The system for financing mortgages and regulating that financing has failed, completely and utterly. The mortgage and real estate markets are now in collapse.
Yesterday I wrote about how positive feedback loops lead to collapse. Welcome to the U.S. housing and mortgage markets. As I have documented here numerous times, the entire U.S. mortgage market has already been socialized: 99% of all mortgages are backed by the three FFFs--Fannie, Freddie and FHA--and the Federal Reserve has purchased a staggering $1.2 trillion in mortgage-backed assets in the past year or so to maintain the illusion that there is a market for mortgage-backed securities.
There is, but only because the mortgages are backed by the Federal Government and propped up by the Federal Reserve.
The mortgage market is completely dependent on government guarantees and quasi-Government purchases of securitized mortgages. If the mortgage market were truly socialized, then the Central State would own the banks which originate, service and own the mortgages.
But then the private owners and managers of the "too big to fail" banks would not be reaping hundreds of billions in profits and bonuses. And since the banking industry has effectively captured the processes of governance (that is, Congress and the various regulatory agencies), then what we have is a system of private ownership of the revenue and profits generated by the mortgage industry and public absorption of the risks and losses.
Could anything be sweeter for the big banks? No.
The incestuous nature of the system is breathtaking. The Fed creates the credit which enables the mortgages, the Treasury guarantees the mortgages via Fannie, Freddie and FHA, the Fed buys the mortgages ($1.3 trillion in mortgages are on their balance sheet) and the private banks collect the fees and profits.
One of the core tenets of the Survival+ critique is the State/Financial Plutocracy partnership. There are many examples of this partnership (crony capitalism in which the State is the "enforcer" which collects the national income and distributes it to its private-sector cronies), but perhaps none so blatant and pure as the mortgage/banking sector.
But now the entire legal basis for that privatized-profits, socialized losses system has dissolved. The foreclosure scandal…
At this point, I didn’t believe it was possible, but the Obama administration has just reached an all-new low in its abysmal civil liberties record. In response to the lawsuit filed by Anwar Awlaki’s father asking a court to enjoin the President from assassinating his son, a U.S. citizen, without any due process, the administration late last night, according to The Washington Post, filed a brief asking the court to dismiss the lawsuit without hearing the merits of the claims. That’s not surprising: both the Bush and Obama administrations have repeatedly insisted that their secret conduct is legal but nonetheless urge courts not to even rule on its legality. But what’s most notable here is that one of the arguments the Obama DOJ raises to demand dismissal of this lawsuit is "state secrets": in other words, not only does the President have the right to sentence Americans to death with no due process or charges of any kind, but his decisions as to who will be killed and why he wants them dead are "state secrets," and thus no court may adjudicate their legality.
A very intense case of food poisoning in New York on Thursday, combined with my traveling home all night last night, prevents me from writing much about this until tomorrow (and it’s what rendered the blog uncharacteristically silent for the last two days). But I would hope that nobody needs me or anyone else to explain why this assertion of power is so pernicious — at least as pernicious as any power asserted during the Bush/Cheney years. If the President has the power to order American citizens killed with no due process, and to do so in such complete secrecy that no courts can even review his decisions, then what doesn’t he have the power to do?…
Here is an advance preview of the monthly moving averages we track after the close of the last business day of the month. At this point, before the close on the last day of the month, all three S&P 500 strategies are signaling "invested" — unchanged from last month's triple "invested" signal. All five Ivy Portfolio ETFs — Vanguard Total Stock Market ETF (VTI), iShares' Barclays 7-10 Year Treasury (IEF), PowerShares DB (DBC), Vanguard FTSE All-World ex-US ETF (VEU) and Vanguard REIT Index ETF (VNQ) — are signaling "invested", changed from last month's quadruple invested signal.
Judicial Watch announced on its website today that it has submitted a list of 25 questions to Hillary Clinton regarding her email practices while serving as Secretary of State. Pursuant to a decision by U.S. District Court Judge Emmet G. Sullivan, Hillary has 30 days to respond, under oath, to the questions. Per federal law, Judicial Watch was limited to a total of 25 q...
Some people like to get outside on the weekends, maybe playing tennis or working in the yard. Some people like to visit their friends or cook a big meal or go out to see a movie. And some people who are passionate about their work -- such as Elliott Wave International's futures analyst Jeffrey Kennedy -- like to stare at hundreds of price charts on their computer screen to find patterns that point to trade setups. We used to worry for his health but not anymore, because he's been doing it for years and he comes up with some neat stuff. A case in point is his discovery of a two-bar pattern that he named the Popgun. Find out more in this excerpt from the Club EWI eBoo...
The US Dollar/Yen is facing a trio of potential support lines at this time with few people bullish the US$/Yen at Stocktwits. What happens at this potential support zone, could well impact the Risk On trade from now until year end.
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The trend in the US$/Yen remains down for the past few months, as the YEN has been stronger than the US$. The US$/YEN remains inside of a steep falling channel over the past 10-months.
The bottom of this steep falling channel and two ot...
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Epizyme was founded in 2007, and trying to create drugs to treat patient's cancer by focusing on genetically-linked differences between normal and cancer cells. Cancer areas of focus include leukemia, Non-Hodgkin's lymphoma and breast cancer. One of the Epizme cofounders, H. Robert Horvitz, won the Nobel Prize in Medicine in 2002 for "discoveries concerning genetic regulation of organ development and programmed cell death."
Before discussing the drug targets of Epizyme, understanding epigenetics is crucial to comprehend the company's goals.
Genetic components are the DNA sequences that are 'inherited.' Some of these genes are stronger than others in their expression (e.g., eye color). Yet, some genes turn on or off due to external factors (environmental), and it is und...
This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible. Feel free to contact me directly at firstname.lastname@example.org with any questions.
Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts. After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.) Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.
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