Stimulus On Demand
It seems that it is not too late for you to capture the American Dream and get your own stimulus check. All you have to do is fill out this form and a rider will be attached to legislation that will allocate your money request. Provided by Reason Magazine.
Here is what I filled out:
Request Your Stimulus
As the government gets set to spend over $800 billion to stimulate the economy, make sure to get your fair share of the plunder by participating in Reason's Personal Stimulus Generator. It only takes a minute and will be worth billions!
Add your request to the ledger below to get in on the action.
Recipient's Name: GetYourselfConnected
Amount of Desired Funding: $10,000,000 (that's 10 Million)
(please, no more than $350,000,000,000)
Purpose of Funding: To use fiat currency to buy gold and silver
(e.g., "avoid economic catastrophe" or "build bongs from recycled plastics")
Recipient's favorite sports team, living musical performer, or current live TV show: New England Patriots
Recipient's least favorite member of Congress: Barney Frank
Oh boy, I hope this thing is for real!
There was a span last night and into this morning where I could not see my blog content, just the headers and sidebars. Weird. It seems to have been resolved now.
That was just a small tech glitch, but let us take a look at another technical difficulty that may prove problematic for the banks going forward. From AP via Yahoo Finance:
Homeowners' rallying cry: Produce the note
ZEPHYRHILLS, Fla. (AP) -- Kathy Lovelace lost her job and was about to lose her house, too. But then she made a seemingly simple request of the bank: Show me the original mortgage paperwork.
And just like that, the foreclosure proceedings came to a standstill.
Lovelace and other homeowners around the country are managing to stave off foreclosure by employing a strategy that goes to the heart of the whole nationwide mess.
During the real estate frenzy of the past decade, mortgages were sold and resold, bundled into securities and peddled to investors. In many cases, the original note signed by the homeowner was lost, stored away in a distant warehouse or destroyed.
Persuading a judge to compel production of hard-to-find or nonexistent documents can, at the very least, delay foreclosure, buying the homeowner some time and turning up the pressure on the lender to renegotiate the mortgage.
Classic. Seems fitting that the mortgage that was given due to a home value that never really existed may not exist in and of itself! If a mortgage note falls in the bank vault and nobody hears it, does it make a sound?
Seriously, this kind of technicality shows just how wild west mortgage origination became during the boom. While the story notes that some electronic version can be used a back-up, some judges may hold a hard line and demand the physical paperwork. Yet another wrinkle on the housing bust.
The rest of the article is worth a look as well. There are some revealing comments that should make one think long and hard about doing anything at all to help "homeowners" that are facing foreclosure. It appears that "gaming the system" made popular in mortgage fraud by buyers looking to buy way over their heads is alive and well and now is made up of delaying tactics to wait for a bailout:
"Chris Hoyer, a Tampa lawyer whose Consumer Warning Network Web site offers the free court documents Lovelace used to file her request, has played a major role in promoting the produce-the-note strategy.
We knew early on that the only relief that would ever come to people would be to the people who were in their houses," Hoyer said. "Nobody was going to fashion any relief for people who have already lost their houses. So your only hope was to hang on any way you could."
The first big success of the produce-the-note movement came in 2007 when a federal judge in Cleveland threw out 14 foreclosures by Deutsche Bank National Trust Co. because the bank failed to produce the original notes.
Michael Silver, a lawyer for two of the families in that case, said at least one eventually lost their home. Still, he considers that a success.
"From the perspective of the person who's in the home, you may have kept them in the house another 10 or 12 months," he said. "If I can get a result with economic benefits to a client, then I think I won."
Democratic Rep. Marcy Kaptur of Ohio endorsed the strategy in a fiery speech on the House floor during debate on the federal bank bailout last month.
"Don't leave your home," she said. "Because you know what? When those companies say they have your mortgage, unless you have a lawyer that can put his or her finger on that mortgage, you don't have that mortgage, and you are going to find they can't find the paper up there on Wall Street."
April Charney, head of foreclosure defense for Jacksonville Area Legal Aid in Florida, said the strategy has been so successful for her that she now travels around the country to train other lawyers in how to use it. She said she has gotten cases delayed for years by demanding that lenders produce paperwork they cannot find.
"This is an army of lawyers getting out there to stop foreclosures so we can get to the serious business of creating solutions," Charney said. "Nothing good is going to happen as long as we continue to bleed homeowners."
Do you think these "homeowners" are paying anything during the 10-12 months that the bank takes to generate the proper paperwork? There is another term that more readily describes these "homeowners" and it is "SQUATTERS".
Strange Market Day
I had seen Market Tickers warning last night about crazy currency swings. The word was that Ireland may default, even as soon as this week. The Russian Markets got closed due to lock limit losses (I did not know they had even reopened since the last closure!) and the futures looked ugly all around. It was a down day for any and all (EXCEPT GOLD AND SILVER!) but check out this one day chart of the DOW:
The market gapped down then absolutely flatlined the whole day. Seems a bit strange to me. Maybe some of the trader types like reader Lisa could shed some light. The whole thing smelled bad to me.
My personal conspiracy theory: There is a guaranteed market bottom provided by the FED/Treasury right at the November lows. Today everyone unloaded, and the US government had to buy everything. My 2 cents. Actually my 1 cent as the other one was taken by the government to buy BAC stock today.
Apologies to Keynesian Clowns the World Over
I have often taken sharp jabs at the Keynesian economists and their silly graphs and models that they believe to hold all the answers to all things. today I think I may have to offer an apology to Keynesians everywhere. I was wrong to think that you were all way off base with your thinking. I was wrong to call you guys clowns and charlatans. I was wrong to make fun of you and reject your ideas outright. I am sorry.
The reason for my new view on those clowns, I mean those thinkers? California and a revealing blog post by Mr. Paul Krugman. It seems I was wrong to accuse Keynesian's of having the wrong solutions to economic problems, all along they have the correct solutions but to the WRONG PROBLEMS.
Allow me to explain. Here is the relevant post:
Everyone should be paying attention to the political/fiscal catastrophe now unfolding in California. Years of neglect, followed by economic disaster — and with all reasonable responses blocked by a fanatical, irrational minority.
This could be America next.
I One can only assume that Krugman means with this line "with all reasonable responses blocked by a fanatical, irrational minority" that the republican minority in the California state senate blocking any attempts to raise taxes.
Leaving aside any political debate, I see now how I misread Keynesians. For Mr. Krugman the problem with California is not huge budget shortfalls caused by government overspending and falling tax revenues due to a recession, the problem is that California cannot take well over 60% of the taxpayers income to bridge the "output gap". To a Keynesian the only issue is greasing the wheels with money, they never pay attention to all the sand in the wheel bearings eating up the metal.
Another example is home prices. The problem with falling home prices to a Keynesian is that mortgage credit is not available. Simply hand out money and support home prices and PRESTO! Crisis averted. They pay no mind to the question "Are home prices unsustainable? Are they too unaffordable? Should they fall to historical levels?". Again, those questions are beyond a Keynesian to ponder. They merely want to treat the symptoms of a disease, but they ignore the CAUSE.
Armed with this new found insight, I do apologize to the Keynesian thinkers. Where I thought you were both foolish and wrong, I see now that looking through the tiny window you call your "worldview" only allows you to focus on simple things.
It all makes sense. We are in the bust phase of the biggest credit bubble the world has ever seen. So many assets are still overvalued. So many homes still overpriced. So much US national debt that it can never be paid back. But instead of asking whether the 2005 high point in the credit boom was based on fundamentals or sustainable in any way, Keynesian's just trot out plans to get the government to spend whatever it has to to return the economy to bubble heights. That is no solution.
One of the reasons no progress has been made over the past year is that the wrong problems are being fought. Until and unless we can agree on and map out the actual structural issues no progress will be made. Time is running out.
Have a good night.