Bankruptcy...global & universal

Greetings good citizen,

Once again our attention is drawn to the, er, ‘omissions’ made by the corporate owned media. (In a ‘for profit’ society there is no such thing as a ‘free press’.)

Since the only,‘independent reporting' comes from the Internets, it is none to surprising to see the ‘Big Picture’ being glossed over by the alleged ‘serious people’ who call themselves the ‘reality based community’.

Witness that we have this jaw-dropping development that the media seems to think the public would NOT be interested in knowing…

What is ‘out of place’ here, good citizen?

The July Mortgage Monitor report released by Lender Processing Services, Inc. shows that foreclosure timelines continue their steady upward trend, as a payment has not been made on the average loan in foreclosure in a record 599 days. Of the nearly 1.9 million loans that are 90 or more days delinquent but not yet in foreclosure, 42 percent have not made a payment in more than a year with an average delinquency of 397 days, also a new record. At the same time, first-time foreclosure starts in June were near three-year lows, and first-time delinquencies accounted for only 25 percent of new delinquent inventory.

Looking at this graph, one might expect the number of loans in the foreclosure process to be increasing sharply since there are so many more starts than sales.

And there are very few cures too - what is happening is a large number of loans each month have been moving from "in foreclosure" back to "90+ days delinquent" status - so the number of loans "in foreclosure" hasn't increased recently.

Years with absolutely ZERO payments being made and A THOUSAND TRILLION DOLLARS OF ‘DERIVATIVES’ outstanding on these very, albeit bad, loans…

What does this say about our, er, ’financial system’?

Wall Street continues to rise and our banking system continues to ’chug along’ as if nothing was wrong…why is that good citizen?

What would happen if YOU exhausted your bank account?

This all went down during the end of Bush’s second term, in a year and a month Obama stands for re-election and NOTHING has been done about this mess.

We’re talking 4 years and the name of the game is still ’extend and pretend’.

‘We aren’t bankrupt as long as nobody admits we can't pay!”

What does that make you?

Are you an idiot for still making your mortgage payments?

(yes)

Are you an idiot for paying anybody?

Well, once the majority takes it into their head that this is indeed the case, the whole damn supply chain will collapse.

IF YOU ran ‘out of money’ (like the banks obviously have) these assholes would be MERCILESS, they’d throw you out in the street in a heartbeat…

They aren’t doing that now due to the sheer number of people in the foreclosure process, it would cause a panic…as well as the secondary benefit of ‘protecting’ the property from vandalism and the expense of keeping it up/the utilities functioning along with the EXTREME DEARTH OF QUALIFIED BUYERS!

Yeah, that foreclosure judgment sort of kicks the shit out of your ability to obtain a new mortgage. Once bitten, twice shy sort of thing happening.

Now are you ready for a real shocker?

What’s happening here is taking place through-out the Western World.

25% of the WORLD’S housing market is in foreclosure AND THERE ISN’T A FUCKING THING THEY CAN DO ABOUT IT!

More disturbing good citizen is the fact that this is NOT an ‘accident’.

More intriguing is the notion that some people ‘leveraged’ themselves into these properties KNOWING they wouldn’t be evicted…begging the question ‘what did they know and when did they know it?’ (Well, obviously they knew when prices were being driven to ridiculous levels and we were all wondering just who could afford the mortgage on an $800,000 home?)

So, given the ‘pieces of the puzzle’ how long do you suppose we have before this train wreck jumps the rails?

How ironic is it that the ‘economy’ such as it is, is being kept ‘afloat’ by the people who have defaulted on their mortgages?

Makes you want to do the ‘patriotic’ thing and join them, doesn’t it?

Hell, if the banks are going to ‘skate’, why not join the party?

Seriously good citizen, if the justice system is this far gone, our civilization is as good as gone. The only question remaining is ‘what comes next?’

What do you do with a broken social model? If it’s anything like what you do to a drunken sailor, this isn’t going to be pretty.

Thanks for letting me inside your head,

Gegner

Economic Miracle

Greetings good citizen,

There’s been a considerable amount of ‘Happy Talk’ being served up by the corporate owned media which (as usual) contradicts the facts you can easily see for yourself.

For all of the ceaseless ‘yap’ about an ‘economic rebound’ (they’ve been ‘jaw-boning’ the recovery for more than three years now) some have noted that the SOTU address didn’t even mention the foreclosure crisis.

If you want your socks knocked off, hit the link at the bottom which shows in graphic detail just how, er, ‘virulent’ the crisis is.

One in nine houses in foreclosure (in a specific urban area) is a shitload of houses no matter how you slice it.

Which is to ask, how can there be an economic recovery if the primary source of the average citizen’s wealth continues to erode into worthlessness?

Not to put too fine a point on it good citizen but your home is only worth what a willing buyer is capable of paying you for it. Workers in the ‘new economy’ don’t have sufficient income to finance the purchase of a pup tent, never mind scrape up the 20% down on a quarter of a million dollars.

Thus are prices (as well as your ‘net worth’) falling like a rock.

Naturally, this is only half the battle.

The ceaseless lies (that economic recovery is just around the next corner) are a manifestation of this irreparable breakdown in civic trust.

Economists be damned, those fools have no clue what happens when the ‘glue’ that holds society together breaks down.

They (stupidly) think the glue that binds society is money…but they’re wrong, the glue that holds society together is ‘trust’.

And all of the money in the world can’t buy an ounce of it.

Worse, the kind you have to buy isn’t worth having…because you can never really trust it!

Far worse than a world without money is a world without trust, an environment most humans do poorly in. We aren’t wired for the ‘kill or be killed’ world, which is what the criminals are banking on.

Those who don’t value honor neither have nor deserve trust.

Bad place to be in a ‘kill on sight’ world.

Time to alter course a little to touch upon the subject of trust.

Most of us don’t trust strangers (although we will, oddly, believe them when they tell us something because they have no known reason to lie to us.)

What we do ‘trust’ is institutions.

Right, wrong or indifferent, we put our trust in institutions (even though they are run by strangers!)the point being we trust institutions to be fair-minded and even handed...when that turns out not to be the case, we expect a legal remedy.

in light of recent events, the airwaves are alive with rhetoric about new laws to control guns, laws that would be totally unnecessary if we had a vigorous justice system.

If the legal system operated the way it is supposed to, the average person would not feel the need to take the law into his or her own hands.

Locally, a police chief resigned ahead of the release of a report that implicated him in several crimes as well as numerous incidents of behavior unbecoming of a police officer (never mind the chief!)

If we can’t ‘trust’ the people entrusted to protect us, were screwed!

If we shift the spotlight back to the national stage, having a ‘turncoat’ president isn’t making the situation any better.

If we can’t trust the people we elect to lead us…who can we trust?

But you don’t need no steenkin’ trust, do you good citizen?

Because you eat what you kill.

Thanks for letting me inside your head,

Gegner

Stratigic Non-Foreclosure...

Greetings good citizen,

While the MSM would like to keep our attention focused on the global arena, like that ‘tempest in a teapot, Greece while reports keep surfacing about incidents of reckless chicanery being perpetrated by the money powers closely connected to our own government.

For example, that ‘gift’ on Christmas Eve of lifting the ‘cap’ on the balance sheets of both Fannie and Freddie. Now it appears the two GSE’s are going to ‘re-purchase’ the non-performing mortgages in the MBS they issued (at, no doubt, 100 cents on the dollar) in an effort to raise the value of assets that remain.

This is very nice for investors but it sucks huge for taxpayers (even though you already know they are going to default on the debt!) What’s REALLY going to suck is the same asshole we bail out at 100 cents on the dollar will be the same one who demands twenty-percent interest on his treasury bonds!

No good deed goes unpunished…

Why does it seem as though you’re always getting fucked? Because we can never do enough for the already wealthy!

We SHOULD keelhaul the lot of ‘em…under a powerboat! But that’s just me…

Anyway…onward with tonight’s offering:

Strategic Non-Foreclosure Becomes Official Policy
by Barry Ritholtz [Purloined from The Automatic Earth]

One of my favorite bizarre twists on the credit crisis and housing collapse has been the concept of Strategic Non-Foreclosures. I usually mention this when speaking to groups to see the reactions people have — they tend to be stunned at the banking opposite of Walkaways (Strategic Defaults.) [Worse, nobody is holding the bank’s feet to the fire for committing this injustice! Don’t get it wrong here, the ‘foreclosure’ proceeds normally right up to the eviction; then the chiseling bank stops short of taking possession. Leaving the former owner ‘on the hook’ for a property they have been denied the use of…]

But now, under the guise of new bank experiments, the Strategic Non-Foreclosure is becoming official policy. First, we get friendlier terms such as “Soft foreclosure” or “Deed for Lease.” And, it appears to offer numerous benefits for both parties (though more for the banks then the borrower:)

• Delinquent Borrowers get to stay in their homes for longer periods of time;

• Lenders get to avoid paying utilities, homeowner association fees, and providing maintenance costs such as snow shoveling and lawn cutting;

• RE Tax obligations remain in the name of the borrower;

• Banks do not have to take an immediate right down of a bad loan;

• Other properties in the same neighborhood where the lender may have exposure delay suffering the negative price impact of a foreclosure; [Which is to say prices remain artificially higher than a foreclosure auction would reveal…]


Here’s the Washington Post:

Seeking alternatives to the nation’s struggling foreclosure prevention efforts, federal and mortgage industry officials increasingly are looking for ways to get distressed borrowers to leave their homes voluntarily, without going through the expensive foreclosure process or a messy eviction.

Citigroup, for instance, plans to announce a pilot program on Thursday that would allow delinquent borrowers who don’t qualify for or decline mortgage relief the opportunity to stay in their homes without making payments for up to six months before turning over the keys, in return for keeping the property in good condition. The bank estimates that up to 20,000 borrowers in Texas, Florida, Illinois, Michigan, New Jersey and Ohio could be eligible. [Um, understand this is just one mortgage lender and we’re talking millions of foreclosures.]

The program is just the latest amid a growing acknowledgment that foreclosure prevention efforts will fail to reach millions of borrowers over the next few years.”


As you can see by the Credit Suisse chart below, the policies might have become official recently, but the gap between delinquencies and foreclosures has been expanding for quite some time.

There have already been millions of foreclosures…and maybe a million properties sold at auction…a vast majority don’t receive bids the banks can live with so they hold on to them…waiting for the day when the market returns…

Sadly, many of the homes sold at auction were purchased with ‘creative financing’ by idiots who thought housing was ready to ‘turn around’. Which is to say they still paid too much but didn’t care because they bought the properties ‘on spec’, planning to let the renter or the next buyer take the loss.

Ironically, this is how we landed in this mess in the first place. Part of the endless search for the ‘Greater Fool’ is never realizing that the greater fool is you.

Our pal ‘Flipper’ has fulfilled the vital social role of village idiot. Sadly, we can’t build a sustainable society if it means satisfying the delusions of the village idiots.

Not only must we put a stop to these endless attempts to fleece our way to the top but we must shut down the avenues the criminals use to take the rest of us hostage.

Thanks for letting me inside your head,

Gegner