Fixing the Housing Market So It’s Safe to Buy or Hold

Reality in Iceland: prosecution and letting the chips fall to the table
August 27, 2012. Neil F Garfield. Mainstream media and in particular Krugman and Ritholz have echoes what Simon Johnson and I have been saying for years. It’s not a question of theory or ideology. It’s a question of reality.
Citizens of Iceland were not in the least bit interested whether the “conservatives” or the “liberals” had compelling ideological arguments. They wanted jobs, economic stability, and decent prospects and opportunities. Citizens of Iceland were not interested in the concept of change or even change in government.
They wanted their society fixed, after being used and thrown under the bus by Wall Street using Icelandic banks as a conduit for international exchange of derivatives that turned out to be worthless. The Banks tried throwing Iceland under the bus, but Icelanders defied the power and wealth of the world’s largest banks and executed simple policies that followed the advanced thinking and analysts all over the world, past, present and future.
Bill Clinton was asked by many how he managed to take an ailing economy and turn it into a booming source of innovation with giant government surpluses. His answer was “arithmetic.” When I was a security analyst and investment banker on Wall Street the primary theme was that before investment, underwriting, or performing any act or making any decisions we had to start at the beginning — the fundamentals. Money may be hard to define but it is easy to measure.
At the end of the day if you taken more real money than you have spent, then you have more money at the end of the month. If some thief steals from you, your wealth drops. If someone claims to own your property and doesn’t own it, your wealth remains unchanged — but Wall Street, bucking the obvious proof in Iceland, says otherwise.
Wall Street says they can “borrow” the identity of homeowners and use it to create the equivalent of bank notes that can be accepted as cash equivalents as long as they dress it up with triple A ratings, and insurance companies that cannot pay for the loss and wouldn’t even if they could because the offer to buy the credit default swap, the insurance and other hedge products were based upon blatantly false premises.
Iceland simply did arithmetic and they continue to do arithmetic. They are reducing household debt, letting creditors suffer the risk of loss that was part of their contracts but now they don’t like their contracts. In Iceland too, the Banks demanded bailout money to save the financial system. But Icelanders rejected that on both legal and moral grounds.
They were not going to reward the perpetrators of fraud tooth further detriment of their victims, they would prosecute them and punish them for breaking the key laws and premises of a stable society — accountability to and for the truth.
They were not going to further burden the victims of the crimes with taxes to reward the perpetrators and their counterparts, they were going to provide as much restitution of wealth as possible and necessary to stabilize an economy that was crashing.
The financial system did not crash and burn as Wall Street had sternly predicted to the Bush and Obama administrations in the U.S. With more than 7,000 smaller banks ready and waiting pick up the pieces. They did not debase their currency and their prospects by saddling future generations with the mistakes of remote greedy bankers. They took the money that existed and disregarded the fake money, the ” cash equivalents” created all over the world allowing the shadow banning system to collapse under it’s own worthless weight. Nothing bad happened.
What did happen is that Iceland now enjoys normal economic growth, sharply declining unemployment and underemployment and does not consider trading paper whose value is based upon false transactions to be part of a their GDP. Produce real goods and services while in the U.S. And other “advanced ” superpowers they have turned themselves into paper tigers. While financial services went from 16% of U.S. GDP before this mess, it now counts for half. Arithmetic: if those shadow banking transactions are worthless then our real GDP is 34% less than what we are reporting.
In Europe where they have their heads partially in our sand, they are trying to sit on two chairs with one ass. They too understand that nothing trumps reality but the people who run government here and abroad are simply making far too much money pretending that shadow money is real money. The real value of our stock indexes is around 7500 for DJIA.
The facts are that housing is still in the dumps even if some reports show “signs of life.” to allow Foreclosures to proceed when the creditor had an undocumented c,aim without any real mortgage lien is absurd, bit it is done everyday. It isn’t a matter of defective documents, it is a matter of no documents, while the banks stole the identities of the pensions funds and homeowners for their own personal Profit,  and buried the losses until they were done trading worthless paper. THEN they gave the “ownership” of the worthless paper and the loss to the investment funds that thought they had purchased them years ago under rules that were never followed by Wall Street.
The foreclosures must end because they are illegally based upon a chain of paper without any money transactions (consideration). The “completed” Foreclosures should be disallowed because the transactions on which they were based were void for lack of consideration wherein the signature of the homeowner was procured by fraudulent premises and promises.
The real money transactions should be documented and the real loan status should be disclosed so that homeowners and investors can come to reasonable settlements and modifications without regard to the consequences to Banks whose continuing fraud is causing the U. S. And Europe without applying basic emergency procedures to stop the bleeding.
The loans are not secured by perfected liens and the principal loan origination was outright theft from investor-lenders and homeowners. But they could be secured and people could pay for the real market value of the deal they were tricked into, if we simply go back and do the arithmetic — and play fair.

Iceland Did It Right … And Everyone Else Is Doing It Wrong
http://www.ritholtz.com/blog/2012/08/iceland-did-it-right-and-everyone-else-is-doing-it-wrong/

14 Responses

  1. hi neil-could you please send livinglies to aschmx@gmail.com.  thanx alan schlosser

  2. & lady who called their shots: http://www.youtube.com/watch?v=MeVY7JH_xVU&feature=related

  3. These LIARS took your $$$ http://www.youtube.com/watch?v=tn3oDUkOKsM

  4. NO!!!! I want restitution for putting me… but most importantly MY FAMILY through HELL for years !!!!!! there is and will be no real market value, the people have lost the trust of the now know to be rapers and pillagers. I do not want their “LOVE” I do not want their benefits, they do not need to take care of this old person, I do great without them because I can THINK…I want nothing but what has been taken to be put BACK to the rightful owner that should have a house paid in full by now by MY own backbone!!!!. Yes we need to remove and replace ALL government as it is NOT in the interest of the people that pay them so well to take EVERYTHING away. Nope, do not want the tricks any longer. I will go live in Iceland first, and I hate the cold but I can and will get used to the smell of clean air and freedom.

  5. It’s a conspiracy. No theory required.

  6. ILLICIT MORTGAGE INVESTMENTS MADE WITH ILLICIT DRUG-MONEY MUST BE DESTROYED:

    Illicit DRUGS are destroyed upon seizure by government forces in every country, when they are confiscated in bulk quantities, no matter who produces, sells or traffics, the bulk drugs. This is the standard mandatory legal procedure in every country. All money and investment proceeds of such drug transactions are also seized ASAP, this includes real-estate investments made by purchase of mortgages with drug money. Therefore, all the 5 million plus Wachovia mortgages bought with $1/2 trillion DRUG DOLLARS, and subsequently laundered into Wells Fargo in 2009, to evade government seizure, must be destroyed by the operation of U.S. laws which I cited in my U.S. Supreme Court petition case #11-1013 on 5/18/12, which was denied. http://www.supremecourt.gov/Search.aspx?FileName=/docketfiles/11-1013.htm
    This is now a publicly made demand to the United States, and to each state’s, government authorities, and to Federal & State Grand Juries, to mandate the destruction of the bulk of Wachovia’s mortgages, purchased with drug-money and amassed during the last decade, most of which drug-mortgages were transferred into Wells Fargo entities in 2009. This simple operation can be done by the U.S. Government’s, or individual states’, passage of a simple bill to annul every Wachovia mortgage acquired last decade, or by “quieting title” of the related real properties in the names of their original owners, by mandating county recorders to record one page NOTICE OF FULL RECONVEYANCE as against every Wahcovia-related mortgage in county records. Such a mandatory legal process would kick-start to stabilize this country’s housing and other economic and social woes which I revealed to be coming in 2004 (eight years ago, and 4 years before it began). In the alternative, and because U.S. Government officials have been fearful of punishing banks’ crime bosses, and have been fearful of hurting banks’ toxic products, such as Wachovia’s drug-money mortgage-investments, a few competent lawyers can collaborate to commence a national qui-tam, mass-tort, or class-action, which could render the same legal results without criminal process. If you are such an attorney please enlist. http://livinglies.wordpress.com/2012/08/20/should-bankers-go-to-jail/#comment-168017

  7. So homeowners re-contract with the clowns at “fair market value.”
    Then when the FMV falls again, then what?

    What is the solution for people who LOST their homes?
    Those millions….Remember them?

    Investors can go after the bad guys just like we homeowners have to do.

    Or, we can just forgive all this phony debt and get on with it.
    We are wasting time. More and more people suffering as the economy gets worse and worse. That’s cruelty to humanity.

    We need RESTORATION.

    It should be obvious by now there is some hidden agenda going on
    or this nonsense would have been stopped AGES ago.
    One doesn’t have to be a conspiracy nut to see that.

    I guess Obama’s saving his best trick for last.
    Schemes and strategies to line the coffers and pad the egos,
    while the world is sucked dry and burns from the salt of QE3.

  8. How about this story from Attorney Weidner : Now you know how to vote :

    http://www.breitbart.com/Big-Government/2012/08/16/Attorney-For-Goldman-Sachs-CEO-Is-Eric-Holder-s-Best-Friend

  9. EULE,

    I hope government doesn’t “step in” again to negotiate a settlement as unilateral as the first one. That matter should be handled by the courts only!

  10. I just read this story from LIBOR :

    http://www.washingtonpost.com/business/economy/libor-civil-suits-starting-to-grow/2012/07/30/gJQAHWFYLX_story.html

    Sounds like the next ROBO lawsuits . How about all the HELOC
    account who had variable interest? That is still missing in all class action lawsuits. May be Banks start to negotiate ?

  11. “…The “completed” Foreclosures should be disallowed…”

    How would that be done, Neil? Did they do that in Iceland? Were there illegal foreclosures in Iceland?

  12. BRAVO!!!!! That is exactly right! send this to all AG’s , Gov, and newspapers. Shout it out, nows the time, demand whats right. Do this right before the election, make it part of a debate…ask what each are going to do to make this right. Jaime

  13. We’ve wasted a lot of time but we will have our Iceland too. With or without government. But if they force us to do without, they’re in for a huge surprise…

  14. DUMP DUMP & DUMP while U-Can http://www.youtube.com/watch?v=CG_2mdXUyjo

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