What Is to be Done ?
The post after the jump will make “What More can the Ded do?” seem disciplined, succinct and sober.
update: Minds think alike, but some bloggers are more concise than others — How About Prison Then ?
The USA is in a tough spot with high unemployment, a sluggish recovery and an insane majority in the House of Representatives. This situation has caused many people to argue that the Federal Reserve Board and and should do more to stimulate the economy. I don’t think they are our best hope.
I think we should look to publicity hungry TV camera chasing ambitious prosecutors who want to obtain higher elective office (think Eliot Spitzer and Rudolf Giulaini). My “logic” follows.
First the coulda woulda shoulda whine. I really think the economy would be in better shape if bankruptcy judges had the tool they need to end the paralysis of the housing sector — the power to reduce mortgage debt to the level a bankrupt debtor can pay. This is known as “cramdown” and is a proposed reform which was rejected by congress (Causing Senator Durbin to claim that the bankers own congress). Clearly it is not going to happen.
I think it is necessary to convince the bankers that they want to renegotiate mortgages and write down debts. This would liberate people with underwater mortgages to move to look for jobs (if they were rational they would just walk away from the debt but people aren’t). It would stop the flow of foreclosed homes on to the market which has helped cause record low rates of new Home sales and declines in housing prices (which were inevitable but now they are fine and without a change in mortgage servicer behavior they will overshoot).
I also think it should be possible to convince bankers to do this.
I don’t think that the USA needs new laws to clean up the mortgage mess — the banks decided they didn’t have to follow existing laws. I assume readers are familiar with the MERS mess, but I will very briefly describe it. A tiny firm falsely claimed it owned mortgages so that banks and other investors could evade the very modest tax on transfers of ownership of mortgages. This created problems when mortgagers defaulted and perjury and forgery have been used in efforts to foreclose.
Also bankers are very much hated reviled and detested. It seems to me that an unscrupulous ambitious prosecutor could get ahead by empanelling a grand jury to investigate possible criminal activity by bankers. Really it seems to me to be a no-brainer. I’d guess that Congress wouldn’t dare block such efforts by declaring an amnesty for bankers. I’d guess that the prospect of felony indictments would make bankers a lot more willing to try to reach agreement with mortgagers in default. I’d say the first prosecutor who trades immunity from prosecution for a healthy economy will be elected President of the USA.
Now banks have shareholders and managers of banks can’t and therefore won’t give away the shareholders’ money in order to respolve their personal problems with an unscrupulous ambitiour ruthless prosecutor leading a grand jury like a flock of sheep. Also we can just count on the tooth fairy to leave a healthy economy under our pillow.
So why isn’t this happening ?
Well. Jan Brewer, Tea Bag Asshole Governor of Arizona, apparently never graduated from High School. Is this what this country is about ?
Dog Biscuits deciding the agenda.
You people rant and rave to each other while the chaos in the real world reaches a crescendo.
Well. Jan Brewer, Tea Bag Asshole Governor of Arizona, apparently never graduated from High School. Is this what this country is about ?
Dog Biscuits deciding the agenda.
You people rant and rave to each other while the chaos in the real world reaches a crescendo.
Well. Jan Brewer, Tea Bag Asshole Governor of Arizona, apparently never graduated from High School. Is this what this country is about ?
Dog Biscuits deciding the agenda.
You people rant and rave to each other while the chaos in the real world reaches a crescendo.
Isn’t it a problem that with securitization, title is unclear? Who knows who owns what?
I propose that all Politicians be required to post their resume’s on-line so we know whom we are dealing with.
I propose that all Politicians be required to post their resume’s on-line so we know whom we are dealing with.
I propose that all Politicians be required to post their resume’s on-line so we know whom we are dealing with.
There is absolutely no reason we should be in the economic straights we are in except for the “peerage” bent of our political society. Obviously, the Ivy league graduates that are hand picked to run our sociery are a bunch of losers. The best college ratings, served to us by the elite, is a stool softener.
Suck my tailpipe.
There is absolutely no reason we should be in the economic straights we are in except for the “peerage” bent of our political society. Obviously, the Ivy league graduates that are hand picked to run our sociery are a bunch of losers. The best college ratings, served to us by the elite, is a stool softener.
Suck my tailpipe.
There is absolutely no reason we should be in the economic straights we are in except for the “peerage” bent of our political society. Obviously, the Ivy league graduates that are hand picked to run our sociery are a bunch of losers. The best college ratings, served to us by the elite, is a stool softener.
Suck my tailpipe.
That’s a problem. There are official records of who owns a mortgage. Often the alleged owner is MERS. This representation is fraudulent as MERS did not pay for the mortgage nor is MERS the beneficial owner. The matter could be resolved in a way which is, in itself and ignoring moral hazard, Pareto efficient by simply agreeing that such mortgages don’t exist and the mortgagers own the house outright. This won’t happen, but it could.
Alternatively, some big bank can accept responsibility to make whole any entity which convinces a court it owns the mortgage in exchange for a new mortgage signed by the mortgager for a reduced balance plus, of course, immunity from prosecution for its officers.
The last couple years keep reminding me of a phrase Molly Ivins used back during the S&L crisis: “Dumber than a Texas banker”
Molly you are sorely missed.
“ ignoring moral hazard”
Well, it seems to me that that solution would be a remedy for moral hazard. 🙂
From what I have heard, some judges are taking that approach. The mortgage becomes an unsecured loan.
I have two thoughts here: # 1 to Robert, why indeed? # 2 to Sandi, why do you post your comments 3 times in a row?