Author: VD

The WSJ in defense of Wall Street

An ostensibly conservative media is still trying to blame borrowers for the multiple frauds that were committed by the banks. And it’s still not working:

Millions of Americans have stopped paying their mortgages, creating a giant paperwork snafu and legal crisis, and yet… Funny how many media accounts begin with that rarest of creatures, a homeowner fully paid up on his mortgage, or better yet a Florida man who paid cash for his house, and who was foreclosed on anyway thanks to a paperwork error by some confused bank. This poor shmuck then is made to symbolize the larger phenomenon when in fact the larger phenomenon is precisely the opposite.

You can’t understand the latest mortgage mess without understanding the powerful appetite to cast borrowers as victims and banks as villains in the housing bubble. This tendency is present in claims that minorities have been especially victimized, that people were sold loans they didn’t understand.

The battle of the narratives is reaching its climax in the robo-signer controversy, with lawyers seizing upon technicalities to let people go on living in homes they’ve stopped paying for.

We hasten to add that technicalities are important; the rule of law is nothing but a profound commitment to honor technicalities. But let’s understand that in the absence of the snafu, we’d have a faster, smoother-working foreclosure process, in which more Americans would more quickly be shoved out into the street in perfect compliance with the law.

It is really remarkable how the self-appointed defense attorneys for the mortgage banks keep dancing desperately around the word FRAUD like wildebeest at a crocodile-infested waterhole. There was no “snafu”. There were no “clerical errors”. There were no “paperwork mistakes”. There was only the mass and ongoing commitment of FRAUD. The loans were FRAUDULENTLY made in the first place. Then the titles were FRAUDULENTLY transferred, after which they were utilized to sell FRAUDULENT securities. When the loans went bad, as many of them were specifically designed to do, the banks then produced FRAUDULENT documents to replace the originals that were either destroyed or showed evidence of the previous FRAUD committed by the bank.

The bankers are the villains here. There is no “elusive search” to be conducted, in fact, there is no debating this! And many, if not most of the defaulting borrowers were one of the many victims of the multiple frauds committed by the villains. The ironic thing is that this disingenuous Wall Street tool complains about politicians having “moved heaven and earth to prop up the self-same banks” when his entire column is yet another feeble attempt to downplay the criminal activity of the banks and shift responsiblity away from them.

A portrait in conservative cluelessness

Can someone just get this chick the job she obviously wants on Fox already? I have absolutely nothing against attractive blondes babbling nonsensically in ignorance, I just don’t think it belongs on the op/ed page:

What have we come to when we believe drunken college students over police officers? That is exactly the case in Boston. Several “eye witnesses” claim the authorities overreacted when they shot at 20-year-old D.J. Henry’s car in front of a local bar, which resulted in his death and the injury of his passenger. It has been reported that D.J. was supposed to be the designated driver and was only there to pick up some friends. I find that hard to believe considering his blood alcohol level was nearly twice the legal limit.

Understandably, D.J.’s parents are outraged and devastated, calling for an investigation by the U.S. Department of Justice. I can’t imagine the pain they must be going through. This is a tough one because on one hand you have parents who just lost their son, and on the other you have a drunken kid who allegedly fled from the cops when he was approached and hit two of them with his car as he accelerated. It’s not like D.J. was just minding his own business and the cops walked up to the car and shot him. He put himself at risk when he knowingly got behind the wheel while he was intoxicated.

Where does personal responsibility come into play? D.J.’s blood alcohol level was .13. He was in the driver’s seat and the cops were called to the bar due to an “unruly crowd” outside. Should they have let him drive home? Of course not; they’re going to do their job and approach him. If the authorities hadn’t gone up to the car and instead just let D.J. drive home, what would the consequences have been? Driving under the influence could have resulted in an accident….

The cops were doing their job. It seems like when they do that, their investigations are “fatally flawed,” as D.J.’s family put it – but when they don’t do their job they’re incompetent and negligent. Are we to blame police officers when they try to protect and serve?

Americans will stop believing “drunken college students over police officers” when police officers stop destroying evidence, lying about what happened, and exonerating themselves of any wrongdoing after leaving a trail of dead bodies behind them. Someone needs to explain to little Chrissy Chatterfield that “protecting and serving” does not involve murdering men who happen to be lightly intoxicated behind the wheel of a car. Or legally carrying while shopping at CostCo. Or sitting at home minding their own business with a door left open to provide a breeze on a hot summer evening. There are no shortage of unjustifiable police murders for which none of the responsible cops were even prosecuted.

What passes for her logic is darkly hilarious; it’s good for the police to kill a man in order to prevent the highly unlikely possibility that he might kill someone else in an accident. By this reckoning, police snipers should be stationed outside every bar and nightclub parking lot in America, picking off anyone who looks like they might have had more than two drinks. And more importantly, the police had absolutely no idea that the guy was drunk. They didn’t shoot him because he had a BAC of 0.13, which despite the absurd legal limits is barely into the range that is even detectable without testing, they shot him because he didn’t follow their confusing and imprecise orders. (At his body weight, D.J. Henry had probably had all of 5 drinks that evening.) Randy Moss would be dead if the Minneapolis police were similarly inclined to homicide.

Take note of the scare quotes around “eyewitneses”. Does little Miss Chatterfield not believe that these people were there on the scene? Does she have any reason to doubt their eyewitness testimony, which just happens to be the primary foundation of every legal system dating back to the Old Testament? Of course not, she’s just a clueless, conservative cop-lover who believes that providing a psychopath with a blue uniform and a gun magically transforms him into a heroic and faultless doer of good.

Miss Chatterfield may be on the cops’ side, but what she is too young and foolish to understand is that they are most certainly not on her side. Since her interactions with the police are probably limited to Norman Rockwell paintings and crying to get out of the occasional speeding ticket, she has no idea of the extent to which the police departments of America have been militarized, corrupted by drug war money, and populated by criminals. This asinine article is exhibit A in the mindless conservative support for the police that must come to an end in order to restore legitimacy to what is presently little more than a lawless government badge gang.

UPDATE: I missed the fact that WND’s cheerleader for the police state didn’t even manage to get the right state, let alone city, in her rush to defend a police shooting. D.J. Henry was shot and killed in Thornwood, New York by the Pleasantville police. The case, exactly or otherwise, had no connection with Boston.

UPDATE II: Well, I suppose this would be one effective means of addressing police brutality: “The entire police force of a small town in northern Mexico resigned after gunmen attacked their recently-opened headquarters with grenades and assault rifles, local news agencies reported quoting the town’s Mayor on Wednesday.”

I suppose it’s not so fun to wave your badge and your gun when the people start shooting back.

Doubt and verify

It is ALWAYS wise to doubt any assertion made by a progressive, no matter how credentialed:

Jonah Goldberg quotes Robert Reich: “Bill Clinton never mentioned the words `health care reform’ after the 1994 midterms.” Reich’s claim is false — wildly false. A check of the database at the American Presidency Project shows that President Clinton used the phrase on 116 occasions after the midterm.

What’s remarkable is how being shown to be factually incorrect seldom slows them down in the least.

Time preferences

This should serve as a cautionary tale to those who still believe that giving money to the impoverished is a rational solution to poverty. And yet, we can be confident that it won’t.

A short drive away, Hamon Matipe, the septuagenarian chief of Kili, confirmed that he had received that sum [$120,000] four months earlier. In details corroborated by the local authorities, Mr. Matipe explained that the provincial government had paid him for village land alongside the Southern Highlands’ one major road, where the government planned to build a police barracks.

His face adorned with red and white paint, a pair of industrial safety glasses perched incongruously on a head ornament from which large leaves stuck out, Mr. Matipe said he had given most of the money to his 10 wives. But he had used about $20,000 to buy 48 pigs, which he used as a dowry to obtain a 15-year-old bride from a faraway village, paying well above the going rate of 30 pigs. He and some 30 village men then celebrated by buying 15 cases of beer, costing about $800.

“All the money is now gone,” Mr. Matipe said. “But I’m very happy about the company, ExxonMobil. Before, I had nothing. But because of the money, I was able to buy pigs and get married again.”

Now, not everyone is capable of blowing $120,000 in only four months and winding up with nothing but another notch on the old bedpost. But this sort of behavior is seen all the time, from professional athletes to lottery winners. So long as an individual’s time preference is limited to the short term, he will never amass any wealth because he will immediately spend any amount of money that is given to him or earned by him.

This is why societies that insist on transferring wealth from those with long-term time preferences to short-term preferences are ultimately doomed. One can always eat a heartier meal if one does not save the pigs for breeding and the grain for planting, but there won’t be anything left to eat come the winter. And unfortunately, one cannot instill time preferences though education due to the human talent for rationalization.

Stay on target

Remember this January 1st prediction for December 2010? “The national median existing-home price will not rise 4% from $172,600 to $179,500 as predicted by NAR’s lead economist Lawrence Yun, but will fall below 165k instead.”

From yesterday’s September NAR report: “The national median existing-home price for all housing types was $171,700 in September, which is 2.4 percent below a year ago.”

Considering that the impact from the Great Mortgage Fraud hasn’t begun to appear yet in the housing statistics, I’m not the least bit concerned about this one panning out. And on that note, MSNBC’s Dylan Ratigan is doing an excellent job covering what the so-called conservative media won’t. The Bill Black segment starting at 6:20 is particularly informative, although the nurse that precedes him is fantastic in her observation that virtually none of the politicians, including the Tea Party all-stars, are talking about holding the bankers responsible for their crimes. Black draws a very clear picture pointing directly at the mortgage banks as being the sole causal factor of the fraud, with the Federal Reserve becoming subsequently complicit in the coverup through its purchase of $1.5 trillion in fraudulent loans. He also explains how the “deadbeat” borrowers cannot have been responsible for committing any fraud due to their ignorance of the loan ratios and various formulas involved in framing their “liars loans” to allow their categorization as AAA-rated loans.

Black is entirely correct to say that the Federal Reserve cannot be trusted in its belated “investigation” that Bernanke announced yesterday. And it is obvious that the Treasury cannot be trusted either.

“The United States Treasury concealed $40 billion in likely taxpayer losses on the bailout of the American International Group earlier this month, when it abandoned its usual method for valuing investments, according to a report by the special inspector general for the Troubled Asset Relief Program.”

Why the Tea Party is female

RT notices something:

Is it just my imagination, or is the Tea party dominated by women? I have always regarded the Republican party as the masculine side of the equation, and the Democrat Party as the feminine. The Tea party, which threatens to supplant the Republican party seems to be dominated by rough, opinionated, conservative women. It certainly is where I live, and even in my state, and I get the impression that’s the case nationally. The impetus seems to be coming from women who hold the limelight and get all the work done. Is that because men are abandoning politics, or is it because they have become feminized?

The Tea Party is mostly female because it is a mass entry into politics by a portion of the electorate that has historically been politically ignorant and inert. It is mostly middle class and female because it is made up of people who have the time and resources to get involved with political activism; these are the wives of the middle class men whose economic interests have suffered and are less likely to be able to put in the time and effort involved.

Since it is a female-driven movement, we can be confident that it will quickly lose its focus and be seduced away from its nominal purpose by callous and cold-hearted men, as Karl Denninger has already noted. This assumption is supported by the fact that Sarah Palin is the current darling of the Tea Party, the very woman who suspended her campaign for vice-president in order to permit John McCain to rush back to Washington and help the Bush administration and the Congressional Democrats hold down the American taxpayer for their financial raping by the banking industry. The idea that a woman who supported TARP and the bank bailouts and believes that government inaction is not an option during times of economic difficulty will not turn around and betray a movement of political neophytes at the first opportunity defies belief.

The other reason, of course, is that men are much more skeptical than women. I have said from the beginning that the Tea Party will prove ineffectual and have seen no evidence to alter my thinking in the least. (Remember, I predicted that the Republicans would regain the House and Senate months ago; the Tea Party is a consequential factor, not a causal one.) While many women are finally cognizant of the cancerous state of America, they are still ignorant enough to believe that politics can be the cure. But while it’s not impossible, it is highly improbable.

The fact that many, if not most, Tea Partiers still support The Global Struggle Against Violent Extremism after nine years of near-total futility tells you all you need to know about their eventual effectiveness. Hell, half of them are probably concerned about defending the banks from Obama.

In conclusion, I quote Britain’s finest politician, Daniel Hannan: “[T]he reason there is a Tea Party here is not because of some perverse American characteristic of being anti-tax. It’s that people think that they can do something about it through the ballot box.”

It sounds inspiring. It is inspiring. But the key word there is “think”.

Beating down the doubters

Bill Black explains how the mortgage fraud was actually worse than I’d previously described. While I have explained how the foreclosure fraud was the inevitable consequence of the mortgage transfer fraud, there is growing evidence that the banks knew that 100 percent of certain loan categories would default at the time they were making those loans and yet still utilized them as backing for the securities they were selling:

Our call for closing down control frauds and stopping the foreclosure frauds typically meets with three objections. First, it is claimed that while there were some bad apple lenders, much of the fraud was committed by borrowers. Our proposal would let fraudulent borrowers remain in homes to which they are not entitled, punishing the banks that were duped. Second, the biggest banks are too important to foreclose. And third, it is not possible to resolve a “too big to fail” institution.

Let us deal with the “borrower fraud” argument first because it is the area containing the most erroneous assumptions. There was fraud at every step in the home finance food chain: the appraisers were paid to overvalue real estate; mortgage brokers were paid to induce borrowers to accept loan terms they could not possibly afford; loan applications overstated the borrowers’ incomes; speculators lied when they claimed that six different homes were their principal dwelling; mortgage securitizers made false reps and warranties about the quality of the packaged loans; credit ratings agencies were overpaid to overrate the securities sold on to investors; and investment banks stuffed collateralized debt obligations with toxic securities that were handpicked by hedge fund managers to ensure they would self destruct.

That homeowners would default on the nonprime mortgages was a foregone conclusion throughout the industry — indeed, it was the desired outcome. This was something the lending side knew, but which few on the borrowing side could have realized.

Notice that the Federal Reserve has now seen fit to comment upon “reported irregularities in foreclosure practices at a number of large financial institutions” and Helicopter Ben is hewing very closely to the line that contains the most erroneous assumptions. This is to be expected; both national parties and the Fed are going to do everything they can to point fingers at everyone but the responsible parties as long as they can. But they’re not going to be able to get away with it for four reasons.

1) The fraud is too blatant and widespread.
2) The political downside to backing the banks is too severe. Note that even Obama, who has yet to meet an ex-Goldmanite he doesn’t want in his cabinet, didn’t dare to let HR 3808 pass.
3) They ripped off many powerful institutions, both foreign and domestic. As events have shown, they can’t buy off every judge, county clerk, pension fund manager, and attorney general in the country.
4) It’s not a matter of merely federal law. Land title issues are a State matter, not a federal one. Therefore, the power of the pro-bank politicians and government agencies, which is centralized at the national level, is less effective than usual.

UPDATE: But, but, it’s all about the deadbeats! Zerohedge summarizes FDIC head Sheila Bair’s recent comments:

1. LITIGATION FROM SERVICER ISSUES COULD BE `VERY DAMAGING’
2. FORECLOSURE PROBLEMS WILL REQUIRE `GLOBAL SOLUTION’
3. MORE PROBLEMS’ WILL ARISE IN MORTGAGE SERVICING

Now, why would a global solution be required, he asked innocently? Why would litigation be very damaging and to whom? And how can Ms Bair be so certain that more problems will arise?

Fly, little bird

Fly! Beezle is all growed up now:

Well, you knew the day would come. The good news is that from here on I’ll probably blight your blog no more (or at least less). The bad news is that I’ve devoted another entire blog to you, and I’m planning to aim a little higher on the leg than your ankles. It’s going to be fun, and productive, and entertaining, and most likely will last no more than a month before I lose interest in it entirely and delete the whole thing. But we will see.

Needless to say, bets will be placed on the over/under for his next deleted comment here. I’ll take the under.

WND column

Doubt and Verify

While it’s true that Juan Williams was unfairly and unreasonably fired from National Public Radio for the crime of showing insufficient enthusiasm for burqa-clad airline passengers, conservatives should think twice before making the mistake of concluding that Williams is a fair and balanced commentator himself, his new contract with Fox notwithstanding. The reason is that in both his first public statement after his firing as well as in the statement that inspired it, Williams committed a much more significant calumny that somehow managed to escape the conservative media’s attention.

“Yesterday NPR fired me for telling the truth. The truth is that I worry when I am getting on an airplane and see people dressed in garb that identifies them first and foremost as Muslims. This is not a bigoted statement. It is a statement of my feelings, my fears after the terrorist attacks of 9/11 by radical Muslims. In a debate with Bill O’Reilly I revealed my fears to set up the case for not making rash judgments about people of any faith. I pointed out that the Atlanta Olympic bomber – as well as Timothy McVeigh and the people who protest against gay rights at military funerals – are Christians but we journalists don’t identify them by their religion.”
– “I was fired for telling the truth,” Fox News, Oct. 21, 2010

Shutting them down

A county in Kentucky takes the law seriously:

The order requires all foreclosure complaints in Kenton County to be accompanied by an affidavit certifying that the plaintiff is the owner and holder of the note and mortgage and identifying the plaintiff as the original holder or an assignee, trustee, or successor in interest of the original holder. Kenton County foreclosure complaints must also be accompanied by a copy of the note and recorded mortgage with copies of all allonges, endorsements, and assignments necessary to document the chain of title to both the note and the mortgage. The complaint must also include documents establishing the plaintiff as the successor in interest if any merger, change of trustee, or other transfer issue has taken place.

The order is effective for all matters filed in Kenton County on or after November 15.

Naturally, this should present no problem at all for any mortgage banks wishing to foreclose in Kenton County. After all, they are law-abiding institutions who would never conspire to break any state or local laws regarding loan documentation. This is an excellent example of a jurisdiction where the Rule of Law still applies, rather than the Reign of Men who allow certain parties to circumvent the law.

No fast talk, no technological excuses, no judges to look the other way and declare the paperwork unnecessary. Either you have everything in order or you don’t. End of story. That’s exactly the way it should be… and almost never is.