Gonzalo Lira On The Second Leg Down Of America's Death Spiral

Tyler Durden's picture

Submitted by Gonzalo Lira

The Second Leg Down of America’s Death Spiral

I swear to God Almighty: Mortgage Backed Securities are America’s Herpes—the gift that keeps on oozing.
 
Last Friday, Bank of America announced that it was suspending all foreclosure proceedings, presumably until further notice. Other banks have already suspended foreclosures in a whole truckload of states. A nationwide moratorium on foreclosures might soon happen—which would be a big deal: Global Financial Crisis, Part II—Longer, Wider and Uncut.

But the mainstream media—surprise-surprise—has downplayed the whole shebang. They’re throwing terms out there into the ether, but devoid of context or explanation: “Robo-signings”, “foreclosure mills”, forged signatures, “double booking”, MERS—it’s confusing as all get-out.
 
So the mainstream media just mentions it casually—“and in other news tonight . . .”—like it’s no big deal: A couple-three lines, lots of complicated, unfamiliar terms, an attitude like it’s a brouhaha over paperwork of all things!—and then zappo-presto-change-o!: They’re showing video footage of a cute koala nursing in the arms of a San Diego zookeeper.
 
But even the koalas know that something awful is heading America’s way. Smart little critters, they’re heading for the treetops, to get away from this mess.
 
So what the hell is going on with the God forsaken mortgage mess in the United States?
 
It’s got a lot of bells and whistles, but it’s basically quite simple: It’s all about the fucking Mortgage Backed Securities (MBS). Again.
 
So this is what happened, more or less—the short version:

In the crazed frenzy to get as many mortgages securitized during the Oughts, banks took shortcuts with the paperwork necessary for the Mortgage Backed Securities. The reason was because everyone in the chain of this securitization mania got a little piece of the action—a little slice of the MBS pie in the shape of commissions.
 
So in the name of “improved efficiencies” (and how many horror stories are we finding out, carried out in the name of “improved efficiencies”), banks digitized the mortgage notes—they didn’t physically endorse them, like they were supposed to by the various state and Federal laws.
 
Plus—once the wave of foreclosures broke, and the holes in this bureaucratic paperwork became evident and relevant—some of the big law firms handling the foreclosures for the banks started doing some document fabrication and signature forgery, in order to cover up the mistakes—which is definitely illegal.
 
Long story short (since this is the short version): A lot of the foreclosed properties might not have been foreclosed legally. The people evicted might still have a right to their old houses. The new buyers might not actually own the REO’s they bought off the banks. The banks could be on the hook for trillions of dollars, and in the sights of literally millions of lawsuits.
 
In short: This could become another massive oozing sore, complete with yellow-green pus drip-drip-dripping out of some unmentionable places on the Body Economic.
 
Now—the long version:
 
Homeowners can only be foreclosed and evicted from their homes by the person or institution who actually has the loan paper—only the note-holder has legal standing to ask a court to foreclose and evict. Not the mortgage—the note, which is the actual IOU that people sign, promising to pay back the mortgage loan.
 
Before Mortgage Backed Securities, most mortgage loans were issued by the local Savings & Loan. So the note usually didn’t go anywhere: It stayed in the offices of the S&L down the street.
 
But once mortgage loan securitization happened, things got sloppy—they got sloppy by the very nature of Mortgage Backed Securities.
 
The whole purpose of MBS’s was for different investors to have their different risk appetites satiated with different bonds. Some bond customers wanted super-safe bonds with low returns, some others wanted riskier bonds with therefore higher rates of return.
 
Therefore, as everyone knows, the loans were “bundled” into REMIC’s (Real-Estate Mortgage Investment Conduits, a special vehicle designed to hold the loans for tax purposes), and then “sliced & diced”—split up and put into tranches, according to their likelihood of default, their interest rates, and other characteristics.
 
This slicing and dicing created “senior tranches”, where the loans would likely be paid in full, if past history of mortgage loan statistics was to be believed. And it also created “junior tranches”, where the loans might well default, again according to past history and statistics. (A whole range of tranches were created, of course, but for purposes of this discussion, we can ignore all those countless other variations.)
 
These various tranches were sold to different investors, according to their risk appetite. That’s why some of the MBS bonds were rated as safe as Treasury bonds, and others were rated by the ratings agencies as risky as junk bonds.
 
But here’s the key issue: When an MBS was first created, all the mortgages were pristine—none had defaulted yet, because they were all brand new loans. Statistically, some would default and some others would be paid back in full—but which ones specifically would default? No one knew, of course. If I toss a coin 1,000 times, statistically, 500 tosses the coin will land heads—but what will the result be of, say, the 723rd toss specifically? I dunno.
 
Same with mortgages.
 
So in fact, it wasn’t that the riskier loans were in junior tranches and the safer mortgage loans were in the senior tranches: Rather, all the loans were in all the tranches, and if and when a mortgage in a given bundle of mortgages defaulted, the junior tranche holders would take the losses first, and the senior tranche holder take the loss last.
 
But who was the owner of the junior tranche bond and the senior tranche bond? Two different people. Therefore, the mortgage note was not actually signed over to the bond holder. In fact, it couldn’t be signed over. Because, again, since no one knew which mortgage would default first, it was impossible to assign a specific mortgage to a specific bond.
 
Therefore, how to make sure the safe mortgage loan stayed with the safe MBS tranche, and the risky and/or defaulting mortgage went to the riskier MBS tranche?
 
Enter stage right, the famed MERS—the Mortgage Electronic Registration System.
 
MERS was the repository of these digitized mortgage notes that the banks originated from the actual mortgage loans signed by homebuyers. MERS was jointly owned by Fannie Mae and Freddie Mac (yes, those two, again, I know, I know: Like the chlamydia and the gonorrhea of the financial world—you cure ‘em, but they just keep coming back).
 
The purpose of MERS was to help in the securitization process. Basically, MERS directed defaulting mortgages to the appropriate tranches of mortgage bonds. MERS was essentially the operating table where the digitized mortgage notes were sliced and diced and rearranged so as to create the Mortgage Backed Securities. Think of MERS as Dr. Frankenstein’s operating table, where the beast got put together.
 
However, legally—and this is the important part—MERS didn’t hold any mortgage note: The true owner of the mortgage notes should have been the REMIC’s.
 
But the REMIC’s didn’t own the note either, because of a fluke of the ratings agencies: The REMIC’s had to be “bankruptcy remote”, in order to get the precious ratings needed to peddle Mortgage Backed Securities to insitutional investors.
 
So somewhere between the REMIC’s and the MERS, the chain of title was broken.
 
Now, what does “broken chain of title” mean? Simple: When a homebuyer signs a mortgage, the key document is the note. As I said before, it’s the actual IOU. In order for the mortgage note to be sold or transferred to someone else (and therefore turned into a Mortgage Backed Security), this document has to be physically endorsed to the next person. All of these signatures on the note are called the “chain of title”.
 
You can endorse the note as many times as you please—but you have to have a clear chain of title right on the actual note: I sold the note to Moe, who sold it to Larry, who sold it to Curly, and all our notarized signatures are actually, physically on the note, one after the other.
 
If for whatever reason, any of these signatures is skipped, then the chain of title is said to be broken. Therefore, legally, the mortgage note is no longer valid. That is, the person who took out the mortgage loan to pay for the house no longer owes the loan, because he no longer knows whom to pay.
 
To repeat: If the chain of title of the note is broken, then the borrower no longer owes any money on the loan.
 
Read that last sentence again, please. Don’t worry, I’ll wait.
 
You read it again? Good: Now you see the can of worms that’s opening up.
 
The broken chain of title wouldn’t have been an issue if there hadn’t been an unusual number of foreclosures. Before the housing bubble collapse, the people who defaulted on their mortgages wouldn’t have bothered to check to see that the paperwork was in order.
 
But as everyone knows, following the housing collapse of 2007–‘10-and-counting, there’s been a boatload of foreclosures—and foreclosures on a lot of people who weren’t sloppy bums who skipped out on their mortgage payments, but smart and cautious people who got squeezed by circumstances.
 
These people started contesting their foreclosures and evictions, and so started looking into the chain of title issue . . . and that’s when the paperwork became important. So the chain of title became important. So the botched paperwork became a non-trivial issue.
 
Now, the banks had hired “foreclosure mills”—law firms that specialized in foreclosures—in order to handle the massive volume of foreclosures and evictions that occurred because of the Housing Crisis. The foreclosure mills, as one would expect, were the first to spot the broken chain of titles.
 
Well, hell, whaddaya know—turns out that these foreclosure mills might have faked and falsified documentation, so as to fraudulently repair the chain-of-title issue, thereby “proving” that the banks had judicial standing to foreclose on a delinquent mortgage. These foreclosure mills might have even forged the loan note itself—
 
—wait, why am I hedging? The foreclosure mills actually, deliberately and categorically faked and falsified documents, in order to expedite these foreclosures and evictions. Yves Smith at naked capitalism, who has been all over this story, put up a price list for this “service” from a company called DocX—yes, a price list for forged documents. Talk about your one-stop shopping!
 
So in other words, a massive fraud was carried out, with the inevitable innocent bystander getting caught up in this fraud: The guy who got foreclosed and evicted from his home in Florida, even though he didn’t actually have a mortgage, and in fact owned his house free-and-clear. The family that was foreclosed and evicted, even though they had a perfect mortgage payment record. Et cetera, depressing et cetera.
 
Now, the reason this all came to light is not because enough people were getting screwed that the banks or the government or someone with power saw what was going on, and decided to put a stop to it—that would have been nice, to see a shining knight in armor, riding on a white horse.
 
But that’s not how America works nowadays.
 
No, alarm bells started going off when the title insurance companies started to refuse to insure the title.
 
In every sale, a title insurance company insures that the title is free-and-clear: That the prospective buyer is in fact buying a properly vetted house, with its title issues all in order. Title insurance companies stopped providing their service because—of course—they didn’t want to expose themselves to the risk that the chain-of-title had been broken, and that the bank had illegally foreclosed on the previous owner.
 
That’s when things started gettin’ innerestin’: That’s when the Attorneys General of various states started snooping around and making noises (elections are coming up, after all).
 
The fact that Ally Financial (formerly GMAC), JP Morgan Chase, and now Bank of America have suspended foreclosures signals that this is a serious problem—obviously. Banks that size, with that much exposure to foreclosed properties, don’t suspend foreclosures just because they’re good corporate citizens who want to do the right thing, with all the paperwork in strict order—they’re halting their foreclosures for a reason.
 
The move by the United States Congress last week, to sneak by the Interstate Recognition of Notarizations Act? That was all the banking lobby—they wanted to shove down that law, so that their foreclosure mills’ forged and fraudulent documents would not be scrutinized by out-of-state judges. (The spineless cowards in the Senate carried out their Master’s will by a voice vote—so that there’d be no registry of who had voted for it, and therefore no accountability, the corrupt pricks.)
 
And President Obama’s pocket veto of the measure? He had to veto it—if he’d signed it, there would have been political hell to pay, plus it would have been challenged almost immediately, and likely overturned as un-Constitutional in short order. (The jug-eared milquetoast didn’t even have the gumption to veto it—he pocket vetoed it.)
 
As soon as the White House announced the pocket veto—the very next day!—Bank of America halted all foreclosures, nationwide.
 
Why do you think that happened? Because the banks are screwed—again. By the same fucking thing as the last time—the fucking Mortgage Backed Securities!
 
The reason the banks are fucked again is, if they’ve been foreclosing on people they didn’t have the legal right to foreclose on, then those people have the right to get their houses back. And the people who bought those foreclosed houses from the bank might not actually own the houses they paid for.
 
And it won’t matter if a particular case—or even most cases—were on the up-and-up: It won’t matter if most of the foreclosures and evictions were truly because the homeowner failed to pay his mortgage. The fraud committed by the foreclosure mills casts enough doubt that now, all foreclosures come into question. Not only that, all mortgages come into question.
 
People still haven’t figured out what this all means—but I’ll tell you: If enough mortgage-paying homeowners realize that they may be able to get out of their mortgage loan and keep their house, scott-free? Shit, that’s basically a license to halt payments right the fuck now. That’s basically a license to tell the banks to fuck off.
 
What are the banks gonna do—try to foreclose and then evict you? Show me the paper, motherfucker, will be all you need to say.
 
This is a major, major crisis. This makes Lehman’s bankruptcy look like a spring rain, compared to this hurricane. And if this isn’t handled right—and handled right quick, in the next couple of weeks on the outside—this crisis could also spell the end of the mortgage business altogether. Of banking altogether. Hell, of civil society. What do you think happens in a country when the citizens realize they don’t need to pay their debts?
 
If this isn’t handled right, then this will be the second leg down, in the American Death Spiral.

    Oh dear Lord, he said, calm yet despondent. Look at it, he said. I mean just look at it! Have you ever seen anything like it?!?

    No, said the koala—truthfully. And you know, uh . . . it’s . . . It’s pretty disgusting, actually. So would you mind putting that thing away?

«««  •  »»»
 
Note: Next post, I’ll discuss a possible—I emphasize, a possible—silver bullet that will fix this whole Mortgage Mess—but it’ll have to be done soon, and have to be carried out fast, and sold under the guise that it’s this great new program that everybody—and I mean everybody—will simply just love to be a part of!—
 
—Streamlined Refinance.

 

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Dagny Taggart's picture

a possible—silver bullet that will fix this whole Mortgage Mess

funny timing for the post, silver just blew through $24.55.

Henry Chinaski's picture

Tough for those who are waiting to buy the dip.

caconhma's picture

The situation is quite simple: both Bush and Obama administration together with the Congress declared that fraud and financial crimes are OK. Nobody will be punished, nobody goes to a jail, and everybody is entitled to keep the stolen loot and bonuses...

The situation will not have a "happy" ending without a collapse of US political and/or economic system. There are no silver bullets to fix it. It is not an economic issue anymore. It is a political collapse. It is a coming of guillotine times.

Jean Valjean's picture

I remember the last guillotine times .... good times...., good times.

Ripped Chunk's picture

Man, you must be really old.

This time it will be a pay-per-view event. That is until the mob storms all of the TV stations and earth stations and makes it free for all.

groucho_marxist's picture

ah, yes. the joy of the reign of terror.

 

Robespierre, where are you now? see:

http://www.fordham.edu/halsall/mod/robespierre-terror.html

cossack55's picture

Again, go long knitting needles and rocking chairs.

Cognitive Dissonance's picture

Check.

Knitting needles as the last line of defense and rocking chairs as winter fuel for the wood stove.

What else?

Dagny Taggart's picture

I see you are just being practical, but by that line of thinking, you'll have my kittens in a crock-pot.

Cognitive Dissonance's picture

LOL

If I need to consider your kittens as a food source, I'm in a whole heap of trouble and they might or might not be worth the effort. Besides, there's something to be said about food for the soul over food for the belly. Your little kittens seem to be of more value to the former than the latter.

Of course, I'm not presently hungry. :>)

groucho_marxist's picture

don't forget too that the Mediaeval hatred of cats is part of why they had plague.

RabidLemming's picture

a little soy, brown sugar and a good hot grill are all you need.

also the age old adage:

Cats are hats and kittens are mittens.

We must not waste in these dire times.

Dagny Taggart's picture

That's so bad. I do threaten to stew them when they're moshing in my charts, but kittens as mittens?

BobPaulson's picture

Agree 100% with paragraph 1. Whether it's the end times as a result, it seems likely, but I'm not completely convinced. When basically everybody is involved in the corruption, I expect this is more likely to end in some currency devaluation, a reconciliation commission, and some dead people or Madoff equivalents blamed for all the worst crimes. Justice comes at the hands of competing nations, and right now the US has the biggest army. I seriously think the carrier fleet is what is keeping the US afloat now. 

ZakuKommander's picture


This may not be as big a deal as some think.  A note is a promise to pay.  One does not need an original to prove up a promise to pay in court; otherwise a fire would absolve the borrower of all obligation.  Yes, there will be a delay in foreclosure, but a delay means relatively little in the scheme of things.  Remember, we all understand that just because a foreclosure takes place does not mean that the bank who obtains the property is putting it on the market and cashing in.  Many, many foreclosed homes are just left sitting, out of the market so as not to depress prices.  So sitting in a delayed foreclosure case and sitting in a holding situation wouldn't necessarily cause the books of the bank to be cooked any more or less.

Now of course without foreclosure the homeowner (so to speak) remains in place, paying nothing, and using his or her money to buy gadgets.  A good thing for retail, no?  

Don't count on the "missing documents" problem leading the banks to losses, either.  The law will come up with a fix, so no major financial donor is left out in the cold.  This is America.

DosZap's picture

WHO has the original TITLE is the issue I see.

If you cannot come up with that,OR WHO the  lien holder is .............your screwed.

still kicking's picture

Who has been promised to be paid?  The original bank sold that promise.

DosZap's picture

My point.

THEY do not have the TITLE DEED.

If they do not have that, their SOL.

Fox Moulder's picture

It then becomes an unsecured loan.

ZakuKommander's picture

None of this commentary is off the mark.  It's just that in the inevitable court case, it gets sorted out.  The people that owe money have to pay it.  Promises made (all down the line) are enforced.  And yes, thre may be unsecured debt, but that doesn't help the homeowner; it's just a fight among creditors over who gets rights to the house.  Which in the end gets put up for sale.

Actually, in real life -- and that's kinda what counts -- there are huge fights, then 99% of civil litigation will get settled, and it won't end up that much differently.

Except the lawyers will be richer!

StychoKiller's picture

Moral of the story:  No one in their right minds is gonna be buying foreclosed property for a looonnnggg time.

swmnguy's picture

If disposition of the house were the issue in question, I'd agree with you.  Seems to me the issues with the actual houses will get sorted out one way or another, in some ugly foul way.  The real money, however, is in the hierarchy of MBS products, derivatives on those, etc. etc.  That's where the faults in the chain of title become heavily leveraged and really deadly.  And I'm not sure how the sausages get made--or hidden--to work that mess out.

StychoKiller's picture

Tranches are gonna be exchanged for Truncheons! (and tar, feathers, pitchforks and Torches!)

CH1's picture

Can you imagine the overflow of the court system? A tidal wave into a cup.

Kayman's picture

Hey Lloyd ! You've been invited to a guillotine party. And you've got to bring your own basket !

Going long on wicker.

Dr. Richard Head's picture

I just picked up a couple hundred oz this morn.  YEAHHHH

DosZap's picture

Dr.,Dr., Mr. M.D., can you tell me, where you buy?.

APMEX seems to be the best I have found.

Problem Is's picture

"silver just blew through $24.55."

I love my silver... genuine coin of the realm...

"For one ounce of this, you can by 24 dollars of talk..."

 

spdrdr's picture

Has anyone noticed that the recent gyrations in the silver price are moving at a regular 20:1 ratio with the PoG?

Gold goes up $4.00, silver goes up $0.20. Gold goes up $20.00, silver goes up $1.00.  Et cetera.

Given that the PoG/PoS ratio remains at 56:1 to 58:1, this creates significant leverage - is this a market based reaction to the true PoG/PoS ratio's historical norms, and can we finally be seeing a return to the norm?

 

 

Cognitive Dissonance's picture

Looks like Gold has found support at $1,372. I love my Silver. I love my Gold. I love me.

The original menage-a-trois.

http://en.wikipedia.org/wiki/M%C3%A9nage_%C3%A0_trois

duo's picture

AGQ.  Nice leverage.  Actually moving up faster than the miners.

Cognitive Dissonance's picture

Is that a parabolic move in your pants or are you just happy to see me? :>)

downrodeo's picture

HAHAHAHAHA.

 

I know i've seen a picture of silvio burlusconi with the exact same expression on his face as the guy in the postcard from the link. It is a kind of malicious mirth. I love (to hate) that guy. To me, he seems like the Italian Rod Blagojevich; or at least, that is the aura he projects.

 

this was it:

http://images.askmen.com/top_10/dating/1250878475_top-10-player-politicians_2.jpg

 

http://en.wikipedia.org/wiki/File:CardThisIsTheLife.jpg 

DosZap's picture

IF we were at( TRUE) historical NORMS, there would not be an ounce above ground on the planet.

william.smith61's picture

Navigation Screen Meanwhile, Iran's Press TV reported that a very large contingent of US ground forces had massed in Azerbaijan, near the Iranian border. The independent Azerbaijani news website Trend confirmed the report

BobWatNorCal's picture

Ruh roh, indeed!

"And President Obama’s pocket veto of the measure?"
On another thread someone said that Sen Reid had technically left the Senate in session even though the senators had physically gone home.
Because of that the pocket veto did not apply and the law would go into effect when the time period expired.

Does anyone know how this turned out?

iDealMeat's picture

The bill originated in the house..  so it went back to the house.. No one is home at the house..

I was seriously concerned that Pelosi would sneak in a recall session but I think we're past the 10 days..

Milestones's picture

The veto of HR 3808 was over the House vote which had already passed. What the Senate status was is of no cosequence.

If the Congress wants to pass this after the election on the 3rd there may more than a matter of conscience; some ropes may well be involved with a wrong vote.

More and more politicians had better dial in to their caculations- what is more important, money or getting a next breathe.

Push is coming to meet shove very quickly. Remember there are 11,000,000 houses under water. Thats a lot of pissed off people.

Milestones

moneymutt's picture

I'd like to see the real numbers if you figure some certain percentage of additional defaults if they don't find a political solution soon...and there will be no political solution til late Nov.

Some numbers questions:

1) so how many previously foreclosure takings of house will be contested?, maybe 1 out of 100? a lot of people never contested, a lot of people put keys in the mail etc...but some fought it and lost due to forged documents. So what does 1 out of 1000, 1 out of 100, 1 out of 50 houses already taken and sold now being contested in court, do to banks.

2) how much does this accelerate existing strategic defaults...what percentage of 11,000,000 underwater houses have already strategically defaulting? how much does this increase that percentage, how much in certain states? While someone with equity and good credit would need high level of confidence to default as they have lot riding, someone way underwater has little to lose now by going for it and defaulting...even if realize they may never get their house for free,  they now know, depending on their state and the type of loan they have, they may get house rent free for 2-3 years...thats a lot of encouragement. In addition, now the banks are shown publicly to be cheating, less moral reason to honor contract, gives people an excuse to quit their end. And strategic defaulting is contagious.

I'd love to see what the datamining guys at the bank who are looking at loan performance in the next month, I bet there will be a huge spike in underwater folks stopping payment. Even if banks get these houses eventually, loss of income and great increase in expense in meantime.

3) How much is this going to cost the banks in legal fees and additional staffing? Is this significant to their bottom line? Now foreclosures will be fought tenaciously by every laid-off lawyer in town. They will have to address the now-building back log. There will be class action law-suits, depositions of their staffs. The will be new legal challenges to previously foreclosed and closed loans. There is the AG and DOJ investigations to respond to and, and there is having to do more expensive, more thorough job on tracking title on all new sales.

4) Plus, any foreclosed REO they try to sell make less as the REO will be brand tainted for some time, even if they are cleaned by political court action, individual homeowners will be wary, value of REOs will go even lower. How much?

If you put some conservative estimates each of these increase costs/losses, even if we factor in some sort of political/court stick save for these too big to jail types, I bet we see a blood bath. And if there isn't a political save that holds up in court, ouch.

Reggie, where are you, I need some numbers...

 

StychoKiller's picture

HR3808 is only a sideshow now, the Tiger (MBS, CDO holders) is out of the bag (and (S)He is pissed!)

midtowng's picture

This isn't going to get fixed anytime soon. It's election season. Congress isn't even in session, and won't be in session for another month.

AnonymousMonetarist's picture

'Bernanke and his ilk are not just trying to boost the US economy, they are trying to salvage their reputations and theories. The crime is that they are savaging average Americans and have bet the country in a desperate attempt to prove that they know best.'
-Bill King, the King Report 10/14/2010

'The effect of QE2 on interest rates could be small and limited to an announcement effect...many believe that the effect on output or employment would be small...unlikely to stimulate aggregate demand...little effect on aggregate demand implies a corresponding small effect on output and, hence employment. QE2 could have adverse effects.'
-Federal Reserve Bank of St. Louis

'The folks at the Fed are frozen in fear. They don't know what to do.'
-Chris Whalen

'But they that will be rich fall into temptation and a snare, and into many foolish and hurtful lusts, which drown men in destruction and perdition. For the love of money is the root of all evil...'
- 1 Timothy 6:9-10

'There hath no temptation taken you but such as is common to man...'
- 1 Corinthians 10:13

'Don't Task Don't Smell', the central plank of the 'I Can't Believe it's Not Capitalism Plan', has given us Sugar Mountain, where stupidity is cupidity.

Ringfencing the multitude through financial pulchritude is but Federales psych ops, masquerading debasement as growth, as the plutocracy sips sweet ambrosia from the skull cap of the common man.

Phat, Plummed and Cupid is no way to go through strife son. Mr. Hand's strong dollar policy is the chimera of currency debasement masquerading as America's wealth exporting machine that is regularly promulgated by our leaders as an exceptional example of America's resiliency(AM Rule #5). Timmy G even takes credit for the creation of the 'strong dollar' policy.'Nuff said!

As the epigram, 'Yes Virginia , there is no collateral' becomes an accepted norm, as the metaphorical fork in the middle of the road er scratch that kicked can hangs with horsehair, the splinter of our disconnect in the deep bosom of our equity buried is proclaimed by the Federales as nothing but a thorn discovered as they fervently hope not to be cast to the lions.

Is it Back to the Future of folly and bubbles or Fade to Back as we peer down the chasm of the black diamond demographic? Building a bridge to nowhere is at least doing something, but please don't peer down dear citizens lest ye randomwalkers realize the gravity of our situation.

The Oracle at Eccles and assembled throngs of Nancy Capitalists beseech their models that show 100% chance of 'no fail' when the money is easy and free to deliver them like Aesop's Shepherd so when the masses see that which healed them, they will pardon and not attack.

Golden goose or scrambled eggs?

The answer it would seem as we destroy our standard of living to create a Potemkin recovery, is both, in an ever increasing divergent measure.

The insouciance of elites and the Antoinette economy.

Verily, let them eat debt.

SWRichmond's picture

The Oracle at Eccles and assembled throngs of Nancy Capitalists beseech their models that show 100% chance of 'no fail' when the money is easy and free to deliver them like Aesop's Shepherd so when the masses see that which healed them, they will pardon and not attack.

That one's a keeper.

Oh regional Indian's picture

AMet, your writing is just awesome. Ah laihks it, a lot!

ORI

Papa Legba's picture

Just because you can always use a metaphor doesn't mean you should.