Author: VD

WND column

A Den of Vipers and Thieves

“Gentlemen, I have had men watching you for a long time and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves.”
– Andrew Jackson

The French famously say that the more things change, the more they stay the same. While the particular form that the latest banking fraud has taken is different – there were no option ARMs, mortgage-backed security tranches or electronic mortgage registration systems in the 1830s – the United States found itself similarly afflicted by the financial predations of a private central bank.

ADDENDUM TO THE COLUMN: Unsurprisingly, those freedom-loving Republicans and champions of the Rule of Law in the conservative media are following the grand tradition of presidential candidate John McCain by rushing to the wrong side of the issue and the defense of the impoverished bankers of Wall Street.

Talk about a financial scandal. A consumer borrows money to buy a house, doesn’t make the mortgage payments, and then loses the house in foreclosure—only to learn that the wrong guy at the bank signed the foreclosure paperwork. Can you imagine? The affidavit was supposed to be signed by the nameless, faceless employee in the back office who reviewed the file, not the other nameless, faceless employee who sits in the front.
– The Wall Street Journal

The No. 2 House Republican, Rep. Eric Cantor of Virginia, said a national moratorium would remove the protections that lenders need. “You’re going to shut down the housing industry” with a national stoppage, Cantor said. “People have to take responsibility for themselves.”
– The Associated Press

This is pure banking propaganda. The idea that the foreclosure fraud is simply a little clerical error and that homeowners are attempting to capitalize on a minor issue of missing paperwork is a blatant and shameless lie. The mere fact of their focus on the borrowing parties rather than the banks is proof that they are intentionally evading the real issue. Karl Denninger, who has been on this for three years now, explains it more succinctly than anyone. “The issue is not about which paper-pusher signed documents. The issue is whether the origination and securitization of this paper in the first instance was fraudulent, and whether we now we have a Watergate-style coverup of what a gang of brigands did to steal literal trillions of dollars!” As he further elucidates, there are three primary parts to the problem; notice that the latter two have absolutely nothing to do with the borrowers that the Republican Cantor declares must “take responsibility for themselves”. But if a poor Hispanic family living in an overpriced house have to take responsibility for themselves, why don’t the bankers who are holding Cantor’s leash have to do likewise?

1. Borrowers overstated income, assets or both. In some cases they did so willingly and knowingly. In others loan officers changed numbers to “ram it through” the computer-operated approval systems, submitting files multiple times while doctoring figures. In the latter case perhaps the borrower knew, perhaps not – many people didn’t read the entire 100+ page stack of paper at closing. That’s dumb but it’s not criminal. Changing the figures or lying, on the other hand, is criminal.

2. Lenders stuffed paper they either knew was bad or had the ability and legal duty to verify the provenance of but intentionally did not into securities sold to investors. This has been disclosed in FCIC hearings and is no longer speculative, although as I noted in 2007 it had to be the case because it was the only way the deals that were being done could have possibly been done. This was an act of deception and in my opinion (along with many others, including plenty of attorneys) meets the legal definition of fraud.

3. The land title system in this nation was intentionally subverted and corrupted by both intentional act and intentional laziness, all driven by the motive of profit. Original paperwork was either shipped overseas or intentionally destroyed. In even more cases it was not conveyed as legally required by the trust documents. This has massively-corrupted the chain of title for perhaps as much as one third to one half of all residential housing units in this country and if not corrected will render these homes unmarketable in the future. This is the vastly unappreciated problem with what has been done to date.

If the Republican leadership is dumb enough to attempt to defend this large-scale banking fraud against the interests of defaulting homeowners and responsible taxpayers alike, they’re going to risk throwing away the entire advantage that they have derived from two years of Obama’s political incompetence. This is the one thing they could do that would force the Tea Partiers to leave the Republican Party and transform into a genuine third party. And it’s not impossible; remember, it was a Republican who introduced HR3808 and it was the Republican leadership that was complicit in allowing it to pass on an unrecorded voice vote.

VPFL Week 4

96 Valders Quixotes (3-1)
47 RR Redbeards (2-2)

79 Moundsview Meerkats (1-3)
51 Meigs Marauders (2-2)

74 Bane Sidhe (3-1)
34 Blackmouth Banksters (2-2)

61 MS Swamp Spartans (1-3)
46 Judean Rhyneauxs (2-2)

68 Winston Reverends (3-1)
43 Greenfield Grizzlies (1-3)

After four weeks, there is no obvious dominant team, but at least the Meerkats and Swamp Spartans have broken their duck. But all of this pales beside the burning issue sweeping the NFL this week: what does Brett Favre look like with his pants on the ground?

The media wakes up

The Washington Post finally notices that there might be a little problem in the housing market:

Senior Obama administration officials said Friday that a nationwide moratorium on foreclosure sales may be inevitable, despite their grave reservations about the impact a broad freeze would have on the nation’s housing market and economic recovery…. With foreclosed properties comprising one in every four homes sold in the United States, the spreading moratorium could disrupt real estate deals in progress, slow down the process of clearing the backlog of troubled home loans and prolong the economic recovery, analysts said.

A freeze would also strike at the financial sector, just two years after it suffered one of the worst crises in its history. One government official who has been in discussions with several big financial firms said the banks are bracing themselves for a wave of lawsuits from homeowners who are fighting to keep their homes and from investors who had bought mortgage loans on Wall Street. On Friday, while the Dow Jones industrial average crossed 11,000, most major bank stocks fell.

Translation: Senior Obama administration officials said Friday that a nationwide moratorium on foreclosure salesallowing the big insolvent banks to go bankrupt may be inevitable, despite their grave reservations about the impact a broad freezefailure to enact a second banking bailout would have on the nation’s housing market and economic recoverydepression.

Yesterday’s post about the 13.3% decline in bank credit didn’t really do proper justice to the seriousness of the situation. One also has to factor in the historical 8.4% annual increase in bank credit. This means that there is presently a $2.2 trillion gap between the current credit supply and the $8.477 trillion in credit that a nominally healthy economy would have at the end of 2010.

That is the gap that the massive increase in Federal outlays are attempting to fill. In other words, the magnitude of the problem isn’t defined by a 13.3% decline from where we were, but rather, the 25.8% shortfall from where we should be.

They can’t steal if you don’t work

Gonzalo Lira of Zero Hedge is correct. Once the middle class realizes that they are being scammed and participation in the scam is no longer worth it, what is presently and fraudulently passing for “America” is doomed.

Just like the poker player who’s been fleeced by all the other players, and gets one mean attitude once he finally wakes up to the con? I’m betting that more and more of the solid American middle-class will begin saying what Brian and Ilsa said: Fuckit.

Fuck the rules. Fuck playing the game the banksters want you to play. Fuck being the good citizen. Fuck filling out every form, fuck paying every tax. Fuck the government, fuck the banks who own them. Fuck the free-loaders, living rent-free while we pay. Fuck the legal process, a game which only works if you’ve got the money to pay for the parasite lawyers. Fuck being a chump. Fuck being a stooge. Fuck trying to do the right thing—what good does that get you? What good is coming your way?

Fuckit.

When the backbone of a country starts thinking that laws and rules are not worth following, it’s just a hop, skip and a jump to anarchy.

TV has given us the illusion that anarchy is people rioting in the streets, smashing car windows and looting every store in sight. But there’s also the polite, quiet, far deadlier anarchy of the core citizenry—the upright citizenry—throwing in the towel and deciding it’s just not worth it anymore.

If a big enough proportion of the populace—not even a majority, just a largish chunk—decides that it’s just not worth following the rules anymore, then that society’s days are numbered: Not even a police-state with an armed Marine at every corner with Shoot-to-Kill orders can stop such middle-class anarchy.

It really isn’t even debatable anymore. Does anyone seriously believe that the bankers who are now known to have stolen literal billions from the government and from the public alike are going to spend any time in prison, let alone 12-15 years like my father? There is no rule of law, there is only the massive and ongoing monetary rape of the middle and lower classes by the financial-government complex. The latter have been gambling, and losing, at the former’s expense for decades; they have set up an indefensible system where it is heads they win, tails everyone else loses.

But more and more Americans are finally realizing that they can’t steal what you don’t earn. They may not have minded being milked, at least not within reason, but they also understand that there’s no benefit in being turned into hamburger.

Mailvox: homeschool or die!

Yet another example. Which makes one wonder: what good is that all-important socialization to a corpse?

It was the fourth time in little more than two years that a bullied high school student in this small Cleveland suburb on Lake Erie died by his or her own hand — three suicides, one overdose of antidepressants. One was bullied for being gay, another for having a learning disability, another for being a boy who happened to like wearing pink.

The emailer who sent me this article wondered where the parents were. “How come they never have the parents of the bullies on the news? After all, what kind of kid walks around knocking books out people’s hands and calling them faggot? What kind of kid’s take pleasure in doing these kinds of cruel things to people? They weren’t provoked after all. I mean, I know from experience that the kid with the stuffed toy was just asking to get picked on, but I can’t imagine going out of my way every day to make someone else miserable.”

I don’t think it’s profitable thinking about the parents of the bullies. They may be unintelligent, unreflective bullies themselves, or more likely, they either a) have no absolutely idea what their children are doing to other children, b) they are in denial, or c) they’re total idiots who believe their little cretins are permitted everything. I actually had a run-in with the latter some months ago; the morons actually believed that their little thug-in-training shouldn’t even be threatened with being hit back after he, unprovoked, hit another kid in the face with a hockey stick. Needless to say, the little thug is going to be wondering what the hell happened the first time he runs into someone who doesn’t give a damn that his parents have declared him off-limits to playground justice.

My question is where the parents of the bullied children are. Protecting one’s children is a parent’s paramount duty. If one’s child is genuinely being seriously bullied to the point of personal danger, first train the child to defend himself by massively violent overreaction. Chances are very high that he’d be never be directly bothered again.

But in the unlikely event that fails, then the adult must directly confront the bullies and let them know in no uncertain terms that one will cheerfully spend the rest of one’s life in jail for multiple charges of homicide and desecration of a human corpse rather than permit one’s child to come to harm. And if spending a few days in jail on an assault and battery charge is necessary to send the message in a manner that it is received, then so be it. If your kid knows one thing, just one solitary thing, he should know that you have his back. No matter what.

“Potential flaws”

It sounds so much nicer than “massive criminal fraud“

Potential flaws in foreclosure documents are threatening to throw the real estate industry into a full-blown crisis, as Bank of America on Friday became the first bank to stop sales of foreclosed homes in all 50 states. The move, along with another decision on foreclosures by PNC Financial Services Inc., adds to growing concerns that mortgage lenders have been evicting homeowners using flawed court papers.

If Obama isn’t completely insane, he’s going to shut down the recent attempt of the House and Senate to immediately make all of this grand theft housing ex post facto legal. I am no green shoots optimist, but this is much, much worse than even most confirmed economic pessimists had been expecting. If Washington doesn’t break with Wall Street soon and jail the guilty bankers, it won’t be long before they find themselves facing crowds of the size of the Beck rally storming the barricades. Nor is this foreclosure fraud the only blatant chicanery. Consider the decline in commercial bank credit since its peak in December 2008.

Notice the immense and unprecedented $452 billion leap in loans that supposedly took place in the last week of March.  And immediately, the decline continued at much the same rate it had shown before.  Now, here’s how TOTLL would look without this reported one-week borrowing orgy.

As of the latest Fed report, correctly adjusted TOTLL is now to $6.297 trillion, down from $7.294 trillion; that is a $993.6 billion collapse in credit.  13.63% of the commercial bank credit in the country has vanished, even without counting all of the defaulting and foreclosed properties that may not even belong to the banks trying to claim them.   Keep in mind that the most TOTLL had ever previously declined in a two-year period was -0.76% in 1974-75.   Here’s the punchline.

“Here are seven predictions concerning economic-related events I expect to see by December 31, 2010

5. Commercial bank loans and leases (TOTLL) will fall below $6.3 trillion.”

After the March 31 report, I was thinking that I’d have to call shenanigans in defense of that prediction, but given the likely fallout from the Great Foreclosure Fraud of 2010, it’s quite possible that TOTLL will fall below $6.3 trillion despite the “potential flaws” visible in the Fed’s statistical reporting.

UPDATE – Apparently Obama isn’t a complete moron. He has made it clear that he will not permit HR 3808 to go forward and cover the mass foreclosure fraud by the banks preparatory to yet another bailout.

Presidential Memorandum–H.R. 3808

It is necessary to have further deliberations about the possible unintended impact of H.R. 3808, the “Interstate Recognition of Notarizations Act of 2010,” on consumer protections, including those for mortgages, before the bill can be finalized. Accordingly, I am withholding my approval of this bill. (The Pocket Veto Case, 279 U.S. 655 (1929)).

The authors of this bill no doubt had the best intentions in mind when trying to remove impediments to interstate commerce. My Administration will work with them and other leaders in Congress to explore the best ways to achieve this goal going forward.

To leave no doubt that the bill is being vetoed, in addition to withholding my signature, I am returning H.R. 3808 to the Clerk of the House of Representatives, along with this Memorandum of Disapproval.

BARACK OBAMA

THE WHITE HOUSE,
October 8, 2010.

Interesting that such a firestorm blew up fast enough to force Obama to show his hand in public this way. This is a very serious situation; it’s arguably more serious than when Paulson was threatening Congress with the image of tanks in the streets and martial law.

Media is educated

Just not, you know, about anything more intellectually demanding than the fall season’s hit new [insert type of television show] on [insert television network]. And Instapundit snickered:

ATLAS SHRUGGED, HAYEK WEPT. And the rest of us are kind of snickering. “The reporter covering the tea parties for the New York Times appears to think that ‘the rule of law’ is some sort of exotic term of art invented by right wingers.” Remember, the people who can’t get this stuff right regard the electorate as their intellectual inferiors.

And apparently they don’t know the difference between S corps and C corps either.

An article on Wednesday about the business culture at the Tribune Company after its acquisition by Sam Zell referred incorrectly to federal taxes on an S corporation, which Tribune became after the deal. S corporations pay no federal taxes because shareholders are responsible for all taxes; therefore, taxpayers do not become “essentially silent partners in the deal.”

The problem isn’t that people who work in the media are stupid, although they don’t tend to be brilliant either. From what I’ve observed in nearly two decades of working tangentially with them, they tend to fall in the +1SD to +2SD range. But what makes them look so stupid on such a regular basis is that they are almost uniformly and grossly ignorant. This is direct result of their narrow educations combined with a complete lack of experience of the non-media world.

Like teachers, journalists don’t actually learn anything useful or broadly applicable as part of their professional training. It’s mostly a lot of jargon and industry-specific minutiae that the average individual could pick up within six months on the job; in fact, that’s exactly how the media used to learn to do its job. And since the nature of the job is so fast-paced, they have to learn how to sound informative while making do with very superficial knowledge. That’s why they so often confuse having heard of something with actually knowing something; they actually believe the two concepts are synonymous on a subconscious level.

Of course, the problem has only gotten worse as a generation of media whores have gone into the business with the objective of reading teleprompters on camera. And now that the other networks are following Fox’s lead by hiring journalists on the sole basis of their sex, hair color, and facial features, the downward spiral is approaching its nadir just in time for the industry’s final collapse.

It’s all good.

Mailvox: the difference between pico and nano

One would require the ability to detect interest measured in these units in order to discern my level of interest in what apparently has been an unhappy atheist outing on a television show. Nevertheless, DoCD writes:

I know you don’t write much about popular culture but have you caught any of the general atheist reaction to last night’s episode of Glee? Most of the observant ones are annoyed that their worldview wasn’t fairly and objectively represented and was defined by two prototypical angry atheists, one of whom ended up asking their sister to pray for them by the end of the episode, and another who is angry that he’s the subject of ridicule because of his sexuality and because of his mother’s death.

I watched the episode with my girlfriend — try not to judge — and I think the episode was pretty fair, even though I had to stomach through ridiculous lines of dialogue about the spaghetti monster and Russell’s teapot. I think the “religious side” ultimately won out, but I don’t think the atheists were presented nearly as unfairly as they seem to claim. In fact, most atheists I know arrived at their worldview due to an emotional reaction, not an intellectual one, but seek intellectual arguments to justify their atheism.

I’m not really sure what they expected to see, guest appearances by Dawkins and Hitchens mebbe? A soda cracker being defiled? I suppose the fact that the creator of the show is a former Catholic who still goes to church and is openly gay might be swaying their perceptions, but the truth is that I just don’t get what they’re whining about.

Now, I have seen part of one episode of a show in which twenty-somethings attempting to look like high school students dressed up like Lady Gaga in order to perform an improbably professional cover of an exceedingly banal pop song. It struck me as MTV meets the Donny and Marie show; no doubt it will be popular with the vacuous set. Needless to say, it takes considerably more than that to draw my attention away from my technotopian existence, so no, I was not aware of this dramatic little – if you will excuse it – tempest in Mr. Russell’s teapot. But KE enlightened me when he sent subsequent email.

“My wife revealed to me that the TV show Glee had an episode dealing with atheism this week, where the two characters were (this is what made me laugh since the stereotype fit perfectly), a self-righteous, uncaring, feminist coach and a flamboyant, gay kid.”

Because the New Atheists are explicitly working off the lavender model as per Richard Dawkins’s strategery, it shouldn’t be surprising that they are upset that they are not being given the conventional Saint Gay treatment on television, where every stand-in for the community is happy, healthy, handsome, popular, and behaves in a manner almost exactly opposite to the way the vast majority of the represented community is known to behave.

Anyhow, there is little of interest on the religion/atheism front these days; as I expected, the New Atheists are already a spent intellectual force. The only real point of interest in that area for me at the moment is to learn how heavily Sam Harris leaned on Marc Hauser’s fraudulent morality research in what is sure to be a philosophical trainwreck of a book on science-based morality. While I am well-disposed to skeptics and contrarians in general, it is unfortunate that Sam hasn’t yet learned that taking contrary positions to established and easily verifiable facts instead of consensus opinion founded on false assumptions is a sure means of rendering your arguments not only ridiculous, but ineffectual. So, without further ado, I shall return with some relief to Cicero, Divine Right, and the technotopia.

Welcome home, Randy!

I was most pleased to learn about the trade between the Patriots and the Vikings yesterday. Moss is still an elite receiver and the Vikings should never have traded him. Had they kept him and pursued Drew Brees, as I had wanted, I think they would have had more success over the last five years.

This bodes very well for the latter half of the season; between Moss, Rice, Harvin, and Peterson, the Vikings have assembled a fearsome collection of offensive talent to match their excellent defense. It should be enough to keep our resident divaquarterback both interested and happy; everyone has forgotten that the Vikings didn’t begin particularly well in 2009 either despite starting off 3-0. The defending Super Bowl champion Saints and the Miami Dolphins are considerably more difficult than the Cleveland Browns and the Detroit Lions and both games were quite close.

And the magical moment that set the stage for the 2009 season, the Favre touchdown to Lewis with no time remaining in the third game, was only necessary because the Vikings were trailing a mediocre San Francisco team. So, if I wasn’t feeling that the Vikes were going to walk away with the Super Bowl – as if any true Vikings fan would EVER think that for a second – I wasn’t the least bit worried about their 0-2 start either.

Adding one of the great receivers of all time and a huge fan favorite isn’t going to hurt either. Aside from what it means for the team’s chances, I’m just glad to have Randy back where he belongs. He never should have left.