Category: Uncategorized

That is NOT a smoking gun

It is a new, hyper-efficient form of communication designed around the noble Native American tradition of conveying messages via smoke signals. It is merely shaped like a gun due to convergent design evolution:

“It appears as though many loans and other mortgage-related assets have been double and even triple-pledged to various constituencies.”
– Bank of America, U.S. Bankruptcy Court, Jacksonville, CASE NO. 3:09-bk-07047-JAF

What Washington fails to understand is that double and even triple-pledging home loans made them more secure for the homebuyer. That’s what mortage securitization was all about from the start! Read a dictionary! Bank of America not only stands by its word and its commitment to the law and all the responsible homebuyers in this great nation of ours, it stands by it two and even three times!

On a completely unrelated note, my official Sponsored Post rate has increased to €23 million.

Warning: hamster at work

This is what it looks like when a woman’s rationalization hamster is actively at work:

I’m 23 years old and have been dating my boyfriend for just over two years. I love him, and I love spending time with him. He’s everything I’ve always wanted in a long-term partner: caring, intelligent, thoughtful and hardworking.

But lately, I can’t seem to shake this “antsy” feeling…. I’ve been thinking maybe it would be good for us to take a break so I could clear my head and figure out what I really want. Is that a disastrous idea?

This is precisely why men should pay very little attention when women, particularly young unmarried women, tell them what they think they want. What they want is very often mutually contradictory; shockingly few women fully grasp the basic concept of opportunity cost: IF you do X, THEN you cannot do Y.

Consider the “advice-seeker”, who isn’t actually seeking advice but rather permission/rational cover to do what she intends to do regardless of what anyone says. She is at the peak of her attractiveness to men, she has already landed a man who provides “everything she wanted in a long-term partner“, but she is unable to shake an “antsy” feeling. No doubt those familiar with Game theory were laughing when they read that, instantly recognizing what is quite clearly the usual desire to spend a few years riding the Alpha carousel.

Gammas and Deltas, note that it doesn’t matter in the least how perfect you are as a potential husband, gentleman, and provider. In most cases, a woman’s decision about pursuing a long-term relationship has very little do with your own behavior within that relationship and everything to do with what holds the tie-breaking vote in her individual case, reason or the rationalization hamster. Whereas reason will vote for a happy married life with the “caring, intelligent, thoughtful and hardworking” delta, the rationalization hamster is furiously throwing out one irrational “reason” after another to justify allowing herself to be mounted by a series of passing Alphas. (Note: women seldom come right out and phrase it this clearly, they usually describe it as “being young”, “having fun”, “enjoying myself”, and occasionally “taking a break”.)

What the woman really wants is to spend the next four years riding the Alpha carousel, then to come back to her current boyfriend, who will of course have spent that time loyally pining away after her and will happily marry her when she is no longer sufficiently attractive to command the level of Alpha interest to which she has become accustomed. It’s not an impossible dream, but it is a highly improbable one. On an anecdotal note, I have NEVER seen any woman of my acquaintance over the age of 27 end up with a higher-quality, higher-status man than the highest-quality, highest-status man with whom she was seriously involved prior to that age.

Is “taking a break” a disastrous idea? It all comes down to a woman’s time-preferences. If peak short term pleasure is her absolute priority, then obviously the carousel is the way to go. If greater long-term satisfaction is her objective, then yes, throwing away everything she’s always wanted in a long-term partner is almost criminally stupid. (The complete uselessness of the female advice columnist goes without saying, which is why there is no need to comment upon what passes for her “advice”.) And while it is certainly possible that marriage to her ideal delta may not work out as well as she imagines, it is also true that the carousel rides on offer may not turn out to be of the status/quality that she hopes for either.

This leads me to contemplating a related email in which GK asked about my acceptance of evolutionary psychology:

My impression from what I’ve read of your writings is that you don’t believe in evolution but agree with some things that could fall under the umbrella of evolutionary psychology. E.g., the whole “game” thing — if I’m understanding you correctly — sounds very much like the kind of stuff you hear from the EP folk.

EP has a mechanism for explaining why a character trait that provides a selective advantage (e.g., women wanting to mate with the alpha male) would be passed on and come to dominate the population. Do you accept that general notion? Of course it’s entirely possible to believe in evolutionary psychology and reject macro evolution. Is that your position?

No, my belief in the utility of Game theory has absolutely nothing to do with evolutionary psychology, which I completely reject. In fact, I outright reject evolutionary psychology whereas I am merely skeptical about evolution by (probably) natural selection. The key phrase is “mechanism for explaining”, which means that evolutionary psychology is nothing more than creative fiction. It has a scientific basis no stronger than the Biblical “Curse of Eve” and represents the confusion of “could” with “is”. Is any one scenario posited by an evolutionary psychologist correct? Perhaps. But the total inability to provide any metric to determine the probability of the correctness of any given scenario renders it no more scientific or useful than 17th century Basque poetry. The history of science is littered with many commonly accepted “coulds” that weren’t; for example the idea that tribes of European hunter-gathers adopted agriculture from the Middle East rather than being supplanted by Middle Eastern immigrants is now being called into question. Plus ça change….

This isn’t to say that it is worthless to attempt to discover the whys and wherefores behind the operation of Game. But accepting the idea that something works is not tantamount to accepting every idea attempting to explain why it works. It’s important to recall that the operative theory of Game preceded the attempts of amateur evolutionary psychologists to retroactively explain it. At times, it appears that no few male scientists have little white rationalization lab rats of their own.

Mailvox: an unfortunate series of minor mistakes

From an anonymous mortgage broker: “There are blatant efforts by several of the giant mortgage-security selling institutions to intentionally “fail to find” the relevant loan documentation. We have seen multiple clients in September and October who either face foreclosure or had been foreclosed and WERE NOT EVEN LATE on their mortgage payments!”

After looking into these serious allegations, I have been reliably informed that these sorts of unfortunate accidents are bound to happen from time to time given how many millions of mortgages are outstanding.  I have no doubt these isolated incidents were mere clerical errors and that the bank(s) involved will be pleased to sort out any mistakes that were made as well as making all appropriate restitutionary actions that are required by the law.  Which, I hasten to note, the mortgage banks totally respect.

In completely unrelated news, I would like to announce that I recently decided to begin accepting blog advertising. The cost for a Sponsored Post begins at €1 million.

In which we are called out

Chateau comments upon America reaching the Crazy Cat Lady Stage:

The crazy cat lady stage of America — yep, that about sums it up. So what follows? Who knows. It’s possible the pendulum will swing back, perhaps violently. As we here at the Chateau relish provoking reminding the readers, giving women the right to vote has been a disaster for liberty-loving small-government patriots. Do any of the mainstream conservative or libertarian bloggers have anything to say about Lott’s study? Their cowardly silence speaks volumes.

I responded thusly:

Cowardly silence? On women’s suffrage? Just to just to give one conservative and one libertarian example, Ann Coulter and I have both been very clear on our opposition to women’s suffrage. I have written on the subject numerous times; here’s one example from 2007:

“What Ann understands and so many nominal conservatives do not is that women’s suffrage is completely incompatible with human liberty or a republic as described in the U.S. Constitution. The two cannot co-exist. One cannot defend freedom on the basis of emotion, as fear always runs to promises of security, however nebulous.”

Women’s suffrage has been a complete and unmitigated disaster across the West and it is doubtful that any society can survive it for long.

The fact is that it is impossible to rationally defend women’s suffrage in a system of limited democracy on ANY grounds except to assert that it is an intrinsic and self-evident societal good. One may or may not agree with that, but regardless, to simply label something an intrinsic and self-evident good is not tantamount to actually making a case for it. To even attempt to begin making a genuine argument for women’s suffrage usually requires a fundamental error in confusing “the act of legal voting” with “freedom” and/or “human liberty”. But neither voting nor democracy are synonymous with freedom or societal well-being, which is precisely why the Founding Fathers limited the franchise so strictly and why so many of supposed champions of democracy are actively opposed to further expanding democracy in America beyond the equalitarian expansion of the electorate presently permitted to select its nominal representatives.

If a single American feminist has embraced the concept of genuine democracy with a 100 percent national franchise, which I support as being vastly preferable to modern American pseudo-democracy and in which there are absolutely no anti-democratic strictures on the will of the people of either sex, I have yet to hear of it. Which should suffice to demonstrate that whatever the feminist rationale in support of women’s suffrage might be, it doesn’t appear to be based on a principled commitment to democracy.

Obama is behind the curve

His adminstration is still tap-dancing around the central issue of the mortgage frauds despite the fact that everyone who is paying attention now knows that the foreclosure fraud is only the tip of the iceberg. Notice how the PR communique from his U.S. Secretary for Housing and Urban Development completely ignores everything but the foreclosure aspect and tries to portray illegal banking actions as “a bank mistake”:

No one should lose their home as a result of a bank mistake. No one. That is why the Obama Administration has a comprehensive review of the situation underway and will respond with the full force of the law where problems are found. The Financial Fraud Enforcement Task Force that President Obama established last November has made this issue priority number one. Bringing together more than 20 federal agencies, 94 US Attorney’s Offices and dozens of state and local partners to form the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud, the Task Force is examining this issue and the Attorney General has said publicly that if it finds any wrongdoing the members of the task force will take the appropriate action. The Federal Housing Administration and Federal Housing Finance Agency have launched reviews to make sure servicers are in full compliance with the law. The Office of the Comptroller of the Currency has directed seven of the nation’s largest servicers to review their foreclosure processes, fix the processing problems and determine whether there is specific harm that has been caused in individual cases.

The message all these institutions are sending is the same: banks must follow the law — and those that haven’t should immediately fix what is wrong.

What an unsurprising and incompetent PR-driven response. But it’s informative to note that a top administration official is willing to come right out and state that banks that have broken the law will not be prosecuted, but have merely to “fix what is wrong” in order to escape punishment. As I posted yesterday, there is absolutely no Rule of Law in the United States anymore. There is not even a serious pretense of it.

If a member of the non-favored classes breaks the law, he is arrested, prosecuted, and tried if he is lucky. If he is not, (in which case he may not have even broken a law, but merely been targeted by a bureaucratic agent), he is subjected to a non-judicial procedure and asset-stripped. If, however, a bank does not “follow the law”, it is expected to merely “fix the mistake”. Moreover, it is an explicit announcement that the Obama administration fully intends for foreclosures to continue less only those that are most PR-damaging to the banks.

It certainly settles the issue regarding Obama’s political intelligence. Like McCain in 2008, he has sent a very public message that he is taking Wall Street’s side against the rest of America.

Monday column

Fixing the Mortgage Fraud

It is both extraordinary and amusing to see how fast Washington and the Wall Street lapdogs that presently pass for our financial media have been forced to turn on a dime by the exposure of pervasive criminal activity on the part of mortgage-backed security sellers. The summer-long collusion of the Republican and Democratic Parties in passing H.R.3808 on an off-the-record voice vote, which would have permitted some of the financial institutions that committed loan title fraud to retroactively hide their misdeeds, was shut down by a furious reaction across the blogosphere that sparked the Obama administration to act in a single day.

And the initial response to the fraud by the market cheerleaders that the whole story was essentially a great big “nothingburger” has rapidly subsided into desperate attempts to change the focus from the widespread fraud committed by the security-selling banks to the possibility that defaulting homeowners might inadvertently profit from this pervasive criminal activity on the part of the banks that offered them mortgages. But it’s not about the foreclosures. The foreclosures are merely the deadly tip of a four-part iceberg that involves mortgage-writing fraud, mortgage-backed security-selling fraud, title-transfer fraud and finally, in a futile attempt to cover up the preceding three frauds, the much-discussed foreclosure fraud.
The column continues at WND

ADDENDUM: As further evidence that the foreclosures are merely a consequent issue rather than the central one in the great mortgage fraud, here is a copy of a letter reportedly sent to Bank of America from the Association of Financial Guaranty Insurers asserting that BOA must repurchase as much as $20 billion in mortgages due to its fraudulent representations and warranties and that “well more than half” of the securitizations from 2005 through 2007 “qualify for repurchase by BOA.

ADDENDUM II: Just so we’re all clear, “clerical mistakes” and “the real issue is deadbeat borrowers” is Wall Street’s official propaganda line: “”Don’t you think, out of 10 million data points, there will be 500 unbelievably screwy examples? It’s a little bit so what. I don’t get it. It doesn’t feel like this is fraud. Maybe there is sloppiness, but at the end of the day, people took out mortgages they can’t pay back. Now I worry that if anything, the government is making something that is just a clerical error into something that would be nefarious or whatever.”

But the government isn’t inventing anything, in fact, all the federal government has done to date is play enabler and incompetent defense attorney. Now ask yourself one question. Does Wall Street’s interpretation of the current situation explain in any way why the GSEs, pension funds, and bond insurers are filing very large financial claims against the mortgage-securitizing banks?

Two wrongs and the Rule of Force

Karl Denninger explains why it is justifiable for people to begin seizing property on their own behalf:

Look, this is what happens when you sit idly by and countenance rampant and outrageous lawbreaking: The people decide they’ll do it too!… Two wrongs don’t make a right – just more wrongs. But the lesson here isn’t that a couple and their kids “re-took” possession and claim their original foreclosure was “illegal.” I don’t know if it was or wasn’t – what I know is that the chain of lawlessness didn’t start with them, and it is impossible to condemn their actions standing alone.

If the foreclosure was unlawful and initiated with “robosigned” and bogus documents then it was. The Earls apparently attempted to demand a jury trial on the facts (including these facts) and were told to go to hell. Someone hasn’t read their Constitution lately – it says that for all controversies exceeding $20, you have a right to a trial by jury (7th Amendment). It doesn’t say that if it’s inconvenient for a bank and might expose criminal fraud for which bank officers could be imprisoned the judge can tell you to pound sand. That, standing alone, broke the chain of lawful behavior in the instant case.

This is where lawlessness leads us – to more lawlessness. Once you commit a lawless act against someone and are not punished for it you have invited them to retaliate with complete disregard for the law in their response. You are only required to deal ethically and morally with an ethical and moral entity across the table – one who ignores the law loses their right to demand that respect in return.

Two wrongs don’t make a right, but they do create both a justification and a motivation for human action. Once the government refused to enforce the law that protected the people from the fraudulent depredations of the banks and then denied them their Constitutional right to a jury trial, it abrogated its right to demand that those same individuals behave in a reasonable and law-abiding manner. It’s not a question of the Rule of Law since it is an observable fact that there is no law as such in the United States anymore, there is nothing more than the public pretense of law and the sporadic enforcement of that pretense on parties who do not belong to the government-favored classes. The Rule of Law has been replaced by the much weaker and more delicate Rule of Force.

This is nothing new, as Cicero’s letters make it clear that the latter days of the Roman Republic featured a similarly dynamic and amorphous pretense of law. America as you knew it, as you imagined it to be, is no more. It has been gone for some time now and it was laid to rest by the same cancerous forces of greed, lawlessness, and ambition that have brought every other great society in human history to its eventual end.

VPFL Week 5

65 Bane Sidhe (4-1)
60 Greenfield Grizzlies (1-4)

75 Judean Rhyneauxs (3-2)
40 Moundsview Meerkats (1-4)

59 RR Redbeards (2-3)
64 Meigs Marauders (3-2)

93 Blackmouth Banksters (3-2)
31 Valders Quixotes (3-2)

44 Winston Reverends (3-2)
83 MS Swamp Spartans (2-3)

As always, this is your weekly NFL discussion thread. I’m still not that worried about the Vikings. I had expected them to be 2-2 at this point; they’ve been in every game and if it weren’t for a failed fourth-and-goal, they’d be exactly where they should be at this point in the season. The Bears are a mirage and it’s the Packers actually who look a lot worse than they were supposed to be this season.

Favre’s elbow, the offensive line, and the injuries in the secondary are concerns, of course, (yes, Nate, Farve’s injury is an issue but the arm isn’t “shot”), but as Favre and Moss get integrated with the offense, I expect them to go on a roll. And then everyone who is writing them off now will get more excited than the win streak justifies and start proclaiming them Super Bowl champs. I think they’ll take the NFC North and after that, who knows? Certainly no one appears to be staking a serious claim to NFC dominance yet.

A dialogue with Ilana (UPDATED)

In which we discuss the Great MBS/Foreclosure Fraud. Keep in mind that Ilana and I are not only WND colleagues, but like-minded libertarians as well, so please note that this isn’t the least bit personal on either side. I think Ilana’s objections are important and illustrative of the challenge in accepting the existence of an institutional fraud of this magnitude, hence this detailed response.

It must be obvious to readers of this site that I would strongly disagree with the case my colleague Vox Day makes against the strict rule of law and for grand-conspiracy….

Distilled, the argument for all-out sweetness and love for the foreclosed upon is that, because the banks are embroiled in the fractional reserve system, they should suffer the worst of fates.

That’s like saying that because the legal system is generally corrupt, murderers should go free; or because an owner who sells a parcel of land partakes in the property tax theft, the buyer should not have to pay him. Or because businesses often act like exuberant idiots during a phase of the business cycle—some as offenders; others as victims—their customers need not pay them. And on and on.

This is chaos theory; create chaos, and out of it, something good may come. And never mind that not all bankers are crooks; that not all of them understand the theoretical aspects of the system in which they are embroiled; and that not nearly enough bad things are said about the defaulters.

As to Vox’s point, it does not follow from “the mere fact of their focus on the borrowing parties rather than the banks,” that this “is proof that they are intentionally evading the real issue.”

Not in logic, at least.

Finally, the laws of economics are natural laws. Whoever is involved, it is categorically good that responsible buyers get to pick up foreclosed properties, and that the mortgage miasma is cleared and cleansed away.

To be honest, I completely missed her statement about my supposed opposition to “the strict rule of law”, otherwise I would have addressed that in my following email by pointing out that the “strict rule of law” completely forbade everything that the mortgage banks did in ignoring the land title system in favor of pushing 65 million mortgage transfers through MERS in only six years instead. But here was my actual response to her:

With all due respect, it is clear you don’t understand the issues at stake in the “foreclosure fraud” issue. You’re missing the relevant point because you’re only looking at the second wave of the frauds, rather than the first. The greater portion of the fraud occurred long before the very first defaulting homeowner was late on his first payment. There is absolutely no question – none – that the banks are
guilty of massive amounts of criminal and tax fraud prior to their subsequent commitment of the foreclosure-related frauds.

What happened was that the banks wanted to create mortgage-backed securities, but selling the securities legally required transferring the notes and titles as per the land title system. But that would have cost a lot in filing fees and all but eliminated their profits, so they simply ignored the law, created an electronic registry called MERS, and thereby ripped off large financial investors by selling worthless paper. The foreclosure-based fraud about which you have such doubts is merely the cover-up that resulted from the way in which a need to foreclose exposed the initial fraud.

I haven’t gotten permission from Ilana yet to post her email verbatim, but I will summarize it as follows, (and either replace the summary or correct it depending upon her preference.)

“We have a 3-stage process, not a 2-stage process. Bankers, most of whom really don’t know squat about Austrian theory, were compelled by law to grant rotten loans to the protected species of the politicians. They invented a product to do that.

Sounds quite creative; sounds like the unintended consequences of politics.

I began reading the column you recommended. It begins with a one-case study as its proof. This is statistically worse than insignificant. It graduates to assertion. Then adds another one-case study. You may be right, but the data in the column you provided does not prove your case.

Understand: I am not a partisan here; I’m not pro-banker. So far, I just don’t see good evidence for your case.”

This was my response:

I’m afraid you’re still a little too under the influence of the banking industry’s defense theory. You are repeating some of their talking points and focusing on some irrelevant side issues instead of the salient matters. What is irrelevant about the “one-case study” and the anecdotes being “statistically worse than insignificant” is that they are merely illustrative examples of an easily provable fact that applies to more than 60 million mortgages. It is quite clear that you do not know what the local land title laws are, (and being a Canadian by way of South Africa, I certainly wouldn’t expect you to; I’ve been in Europe for a decade and I have absolutely no idea what the local property laws are), so your attempt to use general principles to try theorizing around that gap in your knowledge is doomed to failure.

It’s not even possible for you to suggest that “the unintended consequences of politics” compelled the bankers to provide the loans to the favored classes because a) most of the relevant land title laws involved are older than the United States; they derive from the English common law, b) the MBS-selling preceded most of the laws that “compelled” them, and b) the number of loans that were fraudulently transferred far exceed the number of mortages sold that required any compelling. To quote Wikipedia: “What the case law is consistently holding is that MERS cannot do what it has purported to do (and has done in what appears to be over sixty (60) million mortgage transactions nationally).” The lawyers for MERS have even admitted this in court! “During the course of the hearing, the Court repeatedly raised the “MERS as nominee” issues to counsel for the Defendants, [MERS and OneWestBank] with said counsel finally admitting, upon repeated inquiry by the Court, that MERS cannot transfer promissory notes.”

So, this isn’t a case of bad politicians causing bad behavior by the banks. In fact, the bad politicians, the bad bureaucrats, and some of the bad state and federal courts have been repeatedly attempting to cover for the bad behavior by the banks. The banks are absolutely not on the side of freedom and capitalism here; they are deeply and actively involved in the corrupt politics themselves. Natural law also points to the guilt of the banks; they forgave the mortgage debt through their actions, then attempted to retroactively claim they had not forgiven it.

On a related, note, Jim Sinclair shares some interesting information.

I had dinner with my former partner, then lead director of and CEO of Bear Stearns. I could not contain myself so I asked him why he did so much business in OTC derivatives which were certain to bankrupt them. The answer I got was it was more than 50% of their profit. The right answer should have been it was more than 80% of their earnings.

UPDATE I: Ilana wrote back to note that she intends to further contemplate the matter. She added:

“You know very well that my problem with your argument, Vox, is that it teeters on grand conspiracy. One of your readers in the comments section picked this up quite well. The state and its cronies preside over the disintegration of civil society, but they do so reflexively, rather than as a matter of collusion and conspiracy.”

Perhaps it does teeter on grand conspiracy. But as I have pointed out in the past, calling something conspiracy doesn’t make it go away and the undeniable fact is that 65 million mortgages were transferred through MERS since 2004. Furthermore, it is highly probable that many of them, and perhaps even all 65 million, were transferred illegally according to laws that predate the Carter administration by decades, if not centuries. My skepticism is well known to readers and critics alike and it NEVER occurred to me that the mortgage fraud could possibly run this deep and this wide. I was sure that the reason the banks were mysteriously reluctant to foreclose upon properties in default was because doing so would expose their accounting irregularities with regards to the book value of the defaulting properties. It almost defies imagination that any bank would ever knowingly destroy the paper trail that is the only security for its interest in the loans it has made. And yet, we now know that many of them, including all the big, bailed-out banks, did.