Haze and Malaise Again

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Editor’s Notes:

The article below speaks plainly, although at some length about the role of money and the role of Wall Street, the need for regulation and where we should look for remedies for what ails our society.

While the author is entirely correct from a theoretical standpoint, the fact that corruption and abuse emanates from Wall Street is conveniently side-stepped. So I conclude that it is a planted article written by someone who understands too well what went wrong.

To begin with money is not merely a social construct with the sort of neutral value or nature that the author portrays. Money has become the dominant religion in America. In other countries the presence or absence of money is not nearly as important as the services and protection of government that the citizens expect. Here money has assumed a religious component in two respects — first, in order for it to exist and be useful, people must believe that the paper or numbers on their bank statement are real purchasing power and second, Americans have accepted a unique perspective on money extending far beyond the concept of respect for those who have made a lot of money. They are like gods above our laws and whose wrath is to be feared. 

The purchasing power of the dollar has been declining since the Wall Street scandal began. The can was kicked down the road a few times because the victims of Wall Street’s antics in Europe are reacting appropriately to the rug being pulled out from under them. So the dollar looked safer than the other currencies that are in chaos or transition now. But everyone knows that Wall Street caused this chaos, and they did it because our government pulled the referees off the playing field leaving only the bullies to make up their own rules. The religious fervor with which our policies are dominated by money and banking to the exclusion of services and protection of our citizens is appalling and precisely why the large banks must crash and be taken apart with pieces going to the real players in the banking system that do fit the description of banks in the article below.

Our failure to take responsibility for not regulating the banks and letting them into the rooms where the levers of power are pulled is precisely why the belief of everyone other than Americans who don’t trust the dollar or the U. S. will ultimately topple the dollar as the world’s reserve currency. And, when any credible alternative to the dollar emerges, everyone including rich Americans will flock to the new currency. It’s strictly business. The U.S. has so debased its currency, its economic foundation and its infrastructure for power, transportation and public safety that we don’t stand a chance.

Where other countries are wrangling with the problems of delivery of safety and opportunity to their citizens, the American government is still arguing about ” class warfare.” The discussion here is not on point and while Europe looks more chaotic now, they will look a great deal better later because they did deal with the real issues of people and the purpose of government.

Excusing Wall Street from lying, cheating, and corrupting our society and marketplace through the sorrowful and stern pronouncement that private banks have one goal which is to make money for their owners — begs the issue of the long term viability of any enterprise whose only goal is to make money. As the Citizens United case told us, corporations are fictions,  but they are legal fictions entitled to act like a legal person under the law. True enough. And people who commit wrongs are ordinarily held accountable for anti-social behavior. In America they are not held accountable and the victims are seen as bugs who should be squashed with every step.

Bullying, emanating from the power that we gave up when we started worshipping money, is how the regulations were removed, how the judicial system allowed millions of fake foreclosures to go through on the premise faked defaults, and why even the Massachusetts Supreme Court while admitting the wrongful behavior declined to apply it retroactively. Those who steal far less money are forced into making restitution to diminish the loss of their liberty. Here the loss of liberty is not on the table and restitution is thus left to innovative homeowners and attorneys who can outwit the new world order of money and property. 

The corruption of our title caused by MERS is a perfect example. The only valid way of handling  the situation is to void all MERS transactions. Instead we now have a hybrid of transactions laced with corrupted title and claims that are now sitting in the files of the county recorder’s office. So the choices we have are that we accept title as it is which rewards thieves, or we just convert our system to MERS and caveat emptor as to title. Either way we will never know the real status of our title or our mortgages. 

These things won’t happen in countries that see money as a vehicle or tool. And that fact is going to isolate the U.S. from the rest of the world. A marketplace where the certainty of transactions completed and the title is always subject to clouds or defects is a third world unstable country. Welcome to America, 2012 — unless we do something about it.

Misunderstanding Banking Is Bankrupting                 The Entire Society

Cullen Roche, Pragmatic Capitalism

Much has been written since the JP Morgan trading fiasco and the big Congressional hearing last week – some of it enlightening, but most of it confusing some of the basic elements about banking and money in general.  I was reading this piece yesterday on Bloomberg about the responsibilities and the “job” of banks.  It got me thinking about how badly people confuse the role of banks in our system.  So I thought I’d chime in.

Banks are, at their core, profit seeking establishments that serve as the lifeblood of a complex payments system in the monetary system.  Banks make a profit by having liabilities that are less expensive than their assets (well, it’s more complex than that, but let’s keep things simple here).   They compete for deposits and business by offering various products and services.  In the USA banks are almost exclusively owned by private shareholders (as in, not the government or public sector).   Like most other private profit seeking entities the goal of a bank is not just to service the smooth facilitation of this payments system, but to to make money for its owners.  Most of the time, these two functions do not conflict, but at times the risks banks take can indeed jeopardize the functioning of the system.  Despite all the bad press that banks receive the progress surrounding their various services have actually had a positive impact on the world (for the most part).  Bank accounts, credit cards, debit cards, investment services, business hedging services , etc are all elements that make the institution of money more useful and more convenient.  Seeing as money is a tool and a social construct it makes sense that banks have evolved products and services to help facilitate the ease of its usage (all in the name of competition and profit generation, of course).

But we have to ask ourselves the question again.  What is Wall Street’s job?  Wall Street’s job is simple.  It is to increase earnings for their shareholders.  It is not to provide jobs for the private sector.  It is not to make sure the US economy is running smoothly.  It is not to make sure you feel good about your day to day life.  It is to generate a profit for its owners.  This is the essence of private banking.  To generate a profit.  But banks play a unique role in our capitalist system.  I’ve explained before that banks are not the engine of capitalism.  They are simply the oil in the machine.  As the oil in our machine, banks must be functioning smoothly in order for the machine as a whole to be functioning smoothly.  So when big banks do bad things that threaten their well-being parts of the system begin to malfunction.  And sometimes when these mistakes are big enough the contagion leads to the entire machine malfunctioning and requiring a major repair (hello 2008!).

But make no mistake, your local bank is not your best friend or a public purpose serving charity.  For instance, when a bank extends a mortgage (a word literally meaning “death security pledge” from the latin root “mortuus” for death and germanic “security pledge”) they are not doing you some charitable service to help you buy your home.  They are rating your credit risk and evaluating you as a potential profit engine for their shareholders.  That might not be the most pleasant way to think about it, but it is what it is.  A bank is not a charity.  It does not really care if your mortgage results in jobs or happiness for you.  Of course, it would be great if this did because that might result in more future business, but the bank does not need these things from you in order to generate a profit.  It really just wants to manage its risks in a way that helps to generate a profit for their shareholders without excessive risk.  Obviously, the debtor finds the mortgage advantageous, but don’t confuse this service for charity work.  It’s just good old fashioned profit seeking and offering a service where one is needed (in this case, the debtor being able to obtain money they could not otherwise currently obtain).

The business of private banking is largely about risk management.  A good bank manages risk by understanding how the various business components threaten the stability of the overall bank and align with this goal of generating a profit.   And as we ripped down the regulations structuring the amount of risk these institutions can and cannot take (in addition to making the risk taking business more complex) we realized that banks just weren’t very good risk managers.  This is not surprising to anyone who has been around markets for a while.  Investors and people in general are irrational, inefficient and poorly suited to manage the risks associated with complex dynamical systems.  So, for some reason, we all seem shocked when these profit seeking entities take excessive risks and prove to be poor risk managers.  And since we would never blame ourselves (the home buyers for instance) we blame the banking institutions.  And we write silly things about how they’re not doing their “job” or how they’re all out to screw the whole world.  It’s just not that black and white.

From a social perspective, this is all an extraordinarily interesting discussion.  Money is a social construct and a simple tool that helps us achieve certain ends within our society.  But money is something that is to be earned within our society (or utilized by the government in a democratic manner that is in-line with our goals as a society).  So there’s an interesting reality at work within the banking system.  Banks, as loan originators, act as a way to obtain access to money for someone who has not yet earned money.  And in return, they are charged a fee for “borrowing” this money that is technically not yet theirs.  If there was no interest fee attached to loans the demand for this money would obviously be through the roof and it would render it worthless.  Likewise, if banks make credit standards too lax, fail to properly asses risks and make credit plentiful they can create an imbalance within the system (by lending to people who can’t service their debt) that threatens the viability of the monetary system through the risk of excessive debt, defaults and inevitable de-leveraging (as we’re seeing now).  In this world of “what have you done for me lately” and “get rich quick” (or more often, appear rich quick!) you have a messy concoction of borrowers who want their McMansion YESTERDAY and lenders who are willing to give you the money to obtain that McMansion TODAY so they can generate a bigger profit TOMORROW.

To me, none of this is a conflict though and does not mean the system, at its core is corrupted or failing.  Banks are private profit seeking entities who play an important role in our society, but are not public servants and should not be public servants (a government managed loan system would almost certainly be a disaster waiting to happen).  Obtaining money is a privilege, not a right.  And a private profit seeking banking system serves to regulate the ability to obtain money before one has necessarily earned it (though there are certainly instances, such as some forms of government spending, where money is rightly distributed by political choice).  But because banks deal in distributing the social construct that binds our society together we have a responsibility to oversee that money so as to bring the interests of these profit seekers in-line with the interests of society as a whole.  So to me, it is not the capitalist profit motive that is evil here.  Nor is it the greedy consumption driven actions of the borrowers that is evil.  These are crucial elements of a healthy functioning monetary system.

I think we need to recognize that money is a social construct that is to be protected by the society that creates it.  But we must also understand that, while private profit seeking banks are a superior alternative to a government managed loan system, these banks will inevitably be poor risk managers at points during the business cycle.  There is plenty of blame to go around for the current debacle that is the US economy.  Home owners were greedy in the run-up and the profit seeking banks were quick to turn that extra demand into higher earnings per share.  This production/consumption component is a healthy functioning part of the capitalist machine.   But when it involves the very oil that greases the engine we must understand that this is a component of the economy that requires great oversight and better regulation.  I fear we still do not have this despite the recent changes.  And the result is that this boom/bust cycle is likely to continue causing people to believe the very essence of capitalism is corrupted when in fact, it is the users and their misunderstandings who have abused the system.  In failing to properly oversee the institution of money we have allowed it to fail us.

In sum, it is the misunderstanding of the essence of money that is evil here, not the system itself.  We have misunderstood the essence of money as a tool and a social construct and how it relates to modern banking.  And in doing so, we have allowed both borrowers and lenders to abuse that social construct.  And with 8% unemployment and a floundering economy it is not just the banking system that appears bankrupt, but our society as a whole.  Better oversight of the institution of money might not be able to fix our current problems, but it can certainly ensure that future generations don’t have to suffer through these same events.





25 Responses

  1. […] Read more… Posted in Banks, MERS, News Around The Country, States « SHILLER: Principal Must be Written Down for Economic Recovery State of Washington Foreclosure Resource Links » You can leave a response, or trackback from your own site. […]



    Welcome to America BY Denae Gardner


    At 52 -54 secs is a pic of HAMP if I ever saw one.

    2 of the band members are fighting to keep their homes…


  3. @Ann

    See Horvath the 2011 Virginia case 4th cir:

    A thief can enforce the note. (ie. Ahmsi and DB)

  4. @Carie,

    And you have seen nothing yet. My husband is from Africa. The yard is his job. Really. One of my neighbors was laughing very hard one day because he heard us talking to each other. I call him “black man” and he calls me “pale face”. I tried to teach him to call me “mistress’ but it didn’t work… 🙂

  5. @enraged….you made me think of Scarlett and Tara…

  6. In a nutshell—Fake original transaction, fake securitization, fake paperwork created to foreclose—to collect on fake debt…

    How is that not ALL related to FDCPA?

  7. Corelogic is to the money what MERS is to the documents. Some computerized program wiring automatic payments from who-knows-where to county assessor’s offices, homeowner insurers, etc., which are nothing more than accounting entries from one data base to the other.

    Another piece in the virtual world of moneyless, empty numbers, backed up by little green rectangles of paper mixed with fabric thread.

    The only tangible thing in the world is a yard, with real mud, untouched by Monsanto and crawling with billions little bugs keeping it aired and promoting decaying of old roots, leaves and stems. I may not fight for the actual house but I sure a hell will fight for that little plot of dirt, the only thing I have susceptible to sustain my life.

  8. “The Fair Debt Collection Practices Act prohibits a debt collector from the use of “anyfalse, deceptive, or misleading representation or means in connection with the collection of anydebt.” 15 U.S.C. § 1692e. ”

    Wouldn’t the fact that the debt collector/servicer said to me (signed in writing) that my “loan” was securitized—and it wasn’t—and that they were foreclosing “on behalf of the securitization”—which isn’t possible—be in direct violation of FDCPA? And then the fact that they sold my property becomes theft on top of that?

    Do I have “valid claims” here? I should…

    “Given these allegations, plaintiff has sufficiently alleged a material misrepresentation…”

  9. Colorful, descriptive and accurate assessment, iwantmympv.

    Since the data to support reportedly rising home prices came from Corelogic, I think we can just disregard it altogether as just more propaganda from the compromised media outlets owned and operated by the thieves and psychos running them. If I read a bit of truth in the mainstream newspapers, or saw a bit of truth on TV, I’d probably fall off the sofa.

  10. Anyway, more than a year ago I cited FDCPA when Chase was threatening me with foreclosure with my HELOC…which I originally took out with WaMu… they left me alone after that…

  11. How come everyone laughed at me more than a year ago when I kept saying we should use FDCPA?

  12. A judge with the right attitude

    Posted on June 24, 2012

    Yes, a judge with the right attitude can help you a lot in winning a foreclosure trial. Here’s a transcript of such a victorious trial.


    To me it reads like a novel. An extremely well coached and sensible witness who seems to know the right answer to every possible question. But you can’t run from the truth. American Home Mortgage Servicing, the plaintiff in this case, for four and half years has been claiming to be the owner and holder of the note and mortgage. But at trial they finally changed the tune and admitted they were actually a servicer for the owner of the loan. And who is the owner? Allegedly Deutsche Bank. But even after this came out, the attorney for the plaintiff continued to argue his client is “a holder of the note for purposes of this litigation”.

    It defies the logic. The endorsement, even in blank, is made to a person who purchased the debt and paid value for it. If you admit you are not the purchaser of the debt and did not pay value for it, how can you claim you are a holder? The plaintiff’s counterargument is that even a person in wrongful possession of the note is entitled to enforce it. What I would have said to him is: But you are not claiming you are enforcing the note as a person in wrongful possession, are you?

    The trial revealed some other interesting facts. Even the plaintiff’s standing as a servicer was not quite kosher. It turned out American Home Mortgage Servicing, a Maryland Corporation started the lawsuit, but then it went bankrupt. And all the loans were quietly transferred to another entity under the same name, only a Delaware Corporation. In the course of litigation the new entity did not say a word it was not the entity that started the lawsuit. And the only question, and a simple one at that, the witness did not know the answer to: Did the Maryland Corporation obtain permission from the bankruptcy court to transfer assets to the Delaware Corporation?
    Read more at http://foreclosurecourtroom.com/a-judge-with-the-right-attitude/

  13. “The illussion of choice” This article is a perfect example of banks controlling “shill media” ro rewrite history.

    The author is so far off-base that i am inclined to drive into Manhattan and slap him in the mouth!

    The fact, which they continually mask? The money is not created by greedy homeowners. The money is created by greedy private banks who seek out potential homebuyers, credit card customer, students who need school loans, and eveyone who has a federal reserve note in their pocket.

    Through the use of FNM, FRE, FHLB and the FDIC, and finally the FRC as the backstop, these guys create capital pools that seek out debtors. The money is available, yet it does not exist.

    When you the consumer execute the mortgage, credit card, school loan etc… you are authorizing the creditor to create that money into existence. The FRC is a private bank which controls expansion and deflation through its own imaginary balance sheet.

    When we allowed private pool banks like INDY and WELLS, CHASE etc through private securitization, derivatives and other hedge contracts tied to these credit pools / trusts (bullshit) we allowed them to create private credit dollars which have become a very real part of our fabric and society as a whole, [q] uoting the author, “Hello 2008”.

    Whoever wrote the op/ed piece aboutt his article is dead-on. We have passed the inflection point, and the dollar is not still in favor because it is a currency of safety. What really happens – the FRC creates more dollars out of thin air for it own personal balance sheet – they lend those dollars to cash strapped nations, or countries with pegged currencies. In turn those countries leverage up the dollars and purchse US treasuries, whcih are put on the blance sheet of their banks – who in turn repost the treasuries back with the FRC as reserves to pay maintenance for the IMF Loans.

    It gets worse, through the FHLB MIke Perry was allowed to borrow 12 billion dollars to keep his private securitization ponzi scheme running past 2006. Perry, like WAMU, BAC and other originators who use FHLB advances allow the quasi-governmental bank to create a super-lien over all the assets of the bank borring the funds to maintian their balance sheet untilsome sucker buysmortgage certificates and they get to dump the crap into risk tranches for pension funds etc..

    When a bank fails, the FHLB is guaranted their money back 100 cents on the dollar. Guess who owns the FHLB’s? if you guessed the same folks who own the FRC, you are correct. Instead, with an FHLB, all the private bank members (4,800) get to own a piece, and it is risk free. With the FRC you must be a reserve system bank because they have a bettertitle and get to give th folks a more broad f******, for longer periods of time.

    We are not coming back from the expansion, the rest is merely poppycock to keep the wheels turning until they can unwind their dollars tradesand move on like a giant squid sucking at the eyes of society.

  14. Neil writes.”this article is planted”

    just like most posts on this site, they run it all, and 99% of the posters on here work for them. I even wonder why I read it. We are living in anarchy. Communists have control. There is no law of the people any longer.

  15. […] Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud Tagged: Blomberg, citizens united, Cullen Roche, JP Morgan, Massachusetts Supreme Court, McMansion, MERS, misunderstanding banking, money, Pragmatic Capitalism, regulation, US economy Livinglies’s Weblog […]

  16. thanks for that, Abby. How are you? FDCPA is in my counterclaims. Youbetcha!

  17. @Las Vegas,

    You’re gona have to ask iwantmynpv… He knows how everything is calculated and, from what I understand, it’s not too pretty…

  18. @enraged

    Maybe the banks want to once again create the prices they need for their books. Origination = overvalued, foreclosure = undervalued, now
    prices are going up, do they need short sale prices to be higher now? Or maybe it has to be higher for when they sell the servicing rights. The part that befuddles me is how do we compute the value now.

  19. enraged- thanks for the post. A friend of mine, who has business in Detroit, told me, ” on new years eve, the big thing is to get a hotel suite in downtown Detroit, and look out and see the houses going up in flames as far as the eye can see”. and, “don’t get out of your car until 6 or 7 mile road, otherwise you have a better than 50% chance of being murdered.” So much for Mortgage Backed Securities. (or, more succinctly, non-mortgage backed securities.

  20. Oooo… Keeeey. So I thought we had pretty much narrowed down the concept of “insanity”. Guess not! Would you believe it? We are actually working on the next bubble!

    Oh Gawd! Have mercy and come and get me. NOW!

    Home Prices Rise in Nearly All Major U.S. Cities
    By The Associated Press
    Posted 10:40AM 06/26/12

    Posted under: Economy, Real Estate
    4923175571 By CHRISTOPHER S. RUGABER

    WASHINGTON — Home prices rose in nearly all major U.S. cities in April from March, further evidence that the housing market is slowly improving even while the job market slumps.

    The Standard & Poor’s/Case-Shiller home price index shows increases in 19 of the 20 cities tracked. That’s the second straight month that prices have risen in a majority of U.S. cities.

    And a measure of national prices rose 1.3% in April from March, the first increase in seven months.

    San Francisco, Washington and Phoenix posted the biggest increases. Prices fell 3.6% in Detroit, the only city to record a drop.

    The month-to-month prices aren’t adjusted for seasonal factors. Still, prices in half of the cities are up over the past 12 months.

    Prices are increasing as other parts of the housing market are strengthening. Sales of new and previously occupied homes are up over the past year, in part because mortgage rates have plunged to the lowest levels on record. Builders are more confident and are starting to build more homes.

    The S&P/Case-Shiller monthly index covers roughly half of U.S. homes. It measures prices compared with those in January 2000 and creates a three-month moving average. The April figures are the latest available. [Comment mine: that same Shiller that, a page earlier, was advocating principal reductions… What am i missing?]

    Its measure of home prices for all 20 cities fell 1.9% over the 12 months ending in April. That suggests weaker markets continue to weigh on national prices.

    But other measures show home prices have risen nationally over the past year. CoreLogic, a private firm, calculates that prices rose 1.1% nationally in the 12 months ending in May. Federal Housing Finance Agency, which oversees mortgage giants Fannie Mae and Freddie Mac, says prices have increased 3% in the 12 months ending in April.

    Recent data indicate that the housing market has started to recover, more than five years after the bubble burst.

    Greater interest from buyers is boosting builders’ confidence. In May, builders requested the highest number of permits to build homes and apartments in three and a half years.

    Gallery: The 7 U.S. Cities That Spoil Their Kids the Most
    The supply of homes for sale remains extremely low, which has helped stabilized prices. The inventory of previously occupied homes is back down to levels last seen in 2006. And there were 145,000 new homes for sale in May. That’s only slightly higher than in April, which was the lowest supply on records dating back to 1963.

    Despite the modest gains in housing, the broader economy has weakened in recent months. Employers have added an average of only 73,000 jobs a month in April and May. That’s much lower than the average of 226,000 added in the first three months of this year. Some economists worry that the sluggish job market could weigh on home sales just as the housing market is showing signs of recovery.

  21. Wall Street is a parasite who sucks the lifeblood from our nation. An unnecessary and extemporaneous tentacle of the vampire squid known as “the banking system”.

  22. “What is Wall Street’s job? Wall Street’s job is simple. It is to increase earnings for their shareholders. It is not to provide jobs for the private sector. It is not to make sure the US economy is running smoothly. It is not to make sure you feel good about your day to day life. It is to generate a profit for its owners.”

    Who’s the moron who wrote that piece? That’s why we don’t need Wall Street. Wall Street is useless for what people are concerned. Wall Street serves exclusively shareholders. Wall Street does nothing to feed people, put gas in their car, educate them, treat their illnesses. Walls Street is a behemoth whose time has come.

    In many countries, banks exist to help people manage their money, save it, plan their expenses and retirement. Here, it is only to enrich shareholders. Well, I don’t know who the shareholders are and i don’t care. What I do know is that when I place my money in a bank, I get 0.595% interest. When I need that same money to buy tools, it costs me up to 29.99% in interest. Someone (and it isn’t me) is making 29.395% on my back. Under those condition, I ain’t gona be depositing money ever again. plus… if banks collapse (let me rephrase: WHEN banks collapse) at least, my money will be with me. Bevcause the way I see it, FDIC is still my money but it’s been so used and abused that i expect it to be completely insolvent when tiomes comes to pay up.

    Close your accounts. Everyone. Withdraw, make a run for it and banks won’t last over 7 minutes and 53 seconds.

    Then again… who am i writing for…?

  23. This is what it takes to have the case dismissed with prejudice


    The two transcripts in this foreclosure case involving HSBC and its servicer, Ocwen Loan Servicing, show a full bouquet of fraud upon the court. The case has everything: “lost and found note”, an attorney’s notice of filing the found original note without actually filing any such note, affidavit of lost mortgage signed by somebody that nobody knows who she is, deposition of Scott Andersen, Ocwen’s V.P., who “delegated” the signing of assignments of mortgage in favor his employer as if he was V.P. of MERS, to his employees, whose names he forgot, the deposition of Ocwen’s notary public who also forgot whose signatures she was actually notarizing as if they were Scott Andersen’s.



    But I will dare say this is more or less what happens in each and every foreclosure case. And so, this is not why I want you to read these transcripts, if you can. I want you to see, in a nutshell, how difficult it was and what it took the homeowner’s attorney to get a dismissal of the case with prejudice, despite all the fraud. I guess, after reading the transcripts, you will need to ask yourself: can I do this? But you also have to realize that only select attorneys can do this for you. Those who have the skills, the knowledge, but most important of all, those who will spare no time and effort fighting for you.

    wow wow win for homeowner in this appeal decision—used FDCPA


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