AM I DREAMING ALL OF THIS? (If you can read this, please let me know.)

Listen… I don’t mind telling you that I’m starting to freak out over here.

Is it possible that I’m only dreaming all of this?  Like, maybe I don’t really blog about the financial and foreclosure crises… maybe it’s all just part of a reoccurring, and incomprehensibly maddening dream?

Or, am I like the survivors of Oceanic Flight 815, and although I haven’t come to accept it… I actually died in 2007… and am now LOST?  I think that I’m writing hundreds of articles that go out over the Internet, but in actuality, it’s all only happening in my mind?

I’m really starting to freak out over here, so if you can read any of this… please let me know.  And if you see me in person, don’t hesitate to stab me with something sharp, because I don’t think a pinch will do it.

And if I’m on the Truman Show, and my life is just a set-up reality television show that everyone but me gets to watch, would someone please show some compassion and clue me in?  I won’t let on, I promise.

Okay, so before I tell you what’s causing me to question my very existence… I have a few questions, and I’d really appreciate some answers… again, assuming I’m even writing this and someone is actually reading it.

1. Wasn’t it only a few years ago that our Wall Street bankers sold a bunch of AAA rated bond-type investment securities to pension plans, insurance companies and other types of institutional investors all around the world, but as it turned out the securities weren’t actually AAA, so collectively the investors lost trillions of dollars, pounds, francs, yen, drachma… or whatever their money is called?

I want to say that it happened sometime around 2007 and 2008, if that helps jog your memory.

Didn’t everything come to a head in late September of 2008 when Wall Street’s investment banks, our largest commercial banks, and the likes of AIG, all were shown to be insolvent?  Lehman Bros. went bankrupt and Treasury Secretary Paulson said we had to start handing over hundreds of billions in taxpayer dollars to our nation’s bankers, among others?

There was no time to spare, according to Paulson and Bernanke, we were literally at the precipice of a global financial crisis that unquestionably would end the world as we’d all come to know it?  You do remember all of that, right?  Congress was forced to give Paulson $700 billion with no strings attached and Sen. John McCain looked like he had no concept of what was happening around him?

Please tell me you know what I’m talking about, because if this isn’t ringing any bells, then I should probably pack a bag and have someone drive me on over to Cedar Sinai Medical Center, and I should probably plan to check in over there sooner rather than later, because evidently I need real help.

2. After all that happened, didn’t the Obama Administration… most notably Treasury Secretary Tim Geithner, decide that it would be better not to have to go back to Congress for the trillions of additional bank bailout dollars needed, so all of a sudden everyone on Wall Street and elsewhere became “bank holding companies” so they could get virtually all the cash they needed whenever they needed it without ever having to account to anyone?

And didn’t the Federal Reserve start accepting assets, almost on par with baseball card collections, as collateral for the trillions of dollars in low to no interest loans given to bank holding companies?  That did really happen, didn’t it?  I know… it is starting to sound a little crazy to me too, but humor me… it did happen, right?  Right?  Answer me, damn it!

(Wait a minute… before I go on… maybe I should ask… did a black guy who graduated from Harvard by the name of Barack Obama become President of the United States in 2008 after running against a mother of five who was also the Governor of Alaska?  OMG, if that didn’t happen, please don’t tell anyone I ever brought it up. I didn’t realize how crazy I sounded until I heard myself asking that question.)

But seriously… Barack Obama IS our president, isn’t he?)

3. Didn’t President Obama, along with essentially every prominent economist on the planet say that the financial crisis of 2008 caused our country to experience the worst economic recession since The Great Depression of the 1930s?  I was sure that I heard that line about a million times over the last couple of years… you heard it too, right?

Weren’t the banks at risk of becoming insolvent because they had hundreds of billions in “toxic assets” on and off their balance sheets… assets called CDOs that were based on the same improperly rated and leveraged mortgage-backed securities that the bankers had not only sold to investors around the world but bought as well… assets that became worthless when no one trusted the ratings or the bankers anymore?

Weren’t we told back in 2008 and 2009, that the taxpayers going to have to buy the toxic assets off of the bank balance sheets in order to save our financial system from utter destruction… but then we didn’t buy said assets… and almost overnight no one talked about it anymore, and then our financial system somehow got saved anyway?

I could have sworn that it was only a few months later that the banks were reporting making record profits once again, even though they weren’t doing any lending, which caused me to wonder what it was that banks did to make money since evidently it had nothing to do with lending it to people?

Then the bankers started paying themselves record bonuses again… with taxpayer money… and everyone got so mad that they picketed in front of AIG for almost two days.  And didn’t Obama call them all “fat cats,” or something like that around the same time that the House of Representatives passed a bill to make 90% of Wall Street bonuses taxable?  The banks paid out the billions in bonuses anyway… and then no one talked about it anymore?

What happened there?  I must have blacked out or something back then because I’m obviously missing some part of that whole story.  Now I know what it must feel like to have the Men in Black use that flashy thingy that erases a person’s memory after accidentally bumping into a space creature.  It’s like… one minute I was saying, “Oh my God, did you see a 15 foot cockroach driving that cab,” and the next I was sitting at a lunch counter asking the waitress what kind of soup was du jour.

4. Okay, now since all that happened (assuming it did, of course), haven’t foreclosures continued to exceed all expectations in terms of their continuously increasing numbers, as housing prices have fallen non-stop for the last sixty-some months… and isn’t unemployment still going up, even though we appear to stop counting it at about 9.5%?  And aren’t roughly 50 million Americans on food stamps… up from 11 million in 2005?  It’s like a  king-size blanket of bad news, and even so… it was said to be leading us closer to recovery.

Bernanke says we’re having an economic recovery… a “jobless recovery,” whatever that means… and it’s a homeless and foodless one too, I guess.  I don’t remember learning about jobless, homeless, or foodless recoveries back in college or grad school, but then I did miss a few classes due to the flu, which is how we referred to the occasional hangover.

5. Is Fed Chief Ben Bernanke celebrating the alleged recovery by printing trillions of dollars so that we can buy our own Treasury bonds?  Did I hear that story correctly?  We’re printing up new currency and taking it down the street to the Treasury Department in order to exchange it for other pieces of paper called bonds that say that we owe ourselves the money back in 10 years at like 2-3% interest or something like that.  Hey, don’t laugh at me… either that’s what’s happening, or I’m clearly a very sick man.

And then something must have happened next, like the Treasury gives the money to the banks, so they can afford to pay more record bonuses, or repay the TARP funds, which is what we call a small percentage of the money we lent them a couple years back… after they defrauded investors around the world thus causing the worst economic recession in 70 years.

Go ahead… take a breath, but I don’t want to hear a peep out of anyone about my grammar or punctuation.  If I’m not imagining this stuff, then it’s a run-on catastrophe of Herculean proportion undeserving of commas and capable of supporting an infinite number of exclamation marks… a place where metaphors go to die.

I’m not saying that what I’m saying is right, necessarily… I realize that it doesn’t scream coherent, but I’ve written about all of these things on my blog… assuming I really do have a blog.  Like I said in the beginning, you’re going to have to weigh in here.  Until I get some sort of external verification that I’m not banana-fruit-loop-crazy, I’ll be staying in my room watching Cartoon Network in my pajamas and eating jelly sandwiches.

Bernanke calls his print-money-to-buy-bonds-from-Treasury thing, “quantitative easing,” which initially I thought was a Marvin Gaye song, and he said the purpose of the program was to keep interest rates low.   Then months later, since the Federal Reserve sets the interest rates paid by banks that borrow from its discount window, rates have in fact stayed low.  Funny how that works, don’t you think?

Are rates low because of the money press scheme or because the Fed didn’t raise them.  They must know that they can’t raise rates without causing the total destruction of our economy in advance of the 2012 Presidential Election, and besides that… the too-big-to-fail bankers said no.  You see, the banks borrow from the Fed’s “discount window” whenever they need to pay more executive bonuses and repay more TARP funds, and they may have threatened to stop borrowing if rates were higher.

I don’t really know whether that last part is true or not, but I know this… Bernanke better be careful in general because I heard that Jamie Diamonds is about ready to fire him, take away his Princeton tenure, and change his credit card account over to one of Chase’s new “We’re Here to Help Homeowners” cards, which offers a starting interest rate of 29.9%, a declining limit, and automatically compounding late fees.

Some say that men have been known to stop having erections the day they receive the card, and as I understand it, even if you never charge a nickel, just paying off its $300 starting balance takes 45 years.

In addition, my sources tell me that the only reason Jamie hasn’t already gone to the mattresses as far as Bernanke is concerned is that Goldman family patriarch, Lord Blankcheck, has not yet approved the hit.  Word is that Citigroup CEO and industry consigliere, Vikram Bandit has made it clear to Diamonds that he’s to lay off… for the moment anyway.

I have to assume that’s because the five banking families still consider Bernanke to be “an earner,” and they’re not quite ready to condemn him to a life wandering around a junior college campus n Newark looking for a place to sit and eat his tuna on wheat… where the kids won’t throw stuff at him.

I know how this stuff works… I watched something like four and a half seasons of the Sopranos.

Okay, sorry… I’ll get back on track… wait, what was I writing about?  Oh yeah, I remember…

See, the reason I’m writing all of this is that I no longer understand most of what’s going on in, or coming out of Washington D.C. and the fact that whatever is blathered by the administration, or by the banksters PR hit men, is also parroted without hesitation by the main stream media makes me feel a lot like I did when I was five years old, watching in horror as a double scoop fell from my cone to the sidewalk just minutes after leaving the ice cream shop.

Don’t you feel what I’m saying here?  Has the planet been gassed while sleeping and we’re now witnessing billions of IQs fall in harmony?  Does this movie end with Charlton Heston finding the Statue of Liberty broken into pieces scattered about a beach?

I can’t just be me who sees this phenomena right?  What the heck is going on?  Are people just lying… are they stupid?  Are they just stupid liars?  It’s 2011, for heaven’s sake.

For example, why is everyone, and by everyone I mean the administration, the unnamed but oft’ quoted economists, and all of CNBC’s anchors, continually being quite candid about how they are once again “surprised” at how bad our economy has become.

They ALL do this each time more depressing depression-type numbers are released, or when they lower some key measure of our economic health posthumously, as in waiting until 2011 to tell us that we weren’t doing nearly as well in 2009, as was originally reported.

They can’t REALLY be surprised though, can they?  I mean, lately they are all ALWAYS surprised, every single time on every single issue.  So, what’s the deal?  Are they just acting surprised?  If so, I’d like to see their appearances entered into the competition for the Emmy Awards.  Can’t you imagine it?  Maybe we could arrange for Tom Delay, Jeff Skilling or Jack Abramoff to present the winner.

“And the nominees for ‘Most Deceptive Fabrication in a Tragedy’ are… Treasury Secretary Tim Geithner for “HAMP is working well.” (Applause.) President Obama for the mini-series, “Millions will be able to refinance their mortgages.”  (Applause.)  And Benjamin Bernanke for “The crisis appears to be contained to the sub-prime market.”   And the winner is…

And maybe Bernie Madoff could be released for that night to present a “Lifetime Opacity Award,” or something like that… we could keep working on it.  Okay, so take it away Bernie…

“And this year’s award for “National Deception Using a Previously Unimagined Pretext,” goes to… Henry “Just Call Me Hank” Paulson for his role starring as Chicken Little for which he received $700 billion in 72-hours, to use as he pleased and based on a double-spaced three-page proposal.  I do have to say that I found Hank’s work truly awe inspiring and I hope that it serves to demonstrate to all the world that America truly is a country of limitless potential.

“Consider that only a year or so before Hank’s stunning performance, many said that my own ruse and resulting $60 billion theft would remain a record for years to come.  Well, they were wrong… and only in America could such a record be surpassed so quickly… Hank… I am honored to stand in the shadow of your greatness this evening. (Applause.)”

Announcer: Accepting the award for Mr. Paulson this evening is Raul Esperanza, a courier sent over by Goldman Sachs’ in-house associate legal counsel… (Applause.)

Raul: Si.  Que tal.

Okay… so you’re at least starting to get my point, aren’t you?

These people in government… they either know the truth… and are lying, or their “surprise” each time the numbers show with certainty the accelerating pace at which our country is continuing to head towards the proverbial drain, is obviously feigned.  And, although I would agree that it could be years before our reality becomes an acutely painful one, it is the agony of the year over year decline that’s ahead that we should fear more than any outcome, and for which I don’t believe our nation could ever be prepared.

Ignoring our problems isn’t helping us, and misleading the populace can only lead to future mistrust of our government, anger and apathy.  So, what’s going on?  Do our politicians know they are lying, and if so, don’t they realize that doing so offers fleeting benefit, at best?  Or, are they truly as obtuse as their ongoing statements would indicate?

I’m at the point where I don’t even care all that much if they’re lying.  What worries me is if they actually believe the things they say, because if they actually don’t know any better, well… that scares the heck out of me.  And the fact that no one says much about it is making me insane.

Another example… Foreclosure and mortgage related consumer news site known for its lively forums,, recently reported on the outcome of testimony on behalf of the National Association of Realtors®, before the Senate Banking, Housing and Urban Affairs Subcommittee on Housing, Transportation, and Community Development by this year’s president of the New Jersey Association of Realtors®, Allan Dechert.   The article says that the NAR testimony was intended to present and discuss “new ideas to address foreclosures.”

I want to make sure I set this up properly… this is an NAR bigwig testifying to the Senate having been asked to present new ideas intended to improve the deteriorating state of the foreclosure crisis.  You should understand, no one that I’ve spoken with thinks of the NAR as any sort of hotbed as far as new ideas are concerned even under the best of circumstances, but the complex problems inherent to the foreclosure crisis are almost certainly going to place the development of real solutions well out of reach for this trade group.

Not only that, but to be blunt, the NAR is the least credible entity I can think of related to statements about the foreclosure crisis, or even the housing market.  A few years back, during the now infamous and most recent bubble, David Lereah was the NAR’s “chief economist,” the term “economist” being used very loosely, don’t you know, and he was consistently less credible than most infomercials, but similar as to his flagrant insincerity and readily apparent bias at all times.

I wrote one of my monthly “Bringing UP the Rear,” columns about him some time ago, so you can dig in further to see what I thought of him there, if you’re of a mind to do so, but for now suffice it to say that I have been less than impressed by the NAR publishing what is nothing more than propaganda dressed up in well-researched-news clothing.

And sure enough, they didn’t disappointment as far as my expectations were concerned this time out either.  No “new ideas” got within miles of this testimony, I’m told, so its quite likely that we dodged a bullet there.  Allan Dechert trotted out ideas that were just plain trite, some that were not actionable, and a few that established that the NAR… hmm… I want to be polite here… that the NAR is no expert on the foreclosure crisis, how’s that?

I understand, the NAR has hundreds of thousands of Realtors paying annual dues, and I suppose that as a group they simply have no choice but to believe good things about the future of the housing market.  If they didn’t have that hope for the future, however irrational, many would likely find it difficult to justify hanging around the profession, and continuing to pay those all-important dues.  Some might head back to school or towards some other type of professional re-training… others would probably eat a gun.

That being said, according to the story, Allan’s testimony led off with the “idea” that its increased lending that the industry most needs to clear up the foreclosures, which is an hysterical irony if you think about it.

Increased lending?  Is that all?  Does the NAR understand where we are, or how we got here?  They must, right?  Lord, I would hope so… someone must have told them something by now, wouldn’t you think?  Then why would this guy think that some possibility exists to increase lending, or that there’s any interest on the part of anyone in the banking industry, much less in our government to make lending requirements less stringent.

And asking the United States Senate?  Why, that’s just laughable.  Were it up to our U.S. senators, qualifying for a loan in this country would never even be discussed by the government… they’d turn the whole thing over to the banks, as they have, and go about their business avoiding controversy, getting re-elected and blocking anything that even smells like real progress.

Look, let’s understand what’s going on around us, okay?  It’s long since time…

The banks bankrupted themselves by the fall of 2008.  When the credit markets finally froze solid during the summer of 2007 and housing prices started their free fall, the banks were all caught using way too much leverage that was attached to increasingly toxic assets.  In other words, they had borrowed way too much on improperly rated and fraudulently constructed securities that now had no market and were therefore illiquid.

It’s like our investment bankers went around the world selling boxes of hundred dollar bills that turned out to be fives and ten dollar bills, and when the investors that bought the boxes found out, they quite understandably didn’t want to buy the next box of bills they were offered.

So, now the bankers were stuck with these boxes of currency that no one wanted to buy because no one trusted the ratings that promised that they had been filled with hundreds, and no one knew the actual value of the bills inside.  Maybe a given box was filled with twenties, or maybe it was half tens… or maybe half the bills in the box were just blank pieces of paper and not bills at all.

And since no one knew what the boxes were worth or would be worth in the future, no one would buy one of these boxes Wall Street had put together to sell to investors, and since no one would buy a box, there was no way to place a value on any of them.  Maybe a box that was supposed to be worth $10 million was actually worth $9 million… and maybe it was only worth $2 million… and maybe it was worthless.

But the bankers, in their infinite and short sighted frenzy of greed, borrowed 30 to 1 and higher based on a given box being worth the full $10 million, as they had been rated by the ratings agencies, whose job it was to check the contents of such boxes before rating them.

Now that the value of the boxes was falling through the floor, they couldn’t sell them, they could no longer borrow against them, and the amount of money being discovered inside them was turning out to be less and less (as the defaults on mortgages was rising.)

When investors stopped buying the boxes, money stopped moving.  Banks and mortgage companies stopped making the loans whose proceeds was being used to generate the currency that was supposed to filling the boxes, and that made home prices fall even farther and faster… and that led to even more people defaulting, which made the boxes worth even less, and since the bankers had borrowed against their boxes, they were coming up short when they had to repay their loans, as doing so meant they would not have sufficient capital to remain solvent financial institutions.

So, what we did was bail them out with taxpayer cash and government guaranteed loans so they could pad their balance sheets until they could make enough money to recognize their losses, and because that was obviously going to take a number of years, we also suspended or modified various accounting rules so that they wouldn’t have to recognize their losses for some time and that has transformed bank balance sheets into works of pure fiction.

The overriding idea being pursued by Geithner, et al, is that as time passes, the banks will make enough money to offset the losses on these toxic assets, and over that time they hoped the assets themselves would be worth more than what they’d fetch if sold in a fire same today.

Once the banks had the time to make more money, they could write off the losses on the bank’s books without causing insolvency… and in Geithner Land there’s always a forecast laying around somewhere showing that home prices will magically stabilize after a few years and return heading north, which will lessen the losses written off in the future.

That’s Tim Geitner on the Foreclosures 101, in my view… never mind who suffers while we wait for the banks to make enough money by overcharging us for bouncing a check, repossessing homes they don’t own, pilfering whatever they can from government programs… and then there’s the Federal Reserve to pump money into banks without having to disclose what they do.

My personal opinion is that Geithner is cracked for thinking that this country will suffer years of decline quietly while the banks abuse them.  Japan took a similar approach beginning in 1990 when their real estate based economic disaster began, but we’re not Japan.  In my opinion, even if he’s right in the long run, this country will never survive a decade of steady decline in lifestyle without spinning off its access more than once.

In other words, by the time the Geithner plan could possibly work, either I’ll be close to dead and buried or the pain will have been so intense for so long that we will have scars in the fabric of this nation that will require generations to heal… like was the case following The Great Depression of the 1930s.  Not only that, but one might consider that one of the products of that global depression was The Third Reich and World War II.

But my overriding point here is that there are not going to be any abundance of loans available until we’ve fixed the securitization market, and by that I mean facing up to the source of the past fraud, eliminating the potential for it to reoccur, changing our laws and strengthen our regulations and role of our regulatory agencies… all the things that investors around the world will need to see before they’ll be willing to invest again in a mortgage-backed security or related derivative because someone says it’s rated AAA, and very much like we created the SEC and FDIC to regain confidence during the 1930s.

Until then, we’ll continue to have a nationalized mortgage lending system in this country, as we’ve had since taking over the inconceivably insolvent GSEs, Fannie Mae and Freddie Mac, which add to the VA loans made possible by Ginny Mae, and the new sub-prime of late… FHA.

Not surprisingly, none of these institutions are in particularly good shape, financially speaking, although Ginny Mae is likely better than others, and the government will do what is politically possible to remain the lender of first resort for as long as it can, but remember… commercial banks won’t look to re-enter the residential lending world until investors are again willing to buy into the certificates produced by the securitized pools of loans… or in other words, no loans until investors are willing to trust that if they buy a box of hundreds, they get a box of hundreds.

Remember, banks don’t have money they can lend out for thirty years, only insurance companies and pension plans can wait 30 years for their money to be returned with interest, so unless the loans can be sold to investors in the form of bonds, the bank can’t originate them… or if they do, it would only be to someone exceedingly credit worthy.

For quite some time, it’s likely that banks will only be originating loans that can be sold to the GSEs, Ginny Mac, or insured by FHA.  Quite some time… as in… check back with me in a decade and we’ll see how close we are to the sins of Wall Street’s past being forgiven if not forgotten, by the global investment community. It’s going to be a while… get it?

I know people in this country have always seen recessions improve in a year or two, and real estate markets bounce back the same way… but this isn’t that… this isn’t a cyclical thing… it’s not just a real estate market correction… and it wasn’t caused by banks making loans to people who couldn’t afford to repay them.  It’s the result of the largest securities FRAUD swindle in the history of the world.

It wasn’t an unforeseeable and unstoppable natural disaster, as the bankers would have us believe… they made hundreds of billions from creating and now after this crisis… and they didn’t make all that money because they simply got lucky.

Four years into the crisis, however, and we’re still only running in place.  In the years ahead, we’ll need to actually fix what has been broken.  And until we do that, we shouldn’t expect to return to any semblance of an acceptably liquid or growth oriented mortgage market.  Until we do that… we’re headed down, down and down.

Now what I want to know is… does or doesn’t the NAR and that Allan guy know any of this?  Why would Allan testify that what’s needed are more loans when the Senate could hardly address that need even if it wanted to… and no one in the senate wants to besides.  If there were “more loans” they would only come as a result of less stringent underwriting requirements and that’s sure as shootin’ not on anyone’s drawing board today.

If there were more loans, as Allan’s testimony suggested are needed to fix the problems caused by the foreclosure crisis, we wouldn’t even be having the foreclosure crisis… does he understand what I’m saying here… do you?  Does anyone?  Helloooooo… is anyone out there?

See, I’m freaking out over here.

That sort of thing coming from the NAR is positively surreal… how about some stated income, no doc, 1% teaser, option arms… I bet that would fit the bill as far as the NAR is concerned, right?  What the trade association is saying is… if someone will allow us sell the foreclosed to people with bad credit and nothing down, then we can clear the industry’s backlog of foreclosure properties that may remain REOs for years otherwise.

Well, that’s terrific… thank you for telling us.  Make sure you validate your parking on your way out.

The next idea Allan threw out was that… do you want to guess?  I’m certain you’ll guess right… he said there should be a lot more short sales, and loan modifications too.  In other words, the NAR testimony made clear that they are generally in favor of stopping foreclosures, as they place downward pressure on home prices which continues to remove buyers from the market as more and more find themselves underwater and therefore unable to move.  That makes sense, what else would anyone expect… Realtors don’t want their jobs made harder because it equates to a pay cut.

The NAR, however, is being disingenuous when they say they want to keep people in their homes, because they clearly favor short sales over loan modifications, and that shouldn’t surprise anyone in the least either.  Realtors don’t make money by modifying loans… they make money selling homes… and selling them short is better than not selling them at all.  Oh, and if its easy to get a loan… that would be really helpful too.  That’s what Allan was really saying… those were his “new ideas.”

Wasn’t that an invaluable contribution?  No, wait… that’s not the word I was looking for, I meant “irrelevant,” or maybe, “unenlightened,” would be better.  But, what I really want to know more than anything else is whether the NAR knows that they’re just babbling, or are they as oblivious to today’s realities as they appeared here?

Like the administration spokespeople that spew out the government lines on whatever the issue, the NAR is nothing but a self-interested commercial trade group and it could care less about homeowners losing homes or about our economy or quality of life… no matter what they say about the need for more loan modifications… it’s just window dressing on a sales pitch. What does the NAR want… they want it to be 2004 again, that’s what they want.

If the NAR did care truly about lowering the number of foreclosures and repossessions, they’d be clearly on the side of homeowners at risk of foreclosure, and not swimming like sharks through neighborhoods, talking modifications, acting sympathetic, and going for the jugular on the short sale given the smallest of openings.

I’m fine with Realtors being Realtors, by the way… just don’t pretend you care about keeping anyone in his or her house, when you only want them to sell it or buy one.  And if you want more loans in the future, Allan and friends, you really should be working to not only keep people where they are, but also towards the reforms to the financial system that must precede any increase in available capital coming to the residential mortgage market.

That’s right, NAR.., I’m saying that you’d have to oppose what the banking lobby wants… ooooh, that sounds scary right?  Yeah… well grow up and stop thinking of only your next commission.  Start being part of the solution or your commissions have nowhere to go but down for so many years to come that its not worth counting them.

It doesn’t matter whether interest rates are the lowest since the beginning of time… and it doesn’t matter that the home’s value has been cut in half.  The secondary mortgage market and the market for mortgage-backed securities are the only paths to private capital re-entering the residential mortgage market, and your friends in the banking industry broke those markets for good this time around.  And thinking that the bankers are going to fix what they shattered… well, keep dreaming.

The path to any significant recovery in private lending isn’t one the financial industry wants to follow, not only because its going to require they change in numerous ways, but also because they’re doing just fine without lending… why would anyone want to look for unnecessary risk when in reality you’re little more than an unstable bank whose assets remain inflated and losses ignored.  If Realtors want increased private lending, join the battle being waged by the homeowners and investors, and throw your considerable weight to oppose the banking lobby.

You might consider that Realtors need homeowners tomorrow, but homeowners need the NAR today.

So, what’s the deal… yesterday the Federal Reserve announced yet another stab-in-the-dark, ridiculous plan destined to produce no discernable impact, called Operation Twist, a name first used during the 1960s or something.  Apparently, Ben wants to lower interest rates even further, which is both comical and sad.  I didn’t see any reason to study the whole thing carefully, Lord knows it wasn’t put together that way, but basically he’s going to use some proceeds from maturing mortgage=backed securities to buy more mortgage-backed securities.

It isn’t QE3, in case you were wondering, because it’s not a transaction that increases the government’s balance sheet.  It’s more like cutting the end off a blanket and sewing it onto the other end to make it longer.  Will it work?  No.  And if it did, how would we ever know.  It’s like asking if TARP worked or not… I’d rather employ a chimpanzee with bad manners to lead me on a quest for the Fountain of Youth.

And then Geithner just went to Europe, where defaults and debt restructuring both need to get started in earnest, but Tim continues to beg and plead that the answer be no to either.  The whole thing is making me dizzy.  Ireland owes European banks, insurance companies and pension plans roughly $800 billion dollars.  Last year, we lent Ireland $50 billion so they wouldn’t have to default.

What are we planning for next year… or the year after that?  Ireland couldn’t repay $800 billion in a hundred years, and somehow I just don’t see us being able to cover their debt either.  And even if we could cover Ireland’s debt, what about the trillions owed to the same folks for the same reasons by Greece, Spain, Portugal, and most of Europe.

What needs to happen is that the countries need to default and the debt needs to be restructured… period.  And the sooner the better, because the austerity programs are just torturing people, and causing riots, and the country will one day have to default anyway.  And no one can change that reality.

Pretending that the same types of unsolvable problems with banks and markets, as was so apparent during the fall of 2008, no longer exist has allowed us to happily tread water while drifting farther from the shore… we’re solving nothing.  Denial is never healthy.  At this point it’s downright harmful and the most interesting thing is that it’s sure to be most harmful to the deniers themselves in the long run, that it.  In the short run, I suppose Goldman Sachs will cover their bonuses for 2011… so, woohoo!

It’s long-since time that we come to terms with what’s happened as a nation… so we can put a stop to what’s become a part of the new normal… believing what should be unbelievable, unable to discern who is lying about the truth… and who’s just an idiot.

So… what’s the deal?  Did you get any of that, or have I just been talking to myself this whole time?  If it’s the latter, I sure do hope I wake up soon because this dream is a real nightmare.

Mandelman out.

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