Posts Tagged ‘property rights’

The Coming Collapse of the Real Estate Market

Here’s another great article on the frauds at the heart of the mortgage and banking sectors. – Ilene 

The Coming Collapse of the Real Estate Market 

foreclosure Courtesy of Charles Hugh Smith, Of Two Minds 

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…
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An Age of Miracles and Wonders

An Age of Miracles and Wonders

Courtesy of Tim at The Psy-Fi Blog 

Low angle view of a woman with outstretched arms against blue sky

S-t-r-e-t-c-h

Stretch your arms out to either side and imagine you’re looking at the economic growth of the human race over its entire four thousand year documented history. From the fingertip on your right hand to the first wrinkle on its index ftinger more or less covers the first three thousand eight hundred years. From there to the end of the index finger on your left hand represents growth over the nineteenth and twentieth centuries.

We truly live in an age of miracles and wonders. Medical advances have ensured more people live longer than ever before, scientific achievements have created a world in which we’re surrounded by astonishing labour saving creations and inventions which allow us to waste the time we’ve saved and the extra years of life we’ve been granted. Meanwhile our economic understanding of how this happened has, well, gone nowhere very interesting really. How did we achieve this state of grace?

Science and Medicine

View of female pharmacist holding and yellow and white box

 One thing’s perfectly clear – the massive economic growth seen over the last couple of hundred years doesn’t have an awful lot to do with economics. Perhaps the prevalence of capitalist doctrines has prevented excessive government intervention in free markets at too early a stage, but otherwise we’ve veered about wildly while booming and busting our way to a greater level of wealth and health than ever before seen on the planet.

On the other hand this has had a lot to do with medical advances. Medicine has ensured that our useful lives are greatly extended – although a lot of the increase in average lifespans so often discussed is down to vast decreases in infant mortality. Still, we no longer die en-masse of septicaemia. Better, though, improvements in healthcare have extended the useful working lives of people: imagine a world in which most people were dead by 45. Heck, no politicians.

From Third World to First

Along with this we’ve seen incredible advances in science and engineering. In my father’s living memory he recalls the arrival of electricity, sewage disposal and tarmac to his home village. My grandmother was born before the Wright Brothers took flight and outlived – by far – the Apollo program. Yet her grandfather lived in a world virtually unchanged for a millennium: a world of hard…
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Property Rights and Wrongs

Property Rights and Wrongs

magna cartaCourtesy of Tim at The Psy-Fi Blog

It Begins: The Magna Carta

In 1215, at Runneymede in England, King John set his seal upon the document known as Magna Carta and thus kicked off nearly a thousand years of property madness. The charter was the result of the King’s ruthless trampling over the rights of existing nobles and, extracted from him at the point of a sword, gave all freemen of England certain, inalienable rights.

One of these was the right not to be unlawfully deprived of their property and, such is the way of these things, this was to lead to the Anglo-Saxon obsession with housing which has been at the heart of so many recent financial debacles. It may be that “an Englishman’s home is his castle” but mistaking a heavily mortgaged property for a safe financial haven isn’t the cleverest bet you’ll ever make. Although it may still be better than investing in the stockmarket for most people.

Property Rights

At the heart of the Magna Carta were a number of provisions that echo down the ages:

"No free man shall be seized or imprisoned, or stripped of his rights or possessions, or outlawed or exiled, or deprived of his standing in any other way, nor will we proceed with force against him, or send others to do so, except by the lawful judgement of his equals or by the law of the land."

The document is, to be fair, rather a rambling read and at points gets oddly excited about making the King give back all the stuff he’d stolen from Wales including "the son of Llywelyn." Quite why King John had such a liking for the Welsh isn’t recorded, but they clearly weren’t happy with the attention. According to the charter he’d also acquired the sisters of the King of Scotland on his travels, so he seems to have been an inveterate Celtic kleptomaniac.

Although the charter enshrined a lot of rights, many of which are traceable into important future constitutional documents like the American Declaration of Independence, the English more or less observed it in the breech for a few hundred years. Kings may have nominally been as one with everyone else before God but in practice they had the biggest armies, the


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Brokedown Palace: The Undermining of Property Rights in America

This is a very good essay on how property rights have gone the way of the frog, slow cooking in the pot of water on the fire.  (It’s reprinted in the Zero Hedge section below as well.) – Ilene

Brokedown Palace:  The Undermining of Property Rights in America

property rights Courtesy Zero Hedge, by Client 9

ZeroHedge recently highlighted the TPG raid on CDOs. This action puts into focus the alarming trend of the undermining of creditor rights. When even the Courts are in on the gang bang, what hope do we have?

The battlefield: CDOs, mortgages, corporate debt
The players: hedge funds, management teams, elected officials, lobbyists, unions
The weapons: loopholes, new precedents, bankruptcy court, political pressure
 
The Chrysler debacle was stink enough, but the trend of collateral tampering is an outright stench today. Property rights have allowed the U.S. to flourish.  They are bedrock of our economy.  They allow facilitate the spread of credit and economic growth that some other countries cannot match.
 
In Chrysler we saw legal precedent created where a *secured creditor* received less on its contracted collateral than unsecured creditors. In one fell swoop, we saw fiduciaries abscond, “disinterested” advisors incented to rubber-stamp, and the Courts join in on the rubber stamping party (more on this later). Most importantly, we witnessed a government that not only sanctioned this egregious behavior but astonishingly pushed for it. The Government actually labeled those who filed objects to the deal as “terrorists” (you can’t make this up). The Government actually vetoed Chrysler’s offer to give secured creditors additional consideration. Our lawmakers were so involved that Chrysler’s own attorneys tried to block discovery of their communications with Washington (the attorney’s clients were Chrysler, not Washington). We must never forget Obama’s alleged threat of using the “White House Press Core” to weaken what little opposition remained (who exactly were the terrorists?).
 
Chrysler is not the only company to pervert Chapter 11 for the purpose of disenfranchising creditors.  The briefs filed in Charter Communications are full of shenanigans. The DIP roll-up drive-bys of 2009 rewarded handsomely those with the means to literally ‘stick up’ a Court.  Case in point: Lyondell.  Ask yourself, does a company with $27BN of assets really only realize at the last minute it must file for bankruptcy? 


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Brokedown Palace: The Undermining of Property Rights in America

Courtesy of Client 9

ZeroHedge recently highlighted the TPG raid on CDOs.  This action puts into focus the alarming trend of the undermining of creditor rights.  When even the Courts are in on the gang bang, what hope do we have?

 

The battlefield: CDOs, mortgages, corporate debt
The players: hedge funds, management teams, elected officials, lobbyists, unions
The weapons: loopholes, new precedents, bankruptcy court, political pressure

 

 

The Chrysler debacle was stink enough, but the trend of collateral tampering is an outright stench today.  Property rights have allowed the U.S. to flourish.  They are bedrock of our economy.  They allow facilitate the spread of credit and economic growth that some other countries cannot match.

 

In Chrysler we saw legal precedent created where a *secured creditor* received less on its contracted collateral than unsecured creditors.  In one fell swoop, we saw fiduciaries abscond, “disinterested” advisors incented to rubber-stamp, and the Courts join in on the rubber stamping party (more on this later).  Most importantly, we witnessed a government that not only sanctioned this egregious behavior but astonishingly pushed for it.  The Government actually labeled those who filed objects to the deal as “terrorists” (you can’t make this up).  The Government actually vetoed Chrysler’s offer to give secured creditors additional consideration.  Our lawmakers were so involved that Chrysler’s own attorneys tried to block discovery of their communications with Washington (the attorney’s clients were Chrysler, not Washington).  We must never forget Obama’s alleged threat of using the “White House Press Core” to weaken what little opposition remained (who exactly were the terrorists?).

 

Chrysler is not the only company to pervert Chapter 11 for the purpose of disenfranchising creditors.  The briefs filed in Charter Communications are full of shenanigans.  The DIP roll-up drive-bys of 2009 rewarded handsomely those with the means to literally ‘stick up’ a Court.  Case in point: Lyondell.  Ask yourself, does a company with $27BN of assets really only realize at
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More Stupidity: Obama / Chrysler

Obama, having taught Constitutional Law, it would seem, would remember this:  "No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation." Fifth Amendment to the United States Constitution.   – Ilene

More Stupidity: Obama / Chrysler

Courtesy of Karl Denninger at The Market-Ticker


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Politics

Why repressive Saudi Arabia remains a US ally

 

Why repressive Saudi Arabia remains a US ally

A demonstrator dressed as Saudi Arabian Crown Prince Mohammed bin Salman with blood on his hands protests outside the Saudi Embassy in Washington, D.C., on Oct. 8, 2018. Jim Watson/AFP via Getty Images

Courtesy of Jeffrey Fields, USC Dornsife College of Letters, Arts and Sciences

Saudi Crown Prince Mohammad bin Salman “approved an operation … to capture or kill Saudi journalist Jamal Khashoggi,” according to a...



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Phil's Favorites

Ensuring the minimum wage keeps up with economic growth would be the best way to help workers and preserve FDR's legacy

 

Ensuring the minimum wage keeps up with economic growth would be the best way to help workers and preserve FDR's legacy

It may seem like a lot, but it’s not the most important change in the bill. AP Photo/J. Scott Applewhite

Courtesy of Felix Koenig, Carnegie Mellon University

The US$1.9 trillion pandemic relief bill that the House ...



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Zero Hedge

Grimes Just Made $5.8 Million In 20 Minutes Selling Digital Art

Courtesy of ZeroHedge

Elon Musk's baby-mama/love interest Grimes recently made a $6 million score in only 20 minutes by selling digital artwork in an online auction.

The art comes with a digital asset called an "NFT" that proves its authenticity, according to The Daily Mail. She told 10 items from a collection she is calling "WarNymph" (of course), which included "dramatic illustrations of winged baby goddesses battling in apocalyptic skies" (of course). 

The non-fungible token that the works come with is encrypted with the artist's signature and authenticates the art as original. It relies on blockch...



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ValueWalk

Top Five Click-Baits In Buffett's Annual Shareholder Letter, Number 4 Will Shock You!

By Jacob Wolinsky. Originally published at ValueWalk.

Investment legend Warren Buffett released his annual Berkshire Hathaway shareholder letter Saturday and with it a trove of wisdom for value investors. Surprisingly, the letter also showed off Buffett’s recently developed penchant for internet click-bait, as several of his asides uncharacteristically directed readers to follow internet fads previously ignored by the 90-year-old market magician. The Stonk Market has summarized those nonagenarian hot-takes below:

Q4...



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Kimble Charting Solutions

Bond Prices About To Fall Off The Cliff?

Courtesy of Chris Kimble

The bull market in bond prices has steady, durable, and trustworthy. Over the past 40 years, if investors could count on anything, it was rising bonds and falling bond yields (interest rates).

But this trend / dynamic may be changing…

The post pandemic spike lower in interest rates (yields) sent bonds to all-time highs… but that quickly gave way to selling and steadily higher interest rates.

Is the bond market about to receive monster message?

As we have done many times before, today we share an “inverted” chart of ...



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Biotech/COVID-19

COVID-19 revealed how sick the US health care delivery system really is

 

COVID-19 revealed how sick the US health care delivery system really is

Many U.S. hospitals and clinics are behind when it comes to sharing information. Teera Konakan/Moment via Getty Images

Courtesy of Elizabeth A. Regan, University of South Carolina

If you got the COVID-19 shot, you likely received a little paper card that shows you’ve been vaccinated. Make sure you keep that card in a safe place. There is no coordinated way to share information about who has been vaccinated and who has not.

...

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Mapping The Market

Which Governments Ordered Johnson & Johnson's Vaccine?

 

Which Governments Ordered Johnson & Johnson's Vaccine?

Courtesy of Niall McCarthy, Statista

On Wednesday, U.S. regulators announced that Johnson & Johnson's Covid-19 vaccine being developed by its subsidiary Janssen Pharmaceuticals in Belgium is effective at preventing moderate to severe cases of the disease. The jab has been deemed safe with 66 percent efficacy and the FDA is likely to approve it for use in the U.S. within days.

The Ad26.COV2.S vaccine can be stored for up to three months in a refrigerator and requires a single shot, ...



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Digital Currencies

Crypto - It Is Different This Time

 

Crypto – It Is Different This Time

Courtesy of Howard Lindzon

?I have been astonished as you know by the growth of crypto.

I remember back in 2017 when I noticed that Stocktwits message volume on Bitcoin ($BTC.X) surpassed that of $SPY. I knew Bitcoin was here to stay and Bitcoin went on to $19,000 before heading into its bear market.

Today Bitcoin is near $50,000.

Back in November of 2020, something new started to happen on Stocktwits with respect to crypto.

After the close on Friday until the open of the futures on Sunday, all Stocktwits trending tickers turned crypto. The weekend messages on Stocktwits have increased 400 percent.

That has continued each weekend...



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Chart School

The Fastest Money

Courtesy of Read the Ticker

The fast money happens near the end of the long trend.

Securities which attract a popular following by both the public and professionals investors tend to repeat the same sentiment over their bull phase. The chart below is the map of said sentiment.
 


 

Video on the subject.


 

Charts in the video



 



 



Changes in the world is the source of all market moves, to ...



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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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Promotions

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Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

This week, we also have a special presentation from Mike Anton of TradeExchange.com. It's a new service that we're excited to be a part of! 

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