The “It’s Not Real Money” Argument – Perhaps the Best Way to Make the Banks Look Good in Court

MONEY
Below is a case brought by a homeowner arguing that there was no real money involved in their loan. It was dismissed without leave to amend, and the homeowner was lucky that they managed to get out of court without being sanctioned. If you want to make the banks look good in court, while at the same time making homeowners appear certifiably insane, here’s how to do it.

The problem is that this is hardly an example of anything extreme, in fact, I heard some so-called legal theories that make this case look like Brown v. The Board of Education just a couple of days ago on Linked In and Facebook threads. One in particular had to do with identity theft, and I’d explain the rest but I can’t without the risk of brain damage. Look around, you’ll find it… and more, I’m afraid.

THE CASE OF THE MISGUIDED HOMEOWNER…

SHERRY MELINDA VINCENT, Plaintiff,
v.
COUNTRYWIDE dba BANK OF AMERICA, THE BANK OF NEW YORK MELLON N.A. and RECON TRUST COMPANY N.A., REEDSMITH LLP ATTORNEY SHAUDEE NAVID, Defendants.
No. C13-01569 HRL.
United States District Court, N.D. California, San Jose Division.

October 16, 2013.
ORDER (1) GRANTING DEFENDANTS’ MOTION TO DISMISS AND (2) STRIKING NEWLY ADDED ATTORNEY DEFENDANTS [Re: Docket No. 24]

HOWARD R. LLOYD, Magistrate Judge.

The homeowner in this case (found below), the plaintiff, alleged that the defendants (Countrywide, Bank of America, et al) only provided an estimated 5% of their loan’s face value in actual money. In a reply, the homeowner clarified that the actual amount loaned could not be greater than 10% of the face value because that’s the percentage of cash deposits that the bank is required to keep in reserve, and that the rest of the money for the loan was created by the bank itself through a series of book entries.

The homeowner therefore concluded that the check issued by the bank was not backed by “lawful money of the United States,” and so the defendants “breached the loan agreement, committed fraud and racketeering, and violated usury laws and the Truth in Lending Act (“TILA”).”

The court stated that: “Plaintiff’s underlying legal theory has been consistently rejected, and this Court likewise rejects it. The invalidity of her theory is fatal to each of her claims for relief, and none are salvageable by pleading additional facts.”

So, it would seem that the court thought that the bank loaned out real money, but that’s only because the bank loaned out real money. It is unclear to me what other kind of money the bank might have loaned out… play money? Someone suggested that the money only existed “on paper,” but I don’t understand on which other medium money could possibly exist… on rock or wood, perhaps? Lot’s of money exists on paper, in fact most of the money in the world exists on paper, right?

I’m looking at my bank statement right now… it’s money on paper. Unless I go to the ATM and then it will be money on a different kind of paper we call currency. And when I take it to the store I’ll be able to get food with it. And that makes it money.

In this case, the court admonished the homeowner about relying on an infamously ridiculous case from Minnesota and warned that: “further frivolous arguments relying on it or any other opinion of the Justice of the Peace purporting to question the validity of the federal monetary system would result in sanctions.”

The case the homeowner was citing was the result of First National Bank of Montgomery foreclosing on Jerome Daly’s property for nonpayment of his mortgage. The bank was seeking to evict him from the property. (Montgomery v. Daly, a civil case in Credit River Township, Scott County, Minnesota, heard by the courts on December 9, 1968. It’s often referred to as “The Credit River Case.”)

Here’s the case the homeowner cited in a nutshell version…

Jerome Daly was an attorney who based his defense on the argument that the bank had not actually loaned him any money but rather had created credit on its books and therefore had not given him anything of value and was not entitled to the property that secured the loan.

The jury and the justice of the peace, Martin V. Mahoney, agreed. The Justice of the Peace declared the mortgage “null and void” and said the bank was not entitled to possession of the property.

Now, it should come as no surprise that the bank appealed the very next day, and the decision was ultimately nullified on the grounds that a Justice of the Peace did not have the power to make such a ruling, but that’s really not the whole story.

You see… Jerome Daly was a kook. He was also a long-time tax protester who was convicted of failing to file tax returns for 1967 and 1968, his argument being that the only “˜Legal Tender Dollars’ are those which contain a mixture of gold and silver and that only those dollars may be constitutionally taxed.

The United States Court of Appeals for the Eighth Circuit rejected his appeal and referring to Daly’s contention that the only dollars had to contain gold and silver, noted: “Defendant’s fourth contention involves his seemingly incessant attack against the federal reserve and monetary system of the United States. This contention is clearly frivolous.”

The Minnesota Supreme Court later disbarred Jerome Daly in a decision in a case very similar to the Credit River case, which involved the SAME justice of the peace. In fact, the pair tried it several times until the Minnesota Supreme Court just had enough. See In re Jerome Daly, 291 Minn. 488, 189 N.W.2d 176 (1971). In the disbarment proceeding the Court noted that:

“Respondent’s persistent and continuing attacks on our national monetary system can hardly be regarded as zealous advocacy or a good-faith effort to test the validity of repeated decisions of courts of record. For, as found by the referee, up to the time of his findings and recommendations respondent had avoided payment of any Federal income tax for 1965 and subsequent years on the asserted ground that he has not received gold and silver coin and, therefore, had no earnings that were taxable.

Also, he has taken personal advantage of the system he attacks by borrowing money from a bank to purchase lakeside property, only to subsequently defeat the bank’s repossession after mortgage foreclosure by taking the position that the bank’s extension of credit was unlawful, obligating him neither to pay the debt nor to surrender possession following expiration of the time to redeem.

As detailed in the referee’s finding, we regard the tactics employed by respondent in the unlawful detainer proceedings before the justice of the peace as not only unprofessional but reprehensible.

The misconduct found by the referee, and demonstrated by respondent’s oral declarations before this court in violation of the Canons of Professional Ethics, reflects professional irresponsibility to such a degree as to render respondent totally unfit to continue to discharge the duties of an attorney.”

# # #

Now, even though a mildly interested seventh grader could find out what happened in the Credit River case, Montgomery v. Daly, the nullified case and its arguments have been cited on numerous occasions by various conspiracy theorists and groups opposing the Federal Reserve System, who are particularly upset about the practice known as “fractional reserve banking,” and argue that the case demonstrates that all foreclosures are illegal.

Fractional-reserve banking, we should all understand, has been around for a long, long time. Why people don’t like it, I really don’t know. It was originated many centuries ago when bankers realized that depositors do not all demand their money at the same time.

The creation of fractional-reserve banking predates the existence of governmental monetary authorities, which was back when people would deposit their gold and silver with goldsmiths and receive a note for their deposit… like a receipt. Soon the notes became accepted as a way to pay for commercial transactions… they became an early form of paper money.

The goldsmiths noticed that people didn’t redeem their notes for their gold and silver at the same time, so they saw an opportunity to invest their reserves in interest-bearing loans, and soon they became interest paying and interest earning banks. Fractional reserve banking had arrived.

In those early days, however, if people lost confidence in their goldsmiths/banks to repay them, they would all rush down there to try to be first to get their money out, and the “run on the bank” was also born.

So, by the later part of the 1600s, countries started creating central banks, which had the power to set reserve requirements, centrally store gold and silver assets and transfer them in the event of a bank run and be the lender of last resort should a bank fail. Over the years, central banks have also expanded their responsibility to include interest rates and various measurements of the money supply.

Here’s how fractional reserve banking increases the money supply… in this example the required reserves are set at 20 percent, although in real life today they could be as low as three percent.

You deposit $100. The bank lends out $80. Keeps $20 in Reserves.

The next bank gets the $80. Loans out (80%) $64. Keeps $16 (20%) in Reserves.

The next bank gets the $64. Loans out $51.20. Keeps $12.80 in Reserves.

The next bank gets $51.20. Loans out $40.96 Keeps 10.24 in Reserves.

The next bank gets 40.96. Loans out $32.77. Keeps $8.19 in Reserves.

The next bank gets $32.77. Loans out $26.21. Keeps $6.55 in Reserves.

The next bank gets $26.21. Loans out 20.97. Keeps $5.24 in Reserves.

The next bank gets $20.97. Loans out $16.78. Keeps $4.19 in Reserves.

The next bank gets $16.78. Loans out $13.42. Keeps $3.36 in Reserves.

The next bank gets $13.42. Loans out $10.74. Keeps $2.68 in Reserves.

The next bank gets $10.74

SO… TOTAL DEPOSITS = $457.05

TOTAL AMOUNTS LOANED OUT = $357.05

AMOUNT IN RESERVES + LAST DEPOSIT = $100.

So, as you can see in this example, there was only one deposit of $100 that made it all happen… and it works because of fractional reserve banking. Why is this a bad thing? I really have no idea.

Where do banks get the money they lend out to borrowers?

Well, there are different sources. Basically, banks get their money from:

Shareholders who bought shares of stock in the bank.
Deposits of various types.
Bonds sold by the bank (i.e. Debt).
Borrowing from the Federal Reserve and Federal Home Loan Bank.
Some is kept in reserve at the Fed.

They then make loans, but not from one of those buckets or the other… just from an aggregate available pool of cash. Banks can borrow from the Fed’s Discount Window and if the rates are low enough, and there’s demand from credit-worthy borrowers, lend it out at a profit.

Here’s the thing about mortgages, however. Banks don’t have a lot of money that they can lend out for 30 years. No one deposits money a 30-year CD, right? Of course, right. So, banks can originate loans, but then they need to sell them to get their cash back without having to wait for 30 years for us to pay off our mortgages.

The kind of investors that want to invest their money for 30 years are insurance companies and pension plans. You see, you buy life insurance when you’re thirty but you’re probably not going to use it until many years later, if at all, assuming it’s term insurance. So, an insurance company can invest money for the long run, because it won’t need to pay many claims sooner than that. Pension plans are the same sort of deal. You start contributing to your pension plan when you’re younger, but won’t be taking that money out until you retire and therefore pension plans too, can invest for the long-term. Get it?

But, insurance companies and pension plans don’t have retail branches where people go every day to deposit their paychecks, so the banks originate the loans and then they sell them to those who can wait for a longer period of time for their money to be repaid… insurance companies and pension plans. Well, and let’s not forget Fatty and Flabby… the two ugly sisters known as the GSEs.

They buy loans too… in fact, today they buy almost all the loans, except those considered sub-prime, which are insured by the FHA… who is insolvent but so what… and stop being such a gloomy Gus.

SHERRY MELINDA VINCENT, Plaintiff,
v.
COUNTRYWIDE dba BANK OF AMERICA, THE BANK OF NEW YORK MELLON N.A. and RECON TRUST COMPANY N.A., REEDSMITH LLP ATTORNEY SHAUDEE NAVID, Defendants.

No. C13-01569 HRL.
United States District Court, N.D. California, San Jose Division.

October 16, 2013.
ORDER (1) GRANTING DEFENDANTS’ MOTION TO DISMISS AND (2) STRIKING NEWLY ADDED ATTORNEY DEFENDANTS [Re: Docket No. 24]

HOWARD R. LLOYD, Magistrate Judge.

Plaintiff Sherry Melinda Vincent sues defendants for alleged violations of state and federal law in connection with her mortgage loan.[1] At the hearing on defendants’ first motion to dismiss, the Court indicated it would grant the motion and that the plaintiff would be given leave to amend within 30 days of the forthcoming written order. However, prior to the issuance of the order, plaintiff filed an amended complaint which, while nearly identical to the initial complaint in substance, attached over 100 pages of new exhibits. The first motion to dismiss was denied as moot, and the defendants now move to dismiss the amended complaint pursuant to Fed. R. Civ. P. 12(b)(6) and request judicial notice of documents in support thereof. Plaintiff opposes the motion. All parties have expressly consented that all proceedings in this matter may be heard and finally adjudicated by the undersigned. 28 U.S.C. § 636(c); Fed. R. Civ. P. 73. Upon consideration of the moving and responding papers,[2] the Court grants the motion to dismiss without leave to amend.

BACKGROUND

In July 2006, defendants agreed to loan the plaintiff $634,010.78 in “lawful money of the United States.” Amended Common Law Complaint (“ACLC”), Dkt. 23, at ¶ 3. Plaintiff signed mortgage documents and defendants wrote plaintiff a check for the sum of $634,010.78. Id. at ¶¶ 6-7. However, plaintiff alleges that defendants only provided an estimated 5% of the loan’s face value in actual money. Id. In her reply, plaintiff clarifies that the actual amount loaned was not greater than 10% of the face value because that percentage is the reserve ratio that the bank is required to keep. Affidavit, Dkt. 30, ¶ 4. The rest of the money for the loan was created by the bank itself through a series of book entries. ACLC at ¶10. Thus, plaintiff concludes, the check was not backed by “lawful money of the United States,” and consequently, defendants have breached the loan agreement, committed fraud and racketeering, and violated usury laws and the Truth in Lending Act (“TILA”).

LEGAL STANDARD

A motion to dismiss for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6) tests the legal sufficiency of the claims in the complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). Dismissal is appropriate where there is no cognizable legal theory or an absence of sufficient facts alleged to support a cognizable legal theory.Id. (citing Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990)). In such a motion, all material allegations in the complaint must be taken as true and construed in the light most favorable to the claimant. Id. However, “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). Moreover, “the court is not required to accept legal conclusions cast in the form of factual allegations if those conclusions cannot reasonably be drawn from the facts alleged.” Clegg v. Cult Awareness Network, 18 F.3d 752, 754-55 (9th Cir. 1994).

Federal Rule of Civil Procedure 8(a)(2) requires only “a short and plain statement of the claim showing that the pleader is entitled to relief.” This means that the “[f]actual allegations must be enough to raise a right to relief above the speculative level.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). However, only plausible claims for relief will survive a motion to dismiss. Iqbal, 129 S. Ct. at 1950. A claim is plausible if its factual content permits the court to draw a reasonable inference that the defendant is liable for the alleged misconduct. Id. A plaintiff does not have to provide detailed facts, but the pleading must include “more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Id. at 1949.

Documents appended to the complaint or which properly are the subject of judicial notice may be considered along with the complaint when deciding a Fed. R. Civ. P. 12(b)(6) motion. See Hal Roach Studios, Inc. v. Richard Feiner & Co., Inc., 896 F.2d 1542, 1555 n.19 (9th Cir. 1990); MGIC Indem. Corp. v. Weisman, 803 F.2d 500, 504 (9th Cir. 1986).

While leave to amend generally is granted liberally, the court has discretion to dismiss a claim without leave to amend if amendment would be futile. Rivera v. BAC Home Loans Servicing, L.P., 756 F. Supp. 2d 1193, 1997 (N.D. Cal. 2010) (citingDumas v. Kipp, 90 F.3d 386, 393 (9th Cir. 1996)).

DISCUSSION

The basis for all of plaintiff’s claims is that the loan was not backed by “lawful money of the United States.” Defendants argue that this is not a cognizable legal theory and point out that it has been rejected by numerous district courts. See, e.g., Rene v. Citibank NA, 32 F. Supp. 2d 539 (E.D.N.Y. 1999) (dismissing claims of breach of contract, wire and mail fraud, and violation of usury laws and plaintiff’s civil rights based on the theory that the check drawn to them was not backed by legal tender due to inadequate funds in defendant’s vault, and noting rejection of theory by several other courts).

The sole authority plaintiff relies on to support her theory is First Nat’l Bank of Montgomery v. Jerome Daly (1968). However, it has absolutely no precedential value as it is an unreported decision of a Minnesota Justice of the Peace that was vacated by the Minnesota Supreme Court. Sneed v. Chase Home Finance, No. 07-cv-00729, 2007 WL 1851674 (S.D. Cal.) (admonishing plaintiff about its reliance on the case and warning that further frivolous arguments relying on it or any other opinion of the Justice of the Peace purporting to question the validity of the federal monetary system would result in sanctions).[3]

Plaintiff’s underlying legal theory has been consistently rejected, and this Court likewise rejects it. The invalidity of her theory is fatal to each of her claims for relief, and none are salvageable by pleading additional facts.

1. Breach of Contract

Plaintiff alleges that defendants breached the loan agreement by failing to lend plaintiff lawful money. But, plaintiff admits that they tendered a check for the face value of the loan, and the Court rejects plaintiff’s allegation that the check was not backed by lawful money of the United States as required by the agreement. Thus, plaintiff’s claim for breach of contract is dismissed without leave to amend.

2. Fraud and Racketeering

Plaintiff alleges that defendants “are in collusion in using US Mail and Wire Services to collect on this unlawful debt . . . in establishing a `pattern of racketeering activity.'” ACLC at “Count Two” ¶ 1. However, the debt on which defendants were collecting was not unlawful for reasons alleged by plaintiff. Additionally, no fraud occurred because the defendants’ statement that they would provide plaintiff with lawful money was not a misrepresentation. Accordingly, plaintiff’s claim for fraud and racketeering is dismissed without leave to amend.

3. Usury

Plaintiff alleges that because only 5% (or 1/20th) of the loan was in lawful money, by charging interest on the full amount, defendants charged interest 20 times greater than provided in the note, which violates unspecified usury laws. Again, the Court does not accept plaintiff’s theory that the loan was not lawful money, and therefore plaintiff’s allegation that defendant charged interest greater than provided in the loan fails. Plaintiff’s claim for violation of usury laws is dismissed without leave to amend.

4. Truth In Lending Act (TILA)[4]

Plaintiff alleges that defendants failed to disclose material facts in violation of TILA. The undisclosed material facts are that “Plaintiff was the depositor and that the Defendant(s) risked none of their assets in the exchange, or any assets of other depositors.” Not only does plaintiff fail to adequately explain her conclusory assertion that such disclosures are material within the meaning of TILA, but again the claim hinges on plaintiff’s theory that defendants did not provide, or “risk,” lawful money. Accordingly, plaintiff’s claim for TILA violations is dismissed without leave to amend.

5. Defendants Reed Smith LLP and Attorney Shaudee Navid

Plaintiff’s amended complaint added two new defendants. However, as plaintiff did not have leave of the Court to add new defendants or claims, Reed Smith LLP and Attorney Shaudee Navid are stricken from the amended complaint, as are any claims asserted against them.

CONCLUSION

The amended complaint fails to state a claim for relief and cannot be further amended to state one under the theory plaintiff insists on pursuing. It is therefore dismissed without leave to amend.[5] The clerk shall close the file.

IT IS SO ORDERED.

[1] Defendants identify themselves as: Bank of America, N.A. (erroneously sued as “Countrywide dba Bank of America”); The Bank of New York Mellon, f/k/a The Bank of New York, as Trustee for the Certificateholders of CWALT, Inc., Alternative Loan Trust 2006-OA16, Mortgage Pass-Through Certificates, Series 2006-OA16 (erroneously sued as “The Bank of New York Mellon, N.A.”), ReconTrust Company, N.A., Reed Smith LLP, and Shaudee Navid.

[2] Long after her opposition was due, Plaintiff filed an affidavit which defendants interpreted as an untimely response to its motion and replied accordingly. The Court interprets it the same and considers both papers. Plaintiff did not appear at the motion hearing.

[3] Further discrediting the opinion, both the Justice of the Peace, Martin V. Mahoney, and the defendant Jerome Daly, a “lawyer, whose unreachable quest is a judicial decree of unconstitutionality of the federal income tax and the federal reserve and monetary system,” Koll v. Wayzata State Bank, 397 F.2d 124, 125 (8th Cir. 1968), were the subjects of prohibition and contempt proceedings in the Minnesota Supreme Court for their conduct in connection with the case.Sneed, 2007 WL 1851674 at *3, n.4.

[4] In support of this claim, plaintiff directs the Court to see exhibits/attachments, which is roughly 100 pages, including an article entitled “Securitization is Illegal,” an unsourced Memorandum of Law “” Bank Fraud,” and the affidavit of an expert witness from a Michigan state court case. These documents are not properly incorporated by reference pursuant to Fed. R. Civ. Proc. 10(c) and are not considered. See Dichter-Mad Family Partners, LLP v. U.S., 707 F. Supp. 2d 1016, 1019 (C.D. Cal. 2010) (“[I]tems such as newspaper articles, commentaries and editorial cartoons are not [written instruments] properly incorporated into the complaint by reference.) (internal quotations omitted); see also Hernandez v. Smith, (“[Plaintiff] must identify (cite to) the exhibits with specificity and may not rely on the Court to wade through the exhibits and piece together his claims.”).

[5] Defendants’ request for judicial notice is denied as moot because the Court did not consider the documents they submitted in ruling on this motion.

HOW DOES THIS HAPPEN?

Who told this homeowner that this argument had any chance of not being laughed out of court, as has happened countless times before? Where did this homeowner get the idea that the court wouldn’t do what it did back in 1968 and throw the whole thing out based on it being complete lunacy?

Why are homeowners buying into statements presented as legal theories without even taking time to check them out in Wikipedia, let alone with another attorney or even a friend or family member. I mean, I’ve got cousins… and even the ones that I consider to be largely idiots could have talked me out of going forward with this case.

Except that homeowners at risk of foreclosure, don’t talk to their cousins, or their friends, in fact, they tell no one. It’s a form of PTSD, shame-based nondisclosure and isolation…and it’s spreading.

The foreclosure crisis began in late 2006, at least that’s when foreclosures first spiked, but in 2009, when President Obama told the nation about his Making Home Affordable program, which became HAMP for those at risk of foreclosure, that’s when things started to decline for homeowners, and I’m not just talking about losing homes.

This crisis is unique because it’s a quiet crisis.

When someone can’t make even a single mortgage payment, they’re stressed about it. After two months not being able to make a payment, the stress goes up. After three months, many homeowners report not being able to sleep through the night. It gets worse as the months pass, and a large part of why it gets so much worse is because the homeowners can’t tell anyone about their situation… they’re ashamed.

People are ashamed that they can’t make their mortgage payment, so they can’t tell anyone… not their parents, not their closet friends, not co-workers. Shame is what drives us to keep silent about how we think or feel. And the power of shame binds us all.

Shame and non-disclosure has also been the focus of researchers who not surprisingly have found that “non-disclosure was related to the anticipation of negative interpersonal responses to disclosure (in particular labeling and judging responses) in addition to more self-critical factors including shame.”

The lack of human contact that comes from being unable to talk to anyone over a long period of time is a form of solitary confinement, and putting someone into solitary for more than a few weeks is considered a form of torture that can lead to certain mental illnesses including depression and permanent or semi-permanent changes to brain physiology.

Dr. Stuart Grassian, a Board Certified Psychiatrist and member of the faculty at Harvard Medical School for over twenty-five years has extensive experience evaluating the psychiatric effects of solitary confinement and his observations and conclusions related to this issue are cited in a number of federal court decisions.

Dr. Grassian believes there is no question that minimal opportunity for social interaction””can cause severe psychiatric harm. In his paper titled, “Psychiatric Effects of Solitary Confinement,“ which appears in the Journal of Law & Policy, Vol. 22:325, Dr. Grassian states…

“It has indeed long been known that severe restriction of environmental and social stimulation has a profoundly deleterious effect on mental functioning.”

It’s important to note that, according to Dr. Grassian, this issue does not just apply to prisoners, but is also a major concern for patients in intensive care units, or spinal patients immobilized by the need for prolonged traction, military situations, polar and submarine expeditions, and in preparations for space travel. So, you don’t have to actually be in solitary confinement to experience the negative psychological effects of isolation.

Researchers observing individuals confined with small groups, such as being confined to work over the winter in the Antarctic, have reported “progressively worsening depression, hostility, sleep disturbance, impaired cognitive functioning, and paranoia.”

Grassian also explains that, “Such disturbances were often observed in individuals who had no prior history of any mental illness.” He has found that “common effects of solitary confinement include increased sensitivity to stimuli, hallucinations, and other changes in perception, as well as cognitive problems including memory loss, difficulty thinking, and impulsiveness.”

Craig Haney of the University of California at Santa Cruz, also an expert on the effects of isolation has conducted research that shows that some people when isolated from others, “lose their grasp of their identity, because who we are, and how we function in the world around us, is very much nested in our relation to other people.” And the longer we are isolated from human contact the more our ability to process information is undermined. Some lose their ability to register and regulate emotion. “The appropriateness of what you’re thinking and feeling is difficult to index, because we’re so dependent on contact with others for that feedback.”

Shame has made this country able to lose five million homes to foreclosure almost without a peep. But just because its stayed relatively quiet, that doesn’t mean people haven’t been deteriorating, if not physically, then mentally.

And I’m afraid that it only gets worse from here.

The harm caused by our government’s abominable handling of the foreclosure crisis… inconceivably made worse the complete absence of any communication on the subject by the Obama Administration… has barely begun to manifest itself let alone be understood… well, seemingly by anyone.

And with no apparent possibility that anything will change going forward, we can be certain that we are creating millions of Americans who will never recover… and as to the impact on children, in my view, it will likely be felt for decades to come.

Epilogue…

A Tale of Two Cities, was written by Charles Dickens in 1859, when the French Revolution was still remembered, if not by those who had escaped with their heads intact, than by their kin. It was a period known for its sheer “terror,” when the leaders ignored all others and used their powers to instigate mass executions and political purges. Almost 17,000 were executed by the “National Razor,” which was at the time slang for the guillotine.

Am I drawing a comparison between the foreclosure crisis today and the years leading up to the French Revolution? Of course not.

It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way ““

So, what shall we do? Qu’ils mangent de la brioche?

Mandelman out.