Volatility

December 14, 2009

Mortgaging the Moment

Filed under: Civil Disobedience, Land Reform — Tags: , — Russ @ 11:49 am

 

Obama Accepts Nobel, Defends War
 
Salon magazine headline
 
So even the MSM is getting into the act. We have a war president indeed. Meanwhile his party has also been on the warpath. Even as the bailed-out banks have refused to lend and refused to modify mortgages, House Democrats have once again rejected allowing bankruptcy judges to modify primary mortgages. (On the other hand modifying loans for any kind of luxury – second homes, boats, Ferraris or Hummers – is fine. Bankruptcy shouldn’t be onerous for the rich, now should it?)
 
Everyone agrees that bankruptcy mods, and better yet the repeal of the truly vile 2005 serfdom bankruptcy law, is the best and only way to stanch the foreclosure bleeding, to the greater good of America’s social stability and the well-being of American families.
 
Everyone, that is, except those whose priority is the profits of bailed out banks.
 
Meanwhile Obama has continued his resounding silence on the issue.
 
Decided only to be undecided, resolved to be irresolute, adamant for drift, solid for fluidity, all-powerful to be impotent…
 
Winston Churchill, 1936.
 
The adminstration has trumpeted a bogus statistic. Private debt is falling! That’s great, right? Americans are paying down their debts, invigorating their personal balance sheets?
 
Not quite. On closer inspection it turns out that debts are being forcibly contracted through bankruptcies, defaults, banks writing off some bad debts, and most of all because the banks, who were bailed out upon the condition that they “resume lending”, are refusing to lend.
 
So this allegedly encouraging metric is really not a sign that America is retrenching its debt dependency, finding a new frugality, but rather yet more proof that the bailout was sold on a lie, and all that money was looted for bonuses and to reopen the casino.
 
It’s not constructive Change, but the Big Lie, the Bailout Lie
 
Meanwhile those who really could be responsible homeowners if they could get a conventional, “prime” mortgage, face a completely locked market.
 
The current rate for 30 year fixed mortgages is 4.8%, less than 60% of existing mortgages. It’s been driven this low by the Fed’s illegal program to buy $1.25 trillion worth of MBSs. Once this program is wrapped up sometime next year, rates are expected to jump back to around 6%. So the right moment is now for any solid would-be homeowner, and there are some of them out there. And this is the kind of lending which provided the bailout its premise.
 
But these loans aren’t being made. After blowing up the world’s economy with a subprime lending frenzy, suddenly they’re all about responsible, diligent lending in the biz. They’re simply vigilant “making good quality loans”, according to a Mortgage Bankers Association (MBA) cadre. They’re really about making very few loans at all, according to reality. This is because they know the system is a zombie, and all there is to do with the bailout loot is to gamble it in the casino and steal it directly as bonuses.
 
It’s really very “rational”, as Chicago would put it.
 
Government modification programs for loans guaranteed by Fannie or Freddie were supposed to refinance 4-5 million mortgages this year. As of September 30 they had done fewer than 120 thousand. Lender participation (that is, the bailed out insolvent banks) is voluntary, and they reject everything. One of their favorite tricks is simply “losing” the reams of paperwork they demand.
 
 
Lord I was born a ramblin’ man…..
 
– the Allman Brothers
 
American freedom is supposed to be all about mobility, social, physical; and the economy is all about velocity, of money, jobs, labor. Most of that’s pretty bogus, but that’s what the system’s still claiming to seek. On that front, here’s some trends running counter to one another.
 
New reports on “the rentership society” describe how some people underwater on their mortgages are wising up, realizing they can walk away, rent an apartment, and live for much less than throwing money down the hopeless rathole of their deflated property. They describe what a liberation this can be. (Actually some of those profiled in the article sound like they’re still pretty stupid, taking the freed-up money and spending it on luxury crap. But everyone doesn’t have to be that dumb. This can be an excellent tool.)
 
But where people haven’t yet achieved this level of consciousness liberation, where they still feel committed to these mortgages, the market doldrum is having the opposite effect. Those underwater, unemployed or underemployed, and unable to find a new job in their area, are unable to get a permanent mod, and therefore unable to sell in order to move to a more favorable region. “Arteriosclerosis of the economy.”
 
Normally in a recession worker mobility is counter-cyclical – they go where the jobs are. But if you feel trapped in your current mortgage and can’t unload the house because it’s underwater, you’re not very mobile.
 
The piece does say that these people also are starting to realize they’re going to have to just walk away.
 
 
And you walk away, walk away, I walk away walk away. I will follow.
 
-U2
 
And why not? The bailed-out banks themselves feel free to walk away from any property where taking title, and therefore responsibility for upkeep, possibly demolition, would actually be more expensive than abandonment. In the phenomenon called “toxic titles”, the banks bailed out by the taxpayers simply abandon a blighted lot, whole blighted neighborhoods, and leave any costs of policing, maintaining, demolishing a burned out dead zone for those same taxpayers.
 
An individual’s debt to any bailed-out bank has NO moral validity. And it should have no legal validity either.
 
Little by little we’re seeing protest, the lifeblood of politics, start to revive. I call attention to the program to Stop Usury Now, being run by Metro IAF, two dozen interfaith faith-based community groups affiliated with the Industrial Areas Foundation. Similar actions against payday lenders and other “bottom feeders” (Dick Durbin) are breaking out throughout the Midwest and on into the plains of Iowa.
 
In spite of a fraud like an “Islamic bond”, and of course the complete abdication of Western Christianity, usury remains a spiritual sin as well as a secular crime. It’s great to see people recovering this lost spirit and fighting for it, however small the beginnings.
 
(This may provide some insight into recent findings that organized Christianity in America is losing traction. The spiritual force of the people is flowing out in wild directions.
 

For the first time in 47 years of polling, the number of Americans who said that they have had a religious or mystical experience, which the question defined as a “moment of sudden religious insight or awakening,” was greater than those who said that they had not…….

Twenty percent of Protestants and 28 percent of Catholics said they believe in reincarnation, which flies in the face of Christianity’s rapture scenario. Furthermore, about the same percentages said they believe in astrology, yoga as a spiritual practice and the idea that there is “spiritual energy” pulsing from things like “mountains, trees or crystals.” Uh-oh. Someone’s God is going to be jealous……

For those keeping political score, Democrats were almost twice as likely to believe in ghosts and to consult fortune-tellers than were Republicans, and the Democrats were 71 percent more likely to believe that they were in touch with the dead. Please hold the Barack-Obama-as-the-ghost-of-Jimmy-Carter jokes. Heard them all.

The report is further evidence that Americans continue to cobble together Mr. Potato Head-like spiritual identities from a hodgepodge of beliefs — bending dogmas to suit them instead of bending themselves to fit a dogma. And this appears to be leading to more spirituality, not less. Cue the harps, and the sitars, and the tablas, and the whale music.

)

 
(There are also some signs of more violent action. Italian prime minister Berlusconi, general fascist, misogynist, philanderer and corporatist, has become the first head of state physically attacked since George Bush made the acquaintance of a shoe.
 
They’re of course calling it “terrorism”. Reminiscent of Apocalypse Now:
 

We must kill them. We must incinerate them. Pig after pig. Cow after cow. Village after village. Army after army, and they call me an assassin! Well, what do you call it when the assassins accuse the assassin?~

)

 
The protests are the kind of grass roots action we need in order to combat the demoralization the system seeks to spread. Action may seem hopeless if we look only at the magnitude of the problem, the seemingly meager resources up against such vast strength, the will to change against the inertia of a hijacked civilization. But remember how Beowulf defeated Grendel. Here too there will be opportunities for judo.
 
Most of all, the very momentum of the system fights for human renewal via the fact of the system’s unsustainability, that its entire ponderous momentum must render its fall all the more devastating and send sparks of opportunity flashing everywhere, giving who knows what strange and wonderful illumination and heat.   
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