Produce The Note!

From California to Florida, three portentous words, "produce the note" are being spoken by legions of homeowners in arrears. The utterance of those three words is producing something of a spectacle where every one involved winds up looking bad. The banks that are trying to foreclose on the delinquent homeowner look like nothing so much as incompetent nincompoops when they can't produce the actual mortgage document, and the deadbeat homeowner, who absolutely owes someone a pile, looks like nothing less than a two bit chancer, trying to game the system for the purposes of not full filling their financial obligation.

As per a recent report on ABC, it is quite astonishing to see and hear delinquent homeowners rationalize not paying what everyone knows they owe, with such flimsy excuses as, "Why should I pay a bunch of crooked bankers who live in million dollar homes, while I have no electricity." Well, ma'am, while yours is indeed a lamentable state of affairs, particularly being out of a job, and living without utilities in a home that you can't make the payments on, the fact of the matter is you do owe the money. That you are, through a legal technicality, managing to remain in your small bungalow, does not diminish the fact that what you are doing falls far short of ethical or virtuous.

There are, no doubt, numerous lessons to be learned from this business, but it seems to this observer that one thing being illustrated is the strong tendency for a sizable segment of humanity to engage in what some might call situational ethics, a term for describing how moral considerations, at least in certain situations, seem to be sacrificed to expediency. And if situational ethics are in play to the degree they seem to be with something as elemental as people's homes, it's hard not to see how they can not be in play in other areas as well, like paying taxes.

Mr. Santelli's Wrong.

Traders in the Chicago pits aren't, as CNBC commentator Rick Santelli claimed the other day, America. They are a very small demographic with an admittedly out sized influence on the day to day gyrations of the nation that, despite their obvious power are no more representative of the United States as a whole then Chicago hairdressers. In fact, traders who work at the exchanges there and elsewhere have, over their fairly lengthy history, quite often been big time mess makers who have grifted with the worst of them. And here's what Mr. Santelli is most wrong about, that President Obama's plan to help distressed homeowners "promotes bad behavior." Plainly that is an asinine statement. No, what the proposed plan, whose merits or lack there of I am not commenting on here, MIGHT be promoting, is the idea that those who make mistakes, either through, stupidity, avarice, or otherwise, should not, for better or worse, be left to their fate. This is a debatable stand, philosophically and practically, but what is not debatable is the bogus idea suggested by Mr. Santelli that the prospective recipients of Federal assistance are, in the main, bad actors, perpetrators of fraud, or some other sort of illegality.

No doubt there are a substantial number of bad actors, though I defy anyone, and that means you, Mr. Santelli, to offer any reliable numbers where this burning issue is concerned.

As for government promoting bad behavior, well, sir, since you've essentially opened that theme up for our consideration, I'd like to offer that the list of "bad behavior promotions" coming from government is much longer and contains far more egregious wrongs than the one you've, of late, cast your indignation upon.

Soros and Volcker agree....with me.

Most public figures, save for folks like Ambrose Evans-Pritchard, do everything but call our present financial/economic debacle what it is, a depression. Folks like George Soros and Paul Volcker instead utter comments like, well, I can't recall anything of this magnitude since... the thirties. Do tell? Things look like, act like, smell like, behave like.... a very different animal than a recession, even a bad one. Folks, when the stock market gets done doing its anvil dropped off the Empire State Building act, most people's 401ks will be decimated as opposed to badly wounded, which is their present condition. Spending is going to, at best, slow to a crawl, but more likely it will come to a screeching halt in the manner of something heavy and moving at high velocity hitting a steel reinforced brick wall. Unemployment has nowhere to go but up as retail America, the nation's biggest employer disappears. I'm truly sorry, but it's a *&$^@ Great(er) Depression! GOT IT?

Oh, and P.S. It's too late to save the big banks now, so don't worry about whatever the government is or is not going to do. They had their chance and the time to do something has passed.


http://www.reuters.com/article/businessNews/idUSTRE51K0A920090221?feedType=RSS&feedName=businessNews&rpc=23&sp=true

President Clinton is a Lying Jackass!

Check out this epic howler from the man from Hope:

"Do any of them seriously believe if I had been president, and my economic team had been in place the last eight years, that this would be happening today? I think they know the answer to that: No."

Au &@*!! contraire!

Let's do a quick review of your economic team and the marvelous work they did paving the way for our present catastrophe.

Robert Rubin: The former Secretary of The Treasury, and mentor to both Larry Summers, and present Secretary of The Treasury, Tim Geithner was absolutely instrumental in the repeal of Glass Steagall, and strongly weighed in in favor of Congress decreasing or eliminating regulation of the financial services industry. Likewise, Mr. Rubin's deleterious role in blocking oversight of Fannie Mae and Freddie Mac is also well documented.

Larry Summers: As Robert Rubin's protegee, Mr. Summers had no appreciable difference in attitude from his mentor on any of the key issues mentioned above.

It is also a matter of record, President Clinton, that you enthusiastically reappointed the now disgraced Alan Greenspan, whose activist position in support of deregulation of the financial services industry, as well as his vocal support for the use of a vast array of questionable credit and financial vehicles, was instrumental in propelling our nation and the entire planet into the deepest mire since the Great Depression.

REV-O-LU-TION!

I am posting my slightly amended response to the most recent piece over at the Sudden Debt blog.


Thanks for the heads up on yet more disgraceful and shameless spending of Uncle Sam's (our) money. Let me cut right to the chase. Going forward, the U.S. stands an excellent chance of seeing massive social upheaval the likes of which no one alive has ever experienced. Why? Because folks in power are going too far in their blatent looting and disregard for the rule of law.

So, having said that:

If there's a march on D.C. that goes right up the steps of the Capitol and into the halls of Congress, sign me up. If there's some serious civil disobedience being planned in response to the kleptocratic behaviour of our public serpents, who are almost all either lackeys to, or cowed by, private sector interests, I am there. How about you? Are are you going to tell me it's all a waste of time? Save your breath.

Here's how I feel. Do you want a different government-not just one where only the names change-then we are all going to have to trample the grass on the lawn, big time? Clearly fear, fear of the gut wrenching, knock kneed, bowel loosening sort is the only thing our elected and appointed officials in D.C. will respond to.

I'm awfully sorry, but faxing your congressman or congresswoman just won't do, no matter how often and how irate you sound, no matter how right you may be, or have been, "they" aren't going to be moved until "they" have something coming at them that looks unmistakably like it has every intention of leaving them flat on their backs and writhing in agony. Perhaps you think my jeremiad sounds a tad intemperate. So be it. I personally have no interest in getting "them" to do what they ought to have done a long time ago. I want them removed, out, gone!

"It Will Be a Catastrophe..."

Our newly inaugurated President asserts that if we don't pass his stimulus package it will be a "catastrophe" for the economy. This is demonstrably false, sickeningly so, because it echoes so closely the late and not lamented Hank Paulson's adumbration to Congress regarding the urgency of passing the "No Banker Left Behind" bailout bill. Whenever anyone employs scare tactics of this sort, you have reason to believe you are dealing with a bad faith gesture coupled with more than a whiff of desperation.

It's equally nauseating because if one looks closely at the stimulus package one will see that in electrical terms it barely has enough wattage to run an alarm clock, let alone the electricity requirements of an entire household. And there is more rubbish in this stimulus package then on a New York City sidewalk after a trash workers strike.

In any event, more stimulus is not what this humble blogger thinks the U.S. economy needs. What it needs is a government that is honest, ditto for the monetary system, and a banking system that is thoroughly cleaned up. A proper cleanup probably involves setting up an RTC where the cost of dealing with all the "non performing assets" is fairly applied. That means that IF taxpayer money is used in substantial quantities, any and all gains in future go directly to the taxpayer. Any other arrangement is off the table and let the chips fall where they may.

Concurrent with the aforesaid sea change in government and the monetary system must come a great national debate on the advisability of trying to restore our way of life circa 2007 and before. I would argue that constant growth and insatiable consumption are not the way forward. Who is with me?