Banks (and similar holding companies) tend to wait until the difference in total payments from the mortgage holder and the value of the mortgage is less than the value of the estate on file. At this point, the bank can just close the mortgage, foreclose the house, and actually make more money than they would had they just let the owner pay the dues on the mortgage.
I agree with Mark Brian. This is a system that needs to be changed, else Rent.com might take giant leaps towards the most visited site online.
However, O has been hard at work fixing structural problems Bush created that with McCain would simply never get fixed. If we continued on that course few more years there would be little hope for America's future.
"Although Lagarde has the support of France, Germany and Britain, her possible candidacy is dogged by accusations that she exceeded her authority by cutting short a legal battle between French tycoon Bernard Tapie, and a formerly state-owned bank, sending both parties into binding arbitration.
"The arbitration panel decided to award Tapie, a supporter of Lagarde's boss President Nicolas Sarkozy, 385 million euros in the case, linked to the bank's alleged mishandling of the entrepreneur's sale of the Adidas sportswear firm.
"TThe court could give one of three decisions on 10 June: it could throw out the case, it could ask for more information, or it could order an enquiry which in turn could see Lagarde charged with a criminal offence."
Mellon was right. Ron Paul is right. The Fed is evil. They give all the new money at almost 0% inbterest to their bankster buddies who turn around and loan it directly to the government at 3.5% interest as a safe way to recoup their stash lost through devious practices. The banks should have been left to fail. All of the bailouts should have never happened and all that debt liquidated out of the system. We would already be out of the mess right now if this were done. Inflation is the most evil form of taxation because the rich banksters are given the new money and are able to spend it, after they use the government to multiply it, at a period before prices rise. This is why there are sharp increases in sales of extravigant items as the cheap money begins its long journey to the poor. The poor are met with high prices long before any kind of wage increases are thought of, and the gap between rich and poor widens further. It is such an evil cycle that these crooks play out over and over again.
At the risk of invoking the "no true Scotsman", there's a false argument in Politics and Economics which makes it hard to trust the principals of capitalism. It also makes it easy to eviscerate true conservatism and libertarianism, because there's so many bad actors out there that call themselves conservatives and capitalists.
Here's the problem with watered down definitions that are frequently reduced to a single word or phrase to invoke the wrath of one group or another:
1. The political spectrum, though often described on a single linear axis between left and right, is better put on a cartesian plane with two axis, one ranging from anarchy to totalitarianism with respect to law and governance, and the other ranging from laissez faire to central control with respect to market economics. Sure, the average person has a hard time breaking out of one-dimensional analysis, but if one can envision for even a moment a two dimensional world, it's much easier to see past the trite argument of left versus right, Liberals (Labour) versus Torries, Fascists versus Communists. The fact is the best of all political systems is somewhere around the origin, or in other words, maximum self governance with free participation in a law abiding market.
2. On an individual level, I'd call it a state of "Enlightened Self Interest", where it's recognized that everyone is going to pursue their self interest, so the laws finely balance and pit everyone's self-interest against everyone else's in the market place, resulting in fierce competition, but ostensibly held in check through simple equitable rules (e.g. "tell the truth", "pay your debts", etc.). When traditions of such a marketplace become established, where honesty prevails, when the participants realize a) they can't get away with cheating, and b) they have to work and innovate to survive, c) where corruption and bribery are not tolerated, then with faith, the participants engage in ever increasing and expanding commerce. Sounds pretty utopian, but well regulated markets draw participants from corrupt or over-regulated markets. There are far too many examples of this to ignore, but perhaps Hong Kong demonstrated it best, a speck of land that at one time had an economy rivaling that of all of China. Without (too many) burdensome rules, and with strict rule of law, both buyer and seller in HK could engage in rigorous trade, while on the Main Land, you couldn't even buy a soda without double counting your change, nor could you sell your wares without being pressed by an official for a kickback.
3. Capitalism means two different things to two different groups, and though it might seem simple to define the term for the point of debating it, rancor and contention seems to stall any meaningful agreement. To the "left", capitalism is profiteering, one party gaining at the detriment of another (universally the rich benefitting from the labors of the poor), such as is embodied in the actions of banks and monopolies, and their actions deemed untenable, unforgivable. Conversely, to the "right", capitalism is entrepreneurship, risk taking, and hard work, embodied in the likes of Henry Ford, Bill Gates, and Thomas Edison.
It's hard in the middle of an emotional argument to come up with an objective definition, but capital is simply labor, resources, land, equipment, invested with faith that some time in the future it will result in an increase, that the product of the investment will be greater than the consumption thereof. In that sense, there is NO economic system that runs without capitalism (even Karl Marx would agree), because even a centrally controlled communist dictatorship employs capital (albeit inefficiently) and participates in the market (even if the market is horribly inefficient). With respect to the reference of communists, a robber baron monopolist in a laissez faire market creates the same set of problems, by muting the signals a free market (a laissez faire market is NOT a free market, anymore than "freedom" would be found in society with no physical security) would otherwise provide.
So, while it's fun to engage in left-right political dialogs, with bad definitions, there's no value in the debate, and the article struggles with overcoming a definite partisan slant that is no less pejorative than the McCarthy panel it maligns.
(Reuters, May 24) - Nicolas Sarkozy would be beaten by either of the two French Socialists expected to run for president in 2012 after the fall of Dominique Strauss-Kahn, the earlier favourite, according to a poll published on Tuesday.
The poll, conducted after former IMF chief Strauss-Kahn was arrested in New York on attempted rape charges which he denies, shows Sarkozy losing by a sizeable margin to either of the likely left-wing challengers -- Francois Hollande or Martine Aubry.
The two frontrunners for the "Socialist" nomination crush Sarkozy. Martine Aubry wins 59%-41% and Francois Hollande wins 62% to 38%.
Note on French Socialist party. The fact that Strauss-Kahn, head of the IMF, was the leading candidate for the Socialists tells you all you need to know about the socialism in that party.
He takes credit for funding and founding it out of his lobbying firm FreedomWorks in DC. The lack of morality of the movement, guided by the corporate lobbyists, was expressed in the utter absurdity of the "death panel" claim. That's the birth of the movement, in the popular sphere, and that's where the intellectual dishonesty and immorality began.
The attempt to make the Tea Party look like a grassroots uprising is simply PR. Two lobbying groups played critical roles in the start, roles that were for the specific purpose of telling the lies about health care reform via the "death panels" lie.
Despite these attempts to make the “movement” appear organic, the principle organizers of the local events are actually the lobbyist-run think tanks Americans for Prosperity and Freedom Works. The two groups are heavily staffed and well funded, and are providing all the logistical and public relations work necessary for planning coast-to-coast protests: Think Progress, April 9, 2009
Karl Denninger, who did such great work publicizing ForclosureGate, quit the formal Tea Party organization in disgust
Very well written and reasoned. Thanks (I think;). The Fed as activist with Congress and the president on the sidelines is truly anomalous. You hit on a key point, one that will be our epitaph:
"Of course, [the Fed] could have done a much better job of monitoring and regulating the banks..."
Why couldn't the Fed regulate? We have the president of the NY Fed, the one regulator most responsible for the lapses in banking, in charge of Treasury. He's there to cover up and dissemble so that he and his pals don't take the blame and reap the whirlwind of anger that has yet to be expressed.
Just using U-3, there's a workforce of 154 million and an employment figure of 138 million. What if most of those 16 million find real work? Won't that dramatically alter the equation, maybe enough to avoid the roller coaster to Hell or the longer road to perdition?
How about using the American Association of Civil Engineers 2009 report care on infrastructure, a $2 trillion price tag, to generate employment and sell some bonds actually attached to something concrete?
No. Nihilism is not at all consistent with the Tea Party. Wanting limited constitutional government that respects rule of law and does not spend money it does not have is more the reverse of Nihilism.
http://en.m.wikipedia.org/wiki/Nihilism
"Most commonly, nihilism is presented in the form of existential nihilism which argues that life is without objective meaning, purpose, or intrinsic value.[1] Moral nihilists assert that morality does not inherently exist, and that any established moral values are abstractly contrived."
To assert the Tea Party are nihilists, is absurd if you know the meaning of nihilist, and anything about the Tea Party.
It is the debt taken on by improvident borrowers, and granted by imprudent lenders, that needs to be liquidated. The borrowers may have to head into bankruptcy, though underwater homeowners might be able to avoid that extreme if they merely hand the keys of the home back to the bank. The lenders will have to absorb very large write-offs of bad debt, and some of these lenders may not make it through the depression. The collapse of so much credit in the economy is certainly one definition of a depressionary event.
Mellon's advice was taken by Hoover, and it was the liquidation of the banks and subsequent loss of much of the national savings that made the Depression a defining social, political, and economic event. We have a way today to liquidate the banks without destroying national savings, if the US were willing and able to keep the FDIC afloat through potentially trillions of dollars of payouts to consumers on their deposits in fallen banks. We have wasted so much money on bank bailouts that don't really clean up the problem, that it is a question as whether the US could pull on enough resources to keep the FDIC going. This should have been priority number two.
Priority number one should have been to avoid the debt build-up in the first place. This is the only real answer to the problem, and of course is too late for the US and many other countries. This tends to make Mellon's advice moot. Mellon's liquidation scenario will come to pass one way or another. We can take the dramatic road of the 1930s, or the slow road to perdition that the Japanese have been on. Once the debt implosion begins, your only choice left is which road to travel.
If we have to wait until there's no debt in America for the economy to recover, we'll wait forever, won't we? Also I keep seeing that corporations have $2 trillion in idle cash on hand.
I am not saying debt is good, just thinking there must be more to it. Or was Andrew Mellon not as wrong as people thought? It seems to me a prescription of reducing debt, while putting ourselves on a road to economic and job stability and sustainability would require sacrifice, is just about right for us.
I've certainly been thinking it's necessary since before Obama was elected and have been alternatively amazed and disappointed to see how nobody in charge is even suggesting we do what's necessary for our future. The more I think about it, the more maybe I'm a "Mellon Light" advocate.
I hope some people here who know more than me can shed more light on all this.
Nice article, however the movement was quite old before he appeared on the scene. For information on people using voluntary tools worldwide, see http://www.Libertarian-International.org the Libertarian International Organization
The banks are not helping people stay in their homes because the banks or the mortgage servicing company makes more money by foreclosing. Which is both wrong and needs to change IMHO.
Well said. What I find frustrating is how even not just sensible pundits but also sensible political figures (even if clearly running on a Democratic ticket and so “partisanship” is ok), talk of the Plutocracy programs as “Ideology” – giving the proposals and programs the façade
of “opinion” or “ideology’ (e.g. “small government”). In fact, the spin applied to those programs (even to their Orwellian titles e.g. the House’s ‘Repeal of JOB KILLING Health Care”) is nothing more than a cover to hide the real intent –
Privatization, Elimination of Regulation (including Environmental), more tax
breaks for the wealthy, etc. Call it out for what it is. Thankfully we’re seeing a LITTLE of that on the Ryan Plan; yet even there it’s been timid and has been led more by the electorate.
Hey, $21 an hour is considered an awesome wage here in Michigan. Now, if you are an uneducated person or a person just out of college with a professional degree, $21 is considered way too high. And that doesn't count that those persons don't get health benefits.
Nihilism and rage at the DemRep money party seem to be the glue that binds them. Their core beliefs? Aboish Medicare but please don't send me the bill for Dad's heart bypass or granny's medication. Problem goes beyond that -- I still remember the condescending quips of Alan Greenspan to Jude Wanniski on value of money. Too bad Jude could not have lived to see the outcome of Alan's slavish devotion to a theory that turned out to be bankrupt (Jude would have made a lot of money on that one -- but last time I looked, A.G. was qute comfortable financially, even if wrong intellectually.)
Being clever is not the same thing as being smart.
Finally, the reality hits home on just how much money this is and how it will kill Greece to repay it all. Krugman Op-Ed.
Nobody bought into the doctrine of expansionary austerity more thoroughly than Jean-Claude Trichet, the president of the European Central Bank, or E.C.B. Under his leadership the bank began preaching austerity as a universal economic elixir that should be imposed immediately everywhere, including in countries like Britain and the United States that still have high unemployment and aren’t facing any pressure from the financial markets.
Folks, do you realize what happens in Greece comes to America? This is why it's such a big deal, we are getting, through things like Paul Ryan's "plan" very similar agendas....believe me, these whoever they ares really are out to destroy any social safety nets, period, privatize everything and the U.S. has a massive deficit also.
Privatization, short term, is enormously profitable for banks, us, not so much.
Banks (and similar holding companies) tend to wait until the difference in total payments from the mortgage holder and the value of the mortgage is less than the value of the estate on file. At this point, the bank can just close the mortgage, foreclose the house, and actually make more money than they would had they just let the owner pay the dues on the mortgage.
I agree with Mark Brian. This is a system that needs to be changed, else Rent.com might take giant leaps towards the most visited site online.
Haha, clever.
However, O has been hard at work fixing structural problems Bush created that with McCain would simply never get fixed. If we continued on that course few more years there would be little hope for America's future.
New Book, review on HuffPo by NYTimes writer Gretchen Morgenson.
The problem is, we've all written our fingers off detailing this and nothing happens in D.C.
"Although Lagarde has the support of France, Germany and Britain, her possible candidacy is dogged by accusations that she exceeded her authority by cutting short a legal battle between French tycoon Bernard Tapie, and a formerly state-owned bank, sending both parties into binding arbitration.
"The arbitration panel decided to award Tapie, a supporter of Lagarde's boss President Nicolas Sarkozy, 385 million euros in the case, linked to the bank's alleged mishandling of the entrepreneur's sale of the Adidas sportswear firm.
"TThe court could give one of three decisions on 10 June: it could throw out the case, it could ask for more information, or it could order an enquiry which in turn could see Lagarde charged with a criminal offence."
RFI, May 24
More on the makeup and independence of this court later tonight.
Mellon was right. Ron Paul is right. The Fed is evil. They give all the new money at almost 0% inbterest to their bankster buddies who turn around and loan it directly to the government at 3.5% interest as a safe way to recoup their stash lost through devious practices. The banks should have been left to fail. All of the bailouts should have never happened and all that debt liquidated out of the system. We would already be out of the mess right now if this were done. Inflation is the most evil form of taxation because the rich banksters are given the new money and are able to spend it, after they use the government to multiply it, at a period before prices rise. This is why there are sharp increases in sales of extravigant items as the cheap money begins its long journey to the poor. The poor are met with high prices long before any kind of wage increases are thought of, and the gap between rich and poor widens further. It is such an evil cycle that these crooks play out over and over again.
At the risk of invoking the "no true Scotsman", there's a false argument in Politics and Economics which makes it hard to trust the principals of capitalism. It also makes it easy to eviscerate true conservatism and libertarianism, because there's so many bad actors out there that call themselves conservatives and capitalists.
Here's the problem with watered down definitions that are frequently reduced to a single word or phrase to invoke the wrath of one group or another:
1. The political spectrum, though often described on a single linear axis between left and right, is better put on a cartesian plane with two axis, one ranging from anarchy to totalitarianism with respect to law and governance, and the other ranging from laissez faire to central control with respect to market economics. Sure, the average person has a hard time breaking out of one-dimensional analysis, but if one can envision for even a moment a two dimensional world, it's much easier to see past the trite argument of left versus right, Liberals (Labour) versus Torries, Fascists versus Communists. The fact is the best of all political systems is somewhere around the origin, or in other words, maximum self governance with free participation in a law abiding market.
2. On an individual level, I'd call it a state of "Enlightened Self Interest", where it's recognized that everyone is going to pursue their self interest, so the laws finely balance and pit everyone's self-interest against everyone else's in the market place, resulting in fierce competition, but ostensibly held in check through simple equitable rules (e.g. "tell the truth", "pay your debts", etc.). When traditions of such a marketplace become established, where honesty prevails, when the participants realize a) they can't get away with cheating, and b) they have to work and innovate to survive, c) where corruption and bribery are not tolerated, then with faith, the participants engage in ever increasing and expanding commerce. Sounds pretty utopian, but well regulated markets draw participants from corrupt or over-regulated markets. There are far too many examples of this to ignore, but perhaps Hong Kong demonstrated it best, a speck of land that at one time had an economy rivaling that of all of China. Without (too many) burdensome rules, and with strict rule of law, both buyer and seller in HK could engage in rigorous trade, while on the Main Land, you couldn't even buy a soda without double counting your change, nor could you sell your wares without being pressed by an official for a kickback.
3. Capitalism means two different things to two different groups, and though it might seem simple to define the term for the point of debating it, rancor and contention seems to stall any meaningful agreement. To the "left", capitalism is profiteering, one party gaining at the detriment of another (universally the rich benefitting from the labors of the poor), such as is embodied in the actions of banks and monopolies, and their actions deemed untenable, unforgivable. Conversely, to the "right", capitalism is entrepreneurship, risk taking, and hard work, embodied in the likes of Henry Ford, Bill Gates, and Thomas Edison.
It's hard in the middle of an emotional argument to come up with an objective definition, but capital is simply labor, resources, land, equipment, invested with faith that some time in the future it will result in an increase, that the product of the investment will be greater than the consumption thereof. In that sense, there is NO economic system that runs without capitalism (even Karl Marx would agree), because even a centrally controlled communist dictatorship employs capital (albeit inefficiently) and participates in the market (even if the market is horribly inefficient). With respect to the reference of communists, a robber baron monopolist in a laissez faire market creates the same set of problems, by muting the signals a free market (a laissez faire market is NOT a free market, anymore than "freedom" would be found in society with no physical security) would otherwise provide.
So, while it's fun to engage in left-right political dialogs, with bad definitions, there's no value in the debate, and the article struggles with overcoming a definite partisan slant that is no less pejorative than the McCarthy panel it maligns.
(Reuters, May 24) - Nicolas Sarkozy would be beaten by either of the two French Socialists expected to run for president in 2012 after the fall of Dominique Strauss-Kahn, the earlier favourite, according to a poll published on Tuesday.
The poll, conducted after former IMF chief Strauss-Kahn was arrested in New York on attempted rape charges which he denies, shows Sarkozy losing by a sizeable margin to either of the likely left-wing challengers -- Francois Hollande or Martine Aubry.
The two frontrunners for the "Socialist" nomination crush Sarkozy. Martine Aubry wins 59%-41% and Francois Hollande wins 62% to 38%.
Note on French Socialist party. The fact that Strauss-Kahn, head of the IMF, was the leading candidate for the Socialists tells you all you need to know about the socialism in that party.
He takes credit for funding and founding it out of his lobbying firm FreedomWorks in DC. The lack of morality of the movement, guided by the corporate lobbyists, was expressed in the utter absurdity of the "death panel" claim. That's the birth of the movement, in the popular sphere, and that's where the intellectual dishonesty and immorality began.
The attempt to make the Tea Party look like a grassroots uprising is simply PR. Two lobbying groups played critical roles in the start, roles that were for the specific purpose of telling the lies about health care reform via the "death panels" lie.
Karl Denninger, who did such great work publicizing ForclosureGate, quit the formal Tea Party organization in disgust
Very well written and reasoned. Thanks (I think;). The Fed as activist with Congress and the president on the sidelines is truly anomalous. You hit on a key point, one that will be our epitaph:
Why couldn't the Fed regulate? We have the president of the NY Fed, the one regulator most responsible for the lapses in banking, in charge of Treasury. He's there to cover up and dissemble so that he and his pals don't take the blame and reap the whirlwind of anger that has yet to be expressed.
Just using U-3, there's a workforce of 154 million and an employment figure of 138 million. What if most of those 16 million find real work? Won't that dramatically alter the equation, maybe enough to avoid the roller coaster to Hell or the longer road to perdition?
How about using the American Association of Civil Engineers 2009 report care on infrastructure, a $2 trillion price tag, to generate employment and sell some bonds actually attached to something concrete?
Just asking...
No. Nihilism is not at all consistent with the Tea Party. Wanting limited constitutional government that respects rule of law and does not spend money it does not have is more the reverse of Nihilism.
http://en.m.wikipedia.org/wiki/Nihilism
"Most commonly, nihilism is presented in the form of existential nihilism which argues that life is without objective meaning, purpose, or intrinsic value.[1] Moral nihilists assert that morality does not inherently exist, and that any established moral values are abstractly contrived."
To assert the Tea Party are nihilists, is absurd if you know the meaning of nihilist, and anything about the Tea Party.
It is the debt taken on by improvident borrowers, and granted by imprudent lenders, that needs to be liquidated. The borrowers may have to head into bankruptcy, though underwater homeowners might be able to avoid that extreme if they merely hand the keys of the home back to the bank. The lenders will have to absorb very large write-offs of bad debt, and some of these lenders may not make it through the depression. The collapse of so much credit in the economy is certainly one definition of a depressionary event.
Mellon's advice was taken by Hoover, and it was the liquidation of the banks and subsequent loss of much of the national savings that made the Depression a defining social, political, and economic event. We have a way today to liquidate the banks without destroying national savings, if the US were willing and able to keep the FDIC afloat through potentially trillions of dollars of payouts to consumers on their deposits in fallen banks. We have wasted so much money on bank bailouts that don't really clean up the problem, that it is a question as whether the US could pull on enough resources to keep the FDIC going. This should have been priority number two.
Priority number one should have been to avoid the debt build-up in the first place. This is the only real answer to the problem, and of course is too late for the US and many other countries. This tends to make Mellon's advice moot. Mellon's liquidation scenario will come to pass one way or another. We can take the dramatic road of the 1930s, or the slow road to perdition that the Japanese have been on. Once the debt implosion begins, your only choice left is which road to travel.
If we have to wait until there's no debt in America for the economy to recover, we'll wait forever, won't we? Also I keep seeing that corporations have $2 trillion in idle cash on hand.
I am not saying debt is good, just thinking there must be more to it. Or was Andrew Mellon not as wrong as people thought? It seems to me a prescription of reducing debt, while putting ourselves on a road to economic and job stability and sustainability would require sacrifice, is just about right for us.
I've certainly been thinking it's necessary since before Obama was elected and have been alternatively amazed and disappointed to see how nobody in charge is even suggesting we do what's necessary for our future. The more I think about it, the more maybe I'm a "Mellon Light" advocate.
I hope some people here who know more than me can shed more light on all this.
Nice article, however the movement was quite old before he appeared on the scene. For information on people using voluntary tools worldwide, see http://www.Libertarian-International.org the Libertarian International Organization
of the regional Presidents, giving more power...to the Fed chair and NY Fed President, which is frightening. He has a bill up.
No, the Feds and the bankers want our money. Please wake up and stop blaming everyone else. Do your homework.
The banks are not helping people stay in their homes because the banks or the mortgage servicing company makes more money by foreclosing. Which is both wrong and needs to change IMHO.
Well said. What I find frustrating is how even not just sensible pundits but also sensible political figures (even if clearly running on a Democratic ticket and so “partisanship” is ok), talk of the Plutocracy programs as “Ideology” – giving the proposals and programs the façade
of “opinion” or “ideology’ (e.g. “small government”). In fact, the spin applied to those programs (even to their Orwellian titles e.g. the House’s ‘Repeal of JOB KILLING Health Care”) is nothing more than a cover to hide the real intent –
Privatization, Elimination of Regulation (including Environmental), more tax
breaks for the wealthy, etc. Call it out for what it is. Thankfully we’re seeing a LITTLE of that on the Ryan Plan; yet even there it’s been timid and has been led more by the electorate.
Hey, $21 an hour is considered an awesome wage here in Michigan. Now, if you are an uneducated person or a person just out of college with a professional degree, $21 is considered way too high. And that doesn't count that those persons don't get health benefits.
Nihilism and rage at the DemRep money party seem to be the glue that binds them. Their core beliefs? Aboish Medicare but please don't send me the bill for Dad's heart bypass or granny's medication. Problem goes beyond that -- I still remember the condescending quips of Alan Greenspan to Jude Wanniski on value of money. Too bad Jude could not have lived to see the outcome of Alan's slavish devotion to a theory that turned out to be bankrupt (Jude would have made a lot of money on that one -- but last time I looked, A.G. was qute comfortable financially, even if wrong intellectually.)
Being clever is not the same thing as being smart.
I'll check my mailbox again today.
Finally, the reality hits home on just how much money this is and how it will kill Greece to repay it all. Krugman Op-Ed.
Folks, do you realize what happens in Greece comes to America? This is why it's such a big deal, we are getting, through things like Paul Ryan's "plan" very similar agendas....believe me, these whoever they ares really are out to destroy any social safety nets, period, privatize everything and the U.S. has a massive deficit also.
Privatization, short term, is enormously profitable for banks, us, not so much.
Pages