Three essential pieces from Karl Denninger on the accelerating collapse of the American mortgage and mortgage-backed securities industries, a/k/a "Foreclosuregate":
The "Nothingburger" Defense Gets Destroyed
Weekend Observations: The Question Nobody Is Asking
Class-Action Lawsuit Against Countrywide: California
Read each article in full, please. Money quote (get it?) from Janet Tavakoli in the first article:
This is the biggest fraud in the history of the capital markets.
Think about what that really means.
Now think about all of the downstream holders of all of that bad paper - pension funds, retirement systems, other institutional investors.
Think everyone's going to get paid what they are due?
What about the geezers who will lose everything they thought they had?
A nuclear explosion would be more merciful.
Plus, when those mortgages were agreed upon, few knew that the business-industrial elites were going to take the money and run, floating away on their golden parachutes as their workers pulled the ripcord on a backpack full of rocks.
ReplyDeleteLaid-off people don't buy much, which means stores, restaurants, car dealers lose business, and THEY lay off, and THOSE people don't have money, and it ripples out from there. The domino effect.
The civil lawsuits and *potential* for criminal prosecution will go nowhere when it comes to the big fish.
ReplyDeleteAs far as the "geezers" go, that would be the baby-boomers, and they had plenty of opportunities to sock away money, pensions, real estate BEFORE the decline really began with the tech bubble bust in 2000. If they stayed conservative since then, they would be fine. The geezer boomers have had the easiest life of any generation in this country.
WMDs aren't more merciful and as I mentioned many months ago, it's still my opinion that those are yet to come...probably right after most of the geezer boomers have passed away.
Look, our fine Affirmative Action friends in the Federal Government FORCED the lenders to issue sub-prime mortgages in the name of Housing Equality. THEY and their fine enablers in "Law Enforcement" are the ones to blame for this mess. And THEY are the ones who gave us the latest fiasco that recently came out of Congress. The stench is overwhelming!
ReplyDeleteProbably not going to vote our way out of this one...
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