Why The Banks MUST NOT Get Away With This
The Market Ticker ® - Commentary on The Capital Markets
Posted 2010-10-26 13:05
by Karl Denninger
in Foreclosuregate
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Why The Banks MUST NOT Get Away With This
 

It's now in the mainstream media....

People in this country may be uninformed or misinformed -- but they're not stupid. They'll catch on to the message soon, if they haven't already: There's one deal for average people, but a different, far better deal for the really big and powerful.

We can't go there folks.

There's a limit to the screwing of this sort that the people will take.  I have no idea where it is.  Neither does anyone else.  The Politicians definitely don't; they're tone deaf to this sort of abuse, because most of them haven't bought their own groceries or pumped their own gas in 20 years.  We have reported every time there's an election how "Politician X" didn't pay his 24 speeding tickets and as a result his license was suspended - but now he paid them and it's all ok.

These people live in a different world.  If you or I don't pay one speeding ticket the next time we're tooling down the road the cop's "robocamera" will pick up our license plate and we'll get treated to the felony stop - that's where four cop cars pull you over and the cop steps out with his gun out, behind his door, and tells you to get the f%#k out of the car and lie on the ground.  Then, since you've got a suspended license, you get to spend the night in jail before you see The Judge.

This isn't hyperbole - it happens all the time.  Sometimes it's legitimately you trying to be an ass - you tossed the ticket and the warning from the state that your license and plates were suspended.

But sometimes it's not - you didn't get the notice yet, or you send in a check but for the wrong amount.  No matter, you get the felony stop treatment.

Here's the problem: If the people get into their head that not only politicians can do this sort of thing and get away with it when it comes to things like traffic tickets, but banks can literally rob the people with predatory lending and then enlist the courts to screw them a second time in unjustly evicting them from their house, there is a point where they will snap.

That point is where people vote from the rooftop.

That's a bad place to see someone cast a ballot.

Our society relies on the general premise that you can walk from the grocery store door to your car, and from your car into your apartment, in reasonable safety.  That's part of the unwritten social contract that binds all of us together.

Nobody passed a law to make it thus - those laws were all passed for other reasons (e.g. "no murdering, no raping, no pillaging") - but the general agreement among the population that these laws apply to everyone, and the people who disobey them will be punished, is why you can, in fact, walk from your car to your apartment with a reasonable expectation that you'll get there without any extra holes added to your body.

If this element of reasonable expectation is lost, we have instant madness.

Once the population gets into its head that the very legal code that says you can't steal someone's house by lying about debts in court only applies to them, and not to banks, we're not far from the general population deciding that the rest of the law doesn't apply either - and if the banks aren't going to play it legal and straight neither will they.

Society cannot survive in its present form if that decision is taken by even a tiny percentage of the population.  There simply are not enough cops - federal, state, local or otherwise - to enforce the law if the general social contract breaks down.

You want to see the economy shut down?  I mean really shut down?  All we have to do is see a handful of people lose everything, conclude they have no recourse to the law despite lawlessness by the banks, and then take the critical (and ugly) next step and decide they have nothing left to lose

Will you go to the mall and shop if this sort of thing starts happening?  Nope - and neither will I.

We'll wind up like Mexico, and damn fast too.

No thanks. 

There's only one way to prevent this from happening, and that for the law to be actually enforced against these jackals.  You filed 102,000 perjured documents?  Right over here into the dock you go - you're going to prison - after a public and fair trial, of course (if the jury is full of people who got foreclosed on due to your "errors", well that's just gonna suck, isn't it?)  You intentionally concealed fraud in the inducement in the loan?  Over here with that other guy.  You sold "empty box" MBS to investors, or those that ridiculously violated the claims you made for loan quality?  Over there.... "Heh Jack; we're gonna need a bigger holding cell!"

We can't afford to see society's general social contract break - and I don't like the vibe I'm getting from people on this - the people are waking up to what happened - at all.

If Washington will not enforce the law, the States must, and they must do it now.

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User Info Why The Banks MUST NOT Get Away With This in forum [Market-Ticker]
Bobby
Posts: 2994
Incept: 2008-01-19
Silver A True American Patriot!
vermont
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This is your best ticker.

bob

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"It was the money.You Americans, you believe money is power.""Belief, is power."
Soar07
Posts: 353
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Our government is broken. I think we just drift downhill sort of like Kunstler proposes.

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Time to put the USA first! Stop Globalization, Illegal Immigration, Outsourcing. Buy American. Enforce the rule of law. Drop kick political correctness!
Dmm219
Posts: 320
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I don't think it matters anymore. The banks and uber rich have gone "all in". They have declared total war on the lower classes. I don't see them backing down. They have all 3 branches of government on their side. The "common" man lost this war at least 10 years ago, they just didn't realize it till now. Its a lot harder to recognize when its carried out so slowly (intentionally).

I'm not sure...but I think we have a LOT further to go down this path. The amount you can stretch the populace is far greater than you give credit for. Just look at North Korea, that populace is pushed to the extreme and has been for over 50 years...

I'd LOVE for this country to take its government back for the common man...but I'm afraid we just don't have the men needed. They definitely, don't exist in the boomer generation...and I'm not seeing much hope from the younger one's either.

We WILL be Japan. Bank on it. They have dealt with this crap and lack of due law for the rich for over two decades. There's been no revolution yet. That is the outcome they are hoping for...
Quietrally
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@Dmm219... Neither the North Koreans or the Japanese have the 2nd Amendment. Unlike North Koreans, enough Americans know what is going on that there is a breaking point.

Karl is correct in his assertion that people will vote from the rooftops. The law must be enforced, or the few will take action. There are 90,000,000 gun owners in this country, and many of them are aware of what's going on. You DO NOT want them taking the law into their own hands, or it will get really ugly really quickly.

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Bigsapper
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Silver
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Quote:
...but I'm afraid we just don't have the men needed. They definitely, don't exist in the boomer generation...and I'm not seeing much hope from the younger one's either.


You're not looking in the right places. ;)
Arw
Posts: 218
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I agree with Dmm. There are three classes. The uber rich. The government. Everbody else. The first two are in it against the last.

Do elections matter? Not when the newly elected are immediately seduced by the move-up in class.
Hamilchr
Posts: 63
Incept: 2009-02-28

Portland, OR
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"We can't afford to see society's general social contract break"

KD - Trust? Faith? Those who are paying attention now know nearly(?) every word from our Gov, from our Financial leaders, from the MSM are lies, half truths, deceptions meant to further the scam. We are the prey they feed upon.

The entire edifice / nexus of Wall St., Finance, and the Gov (legislative, executive, judicial) are in bed to maintain their power. This entire system is rotten to the core and worse than any of the perceived threats to our security. They are destroying America because they can get rich in doing so and nothing within the legaly rigged system can stop them.

I think the question many will ask is when legal means to correct the system no longer exist, are unlawful means to reassert a law abiding society moral and right?

Mpilar
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Quote:
You DO NOT want them taking the law into their own hands, or it will get really ugly really quickly.


I agree, but when nobody else will enforce the law - except against the 'little people', there is no other recourse left. At this point...the attorneys general of the states investigating this need to come up with some very important heads displayed on platters (I SERIOUSLY doubt that will happen), otherwise, this ends badly.

It's only a matter of time...


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Every normal man must be tempted at times to spit on his hands, hoist the black flag, and begin to slit throats. H. L. Mencken
Dashingdwl
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Great ticker Karl. Fine words indeed.

I remain in the camp that We, The People, will continue to lose in this battle. Boiled frog and all that.

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When you are hard and disciplined, you can be principled. People fear you because they have no leverage against you. It's the truest form of Liberty.
Genesis
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Hamil, that's not the issue at hand.

The issue is how long do we have before someone loses it all - and decides they have nothing left to lose?

This nation is a powderkeg. These banks break into the wrong house down here and come up against an owner with a shotgun, the "securing company"'s goon gets a load of 00 buckshot to the chest, and this ENTIRE ISSUE will come down to whether the local Sheriff shakes the homeowner's hand and pats him on the back or calls SWAT.

If he does the latter the powder might very well go off.

We can't afford to go there as a nation.

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I don't care if it makes sense -- only if it makes money. -- Me
Bank (n): See scam, fraud and theft. Eat a bankster -- they're low-carb.
What part of "shall not be infringed" was unclear?
Anti
Posts: 4295
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We have a voluntary tax system. When Reagan changed the tax code to index for inflation and cut a lot of loopholes a lot of people felt the system had regained some fairness. I knew people who complied better after that and felt that they had a part of a social contract.

I'd guess with the bailouts a lot of people are feeling that social contract has been violated.

With zero interest rates on savings, inflation, underwater homes, job sent overseas, a lot of people have nothing for the IRS to seize. I'd bet TurboTim discovers that a lot of other people will find the "override" button too.

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Caton
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This is the main difference between Europe and the U.S. We are so used to being screwed that nobody will revolt any more. The worse that can happen is a few idiots burning their own cars...
Dashingdwl
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Caton, welcome aboard. I have a slight variation on your theme... Americans are definitely NOT used to being screwed. I think Americans simply DO NOT KNOW they are being screwed. Our education system, the media, the constant half-truths and deceptions have created a nation of idiots.
Like jelly fish... most Americans are simply along for the ride.

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When you are hard and disciplined, you can be principled. People fear you because they have no leverage against you. It's the truest form of Liberty.
Jtmo3
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Missouri
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You are correct Gen. The only issue is when even a small enough percent of the population will realize this. We are already at the point you describe. It is though, just as you said. There are not enough people who've lost all hope and snapped. We passed the point of 2 sets of laws for different sets of people. And it's quite obvious that UNTIL the people are in the streets, this will not change. If history is any guide, then it will take a major reshuffle to bring this about. There is no law you're going to pass and you won't get new fresh pols in the system fast enough to fix it. The morons running now are just the other side of the same coin. This problem will not be fixed by this or the next election. Anyone who believes it will is naive. The Europeans are catching on. They are starting with marches and small violent movements. If they don't get what they want, watch for an intensifying.

We are not going to fix this by hoping the people responsible are good enough chaps to turn themselves in and put themselves on the mercy of themselves, since they run the show.
Richard112360
Posts: 610
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Hooterville
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Lesson for the day from our current political system--both parties:

THE RULE OF LAW-- It's for the little people. A hungry man can steal a donut from a corner store, and justice is immediate and swift. A government or banking cartel official can steal TRILLIONS of dollars from the public, and get a slap on the wrist.......

What does it tell us??????

The Banks. If we want to put them out of business, and make them PAY for their crimes against Americans, we are going to have to do it the old fashioned way---MOVE YOUR MONEY out of any too big to fail institution, and VOTE with your checking accounts by the millions!!

It is quite obvious to anyone with half a brain that our govt. is not going to protect the people against the Banks...they can't even protect themselves. Obama has been strangely silent on all issues of criminality, which tells me he has checked out mentally. The revolving door between DC and Wall Street takes no prisoners...

ACT collectively, and lets BREAK UP THE BANKS on our own.
Caton
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jtmo3, don't believe what you see in the MSM. What we have here in France right now is civil service unions doing politics the old communist way. They saw an opportunity to gain a few voters in 2012 -- but instead, they almost guaranteed Sarkozy's reelection by*****ing off everybody in the private sector.
Pavlovshouse
Posts: 199
Incept: 2008-05-21
Silver
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KD,

Excellent ticker per usual, what you are explaining is something that indeed we should be EXTREMELY concerned about. It basically comes down to a term called "strong reciprocity". Defined quickly as people (all animals, even insects really) are conditional cooperators and also altruistic punishers. Easier way to put it, "I'll work with you, if you work with me, but if I find out that you've been slacking off while I've been working, or worse you've been ripping me off of my hard earned whatever, I'm going to go out of my way to see you punished, even if it means that I put myself in a worse situation". The most dangerous person isn't the guy who has something to live for and is trying to keep it, its the guy who has nothing to live for and looking for the guy who took it from him.

In one of the many letters that I have written my Sens and Con, I included the following sentence..."It does not matter if it is some tribe in the wilderness of the Amazon or the Roman or British Empires, as soon as part of the society feels that they have been taken advantaged of by another, the system breaks down, usually with disastrous consequences for everyone", 9/15/08. Did not think it was gong to happen here, much less this quickly.

This is very, very serious stuff. KD is correct, if they do not put a stop to this imediately, and the public becomes evermore aware of what has actually been occurring with the full knowledge of those in power, things get horrifyingly bad, real quick. They have a chance to stop this, if they don't the response by those that have been damaged by this is going to be apocalyptic. Why do you think it was so "easy" for Stalin, Hitler, Mao, Pol Pot, Amin, etc. to convince their population to do such horrifying things to people that were once there neighbors, co-workers, family? Strong reciprocity.

Stay rosty and plan accordingly.

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"Society in every state is a blessing, but government even in its best state is but a necessary evil; in its worst state an intolerable one; for when we suffer, or are exposed to the same miseries BY A GOVERNMENT, which we might expect in a country WITHOUT GOVERNMENT, our calamity is heightened by reflecting that we fu

Reason: typo
Quietrally
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@Caton... I believe the exact opposite. Americans will not act until it becomes absolutely necessary. You don't see Americans taking to the streets because the majority of us don't suckle from the public tit for our daily bread. We are busy earning a paycheck doing productive work.

It's a hassle to have to pick up the phone, e-mail and communicate with public officials who, if they were doing the jobs we elected them to do, wouldn't need their hands to be held. It's a hassle to have to pay attention to the massive frauds and corruption going on at the highest levels. But, as Americans, we know it's our duty to do these things from time to time as the system breaks down.

We've spent the last couple of years figuring out what's been going on while we were asleep at the wheel. Now, fully informed, we are doing our best to achieve lawful ends to the massive crimes that have been perpetrated on our great nation.

People like us won't take matters into our own hands until we are sure, beyond a shadow of a doubt, the last vestiges of the system we depend on for our social well being have been completely overtaken.That moment is approaching, and the powder keg is full. The rule of law better get into gear, and it better get there quickly, because our patience wears thin.


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Janedeaux
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Mississippi
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Another problem, as I see it, is that almost 50% of the people are on entitlement. They are not going to "rock the boat" as long as it doesn't affect their monthly check!

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A nation of sheep breeds a government of wolves.-anon


Bagbalm
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I think the politicians and banks are looking in the pot and they don't see it simmering - no bubbles so all is everything is fine. Instead it is heated well past boiling and all it will take is a tiny dust mote or a bump and it will flash.
Hamilchr
Posts: 63
Incept: 2009-02-28

Portland, OR
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KD,

I think what we are discussing is whether America can turn to the law as a means to resolve our troubles any longer. Or is the law no longer capable of a resolution it's citizens feel just, fair, or constitutional? I think many have come to their own conclusions and more are seeing the light.

I think the riots in France, elsewhere are not about the retirement age or benefits specifically. I believe they are about a system in which the corporates and top .01% can't lose their ill gotten riches while all those who played by the rules and told we are now to pay for the imbalances. Heads, we lose, tails, we lose.

My point is there are now great imbalances that are in need of correction and if this correction were applied evenly accross our society, it wouldn't be "fun" but could be a shared sacrifice for a greater good (I actually, naively, thought that's where Obama was going to go when he took office...silly me). HOWEVER, our citizens are watching the punishment of those least responsible (savers, middle class, middle America) while rewarding those directly responsible abusing the law to achieve this end.

Vmooper
Posts: 1826
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Bailout ville
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About 7 years ago my wife (through a spouse at her law firm) and I were treated to an inside tour of D.C. by our U.S. Senator, who held my babies diaper bag outside while we toured the White House. We had just received a tour of the Congress and got to sit at any desk in the Senate chamber while he explained what goes on there.

The Senator and I walked together from the Dept. of Justice to the Congress that day talking about how Senate procedural rules could be changed. What I will never forget is that as we crossed the street at a light, I realized I could have pushed him in front of a car buzzing by 5 feet away with no sweat.

These people, unless they wise up, are very "gettable" if someone chooses to. The day before, Justice Souter told us in a private tour of the SCOTUS that Rehnquist was out jogging (in sweats) and some tourists asked him if he would take a picture of them in front of the court. He said sure and then asked them if they had seen any important officials while in town. They answered no and he went off to finish his jog.

Their families are also just as accessible back in their home districts.

I hope my point is both visible and unnecessary. But I'm just sayin'...........

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"If you don't know where you are going, speeding up is not the answer." -Jeff Macke
"If you bail out everyone, nobody gets bailed out." -Jeff Macke
"Those who make peaceful revolution impossible, make violent revolution inevitable." -JFK

Goforbroke
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Dramsey
Posts: 79
Incept: 2009-03-16

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One of the primary things that the Republicans running as "Tea Party" people fail to realize is exactly what Karl has said here. The average American doesn't want to live in some left wing socialist paradise but he also does not want to live in some right wing banana republic.

Thus, Karl's persistent call that we must return to the rule of law, is the correct call. The only thing that is not clear to me is whether we can return to the rule of law within the existing social structures or whether those social structures must be destroyed and reformed. And if it is the latter, then oh hell, we're in trouble.

It is only via the rule of law that we can maintain some form of social order. If the rule of law is truly dead, then "da boyz" on Wall Street are dead. They just don't know it yet. So, for their own sakes, for the sakes of their spouses and children, they'd better hope the law prevails here. I don't want to imagine an entire United States like Lebanon in the 1980s.
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