Sunday, October 31, 2010

A few from "Scare on the Square"...

Saturday, October 30, 2010

Broken Code was at Cadillac last night!
Ran into Quinten...he was @ Rick's...

town seemed a little dead compared to normal...

Thursday, October 28, 2010

Mary Ellen Mark speaking at Richland College tonight...was an excellent lecture from a woman who has had a long and fruitful career...

Tuesday, October 26, 2010

100 Dollar Oil Is Coming
100 Dollar Oil Is Coming

The price of oil has been hovering around 80 dollars a barrel for quite some time now, but get ready, because it is going to move significantly higher. Oil prices have already risen about 9 percent over the past month, and many believe that this could very well be the start of a new trend. Lawrence Eagles, a top analyst at JP Morgan, recently made headlines across the globe when he stated that oil could hit 100 dollars a barrel "much sooner than we expect". Not only that, but a number of top OPEC officials are also publicly discussing the possibility of 100 dollar oil. But just because a few people are talking about it does not mean that it is going to happen. So are there any other reasons why we should anticipate a significant increase in the price of oil?
Well, yes there is.

*The Decline Of The U.S. Dollar
Since August 27th, the U.S. dollar has declined approximately 4.8% against the currencies of major U.S. trading partners. Unfortunately, there seems to be every indication that the dollar is going to continue to decline. As the U.S. dollar continues to display weakness, just about everything priced in dollars (including oil) is going to continue to rise.

*The Threat Of Quantitative Easing By The Federal Reserve
For weeks, top Federal Reserve officials have been making public statements about the need for more quantitative easing. If the Fed does initiate a significant program of quantitative easing in the coming months, that is going to put even more downward pressure on the U.S. dollar and even more upward pressure on the price of oil.

*Other Commodities Have Been Skyrocketing
Over recent weeks, the prices of a wide array of key commodities have been absolutely skyrocketing. As I noted in a previous article, not only has the price of gold been setting records, the truth is that almost every major commodity has been spiking. In a recent column entitled "An Inflationary Cocktail In The Making", Richard Benson noted some of the commodity price increases that he has been tracking this year....

-Agricultural Raw Materials: 24%

-Industrial Inputs Index: 25%

-Metals Price Index: 26%

-Coffee: 45%

-Barley: 32%

-Oranges: 35%

-Beef: 23%

-Pork: 68%

-Salmon: 30%

-Sugar: 24%

-Wool: 20%

-Cotton: 40%

-Palm Oil: 26%

-Hides: 25%

-Rubber: 62%

-Iron Ore: 103%

The increase in the price of oil is just part of a larger trend of soaring commodity prices. As long as this trend in commodity prices continues it is unlikely that the price of oil will go down.

*The Strikes In France
The austerity strikes in France have interrupted the flow of gasoline in that country. Once the strikes are over there will be an increase in demand as inventories are restocked.

*Increased Demand From China And Other Emerging Nations
Most analysts are forecasting that the demand for oil in China and other emerging nations will continue to grow at an impressive pace. This growing demand will also cause upward pressure on the price of oil.

*The Potential Of War In The Middle East
As always, war could break out in the Middle East at any time. A minor conflict in the Middle East would likely push the price of oil over 100 dollars a barrel very quickly. A major conflict would likely push it over 200 dollars or even beyond. War is very, very difficult to predict, but it does seem quite likely that some kind of conflict will break out in the Middle East at some point over the next several years.

So how soon will oil reach the 100 dollar mark?
That is very hard to say.

But even now, Americans are already having to dig deeper into their wallets at the gas pump.

For the two week period ending October 22nd, the average price of gasoline in the United States increased 5.23 cents to $2.82 a gallon.
As the price of oil continues to rise significantly over the long-term, it is going to have an impact on thousands of other prices. Virtually all products must be transported, and an increase in the price of oil will cause those transportation costs to go up.

So an increase in the price of oil would be really bad news.
If we do see 100 dollar oil, that will be a huge challenge for the U.S. economy.
If we end up seeing 150 dollar oil (especially for an extended period of time) it will be an absolute nightmare for the U.S. economy.
Nice way to start the day...from a msgboard this AM...think about this as you vote next week...

"The money is gone. It does not exist anymore.
Your money, their money, gov. money, your kids money....

Its Gone.

Every month, we pull money from the budget to pay SS.
And that trend is going up.

Its going away,,
one way or the other.

Number of folks that pay is going down.
Number of folks that get paid, going up.

None of the money was saved, it comes in and than it goes out.

The Math does not care.

Its not who's money it is or is not.
The money is gone.

The feds are having treasury auctions, several times a week.
We borrow 40% of the federal budget, now.
And we borrow it every month.

Tax income is going down, expenses go up.

It ends, badly.

We stop it now, it ends less badly.
We wait, it gets worse.

AARP is not going to save the day.
The demos are not going to save the day.

The promise cannot be kept.

The folks paying SS, now, no money is getting saved.
It goes out the door.

The folks paying SS, now, are paying for SS monthly payments.

SS will grow to more then the US can tax,
and than it stops.

Or the workers will vote to cut it.

Right, wrong the money is gone.
The folks working to pay your monthly SS check did not spend it."


Monday, October 25, 2010

City Hall Demolition...

The Tombstone Blues

       The latest version of Pretend - going on a couple of weeks now - is the nation whistling past the graveyard of mortgage documentation fraud while skeletons dance around everything connected with the money system. Halloween came early this year. The USA is getting to look like one big Masque of the Red Death, so I suppose it's convenient that our pop culture has been saturated with vampires, zombies, and werewolves for a decade, coincident with the self-cannibalizing of our economy. Something in the zeitgeist told us to get with the program of a twilight existence. We're well-schooled now in the ways of the undead, operating under cover of darkness, going for the neck at every opportunity, even eating our young - if you consider the debt orgy, both private and public, as a way to party like it's 1999 by consuming your children's' future. 
      The big banks leading the charge of the anthropophagi are making like it's no big deal that notes representing money lent have become mysteriously dissociated from the mortgages that secure them. In the good old days, these things traveled in pairs, like boy-and-girl, Laurel and Hardy, a horse and carriage. It made for straight-forward property transfers, where Person A could be confident he was buying something free and clear from Person B.  What a quaint concept, free and clear! 
     Nowadays, these documents can hardly be located at all - not such a surprise, really, since they were ground out like e-coli infested bratwursts in strip-mall boiler rooms run by former used car salesmen, and pawned off wholesale (literally) on banks who served them up sliced-and-diced, sloppy Joe style, on CDO buns to credulous pension funds, cretinous insurance company yobs, double-digit IQ college endowment managers, and other such nitwits bethinking themselves the reincarnation of Bernard Baruch, not to mention foreign sovereign nations who bought this smallpox-blanket-grade investment paper by the container-ship-load and, finally, the innovative geniuses at the very banks who engineered the stuff and got stuck with tons of it themselves when, as they say, the music stopped.
     The Big Picture looks even worse when you figure in the mischief of so-called synthetic CDOs that represent the multiple securitizations of single underlying mortgages - God knows how many times each - which mean, curiously, that a lot of real estate is everywhere and nowhere at the same time, plus the Ponzi universe of credit default swap black holes just sitting out there waiting to suck whole civilizations into oblivion. Ollie to Stan: Well, here's another fine mess you've gotten me into....
    But I stray a little from my point, which is the massive systematic monkeyshines involving legal documents relating to American real estate. The bankers say, just bring a "lost note" letter to the closing. "The dog ate it." Signed, Mom. Like, that's an okay substitute for the rule of law. Oh, and, by the way, the dog ate the title, too. Congress even tried to get in on the act last week with a bill that would have essentially negated the significance of notarization - that is, of witnessing and attesting to the veracity of documents - in order to mitigate the fiasco of robo-signing, which was endemic in places like the mortgage mills of Nevada and Florida where due diligence went AWOL and Burger King-quality employees just threw some contracts in the trash out of sheer boredom.  "Oh, the dog also ate my signature...." President Obama vetoed the damn thing, which was passed in the US Senate unanimously by the human dung-beetles who work that manure pile. The dog ate your financial system.
     This is hardly to say that the people who bought property based on those improperly processed and/or scam-a-lama-ding-dong mortgages deserve to avoid foreclosure and get to keep and live in million dollar houses they never could have really afforded to buy in an economy run by grown-ups. But they might, because there are an awful lot of hungry lawyers out there who will demand that the agents of foreclosing parties produce the relevant documents. And some of these foreclosing parties may not have the nerve to hand over forged instruments in a court proceeding once everyone is going over them with scanning electron microscopes looking to find one molecule out-of-order.
     Bottom line is that we've reached the point where nobody in that particular racket can get away with much anymore. That string is played. The banks are toast. Not only won't they be able to recover the collateral on a lot of loans, but the MBS related crap sitting in their own vaults goes to zero, not thirty cents on the dollar or some mark-to-fantasy number that has kept them in the zombie zone for two years, like cancer victims desperately eating apricot pits in hopes of a cure. And if the banks are toast then the Federal Reserve is toast, because the Fed has been acting as a dumpster for so much of the smallpox-blanket-grade securities off-loaded by the banks since TARP, with a balance sheet that must look like a suicide note, and if the Fed is toast then the dollar is toast because they are promissory notes issued by the Fed.
     Anyway, the states themselves are temporarily shutting down foreclosures, and the upshot will be a paralyzed property sales industry. Who will want to buy property when there is any question about owning it free and clear? You can be sure the sickness will spread into commercial real estate, with its much shorter-term loans and its desperate rollover deadlines. Things begin to look a bit gruesome. But 'tis the season for it! The night of the Blood Beast comes Sunday, just in time for the All Souls Day open of the equity markets. That's the day when the costumes come off and we stop pretending. That's the day that the skeletons dance on the real estate destined to be our graves.

Happy Monday Everyone!  There's a storm brewin out there!

Forget the markets!...It's all FX, all the time. JPY/USD is the most fascinating game in town.

Saturday, October 23, 2010

demolition of old City Hall...

Tuesday, October 19, 2010

People watching can be a lot of fun!...

Monday, October 18, 2010

The Surrealist Vista

     Some profound seismic infarction deep in civilization's very soul - brought on, no doubt, by the sludgy buildup of vast swindles and frauds - now propels deadly tsunamis toward the land masses where money dwells. And when they break over the shorelines of banking and capital, little may be left standing.
     The latest rogue wave broke about ten days ago, when an orgy of foreclosure revealed massive irregularities in mortgage contracts and property titles, suggesting a slovenliness so arrant and broad that even the states' attorneys general woke from their narcoleptic raptures of golf to shut down transfers of distressed property. But this was only after the banks themselves declared "moratoria" in a perhaps vain attempt to forestall further discovery of their countless misdeeds. And somewhere along in there the title insurance industry had a whack attack.
     During this period a new cliché issued from a million pie-holes: the rule of law. Well, as Joni once sang to we happy Boomers, " don't know what you got 'til it's gone...." 
     To systematically ignore the niggling, stodgy lawful protocols regarding contract documents - notarization, due diligence, various dotted "i"s and crossed "t"s - was easy on the way up Fraud Mountain. On the ride down, though, it turns out all those niceties comprised the braking apparatus,  Now the cargo of swindles is accelerating out-of-control and breaking apart. Suddenly this cliché - the rule of law - begins to assert its meaning for this nation of slobs, morons, and grifters, to the degree that even lawyers begin to understand what's at stake (as opposed to just how much they can get paid), though the bankers may never learn.
     The upshot is that the real estate industry is on ice indefinitely. Nobody dares to buy or sell property because there is no way of knowing who actually owns it, whether the chain of title is on-the-level, whether (or not) there is a document somewhere with coffee mug rings and taco sauce stains denoting the past and current owners of, say, a half acre of sawgrass scrub with an abandoned harlequin brick ranch-house full of mold feasting on damp sheet-rock in the unspeakable South Florida humidity.
     The US real estate racket was already in enough trouble with the collapse of bubble pricing and then the consequent effect on untold tons of mortgage-backed securities and derivatives of them buried in the vaults of banks, insurance companies, municipal investment accounts, pension funds, and other repositories of trust. It certainly has been known for years that the value of these clever instruments is somewhere south of where they represent themselves to be - but since the crash of 2008 accounting legerdemain kept a lid on that putrid stew. The new wave of mortgage and title fraud now threatens to drive their value down to zero, that is, quite a bit lower than even the previous worst-feared estimates of mark-to-market apocalypse.
      These bundles of bonds of bundled mortgages are now so infected with impropriety that the bundlers themselves might just have to buy them back and eat the losses, and in so doing watch the value of their companies whirl down the drain, and then, after losing their jobs, their incomes, their private jets, and all the other blandishments of the high life, face prosecution and any number of years assigned to a steel slab bed and a ping-pong career in some correctional facility. That is, if we are even able to recover some fragment of the rule of law from the landfill of good intentions.
     The trouble is, that the damage is so severe through every institution concerned with the operations of money (including the US government) that none of these fatal monkeyshines can be mitigated. Or, to put it as Barack Obama's predecessor did, so neatly, "...this sucker could go down." After all, what are the practical remedies for property the ownership of which can't be established? And upon which are claims and obligations that underlie the very value of money in this society? The rights of property form the basis of Anglo-American law. Subtract them and all bets are off. Literally.
     Schemes akin to a debt jubilee are already being floated - which might sound dandy in theory, but would very neatly thrust the USA back to a standard of living equal to that in the year 1690. In other words, you can shake off your debts, but be prepared to spend the rest of your days picking stones out of your daily lentil ration before turning in on a bug-infested straw pallet next to the hog-pen, care of which is your new career.
     Or perhaps your idealism runs along a different track and you would prefer to just let the government come in and take ownership of virtually everything and then decide who ends up getting what? While I am personally not tortured by nightmares of what the Tea-baggers imagine "socialism" to be (i.e. fears that the gubment will insert a computer chip in your gonads, confiscate your Go-Go Ultra X Electric Travel Scooter, and restrict your monthly admissions to the Talladega Superspeedway) I can easily see functional limitations on something like the old dictatorship of the proletariat - especially when said proletariat has been reduced in this country to some kind of a lumpen slobeteriat of methadrine-addled, tattooed psychopaths with axes to grind.
     Or maybe you prefer the realm of anarchy, where a few plucky souls decide to stop playing ball with their creditors, on the grounds that they can probably get away with it due to all those slip-ups and oversights in contract review... and the idea goes viral across the nation that nobody has to make his or her payments on anything owed... and screw those bankers, anyway. "You want me? Come and get a piece of me!" Well, that route has its disadvantages, too, pretty much quickly resolving in the end-of-civilization-as-we-know-it, since after the first delirious weeks of non-payment everything based on money comes to a halt. Enjoy that one while you can.
     In any event, meanwhile, property transfers will cease and the money bound up in them will not circulate, and interest not paid and - well, it's a chain of consequence leading to banks not functioning, businesses going down, people not getting paid, goods not being shipped, and something like a long emergency getting underway. The outcome is not any different from the anarchy option, except you must remember that a lot of the things that end up broken will never be put back together again.
     This is therefore what the late, great Eudora Welty might have called... a still moment - the boundless interval of grave recognition that something momentous is occurring. Where we stand is something like the doorway of a surrealist painting leading to a blue sky dotted with puffy little clouds - which is deceptively reassuring, until you realize that the solid earth is nowhere in sight. The truth is, nobody has a clue what happens next, most particularly the folks in charge of things.
      All we know in this still moment is that the hoary old rule of law no longer obtains. It's on everybody's lips because everybody knows that some epochal slippage has occurred, and in the dark maw exposed by that slippage a lot will be lost.

There's a storm brewing out concerns all the banks...
Hopefully it will be OK...but don't count on it...

Bank Shot

     The banking authorities were shocked - shocked - to discover last week that an awful lot of mortgage paper in this country is not quite in order... appears to contain, er, irregularities... seems less than kosher... frankly, exudes an odor like unto dead carp or, shall we say, a heap of dead carp the size of the building at 3900 Wisconsin Avenue, N.W., Washington, D.C. Any day now we will hear that... mistakes... were... made. 
     Is it indelicate to say that the USA as an enterprise has its head so deeply and firmly up its ass that the all the proctologists alive on planet Earth could not extract the collective cranium from the collective cloacal chamber even with the aid of a Bucyrus-Erie 1060-WX bucket-wheel excavator? Like, where were we the past ten years? Surely not everybody in the nation was doing bong hits while playing Grand Theft Auto, or watching The Real Housewives of New Jersey, or downing tequila shots and Percocets in the parking lot of the Talladega Superspeedway, or cooking meth in the family room, or whacking it to Internet porn, or searching for "excitement" in one of America's 450 commercial gambling casinos. 
     Did nobody, for instance at Fannie Mae or Freddie Mac, review any of the paperwork fluttering in from places like Countrywide or Ditech and scores of other boiler rooms where mortgages were hatched like Peking ducklings?  There was an awful lot of it, I'm sure, but aren't there a lot of seat-warmers at Fannie and Freddie who collect their salaries for the express purpose of reading mortgage documents? Was nobody the least bit suspicious about the mysterious flurry of "restaurant employees" and "lawn-care technicians" buying million-dollar condominiums with no money down at terms that would make a three-card monte dealer weep with laughter? After all, they had to sort and bundle all these contracts for the likes of Goldman Sachs and JP Morgan and Citibank - the list isn't that long, but you get the picture....
      And speaking of these august institutions, didn't anybody in the divisions charged with assembling complex securities composed of mortgages, or composed of bets against bundles of mortgages, or composed of some notion of something dimly related to a rumor of mortgage lending - didn't any of these expensively-educated chaps or lasses pause a moment in their aardvark-like labors of bonus-seeking to withdraw their snouts from the moist ground where swindles pupate and at least goggle in self-admiration at the fantastic legal novelty of their endeavors.
     And what of the numberless agencies, federal on down, starting with, say, the Office of Thrift Supervision, or the Comptroller of the Currency, or the Federal Deposit Insurance Corporation, or the Board of Governors of the Federal Reserve, or the chairpersons of a dozen senate and house subcommittees on matters related to finance, or the various inspectors general from sea to shining sea or the attorneys general of all fifty states plus the US Department of Justice, or the countless fiduciary officers of the pension funds who tripped over each other buying all the tainted paper churned out like so much Purina Rat Chow - or, for Godsake, a lonely loan officer here or there with something resembling a conscience?
     Nobody in the USA noticed anything the least bit fishy. And now all that epic rot has eaten through the last hanging tendrils of the banking system. And the whole shootin' match is fixing to seize up and blow like a Chevy Big Block Super Stroker 632 engine that some clown has poured karo syrup into.
     But, sadly, I can only return to the trope of cranial rectosis. And when your head is in such a dark place, it's hard to see the truth, let alone tell something you can't even see. And sadly too, the truth is that this ghastly mortgage fiasco was a fraud that the whole nation perpetrated on itself in a tragic rush to get something for nothing. Since the failure of authority is complete, it's now up to nature to act as the arresting officer. She's a harsh mistress. She's going to kick our ass. 
     I'm sorry, but I don't see anyway out of this. With fraud absolutely everywhere in our banking system, like some advanced metastatic cancer, financial metabolism comes to a sickening stop. Nobody can buy or sell property. Nobody can trust any American financial institution. Money can't circulate. Nobody will be able to get any money. It won't be long before that translates into nobody getting any food. We may be a nation of clowns, but as Lon Chaney famously observed a while ago - when explaining his technique of horror movie-making - "...there's nothing funny about a clown in the moonlight...."

Sunday, October 10, 2010

Saturday nights are special!...

Friday, October 08, 2010

More from the "Urban Decay" series...
Making room for the new...
Corn, Soybean, Wheat Futures Surge in Chicago After Crop Report

Oct. 8 (Bloomberg) -- Corn, soybean and wheat prices surged by the maximum permitted on the Chicago Board of Trade after the U.S. Department of Agriculture reduced its estimates of supply.

Corn futures for December delivery jumped the 30-cent limit, or 6 percent, to $5.2825 a bushel at 9:32 a.m. in Chicago.

Soybean futures for November delivery gained the 70- cent limit, or 6.6 percent, to $11.35 a bushel on the CBOT.

Wheat futures for December delivery advanced by their 60-cent limit, or 9.1 percent, to $7.1925 a bushel.

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.n

Thursday, October 07, 2010

Oil slips after hitting 5-month high above $84

11:04am EDT
LONDON (Reuters) - Oil slipped from a five-month high above $84 a barrel on Thursday on concerns that a rally driven by a weakening dollar had run ahead of the market's fundamentals of supply and demand.
A falling U.S. dollar, linked to an expected inflow of fresh dollars into the economy, has spurred money flows into oil and other commodities. Oil reversed course as the dollar pared its losses and equities slipped. .N
"It highlights the nervousness in the market about underlying fundamentals and worry the rally may be getting ahead of them," said Gene McGillian, an analyst at Tradition Energy in Stamford, Connecticut.
U.S. crude for November fell 40 cents to $82.83 by 1431 GMT, after trading as high as $84.43, the highest intraday price for a nearby contract since May 4. ICE Brent slipped 50 cents to $84.56.
"The market is very nervous and there was some profit-taking," said Christopher Bellew, an oil broker at Bache Commodities in London.
A French oil port strike that has disrupted supplies limited the decline. Talks between strikers at the Fos Lavera port and management were in deadlock, the port said as the strike entered its 11th day.
The dispute has blocked oil tankers, forced some oil refineries to reduce operations and driven up fuel prices in Europe -- supporting the wider oil market.
"It will have a very strong impact on the supply of oil products," said Christophe Barret, an oil analyst at Credit Agricole. "I think it is one of the main factors supporting product and crude oil prices."
The prospect of a second round of U.S. quantitative easing, known as QE2, hangs in part on U.S. employment reports. Closely watched monthly data are due on Friday.
In a precursor of the monthly jobs figures, ADP's national employment report on Wednesday said private employers in the U.S. cut 39,000 jobs in September, versus expectations for an increase.
New U.S. claims for unemployment benefits unexpectedly fell last week, touching their lowest level in nearly three months, according to a government report on Thursday.
The rally in oil prices may be close to running its course for now, according to some technical indicators. U.S. crude's relative strength index (RSI), at 72, is in overbought territory, which can indicate a pullback is coming.
"No doubt, many sectors are overbought, and so the upside response is looking more sluggish, but we think the more likely variable has to do with nervousness ahead of the non-farm payroll number out on Friday," MF Global commodities analyst Edward Meir said in a report.
Oil prices had gained some support from a U.S. government report on Wednesday that showed inventories of gasoline and distillates fell more than expected in the world's top consumer.
Even so, U.S. fuel inventories hit a record high earlier in September and are near a record high in the economies of the Organization for Economic Co-operation and Development.
(Additional reporting by Alejandro Barbajosa and Robert Gibbons, graphic by David Turner, Editing by Sue Thomas and Jane Baird)
Coming down!...

Wednesday, October 06, 2010

Louisiana and Kentucky streets...

During Oktoberfest...

Monday, October 04, 2010

Full Bore to the Vanishing Point

      Last evening at twilight I was driving my rent-a-car up Interstate Five north of Seattle with a vivid testicular fear of being trapped in the very metaphor of a failing society racing into a dark future. All around me loomed the monuments of an out-of-control financial credit Moloch - the tilt-up chain store boxes with their giant logos glowing against the distant craggy peaks of the Cascades (many of them active volcanoes which, like Mt. Saint Helens, might blow their tops any day). At every compass point sprawled the McHousing pods of American dream mortgage time-bombs silently blowing families to financial smithereens, and banks with them, including, incidentally last Friday, the state of Washington's own Shoreline Bank just off I-5 north of Seattle, seized by the FDIC. My way was lighted, as darkness finally stole in, by the endlessly replicated dispensaries of fast food-dom (pizza-burgers-chicken-fries-and-shakes) provoking this nation of overfed clowns to ever-greater feats of gluttony, medical catastrophe, and bankruptcy. And, of course, these were my fellow-travelers in the perpetual stream of cars plying this great thoroughfare of the tragic western littoral, burning up gasoline that had traveled all the way from the sands of Abqaiq or from some sweltering platform off the Niger Delta, where dangerous, angry, armed men in Zodiac boats plot mayhem nearby among the mangrove thickets. Not to mention the row-upon-row of idle cars parked in the lagoons surrounding the countless malls and strip-malls and auto dealerships that flanked I-5 for fifty miles north of Seattle. Cars, cars, cars, as far as the eye could see where the sodium-vapor lamps cut through the crepuscular murk. Sasquatch was a no-show. But Sasquatch don't drive.

      This was the week when the US housing fiasco got even more extra-special interesting as the Bank of America suspended mortgage foreclosures in twenty-three states, and the Connecticut Attorney General (Richard Blumenthal, who is running for Chris Dodd's senate seat) declared a 60-day moratorium on foreclosures (a political ploy do ya think?). Also of interest, Ally Financial suspended foreclosures in twenty-three states - and note, by the way, that Ally is the mutant offspring of the bailed-out General Motors Acceptance Corporation (GMAC), which also spawned the infamous DiTech Mortgage finance company (remember those non-stop TV commercials a few years back) which specialized in jumbo NINJA loans (No Income No Job or Assets). A conspiracy theorist would be in nirvana with all this, but it was just plain vanilla fraud in a time when fraud was over-taking apple pie and Mom as the defining quality of our national character.

     The net effect of all this is that the real estate industry in America just got a whole lot more desperate on Friday.  What's with suspending all these foreclosures? Generally it's about the slovenly (and possibly felonious) paperwork associated with so many home loans doled out in the recent bubble years, above and beyond, you understand, the complete absence of due diligence in evaluating borrowers - but that aspect has been so well known for so long, and so blatantly ignored by the legal authorities that it has merely entered the realm of humorous American folklore like Br'er Rabbit and the Chickens - too quaint to prosecute. 

     This new subplot concerning the paperwork itself, however, complicates things more than anyone expected, and real suddenly. So eager were the originators to pump-and-dump mortgages - to write up loans and immediately re-sell them to the chumps at Fannie Mae, Freddie Mac and elsewhere - that they got ludicrously sloppy. Instead of mortgage applicatons being signed by notaries, the lenders just set up signature boiler rooms where unauthorized factotums signed them by the forklift-load without anyone so much as glancing at the pages within. Whoops.... 

     Enter the lawyers for the foreclosees. Their mission: to either assist their clients in evading foreclosure, or at least stalling the process indefinitely, allowing said clients to occupy a property as a sort of court-sanctioned squatter possibly forever. For one thing, it's probably cheaper to pay a lawyer a couple of thousand bucks to roll his hoop through the courts for a year than to actually fork over a $4,500 mortgage nut each month on an under-water five BR four bath vinyl-and-chipboard contemporary - with the possible bonus outcome of the house's title becoming so hopelessly lost and unproduceable that two generations of title insurance investigators will squander their whole working lifetimes in fruitless searching... and by then, perhaps, the whole sordid, messy business will be forgotten, like an old forgotten patent suit filed decades ago by lawyers for a poor swindled nearsighted engineer, who has been pushing up daisies now in a lonely Michigan bone orchard since Alan Greenspan blew his last clarinet lick at the Five Spot. 

     The title insurance business will take a dim view of these monkeyshines, you may be sure, but by then they will be out of business, too. And then won't it be fun imagining some future when every attempt to transfer property is just a shot in the dark... or else property won't be transferred at all, at least not legally. It seems we're developing a whole new and interesting relationship with the rule of law in this country. Increasingly, it's become optional. And what you finally get when you opt for that is a lawless society where people simply grab what they want via the barrel of a gun and smash whatever gets in their way. Our nostalgia for the Wild West may suffer as this occurs and no one is able to live a settled secure life anymore in the USA.

     This new anarchy in the troubled housing / mortgage nexus comes at a very interesting time, too: just when the public is about to elect a new national legislature full of characters with a very squishy idea of the rule of law. Many of them conflate it with the theocratic rule of Jesus. Maybe Baptist ministers and snake handlers will start showing up in the probate courts to sort these matters out. America is increasingly looking like the saloon in one of the earlier installments of Star Wars, where the most improbable creatures mingle and frequently bust up the place for no apparent reason other than they felt like it.

     Coming back to Earth though, one can only see more Big Trouble ahead for the Big Banks in all this mortgage hugger-mugger, and of course the country as a whole. Sooner or later, somebody with a badge is going to demand to look inside their vaults and examine the paper they are hiding in there. And when that day comes, the truth will be revealed about the greatest self-swindling of any nation in the long, groaning history of the world. Nobody among the community of other nations will want to do anymore business with us - including the sale of any oil, and won't that be a funky day?

Sunday, October 03, 2010

Next on my list of places to visit or re-visit!  Fall colors should make this place grand!