethics for Executives In the event you are a top level executive with questionable ethics who stumbled across this site, here is a link to a selection of books that we highly recommend you read. Apparently ethics courses are not mandatory in today’s business colleges . . . that is apparent, don’t you think?

Organized Crime: The FBI defines organized crime as any group having some manner of a formalized structure and whose primary objective is to obtain money through illegal activities. Such groups maintain their position through the use of actual or threatened violence, corrupt public officials, graft, or extortion, and generally have a significant impact on the people in their locales, region, or the country as a whole.

Once we get beyond giving free rides to those with advanced degrees, you will see many more white collar criminals in their proper place . . . which will be in jail right alongside Mr. Madoff. “Robbery” is included under state crimes. The illegal and/or lost paperwork locking you into your mortgage should come under “Robbery.”

Excerpted from The Sovereign Society2010: The Year of Institutionalized Theft

Balancing State & Local Budgets
With the Frightening Power of Civil Forfeiture
By Mark Nestmann

While the talking heads on television declare the recession over, state and local governments face record deficits and a shortage of viable solutions.

Arizona’s state budget, for example, represents more than 50% of anticipated 2010 revenues. And while Arizona faces perhaps the largest per-capita budget shortfall in the United States, many other states have a similar funding crisis.

Unfortunately, there are very few politically expedient ways to stem the flow of red ink. Raising taxes is not only politically unpopular, but threatens to further depress state and local economies. Cutting benefits is even less popular.

On the other hand, confiscating the “proceeds of crime” has a near-universal appeal. And using “civil forfeiture” statutes in effect in all 50 states, police have pursued this tactic aggressively.

Civil forfeiture is a legal procedure in which prosecutors can seize your property without accusing you – much less convicting you – of any crime.

Most federal civil forfeitures require the government to at least demonstrate probable cause that your property is somehow connected to a crime to confiscate it. But the federal rules don’t generally extend to state and local governments. In many states, the government can simply seize your property and wait months before allowing you to contest the forfeiture.

While The Soverign Society considers seizing your property as a bad thing, I can see cases where it might be a good thing and a means to get back that which has been stolen from taxpayers.

If you are a good and hardworking citizen, this is a nightmare and should not happen to you. However, if you are one of those questionable citizens who came to your wealth by cheating others . . . which is commonplace these days . . . well, one can only hope they seize everything you have just as you have done to others.

Getting Your Own Back on the “Pirate Equiteers”
From SovereignSociety.com

Busts happen much faster than booms. But that doesn’t have to mean bad news for you.

In fact, contrary to popular belief the fastest and fattest fortunes have actually been spun in the worst of economic times, not the best.

For example, Sir John Templeton, one of the world’s greatest investors said the easiest money he ever made was not going long on stocks, but actually going short. By going short, instead of betting on the long-term health of the company, you actually make a bet on its demise. In this way you can make money 2–21 times faster than you can with traditional “buy and hold” investing.

Sir John made $88 million in less than 2 months by shorting telecommunications stocks in 2000.

Again one of the most successful investors of the last three years was also a short-seller. No one had heard of him before 2007. But now he’s one of the richest men in the world. And he did it by shorting banks and sub-prime mortgages. His name is John Paulson.

He made an average of over $7.7 million for 731 days straight. And in 2 years clocked up $5.7 billion!

And one of the most famous fortunes ever spun, was by the legendary investor George Soros. By shorting the British pound in 1992, just before it crashed, Soros made almost a billion dollars in a day!

Excerpt from Sovereign Society’s April 2007 report entitled “Gluttons at the Gate” warning of the mess that was to come:

“Private Equity firms have borrowed trillions in the past several years to buy up over 19,000 companies worldwide. These companies affect millions of jobs. They reach far and wide into almost every nook and cranny of the global economy. But now most of these company’s balance sheets will be loaded up with junk debt. If the world goes into recession, the revenues of these companies will suffer, and it will become increasingly difficult for them to pay back their loans. They will default — en masse.

“The Private Equity debt bomb will have detonated, and the banks will have become ground zero. The markets may bear witness to the biggest wave of defaults ever known. Bondholders will be left clutching worthless pieces of paper. Stockholders will watch the value of even their bluest of blue chips collapse 50% or more. And homeowners will watch the value of their properties fall off the edge of a financial cliff…

“It will make the sub-prime mortgage meltdown look like a walk in the park.”

Ethics for Executives In the event you are a top level executive with questionable ethics who stumbled across this site, here is a link to a selection of books that we highly recommend you read. Apparently ethics courses are not mandatory in today’s business colleges . . . that is apparent, don’t you think?

According to Sovereign Society, The 7 Best Post-Crisis Companies to Bet On”

In this special investment alert we’ll introduce you to a number of our favorite deeply undervalued cash-rich corporate kings. These are the kind of Buffet-like companies that you should be happy owning even if the stock market closed down for 10 years. They include our #1 picks in many depression-proof sectors like food, drugs, gold, plus a number of our greatest post-crisis boom stocks as well, including:

• The Depression-Proof Drug Stock. It’s the biggest producer of generic drugs in the world. And one thing that never lags in a recession is demand for drugs…and when times are tough people will choose a generic over a brand name. Plus with so many big-name drugs coming off patent, generics will fly. And with so many baby boomers retiring in America and the rest of the world, generic drug producers should do very well. And these guys are hands down the global leaders! They’re an Israeli pharmaceutical giant, and one of the few stocks whose profits and revenues went up in the last few years when almost everything else went down.
• The Turn-Around Story of the Decade . . . and a compelling play on the Food Boom. Food is another recession-proof investment. Food companies have been hands down the best-performing stocks of the last 2 years. This company is undergoing a dramatic transformation, and is now well on its way to becoming the largest diversified food company in the world. It’s employed one of the finest CEOs in the business to turn it around, and the job she’s doing is so spectacular that three of the world’s biggest billionaires (and greatest value investors) have rushed to gain a huge stake in it.
• The Chinese Government-Granted Monopoly that is fuelling an industry that has only one way to go — up!
• One of the America’s Last Great AAA-rated companies.
• The World’s #1 Gold Producer . . . no matter what happens to the global economy!
• One of the World’s Greenest Companies. It just got voted as one of the Globe’s 100 Most Sustainable Companies, it has topped Newsweek’s Green Lists and has also made it to the prestigious DOW Jones Sustainability Index. It’s a play on the Energy Efficiency Boom. With a cash-and-commodity strapped world we believe there will be a rising movement toward Energy Efficiency. And as conservation becomes the new name of the game this company will be one of its greatest beneficiaries.