Nine Years of Housing Inventory Owned by Banks

Which is why Chris Whalen calls the banks unwilling REITs (Real Estate Investment Trusts). This is a national catastrophe which threatens our very way of life. No one can sell. No one can move.

As reported here by the Wall Street Journal on October 30th:

As of September, [banks] owned nearly 994,000 foreclosed homes, up 21% from a year earlier. The shadow inventory stood at 5.2 million homes, down 7% from a year earlier. Grand total: 107 months of inventory.

And Obama's off on another junket at taxpayer expense, costing an estimated $200 million PER DAY according to widely circulated reports.

Why are Americans putting up with this?

Disinformation Election Headlines at Real Clear Politics Repudiated by Republican Tsunami

Compare Walter Shapiro's "The Democratic Debacle" at Politics Daily today here:

America has seen tidal wave off-year elections before (three, in fact, in the past 16 years). But what was epic about the glub-glub election of 2010 is that even with months of warning most imperiled Democrats could not find high enough ground.

In the House, Republicans gained a minimum of 60 seats, dethroning Nancy Pelosi as House speaker, probably making this the GOP's biggest off-year triumph since (gulp!) 1938 once all the votes are counted.


And these headlines from Real Clear Politics, which admittedly disappeared rather suddenly in early October, for a good belly laugh on this historic day for America:

Saturday, October 9, 2010: Dem: Election Won't Be So Bad After All - Tim Fernholz, American Prospect

Friday, October 1, 2010: Democrats Will Hold the House and Senate - Bob Shrum, The Week

Wednesday, Sept. 22, 2010: Why the Generic Ballot May Underestimate Dems - Nate Silver, NY Times

Tuesday, Sept. 21, 2010: GOP Has Tough Road to Win House - Martin Frost, Politico

Monday, Sept. 20, 2010: Tying GOP to Tea Parties is D's Best Hope - Michael Tomasky, The Guardian

Sunday, Sept. 19, 2010: Don't Forget That the Bailouts Worked - Fareed Zakaria, Newsweek [If they had worked we'd know it and wouldn't need to be reminded. After all, we are paying for it right now . . . and Will. Be. Forever.]

Sunday, Sept. 19, 2010: Landslide Midterm is Hardly Certain - Charles Blow, New York Times [Did we mention a landslide is hardly certain?]

Saturday, Sept. 18, 2010: Landslide Midterm is Hardly Certain - Charles Blow, New York Times

Friday, Sept. 17, 2010: Faustian Deal w/Tea Party Will Cost GOP Dearly - Bob Shrum, The Week [Hahahahahahahaha!]

Thursday, Sept. 16, 2010: David Plouffe: Tea Parties Help Democrats - Lloyd Grove, The Daily Beast [Yeah right, when pigs fly in formation]

Wednesday, Sept. 15, 2010: Pelosi: Democrats "Absolutely" Will Retain the House - The Hill [When pigs fly upside down]

Sunday, Sept. 12, 2010: Maybe All Isn't Lost for Democrats - Dick Polman, Philadelphia Inquirer

Sunday, Sept. 12, 2010: Democrats Can Win the House - Ben Crair, The Daily Beast [When pigs fly]

Saturday, Sept. 11, 2010: 10 Things Dems Could Do to Win - Thomas Geoghegan, The Nation [No. 10: Become Republicans]

Friday, Sept. 10, 2010: Dems' Gloom May Be Premature - David Corn, Politics Daily

Thursday, Sept. 9, 2010: It's Good to Have Obama on the Campaign Trail - Gene Lyons, Salon

Thursday, Sept. 9, 2010: Dem Strategists Pooh-Pooh the Polls - Dana Milbank, Washington Post

Thursday, Sept. 2, 2010: Democrats Doomed? Not So Fast - Susan Estrich, Creators

In Victory, Representative Justin Amash Already Disappoints

In televised remarks last night thanking his supporters and outgoing Michigan 3rd Congressional District Representative Vern Ehlers, who stood out like a sore thumb in a sea of young faces assembled for the event, Justin Amash made two statements which sounded incredibly tone-deaf to his Republican political base.

He pledged himself to the cause of transforming America and transforming Michigan, and to the cause of bipartisanship. The former has been the clarion call of the Obama led Democrats, which the voters of America soundly rejected yesterday in an historic Tea Party inspired Republican takeover of the US House of Representatives: We don't need no trans-for-ma-tion, they might have been singing. The latter, bipartisanship, is hardly the message being trumpeted by the likes of Rush Limbaugh, whose  radio program's commercial breaks have been saturated with Justin Amash for Congress political ads in recent days. Americans have had quite enough of the (demolition) work being accomplished by a Congress controlled by Democrats and don't want Republicans to join in the destruction, but reverse it.

One can chalk it up to rookie mistakes, but Kent County Michigan voters would do well to prepare themselves for many more such disappointments from Justin Amash, whose kinship to president Obama's ideological habit of mind was revealed by the faux paus. Libertarians and Marxists have more in common than American liberals and conservatives have at issue between them.

From tax policies favoring the nuclear family to support for the defense of the state of Israel, Republicans may all too soon learn that the libertarian and pro-Arab ideas which undergird Amash's thinking can and will lead to some surprising votes in the next Congress. And one can well imagine how Amash may use his pledge to vote NO on bills he has not read as an excuse to avoid difficult votes in the US House. Illinois voters got plenty of that political cowardice from one Barack Hussein Obama during his tenure in their state senate, where he often voted PRESENT to avoid taking politically inexpedient stands. Look what that has got us. Amash's assiduous courting of the support of the fiscally moderate and pro-TARP Vern Ehlers should have already warned voters to regard Amash's incessant appeals to principle and consistency as expressions of politically winning aspirations, not of the reality. But you can fool most of the people most of the time, especially with lots of money from outside the district.

Buyer beware!

The story was reported here:

In his victory speech at Kent County GOP election night headquarters, he said the party should work to bring more Democrats and independents into the party to "transform this state" and "transform this country."

The congressman-elect thanked his predecessor, U.S. Rep. Vern Ehlers, calling him a model of integrity. Ehlers did not seek re-election.

Economic Distress Defines Today's Election

Exit polling results indicate that after two years with complete control of the White House, the US House of Representatives and the US Senate, Democrats have not done much to convince voters that things have appreciably improved:

Preliminary exit poll results underscored the economic distress defining the 2010 election. Eighty-eight percent of voters today said the national economy's in bad shape, nearly as many as the record 92 percent who said so two years ago. Only 14 percent say their own family's financial situation has improved since 2008.

And few see much respite: Compounding the political impact of the long downturn, 86 percent remain worried about the economy's direction in the next year, including half who are "very" worried.

The economy has deeply affected the broader public mood. Sixty-two percent say the country is seriously headed in the wrong direction (a record 74 percent said so in 2008, as the economy fell into the abyss). More broadly, 39 percent expect life for the next generation of Americans to be worse than it is today, compared with 32 percent who say better.

ABC News has much more here.

The Answer: Because He's Going Golfing For The Rest Of His Life For Free

The Question: Why Is Obama So Calm Right Now?

Jonathan Cohn for The New Republic has a different answer, however, here:

"I keep thinking back to that email that circulated in late 2008, when Obama was behind in the polls. It had a picture of him speaking at the convention with the caption 'I’ve got this.' Part of me thinks he still does. And part of me doesn’t."

Meet Nemesis Jonathan, starting today.

QE (Quantitative Easing): How to Bailout Banks by By-Passing Congress

TPC at Pragmatic Capitalism makes a persuasive case that we have government of the banks, by the banks, and for the banks:

[I]f you’re a bad bank with a few trillion dollars in bad mortgage paper you’re delighted if a AAA rated entity [The Federal Reserve] comes in and swaps those assets out with their highly rated paper. This is exactly what the Fed did in 2009 and make no mistake – it was hugely successful in clearing the credit markets and altering the composition of bank balance sheets. This was Mr. Bernanke’s goal after all. He was simply trying to clear the credit markets and improve the banking system and he believed that would ultimately fix the problems in the US economy. Unfortunately, he misdiagnosed a household balance sheet recession as a banking crisis. QE1 provided liquidity in the credit markets and it gave the banks some much needed breathing room. Unfortunately, the impact on the real economy was far more muted.

The author points out that QE II is now necessary because the banks are going to be in trouble again very soon as the next leg down in housing ensues.

Don't miss the rest here.

Tomorrow Is Election Day: Time To Become A . . .

Enshrining Bailouts Into Law: Both Parties Terrified of Upsetting High Finance Status Quo

A reminder from Nicole Gelinas from July why the Dodd-Frank legislation was a failure:

For 25 years, Washington has done everything in its power to subsidize Americans' profligate borrowing habits. Debt became the fuel for economic growth. Washington subsidized the financial industry's borrowing through implicit guarantees against loss.

The feds first started rescuing creditors to "too big to fail" banks in 1984. Since then, it's become clear to lenders -- Wall Street's global bondholders and trading counterparties -- that the government would save them anytime a large financial firm foundered.

Indemnified against losses, bondholders could lend nearly infinitely to Wall Street. Wall Street found creative ways to lend that money right back to the public, through mortgage brokers and credit card marketers.

Some exceptions exist. In September 2008, the feds refused to rescue Lehman Brothers' lenders. But the exceptions have only proven the rule. Today, conventional Washington wisdom is that letting Lehman fail was a catastrophe.

The Dodd-Frank bill is a monument to the status quo. Despite promises that the bill will end bailouts, it enshrines bailouts into law.

Read the whole thing here.

Foreclosure and Securitization Fraud: Conjuring Collateral Documents From Thin Air

Yves Smith of Naked Capitalism writing for the New York Times zeroes in on the fraud which lies at the heart of the mortgage securitization and foreclosure crisis:

Consider a company called Lender Processing Services, which acts as a middleman for mortgage servicers and says it oversees more than half the foreclosures in the United States. To assist foreclosure law firms in its network, a subsidiary of the company offered a menu of services it provided for a fee.

The list showed prices for “creating” — that is, conjuring from thin air — various documents that the trust owning the loan should already have on hand. The firm even offered to create a “collateral file,” which contained all the documents needed to establish ownership of a particular real estate loan. Equipped with a collateral file, you could likely persuade a court that you were entitled to foreclose on a house even if you had never owned the loan.

That there was even a market for such fabricated documents among the law firms involved in foreclosures shows just how hard it is going to be to fix the problems caused by the lapses of the mortgage boom. No one would resort to such dubious behavior if there were an easier remedy.

Read the rest of her excellently presented discussion here.

GDP Q3 2010 at 2%

The Bureau of Economic Analysis has the numbers here. They're sticking with 1.7% for Q2, for now.

Yves Smith of Naked Capitalism: Obama's Lies On Jon Stewart Epitomize His Failure

"I’m so offended by the latest Obama canard, that the financial crisis of 2007-2008 cost less than 1% of GDP, that I barely know where to begin. Not only does this Administration lie on a routine basis, it doesn’t even bother to tell credible lies. And this one came directly from the top, not via minions. It’s not that this misrepresentation is earth-shaking, but that it epitomizes why the Obama Administration is well on its way to being an abject failure."

And that's just the opening paragraph. The rest is not to be missed, here.

Katie Couric Wants a Whiff?

Divine this mood Tinkerbell:

Couric has spent recent weeks in Chicago, Philadelphia, Boston and New Brunswick, New Jersey. She is touring what she calls “this great unwashed middle of the country” in an effort to divine the mood of the midterms.

Quoted here.

Yea, we can't spell "literally" and "capitol" either, but "NO!" is really easy.

The Official Pace Car for Obamacare

2010 Consumer Contraction Worse Than 2008

Read the data for yourself here at Pragmatic Capitalism, but don't miss the second half of the entry which discusses the genesis and meaning of "the new frugality" and the devastating consequences of the Fed's war on the average American through ZIRP (zero interest rate policy):

On Wall Street and inside the Beltway there are no perceived victims of low interest rates, because low rates result in obscene spreads between the real cost of institutional borrowing (essentially zero) and the real rate of consumer lending (18% to 24% on real-world short term loans). Meanwhile every barrier possible has been raised to prevent those lower rates from propagating to those most in need of longer term relief.

Down with debt! Down with the Fed!

Making a List and Checking it Twice

Ears: They're Not Just For Presidents Anymore

Major Banks Appeal Federal Reserve Disclosure Ruling to Supreme Court

But the Federal Reserve did not join in the appeal, apparently in order to enhance the standing of the banks in the case.

At stake are the details of $2 trillion in Federal Reserve assistance to financial institutions beginning in late 2007 and running through the crisis of 2008, details which the Fed does not want to reveal to protect the institutions which received the dough.

Nevermind it's your money.

Down with the Fed!

Reuters.com has the story here.

US Treasury Still Stonewalling FOIA Request on Citigroup Guarantees

Twenty months and counting, including a non-response response on what securities $300 billion of taxpayer monies guarantee. It's our money! We have a right to know!

And tomorrow it will be the Federal Reserve's turn to continue the stonewalling on a separate FOIA request involving $2 trillion in taxpayer guarantees for financial institutions from two years ago, and we still don't know even though the courts have ordered the Federal Reserve to comply with the requests. When they finally do, how much do you want to bet it will be a similar non-response response?

No wonder the people want the Federal Reserve abolished, and the Treasury to burn down.

Bloomberg, which supports the FOIA requests, has the full story here.

National Debt Up $5 Trillion Under Pelosi, $3.1 Trillion Under Hastert

The woman said in January 2007 that under Democrats there wouldn't be any more deficit spending but pay as you go instead. Yea right.

Under Hastert the deficit increased so much not because of war spending, but because of social spending, particularly on Drugs for Seniors, the largest expansion of government since the 1960s at the time.

You can't trust either party as far as you can throw them.

The story was reported here.

A Libertarian Defends Local Bankers

An analyst of the banks and an increasingly visible commentator on the foreclosure mess, R. Christopher Whalen puts in a good word for local bankers on his blog at Reuters.com:

The bad guys in the housing bust are not the banks who must foreclose on homes, but the politicians in both political parties who used reckless housing policies to further their personal interests. This is a bipartisan national scandal. Barney Frank, Chris Dodd, Phil Graham, Alan Greenspan and their contemporaries are the authors of our collective misery, not the local banker who must clean up the mess created by government intervention in the housing market.

Read the rest here.