My thoughts on the mortgage settlement

You can read about this here, here, here and here.

First of all, let me say this; this issue here, above all of the others, is why I packed it in with the Democratic Party. On top of all of the class warfare, class resentment, racial resentment and everything else; was the realization that I made, that the Democratic Party, starting in 1973 and again in 1993 literally rigged the system to fail. This was by loosing credit restrictions to allow people, who had no business even getting loans, to get credit so easily.

Then once the system failed, the Government, started by George W. Bush in 2008 with tarp loans and the bailing out banks that were “Too big to fail.” Not to mention the fact that the Republicans ripped out regulations that made the whole thing like one million percent worse and when the Republican Congress received a warning that the whole thing was going to collapse, what did they do? They held a hearing and the CEO of Freddy and Fannie played the RACE CARD, they retreated! 😡 I won’t even get into the stupidity of the Federal Reserve, which really made some seriously idiotic mistakes.

Then instead of Obama being smart and saying, “We’re not picking favorites, we are going to allow the market to correct itself.” Instead, he continued the bailouts and even spent more on top of that. Not the mention his attempt to destroy our private healthcare system.

Anyhow, this settlement is not perfect; in fact, it stinks and someone has given a bullet-point list as to why.

This is via Naked Capitalism:

Here are the top twelve reasons why this deal stinks:
1. We’ve now set a price for forgeries and fabricating documents. It’s $2000 per loan. This is a rounding error compared to the chain of title problem these systematic practices were designed to circumvent. The cost is also trivial in comparison to the average loan, which is roughly $180k, so the settlement represents about 1% of loan balances. It is less than the price of the title insurance that banks failed to get when they transferred the loans to the trust. It is a fraction of the cost of the legal expenses when foreclosures are challenged. It’s a great deal for the banks because no one is at any of the servicers going to jail for forgery and the banks have set the upper bound of the cost of riding roughshod over 300 years of real estate law.
2. That $26 billion is actually $5 billion of bank money and the rest is your money. The mortgage principal writedowns are guaranteed to come almost entirely from securitized loans, which means from investors, which in turn means taxpayers via Fannie and Freddie, pension funds, insurers, and 401 (k)s. Refis of performing loans also reduce income to those very same investors.
3. That $5 billion divided among the big banks wouldn’t even represent a significant quarterly hit. Freddie and Fannie putbacks to the major banks have been running at that level each quarter.
4. That $20 billion actually makes bank second liens sounder, so this deal is a stealth bailout that strengthens bank balance sheets at the expense of the broader public.
5. The enforcement is a joke. The first layer of supervision is the banks reporting on themselves. The framework is similar to that of the OCC consent decrees implemented last year, which Adam Levitin and yours truly, among others, decried as regulatory theater.
6. The past history of servicer consent decrees shows the servicers all fail to comply. Why? Servicer records and systems are terrible in the best of times, and their systems and fee structures aren’t set up to handle much in the way of delinquencies. As Tom Adams has pointed out in earlier posts, servicer behavior is predictable when their portfolios are hit with a high level of delinquencies and defaults: they cheat in all sorts of ways to reduce their losses.
7. The cave-in Nevada and Arizona on the Countrywide settlement suit is a special gift for Bank of America, who is by far the worst offender in the chain of title disaster (since, according to sworn testimony of its own employee in Kemp v. Countrywide, Countrywide failed to comply with trust delivery requirements). This move proves that failing to comply with a consent degree has no consequences but will merely be rolled into a new consent degree which will also fail to be enforced. These cases also alleged HAMP violations as consumer fraud violations and could have gotten costly and emboldened other states to file similar suits not just against Countrywide but other servicers, so it was useful to the other banks as well.
8. If the new Federal task force were intended to be serious, this deal would have not have been settled. You never settle before investigating. It’s a bad idea to settle obvious, widespread wrongdoing on the cheap. You use the stuff that is easy to prove to gather information and secure cooperation on the stuff that is harder to prove. In Missouri and Nevada, the robosigning investigation led to criminal charges against agents of the servicers. But even though these companies were acting at the express direction and approval of the services, no individuals or entities higher up the food chain will face any sort of meaningful charges.
9. There is plenty of evidence of widespread abuses that appear not to be on the attorney generals’ or media’s radar, such as servicer driven foreclosures and looting of investors’ funds via impermissible and inflated charges. While no serious probe was undertaken, even the limited or peripheral investigations show massive failures (60% of documents had errors in AGs/Fed’s pathetically small sample). Similarly, the US Trustee’s office found widespread evidence of significant servicer errors in bankruptcy-related filings, such as inflated and bogus fees, and even substantial, completely made up charges. Yet the services and banks will suffer no real consequences for these abuses.
10. A deal on robosiginging serves to cover up the much deeper chain of title problem. And don’t get too excited about the New York, Massachusetts, and Delaware MERS suits. They put pressure on banks to clean up this monstrous mess only if the AGs go through to trial and get tough penalties. The banks will want to settle their way out of that too. And even if these cases do go to trial and produce significant victories for the AGs, they still do not address the problem of failures to transfer notes correctly.
11. Don’t bet on a deus ex machina in terms of the new Federal foreclosure task force to improve this picture much. If you think Schneiderman, as a co-chairman who already has a full time day job in New York, is going to outfox a bunch of DC insiders who are part of the problem, I have a bridge I’d like to sell to you.
12. We’ll now have to listen to banks and their sycophant defenders declaring victory despite being wrong on the law and the facts. They will proceed to marginalize and write off criticisms of the servicing practices that hurt homeowners and investors and are devastating communities. But the problems will fester and the housing market will continue to suffer. Investors in mortgage-backed securities, who know that services have been screwing them for years, will be hung out to dry and will likely never return to a private MBS market, since the problems won’t ever be fixed. This settlement has not only revealed the residential mortgage market to be too big to fail, but puts it on long term, perhaps permanent, government life support.
As we’ve said before, this settlement is yet another raw demonstration of who wields power in America, and it isn’t you and me. It’s bad enough to see these negotiations come to their predictable, sorry outcome. It adds insult to injury to see some try to depict it as a win for long suffering, still abused homeowners.

I have zero to add to this. The only thing I will ask is, who’s paying for all of this? Answer: You and Me — in Taxes. 😡

This is why we need a new political Party to get in there and fix this asinine morass.

Others: (All Liberals BTW…) American Prospect, Washington Post, US Politics, FT Alphaville, ourfuture.org/blogs_chrono/*, Wall Street Journal, Time, The Huffington Post, Swampland, ThinkProgress, Prairie Weather, Firedoglake, Business Insider, Financial Times and Discourse.net, ThinkProgress, The Huffington Post, Washington Monthly, Washington Post, Firedoglake, Rolling Stone, The Big Picture, Business Insider, Hit & Run, The Democratic Daily, Zandar Versus The Stupid, Feministing, ourfuture.org/blogs_chrono/*, No More Mister Nice Blog, Blog of New Orleans, Gambit, emptywheel, The Political Carnival, DealBook, The Page, Booman Tribune and Wall Street Journal, ProPublica, FORECLOSURE FRAUD, Business Insider and Calculated Risk, Washington Post, Daily Kos and Firedoglake, The Atlantic Online

FBI says that “sovereign citizens” are a threat.

Hmmmmmmmmmmmmmmmmmm….:

(Reuters) – Anti-government extremists opposed to taxes and regulations pose a growing threat to local law enforcement officers in the United States, the FBI warned on Monday.
These extremists, sometimes known as “sovereign citizens,” believe they can live outside any type of government authority, FBI agents said at a news conference.
The extremists may refuse to pay taxes, defy government environmental regulations and believe the United States went bankrupt by going off the gold standard.
Routine encounters with police can turn violent “at the drop of a hat,” said Stuart McArthur, deputy assistant director in the FBI’s counterterrorism division.
“We thought it was important to increase the visibility of the threat with state and local law enforcement,” he said.
via FBI warns of threat from anti-government extremists | Reuters.

I said this over at another blog’s comment section and I will say it here; A Government that watches it’s citizens and considers them a threat; fears those people and that is because they are doing wrong. This is nothing more than a police state action; and the American people should vote accordingly in 2012.

Further more, I find it most insulting that the United States Government would rather hunt down its own citizens, rather than hunt down and capture the real terrorists, who truly hate this Country and want to see it destroyed. That would be the radical Islamic Jihad Terrorists; you know like the ones that slammed those planes into the Trade Center, the Pentegon, and the field near Shanksville, Pa? — or people like these here? But no, our Government, see people like me; citizens who disagree with the policies of the socialist President to be a threat.

Having said that, I have an open message to the United States Government, Federal Bureau of Investigation, President Barack Hussein Obama, The United Nations and the rest of the Big Government morass:

Go Fuck Yourselves Sirs!

Which is all the more reason to go here and get armed with one of these:

That is all….

Others: Blogcritics, Hot Air, Weasel Zippers, Scared Monkeys, Atlas Shrugs, The PJ Tatler

Update: Like this posting? Please vote it up over at Reddit, please.

Video: Open Message to Michelle Malkin and Karl Rove

First of all, before you watch my video; Go read this article here, it will open in a new window — then come back here.

After reading that article, I went to twitter and really spoke my mind:

I am the type of person, if I make a mistake; I will admit it. I am also the type of person, that when I feel that I am right, I will back it up. So, I made this video:

I will simply end this blog posting with this; as I said in the video. To Michelle Malkin and Karl Rove; clean up the crap in your own party, before you unleash on my home town. The Republican Party is just as evil, just as screwed up and just hypocritical about many things, including foreign policy. I agree on Terrorism, it is a problem. But the Republican Party’s nominee for 2000 and 2004, who won those elections handled 9/11 in a wrong-headed way. Because of this, we are now having the problems in the middle east that we are having now. Maybe you should work to fix the problems with your party’s foreign policy and let Detroit sort out its own problems.

Thank You.

-Patrick

…and of course, Michelle Malkin’s resident useful idiot agrees with her.

Update: ….and if this isn’t bad enough, we have Andrew Breitbart meeting with Bill Ayers. You see now why I don’t want anything to do with the Republican Party and the majority of the Conservatives; or those who call themselves Conservative? 🙄

Update #2: In my video, I made a reference to Michelle Malkin using Frankfort School tactics, this is what I was referring to here:

Others: Alan Colmes’ Liberaland, The Atlantic Wire, New York Magazine, The Nation, Wonkette, Hollywood Reporter, nation.foxnews.com, The Hill, The Moderate Voice, Christian Science Monitor, Los Angeles Times, National Review, PopWatch, emptywheel, Poynter, ABCNEWS, Taylor Marsh, Outside the Beltway, The Raw Story, The Daily Caller, Hullabaloo and Daily Kos (via Memeornadum)

Video: Happy Birthday President Reagan

(Via Americans for Prosperity – H/T Ed Morrissey)

Charlie Rangel continues his role as a race-baiting twit

What a buffoon… 🙄

Video:

The story:

On of the main tenets of Eric Bolling‘s show Follow the Money is that a free market economy is fairer and more successful than one administered by the goverment. Tonight, Rep. Charlie Rangel ventured onto the program to make the opposite case: that government jobs were in some ways more attractive, because minorities and women experienced less discrimination.
Bolling opened the floor by asking why the president promotes government jobs. The distrust of the government didn’t surprise the longtime Congressman, but he noted that “a lot of women are involved in these lower income jobs, a lot of minorities,” and later explained, “the government doesn’t have the racism and discrimination that the private sector enjoys.” This, to Rangel, means that “a lot of people could to better with the government job,” both minorities, women, and the elderly, working in places such as the post office. Bolling asked again to confirm whether he really meant the private sector had discrimination.
via Rangel Says Private Sector is Racist – Charlie Rangel – Fox Nation.

Let’s see here; where’s that graphic at?

Whoop, there it is! 😆

A good reason why the Government needs to get OUT of the Space Business!

(Via Insty)

The problem:

The problem was that after the ISS was complete, without the Shuttle, the U.S. would have no capability to reach it, and there would be a “gap” in capability until some sort of replacement was developed. At the time of the announcement, the “Crew Exploration Vehicle” (CEV) was the proposed means, but it wasn’t expected to be ready until 2014, resulting in a “gap” of at least three years, and probably longer. When Mike Griffin replaced Sean O’Keefe in 2005, he rolled out a concept called Constellation, which included the CEV, renamed at that time Orion. It also included a new rocket for it, that had not been anticipated in the original Bush plan, called Ares I, despite the fact that existing rockets, such as the Atlas V or Delta IV, could have done the job. Griffin even originally claimed that his plan would reduce the gap, being ready by 2011.
Unfortunately, the design chosen was flawed, and ran into technical difficulties immediately, increasing its costs and stretching its schedule. Because there had not originally been plans for a new launcher, there wasn’t sufficient budget to support it, and other budgets, in science and technology, and the hardware actually needed to get back to the moon, were raided to feed the rocket disaster. The schedule was slipping more than a year per year, and by 2009, when the Augustine Committee was convened to evaluate the situation, it moved rightward to 2017, with only a low probability of hitting that operational date.
[…]
Next year, it will be a full decade since Columbia was lost. And judging by the pathetic state of space policy discussion we’ve seen over the past few days, with Mitt Romney hiring Mike Griffin, the man who caused this policy disaster, to advise him, it’s likely that we’ll still be floundering and earth bound, despite the billions we’ve spent and continue to spend.
via PJ Media » Nine Years Of Space Policy Disaster.

The Solution:

The United States of America needs to get the hell OUT of the space business! Period! End of Discussion. It has been proven time and time again that NASA is nothing more than a wasteful, hazardous, big Government bureaucracy. Let private companies do the research, the development and the deployment. The question is this; how many more astronauts are going to have to be killed, before we realize that the United States Government is not good at space exploration?

This is the entire problem with Neoconservatives or big Government Conservatives; they rail against Big Government, but when it comes to programs like space exploration — they are all for it. Wake up guys! Big Government is Big Government! Either kill the space program and let private companies do the job or stop calling yourself small Government advocates, because you look like absolute hypocrites. This is not some off-the-wall Ron Paul sounding stuff either. It is simply common sense, something that is sorely lacking in the world of politics and Government today.

It is time that Republican and Conservatives started talking and really acting like that which they claim to be. Either we believe in small Government or we don’t. Pick a position please. We do not have the money to be the leader in space exploration anymore. We need to fully privatize that industry. The Russians are no longer a threat to our society, the cold war is over, finally. So, why do we care what the Russians do?

This is the stuff here, that separates me from the rest of the “right” in the Blogosphere. The rest of these guys believe in small Government, except when it comes to space programs. History proves that Government space programs are dangerously misguided; Challenger, Columbia, Apollo — all of them.

We need to stop it, before more people are killed.