finance

It's not the Stupidity, It's the Money Behind the Shutdown Crisis

In This Crisis It's Not Stupidity, It's the Money: Three Relevant Laws

There are three basic laws about discussion, especially political discussion, that are useful in the contentious government situation we have today.  The third of these laws is especially relevant because it warns us that what is happening in Congress is not a passing aberration, but in fact a threat to democracy in our country.

MERS Leaves the Field

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By Numerian
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How the banks could inflict such damage on the country’s home title and mortgage registry system would take another investigation by Congress to determine – assuming Congress was interested.
The Mortgage Electronic Registration Systems company (known as MERS), which has been at the center of legal problems affecting the securitization of home mortgages and foreclosures, has given up one of its principal corporate objectives. It is now instructing its members to cease foreclosing on residential properties in the name of MERS, and to begin immediately to register all assignments of mortgages with local county recorders of deeds. (Image)

The whole purpose of MERS when it was established in 1996 was to by-pass the county recording process, and the billions of dollars of fees that banks and mortgage companies would have had to pay to comply with state and local real estate laws. MERS operated on a legal assumption that it could have its cake and eat it too, by acting as an agent for its member banks in their real estate transactions, but also acting if necessary as a principal in its own name when it came to assigning mortgages and foreclosing on properties.

The Populist Pub is Open. Let's Talk Worst Case Scenarios!

 

Petit Julien welcomes you back to the Populist Pub.  

Nearly 18 months into this recession, skepticism is growing about what "recovery" might look like. We hear talk of "green shoots" in an economy that is being remade into another bubble economy, this time based on "government finance". Is it really "stimulating" to the real economy to inject massive amounts of liquidity into the financial system? This unprecedented intervention includes Federal Reserve Credit, Treasury borrowings, agency debt, mortgage-backed securities issued by GSEs, as well as increased involvement of the FDIC. The latest estimates of the size of this bubble is around $14 Trillion which, amazingly, dwarfs the mortgage finance bubble it replaces. The question many analysts ask is whether the FED will be able to withdraw liquidity from the system in the proper amounts and at the right time in order to avert the inevitable inflation when it begins. Ironically, the FED will then find itself in the familiar position of being trapped by the risk of bursting another historic bubble!

The Populist Pub is now open.

 

Petit Julien welcomes you back to the Populist Pub.  

Earlier this week, we passed a milestone of sorts. The Obama administration marked its first 100 days in office. In 1933, FDR, facing a full blown depression, made numerous and transformative changes in his first 100 days. Since then, the accomplishments of the first 100 days of every new administration have been symbolically compared. That is, until this year.

On Thursday, Day #101 of the Obama administration, Steve Lendman, author, blogger, radio co-host and activist, who lives in Chicago, wrote an excellent article contrasting the first 100 days of FDR to BHO. This was effectively a follow up to a scathing article he wrote two weeks earlier. In that article, published on April 18th, Steve Lendman was highly critical of the Obama economic team especially. It was provocatively titled Barack Obama: Crime Boss.

The Populist Pub is Now Open

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Petit Julien welcomes you back to the Populist Pub.  

As a nation, we are groping for some sense of hope that we are emerging from the economic morass. The ranks of the unemployed continue to swell and millions of working Americans and retirees worry that the economic tsunami may engulf them next. The government has enacted a dizzying array of bailouts and assistance plans aimed at stabilizing the banking industry, thereby clearing a path to recovery in the real economy.

There is plenty of criticism for the government's actions to date, much of which is centered on understanding what brought on the crisis in the first place. Many critics attribute the 1999 repeal of the Glass-Steagall Act of 1933 and the 2000 enactment of the Commodities Futures Modernization Act as the impetus for the wreckless financial gambling of the last 8 years. For sure, this is not wrong and various measures of reform are now working their way through the Congressional process.

However, in an excellent article published in the April edition of Harper's Magazine, Thomas Geoghegan argues that we have not focused enough on the big deregulation that precedes all other deregulation. For him it was the day that America changed. His essay is titled: Infinite Debt; How Unlimited Interest Rates Destroyed The Economy.

The Populist Pub is Now Open

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Petit Julien welcomes you to the first gathering at the Populist Pub.   As an introduction, let me refer to this comment I made the other night. You can scroll up and down in that thread to get more context.

One of the things I like most about Naked Capitalism is the daily links that Yves provides. They are wide ranging, only sometimes graphical or analytical, but always apropros to the bigger picture.

So I was thinking if there is a way of doing something similar here at EP. Provide links to other reports, essays, analyses without paraphrasing and just invite general discussion or further original blog posts.

Econ-Fin News - Dec 5, 2008 – Basic Assumptions and Nationalization

Back in the middle of September, when the Wall Street model of investment banking collapsed into the dustbin of history Stirling Newberry wrote a series of articles laying out the underlying realities of the financial crises, and re-framing the issue as a Constitutional crisis because of the existence of a reactionary faction in American politics that is as yet unwilling to move from the existing means of storing wealth – the development of land, i.e., suburban sprawl – to a new store of wealth that would allow us to begin building a workable future. The Constitutional crisis arises because the present monetary configuration of the United States rests on the valuation of mortgages, the values of which are supposed to keep increasing as more land is developed:

 

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