In my last post, I argued that the United States is now a bank-owned state. As if to prove my point, the banks used their power over 12 Democratic members of the Senate to defeat Senator Durbin's "Helping Families Save Their Homes in Bankruptcy" amendment. And they financed the lobbying of taxpayer representatives with some of the billions of bail-out dollars provided by - taxpayers.
This was a defeat for American democracy. It represented a failure of senators to represent their constituents, honor the constitution and 'establish justice, insure domestic tranquility and promote the general welfare of the American people. But while it was a defeat for democracy, it was a Pyrrhic victory for the bankers. One more such victory over Congress and the White House, and the bankers will be facing ruin.
Why? Property makes up most of the collateral backing up toxic assets owned by bankers. The upward spiral of foreclosures places downward pressure on property prices - the banks' collateral. With falling collateral values, bank debts rise and become unpayable - forcing even more financial institutions into bankruptcy.
American homeowners - both those facing foreclosure and their neighbors - need a floor to be placed under falling house prices, for obvious reasons. Realty companies need a floor to be placed under falling house prices. The economy needs a floor to be placed under falling house prices. Above all bankers need a floor to be placed under their most important collateral - house prices.
The market will not stop house prices falling. So government has to intervene. Not just to save the homeowners, but also to save banks, because the banking system is still at risk of systemic failure.
The best way to protect the banks is via the route proposed by Senator Durbin. By managing bankruptcy law in such a way as to keep homeowners from forced sales of their homes, or from defaulting on their mortgages. In other words, by using bankruptcy law to place a floor under falling house prices.
Be sure, this route will cost American taxpayers a lot less than another bailout of the banks.
The bankers and their lobbyists on the Hill just did not get this. They may be voraciously greedy and anti-democratic, but, ironically, they are not pursuing their own best interests. By defeating Senator Durbin's amendment, they are voting for more foreclosures, more bankruptcies and more bank failures.
In other words, they are like turkeys voting for Thanksgiving.
This time it will be different. If I was entirely wrong, I'd have lost it all already.
Add to that the twisted rationalization that one's efforts are contributing to the greater good through consumer confidence, and you might convince yourself that gravity itself might cease to exist before we hit pavement.
We don't have time or resources to fix or replace the old jalopy economy. Our job is just to spray some ether into the dang thing to get it going. After all, It, not we ourselves determine our destiny and our kids' future.
Denial economics from the hallowed rooms of money anonymous.
It takes one to know one.
FOR GET CITI, BANK OF AMERICA AND THE LIKE, SHRINK BK DOWN TOT HE BB&T'S ETC OF OUR NATION AND ESPECIALLY THE CREDIT UNIONS, TAKE YOUR MONEY THERE IN WHEEL BARRELS IF YOU HAVE TO.
i am so tired of people in power doing our tax payers in for the pure purpose of greed,.
The wealthy and powerful banks operate autonomously and with impunity.The banks have no fear of
reprisal from their mortgage borrower since the Congress has never legislated any laws or regulations
to permit the borrwer to have a voice so to speak.
What has happened to day in this place at this time will happen again and again because the wealthy and the powerful will never permit the borrower to have the legal defense to contest, object or question the unethical behavior of their mortgage holder.The average person cannot afford the creativity of a qualified attorney to speak for them. The Congress on its knees will not legislate in favor of the borrower to have a voice of protection within the same regulatory system that the federally chartered bank lends its money.
The Office of Thrift Supervision stated in writing December 19,2006 that they would not help me since Congress has never passed any Federal Consumer Banking Regulations.
I cannot speak for the millions in foreclosure or those who have been through foreclosure because I am one of them. The Bankers have stolen my past and made my limited my future with the approval of the Congress.
Michael LittleBig - Cleveland Ohio 5-6-2009
either do this or we will foreclose,
her other option take that 1,000 to an attorney and file for chapter 13 bankruptcy protection.
it is the only reason she has her home today after an unexpected layoff at her job with Wachovia Bank.
her incoem went from 50,000 to 30,000 after 4 months unemployed.
she now makes the regular mortgage payment and the arrearage is being paid thru the court, guess what, it is a double payment almost....and a struggle all the way, SOME RELIEF WOULD HAVE BEEN APPRECIATED, you know re negotiate the mortgage, for a better payment, so the customer can have somethign left over for other obligations, instead the banks want it all all our future tax dollars and all the money we make today
The majority of our citizens who have mortgages are unaware that if a serious problem or
breach occurs whereby the Bank does not or will not address the issues that the borrower has no protection or right to be heard. The average person cannot afford a creative money grabbing hourly rated attorney, who by the way has to have experience in real estate,banking, federal,state,forclosure laws and regulations.
You should note that NO ONE controls the bank. The bank answers to no one.
The borrowers only true protection is at this point bankruptcy-Chapter 7.
The Banks do not even have to honnor or participate in any government programs.
The Congress in the US, the people that you and I elect for lack of a better term are watching the banks rape their customers.
If you doubt what I say, it is simple to prove, do the research, it all on the internet in black and white.
Been there lost my home. My two elected Ohio Senator Brown and Latourette had the guts to
tell the Office of Thrift Supervision to back off from closing AmTrust Bank. This Bank is the Bank from hell-again google AmTrust Bank and lawsuits or foreclosures.
I won't forget.
I'll probably be accused of being insenstive, but therein lies the fallacy, - banks attract less sympathy because they are insentient.
The alternative to mortgages is soviet style housing projects. But remember, the fancy folks had those dachas.
Anyone for commues?
I don't know about that, but I'd like someone to draw a diagram of the power structure of the U.S. as I'm not too clear how it works.
"The market will not stop house prices falling. So government has to intervene."
I disagree on both. Housing should be one segment that should be left to free-market, and it's far from that now.
Falling house prices is generally seen as a bad thing. It's not.
In the housing market itself, buyers benefit, sellers don't. (Sellers moving up do benefit).
In the money side of the market, everyone benefits from rising house prices. That's what fueled the bubble. Remove risk, or ignore risk, and there's no concern for consequences.
There's no such thing - sounds like an inchoate re-definition of capitalsim.
Better than state owned banks
The only thing Bush's bailout did was make the world secure for rich folks.
Because you are not a failing bank that would take billions in savings accounts down with it.
We cannot re-instate bubble prices. Those prices were not sustainable and still aren't.
Nothing Congress does, or doesn't do, will change that.
The Democrats have a majority and can pass whatever they want. They didn't pass this 'cram down' bill
The bill would have allowed judges who have foreclosures come in front of them to lower the mortgage to what the house is actually worth. They banks will end by having to foreclose, put the house on the market and still only get what the house is actually worth in today's market. The banks would have saved money by just charging the current owner what the house is worth. But no. That would have meant giving up power. No one ever gives up power. Power must always be asserted. Forgive people for thinking an election might matter. The struggle is not over.
There is a pretty simple answer to all this... elect progressives next time. Ben Nelson isn't even on the same planet as a Democrat. Obama does not have a magic wand. And all this negativity is getting a little gruesome. It really does hurt people you know. How you make them feel, whether they have hope is critical to them making it through this.
BTW - I have no credit cards, nor do I plan to get one; debit and Amex only.
You're right! They are raping us! Everyone STOP using credit cards unless it's absolutely necessary. Don't just give them your money! Mortgages-, the banks don't have anything invested as they sold them in the securities ponzi scam. The end investor, some foreign entity, is left holding the bag of crap. They try to blame the brokers/ borrowers - the bankers knew EXACTLY what they were doing along with wall street. THEY created the programs and approved the loans! The Fed reserve ALSO was investing in derivitives. The banks get 6% dividends from their stock in the Fed Reserve. Our banking system is a scam, and the people are getting screwed! So what do we do? Use your local credit union, use seller financing, save up until you can afford to buy. DEMAND a new banking system run by the people and not corrupt corporate cronies that could care less if we lose our homes. They have nothing invested. They got reimbursed when they sold the loan to Fannie Mae.or Freddie Mac who in turn sold to the wall street spin machine. The banks DON'T own the majority of the mortgage notes! This mess was created by Wall Street in bed with the bankers helped by deregulation that allowed them to get away with it. We need NAMES of politicians that have their hands in the cookie jar and hold them accountable. Eliminate the "campaign" contributions scam that is just a way for them to "legally" get kickbacks. ENOUGH!
I keep wondering who Wal-Mart plans on selling to once they have driven competitors out of business and suppliers offshore. I also wonder who the Repubs will rob from once the middle class is gone. The middle class started democracy and it's demise will bring about the demise of democracy. We can see it already in the partial dismantlement of both.
But the rich have gone too far. They are the ones who started this round of class war. God, i hope we can keep the Republic intact while it rebalances itself. I wonder if it can re-balance in the light ot elections that cost millions and all those millions mostly go to mainstream media. The day we hear about Public financed elections from anyone on MSNBC, just for instance, will be a cold day in hell. It is completely against the interests of mainsteam media to tell us that the rest of the civilized world has public financed elections that only last a couple of weeks. No, in this country the same Supreme Court that brought us Gore v Bush says "Money is Speech".
Hey! This is America. If you pay for it, you own it. Until we pay for elections, Congress will remain owned by the people who do pay. We have Obama. We paid for him. Let's give him political cover in every way available.
The Christian church pronounced that charging more than 10 percent interest on a loan was a mortal sin. That meant the sinner went straight to hell. That's back in the day when mortal sins required remedies like walking to Rome on one's knees to beg forgiveness from the Pope himself.
I still think charging more than ten percent is a fatal flaw. It's enough of a sin to be shunned by men if not by God.
Capital's need for loans that risk that much, is the reason Islam and Capitalizm are at complete opposite ends. Like fire and ice. There's more than one reason things are as they are.