The horizon is not so far as we can see, but as far as we can imagine

Rule of Men, Not Law

Amidst all the screaming about Trump, there is a feeling that he is being unfair by singling out various companies for attack.

This is true.

It is also special pleading.

What Trump is doing, and what he will almost certainly do when he is in office, is pick out specific groups and individuals, and he will very likely use the weight of the state against them.

Oh dear. Oh dear.

This is rule by men, yes. It has also been going on for years. Anti-war protestors and environmentalists have been singled out for special attention on the positive side of the scale.

Meanwhile, on the negative end of the stick, let us compare two financial crises. In the eighties, there was a financial crisis too, filled with tons of fraud, called the Savings and Loan crisis. It happened under a Republican president.

Executives were charged, and they went to jail.

In 2007-2008, we had a financial crisis, and from 2009 on, Obama’s DOJ applied fines, not criminal charges. Those fines immunized the participants, and since they did not take money from those who had benefited (and were often less than the profits taken by the corporation, even) they did not dis-incentivize criminal acts. Instead, the DOJ said: “There is no real penalty, so make the money when you can, and we’ll immunize you for a token fee.”

There is no question in any reasonable person’s mind that many executives had engaged in fraud, negligence, and criminal conspiracy which could have been indicted under RICO.

But hey, they were let off. Meanwhile, people who applied for mortgage relief were deliberately given the run-around and fucked over, losing their houses (see David Dayen’s “Chain of Title” if you need the blow-by-blow.)  Robo-signing by financial institutions, post-financial crisis, was also mass fraud, attesting to facts the signers had no knowledge of.

America is already a nation of men, not laws. One can say, “It has always been thus,” and there is some truth to that, but it is more a lie than true: see the S&L crisis.

People have already been getting away with lawbreaking–depending on who they are–and not small numbers of people. And if you don’t think various firms haven’t been picked out for special, positive favors, you simply haven’t been paying attention.

2000’s Gore vs. Bush ruling was “men over laws.” It was such a bad ruling that the Supreme Court tried to say it couldn’t be used as a precedent. Meanwhile, the protections of law in general were gutted: the Patriot Act, the AUMF, the rise of the vast surveillance state with its clear industrial-scale violations of the Fourth Amendment. Most Americans live in a border zone, where they don’t have freedom from arbitrary search and seizure. As for the First Amendment, the existence of “First Amendment Zones” tells you all you need to know.

Trump’s behaviour is and will be the direct consequence of how many previous Presidents acted, including Obama (who notably killed an American citizen without any trial and claimed the right to do so).

To cry now, and especially to weep for large corporations who are bad actors, is hilariously hypocritical and intensely revealing. “Trump blackmailed them into keeping a few jobs in America, that tyrant!”

Oh, My, God, the funny. Now yes, Trump has also called out people for terrible reasons. Oh well. Yes, that’s a new bad thing (though not worse than killing a US citizen without trial, the right to face his accusers, or see the evidence presented against him), but I just find it hard to get very worked up over.

You already lost your rule of law. There are a few places one can date the loss to, but I put it in Obama’s mass-immunization of financial executives. You could argue for Bush vs. Gore or a number of other places.

But wherever you put it, it already happened.

You have the rule of men. For certain people, the law is interpreted and enforced differently.

This, folks, was at the heart of Trump’s attacks on Clinton for e-mail, which liberals laughed off.  But we all know that if some peon had done the exact same thing, they would have been ruined and probably gone to jail.

You already lost rule of laws, and had rule of men.

You have already paid a frightful price for this. The reason your economy is so bad is because bankers were immunized and bailed out, staying in charge of your economy when they are incompetent crooks and ordinary people were not bailed out.

Not coincidentally, minus not bailing out ordinary people, Trump does not win election in 2016.  (He also wouldn’t have won if Obamacare was not so flawed, but that’s another post.)

Trump is just the continued price for breaking your own laws and constitution, and your own unwritten norms.

As such he falls under “as you sow, so shall you reap”.

Until large numbers of Americans see it this way, including at least some faction of elites or would-be-elites, there can be no true fix for this situation, whatever happens with Trump.

Trump is the symptom, not the disease, and until you treat the disease, things like Trump (or the financial crisis and the lack of real recovery from that crisis) will continue to happen, and fools will continue to be bewildered by them, as if the very public actions of the people they elected had not led to them.

Machiavelli wrote, and America’s founders agreed, that good men could make bad laws work, and that good laws could not save bad men.

The founders’ equivalent was that eventually Americans would become so degraded that they could only be ruled by despots.

Americans have given many signs of being this degraded, and now it’s up to Americans to prove that they aren’t.

Don’t dare to say this is all on “deplorables” or Republicans, because Democrats have not just been complicit in all of this, they have spurred it on in deliberate ways–as with Obama on surveillance, drone murder, and whistleblowers.

It is on Americans.

Americans are reaping as they have sown. That all Americans are not bad or degraded is not the point. Enough of you are, and your elites are corrupt as a class, so much so that I would easily expect, in nine or ten years, to be fundamentally unethical and unsuited to public life. That includes, by the way, Bill Clinton, Bush Jr., Obama and Hillary Clinton.

Trump is what Americans have earned.

The results of the work I do, like this article, are free, but food isn’t, so if you value my work, please DONATE or SUBSCRIBE.


Trump and the Art of the Strongman


The Public Option for Obamacare Was Not Impossible


  1. Tom

    That is right. For good or ill, Trump is the one who promised change and meant it, and was willing to fight for it.

    Bernie didn’t fight, he had the evidence to put Hillary in jail with the leaks showing her fraud, but didn’t press it.

    That decided it for the Rust Belt who have crooks and liars robbing them blind for decades and in Snyder a man who was poisoning their water. Trump showed in the Primaries he would fight and bitchslap the assholes who fucked over the Rust Belt and that was decisive.

    Let this be a lesson to the Elites. Don’t fuck with the factory workers or they will fuck you.

  2. bruce wilder

    “A great deal of intelligence can be invested in ignorance when the need for illusion is deep.” Saul Bellow.

  3. Webstir

    My dad used to say “I buy you books and I buy you books, but all you do is read the cover.”

    All you are doing is reading the cover Tom. That Trump is our savior is not what Mr. Welsh is saying. He is saying that Trump is just one more sham example of the “Rule of Men, Not Laws.” He is a symptom of the disease. He is not the cure. The rule of law is the cure, and the rule of law will only be re-established and enforced when enough people organize and demand it.

    Sure, maybe Bernie blew it. But it does not negate my comment in Ian’s last post that nothing will change until the 99% pull together and support the true Democratic Socialists, whose motivation (and thus the ability to trust them) are to help the 99% instead of themselves.

    Jesus Christ on a dinosaur … when are people going to get it through their thick skulls that there will never be salvation of our democratic foundations through a “one man revolution”??? Trump is just a new grifter with a different bag of tricks.

    Can Trump manage to due some good through creative destruction? Maybe … it remains to be seen. But until I really see it I’ll be sticking to my guns. He’s a con-artist. Zebra’s very rarely change their stripes.

  4. Chris

    Well, yes. Had Obama done the right thing and placed the unrepentent bankers and the mortgage swindlers on trial, presented and prosecuted criminal charges, we’d be in a different place. Obama, for all his good intent and patience, let slip the real axe of justice. Thus the situation we now have. And, of course, democrats ran a very, very flawed candidate in this last cycle but that, too, I think, can be laid at the feet of the lack of justice applied to the financial industry and its leadership in 2009, 2010, 2011. You cannot send such strong signals and not be heard.

  5. realitychecker

    @ Chris

    You can’t reasonably give Obama any points for “good intent,” if you know the facts.


    Fact 2: Eric Holder, as Attorney General, appointed Lanny Breuer as his Chief of Criminal Law Enforcement. Breuer was, and is again, a partner at the same law firm as Holder.

    No good intent can be inferred here, sir. Absolutely none. Zero. Zilch. Nada.

  6. Chris

    Well, you’ve certainly checked my reality.

  7. Ché Pasa

    The Republican Party should have been RICOed out of existence long ago. It was and is a criminal enterprise.

    Had that happened, the Democratic Party could have become the establishment conservative party it has always seen itself to be — and still wants to be, viz: La Clinton’s futile efforts to amalgamate “moderate Republicans” into the Democratic coalition.

    Were that to happen, voila, there would be an opening for a more or less genuine leftist (well, “leftish,” this is the USofA after all) party, which the Democrats never, ever were nor can they ever be.

    Had any of these necessary things taken place, the rule of law and a self governing constitutional republic might have been preserved for future generations. But no. It was not to be.

    Instead, the rule of law is a joke — a cruel one. The constitutional republic is farce. And people who should know better are celebrating the advent of a gangster-conman in the now irrelevant White House (it appears he will rule by Tweet from the Mar-a-Lago Winter Palace.)

    It didn’t have to be this way.

    Well, maybe it did….


  8. different clue

    Here is an article I have dragged over here from the Naked Capitalism links-aggregator feature.
    It is about the piece of Clintonite Shitocrat scum which calls itself ” Andrew Cuomo”.

    Andrew Cuomo hopes to get itself nominated for DemPrez candidate in 2020. If any pieces of Clintonite Shitocrat scum are still reading these threads, be advised: If the Clintonite Shitocrat Party nominates another piece of Clintonite fece like Andrew Cuomo or Cory Booker or even Hillary Clinton itself all over again . . . then I will very probably vote for Trump all over again. There won’t be any political or legal progress towards anything until the Clintonite Shitocrat Scum wing of the Democratic Party is exterminated from existence and wiped off the face of the earth.

  9. StewartM

    In a somewhat related vein, the denial of the Obamacrats and Clintonistas to what is transpiring is just amazing.

    The last two nights, on MSNBC, one guest called Assange (paraphrasing) \”an anti-American working at the behest of Russia\” (hmm, I guess the release of \”Collateral Murder\” was evidence of that too?). Last night all the MSNBC\’ers were hysterically ranting about \”Russian interference\” now having been \”proven\” by the intelligence report and our oh-so-apolitical spooks (hmm, ignoring not only the conclusions they reached about the Iraq War, as Ian has stated, but all those alarmist projections of Soviet military might by the CIA\’s Team B in the 1970s? No political motivation there, nosirree).

    And, to that point, what did those dastardly Russkies supposedly do to influence the US election? Did they plot and help execute a coup (as we have done to other countries to take out governments we don\’t like). Did they hire assassins, or support armed repressions of political or ethnic groups that led to tens or hundreds of thousands of deaths? (As we have done). How about destabilizing their economies so that the new government is blamed? (As we have done). How\’d they do it?

    Ah, we were told what the dastardly Russkies allegedly did was *far worse*–they *paid bloggers* and *paid trolls* on social media to advocate their talking points!! As everyone knows, if the Russkies actually did do this, given the current bought-out state of US politics, with the media filled with spokespeople paid to spout their talking points and social media filled with trolls paid with big bucks from all \”mainstream\” persuasions, then the Russian trolls would be coming into an arena already mighty crowded. It would be similar to the 1960s infiltration of the Socialist Workers Party by the FBI under COINTELPRO (1,600 paid informants; only 900 genuine members). Moreover, if the Wikileaks disclosures are correct, those paid Russians would be toeing keyboard-to-keyboard with paid Clinton trolls and bloggers.

    So how come paid Russian trolls are so awfully bad, and paid Clinton trolls are okie-dokie?

  10. seltzer

    Obama does not have good intent. What a load of delusional pansy middle Dem SHIT. He is a neoliberal, and he does not care, AT ALL. He cares only about his family and lying his way to a phony legacy. He is a pure narcissist, as most technocrats are, and completely lacking in knowledge or wisdom. We warned you assholes what would happen if you pursued lesser evils without a parallel plan, but you didn’t listen, and now you’re trying to escape responsibility. Oh, Obama had good intentions! Oh, it’s racist poor people who are at fault! Oh, it’s the Russians! What a bunch of pathetic cowards the lot of you neoliberal technocrat scum.

  11. Hugh

    I look on it as rule by crooks and thieves, or kleptocracy. When the criminals are in control, they can ignore the law, enforce it selectively, or use it to make crime legal. Both Clinton and Trump are kleptocrats. Both Democrats and Republicans are kleptocratic parties.

    I think assessing blame is tricky. We are all of us responsible, but it is hard to expect people to be good citizens and hold themselves and their institutions accountable when they have never been taught what being a good citizen means. And when a class war has been directed against them precisely to keep them disempowered, divided, and confused and so unable to organize or right things.

  12. realitychecker

    @ Chris

    Not trying to be especially hard on you, those facts were among the best-hidden of the last eight years.

    ‘Twas just a mystery how they couldn’t find anyone to prosecute lol.

  13. realitychecker

    @ Hugh

    The only people who must never die are the people running the corrupt system, amirite?

  14. darms

    Ian, you nailed it in this essay. It’s what I have been saying for decades but you said it better. I’d love to pay you something but we are old & broke & on a tiny fixed income. So the best I can do for now is say “Thank you for writing this”. This one needs to be spread far & wide…

  15. Brucie A.

    Here’s a good wrap up of some of Obama’s legacy: Locating Fascism on the Home Map

  16. bob mcmanus

    Somewhat off-topic, but since it came up above I have been wondering for months as to why there is such panic about Russia in the Democratic Party. Naked Capitalism linked to Dmitry Orlov who speculates that Trump and Russia (plus maybe China, Iran, Turkey, etc) are going to turn on Saudi Arabia and the Gulf States for a massive looting operation, possibly including war. I don’t know how seriously I take this, but it kinda does make the pieces fit better.

  17. Peter


    The MERS story sure brought out the sharks but they didn’t do too well in court having the big class action suit thrown out but they won some smaller decisions.

    The MERS system was in business almost ten years before the crisis and seems to be doing very well today handling keeping track of much of the mortgage securitizing business nationwide. I don’t think that MERS actually bypassed the county mortgage registration laws but it does handle everything after that initial sale. I’m sure the counties would love getting a fee every time someone slice or dice a mortgage but that isn’t happening.

    What bothers me is that much of the litigation, hype and government BS produced at this time gave many people a false hope that they could somehow keep or recover homes they had already lost and couldn’t pay for.

  18. Chuck Mire

    “Sow not your seed in anger, nor with hatred, nor with fears, for ye who sow in anger shall for certain reap in tears”.

  19. realitychecker

    @ Chuck

    And what do those who sow in joy and hope reap? Give some modern examples, please.

  20. realitychecker

    @ Peter

    I used to be all over the mortgage scandals when they were coming to a head and I was doing a lot of futures trading, not so much anymore, but I do know the courts have done nothing substantial about it.

    There was no way to undo the damage that was made possible by MERS, so the courts had to use band aids only.

    You may know, however, and if you don’t you should, that the real crisis taking place in the early 2000’s was that the MERS was used to help slice and dice mortgages so as to securitize them in all kinds of crazy-leveraged derivatives, etc. vehicles, which were deliberately and relentlessly marketed to low-risk investor groups. The nominal value of these vehicles were in the hundreds of trillions of dollars.

    Here’s the key, which many don’t know.

    The vast majority of the mortgage trusts that these securities were based on were trusts created in and subject to the laws of New York.

    Under New York law, the assets in a trust must be fully perfected at the moment of its creation, and (and this is the killer) New York case law was clear that it was not possible to remedy a failure to so perfect the assets after the instant of creation of the trust, so that if the assets were not properly perfected in thhe first instance, the entire trust had to be deemed to fail.

    Because the MERS documentation was so faulty, any trusts which included assets where the chain of title had been polluted by MERS involvement would have to be ruled to have failed under New York law. All those trillions of dollars of contract bets

    That is the true catastrophe that had everybody shitting bricks in 2007. As far as I know, there has been no authoritative court ruling since to deal with this problem, the Fed has merely taken much of these spoiled assets (the mortgage-backed securities) onto its own books in order to artificially create the appearance of a market where no true market actually exists.

    I have tried many times to get current info on the mortage-backed securities market, but to no avail. AFAIK, it is still a ticking nuclear bomb that could take down the whole world’s financial system.

  21. Hugh

    Property law is very well established, as in centuries old and well understood. Each time a mortgage is transferred, the transfer is to be recorded on the title or an accompanying allonge if more space is required and registered with payment of fee. This was black letter law which the banks and mortgage originators fully understood, and ignored. MERS did not skirt the law. It was completely illegal from the getgo. This had huge legal and financial implications because many of these mortgages ended up in (tax avoidance) trusts which served as the basis of CDOs. These trusts had fixed closing dates after which they could not be modified, but were in fact filled with invalid mortgages. Later still, during the foreclosure rampage, companies came into existence precisely to retroactively manufacture forgeries recreating the title chain. All branches of government, the executive in the form of the Justice Department, the legislative, and the courts, both state and federal, largely turned a blindeye to this. There were only a few state courts, I think New York was one, which late in the game finally demanded that lawyers vouch for the authenticity of the documents they were submitting to the courts, which put a crimp in the wholesale forgery which had been going on.

    All of which goes back to what I was saying. In a kleptocracy, the criminals ignore the law, or simply make sure it seldom or never applies to them.

  22. Hugh

    I see realitychecker made the point before me I was trying to make.

  23. You do not hear the cracks.

  24. dude

    Hugh & Reality Checker-
    Thanks for the update on MERS. I was aware the class-action case was under consideration at the time. Did not know it was thrown-out by the courts. The Register of Deeds in Greensboro NC (Guilford County NC I think) was very vocal about how MERS deprives all local jurisdictions of recording fees which, in the scheme of things, may not amount to much in any given year, but now for over ten years, must deprive local governments of lots of much needed income.

  25. realitychecker

    @ Hugh

    You added more details than I was willing to type, but you got it all right. Cynthia Kouril did some of the best early work on this, read her stuff at Firedoglake, others have done some good writing since, but not recently and I have been amazed at the relative silence surrounding all the related issues since the crash.

    In particular, I have been unable to access any precise information re the current pricing of all these mortgage backed securities. Quite astonishing, really, when one thinks about it.

    @ Peter

    I am reading into the flavor of your comments that you do not fully grasp all the deeply disturbing legal implications of the MERS thingy, do you perhaps have a bias in favor of the mortgage industry? I ask because it seems like it. Hugh clearly grasps the MERS implications better than you do. I would suggest some deeper reading about the boring legal details, amigo.

  26. Lisa

    Pretty much nails it. The absurdity of someone going to jail for life for having a joint, while not a single person (despite endless proven criminality) responsible for the GFC being touched makes that very clear.

    Even more so than offshoring it displays the class/race system in all its naked glory.
    Laws are not about justice they are now about oppression, ‘in’ groups’ can do anything they want with no penalty, ‘out’ groups get hammered.

    And, as always the case, the collapse in ethics of the elites spreads ever downwards. So it becomes ever easier for those who have a tendency towards it to act in criminal ways. The whole and appalling shooting of (mostly) blacks by police with impunity, is a clear example of that where their ethics have gone under as well.

    Now lets not be naive about it, those at the top always had an easier ride and far greater ‘forgiveness’ than those at the bottom, but it has never been so apparent as today. They don’t even try to hide it.

    In the US the power and influence of the ‘religious right’ adds a whole other dimension to all of this. Always extremely right wing economically and in foreign affairs, they add other dimensions to those targeted for oppression along with an amazing ability for ‘forgiveness’ of those at the top. This adds to corrosion of public ethics.

    Trouble is, when things become as corrupt as they are it becomes nearly impossible to deal with real issues, like climate change, crumbling infrastructure, education, health and all the rest. At each and every point those who can will grab a share of whatever is spent, until there is nothing left. Put $100 into infrastructure spending and $200 will be taken out of it by those who can, those at the bottom will have to pay for the borrowings to make up the difference and nothing will actually be spent on the infrastructure… When you get to that level the system is busted ..which is basically what happened to the USSR.

    When it has got as bad as it is now, maybe it does take a despot to ruthlessly cut them down, trouble is most despots throughout history come from that class and add to the oppression of those at the bottom, making it worse.

  27. V. Arnold

    It is my observation that the U.S. is already a crypto-fascist state. The U.S. is also an “Inverted Totalitarian” government; the two mesh effortlessly, if not complimentary.
    Sheldon Wolen (RIP) coined the term “Inverted Totalitarianism”.
    For those not familiar;Totalitarianism is a political system in which government is on top with economics subservient.
    Inverted Totalitarianism is the government subservient to the economic system, which is exactly what we have today.
    Which do you prefer?

  28. Ché Pasa

    Obviously, the gangsters have been in charge of our government for quite a long time, as much of the testimony in this thread demonstrates. Until now, they have been content to rule through their bought and paid for servants and lackeys in government and the consultant class, but no more.

    Now one of their own made-men is to take the reins and rule directly and through his cronies — many of whom have no government experience at all, something his loyalists and defenders celebrate.

    Whatever questionable or illegal acts that have been done in the past at the behest of these and other gangsters will certainly not be corrected. After all, these people have benefited from those questionable and illegal acts, haven’t they? Why would they fix something that serves their interests and demands? It’s pure fantasy to assume they would.

    Much of the globe has had plenty of experience with gangster-rule; our own Three-Letter-Agencies are masters at installing gangsters to rule over peoples who make the wrong governing choice on the erroneous notions that they have some sort of pathetic right to self-government. How do you think the Third World got to be in such shit-shape? Why do you think it can’t be corrected?

    When almost the entire ruling clique pledged fealty to Trump almost immediately after the election, it was clear to anyone with any concept of how our government works that the shift to direct rule by the gangsters — or rather a faction of them — is perfectly acceptable to those who have ruled on their behalf for more than a generation. Sure, why not? Of course it won’t turn out well, it never does, but if the People won’t rise up and say “No!” too bad for them. They almost never do in any case, and if they do, no problem. Just shoot them down. Nobody will miss them. And if they do, nobody who matters will care.

    What we’re witnessing is not a popular/populist revolt — most Americans long ago forgot how to do that. Trump is a phony celebrity-populist whose primary interest is in his own success measured by his standards without regard to anyone else, particularly not the Rabble.

    However, there is a serious contest between factions of the gangsters and the ruling clique over whose vision (if you want to call it that) will dominate. The idea that Trump’s vision can dominate by force of his will remains to be seen. I’m skeptical. On the other hand, he’s daring his rivals to do anything about it. Taunting them, indeed. That will have consequences. Just watch.

    Well, as I’ve said, he’s sown the wind, and he will reap the whirlwind — and so will many of the rest of us who had no inkling of what could be in store.

    The anti-Clinton obsession should have run its course by now, but clearly it is an animating principle for Trump defenders. Without it, one would have to deal with the reality of what’s underway, and that’s never so rewarding as scapegoating those who have served the gangsters so well. No matter what happens, it has to be the fault of the Clintons, Obama and the Democrats. It isn’t entirely their fault, but oh well.

    The public pageant is no way as interesting as the background jockeying. Who or what comes out on top remains to be seen, but this cycle has been so bizarre, nothing much would surprise me.

    I’d say we’re in for at least one more shock.

  29. highrpm

    collectives work as long as members observe rule of law. the reason for corporate by-laws. and church creeds…and traffic laws and lane markers and center dividers. and hollyworld thrives making and selling high-emo entertainment products where the hero lives outside the collective and its rule of law. and this nation-state embraces hollyworld — east (washington) and west (los angeles) — as primary deliverer of nation-state indoctrination. any wonder we’re had?

  30. Tom


    We are way past books now, 40+ years past them. America voted for change, the Democrats illegally buried Bernie and he failed to fight so we lost that option.

    Trump stepped up. The working class rallied to his banner and he is delivering before he is even taking office and bitchslapping the Elites in line.

    And now it looks like he will go to war with the CIA and bitchslap it down and anyone stupid enough to stand with them. He is also preparing to go to war with the Cold War Senators who can’t grow up.

    So far Trump is showing he want to bring genuine change by railroading the elites who looted us for decades without restraint and bring them back in line with the US Government rather than acting off on their own and at cross-purposes to the elected government’s prerogatives.

    Could Trump turn into an even worse president than Obama? Certainly, but till then, we just have to wait and see if he maintains his assaults on the establishment or caves into them.

  31. Be careful Ian lest you be seen as giving credibility to a potential autocrat and encouraging more rule by man than law than is healthy

  32. Jim

    Lots of finger pointing. However…the point stands.

    It has nothing to do with liberal, conservative, Democratic, Republican yadda, yadda. There is not even close to 1% of Americans who fight to end what America is and why all of the people in the previous sentence are responsible and culpable in what America is and does. It does not matter if you are a card carrying member of the black BAU crowd or a card carrying member of the green BAU crowd. You are all card carrying members of the Empire and none of you have shown any inclinations to end that empire. It does not matter who won the recent election as all of the candidates were clearly wedded to that fundamental fact. No one on this ship intends to give up 90% of their lifestyle…period.

    So, yes, America has earned what it has gotten just as it would have if Clinton had won. Makes no difference.

    But there is another level to this responsibility which should not be overlooked. There are no end to facilitators, accomplices, hangers-on, and mercenaries who help this situation perpetuate itself. Every emperor needs his ‘allies’ to help maintain order on the frontier, his knights to enforce the empires laws and to collect the tribute and taxes. These folks own this situation also. So let’s have a shout out to all of them as well. Please stand up and take a bow Canada, Great Britain, Germany, Japan, France, Australia, the EU and all the rest because without your support America could not be living up to its high ideals and you could not be getting rich off our way of life. Responsibility works both ways.

    All of us earned what we have.

    We broke it we own it.

  33. Chris

    Was there ever a time during which the US was ruled by laws?

  34. Peter


    The emotional impact of the crash was widespread and everyone was worried even if they had never bought any of these questionable products, the sky did appear to be falling. The mortgage/financial industry certainly are responsible for their part of the mess. There was a lot of money needing investment after the dot-com bust and people were looking for the relatively high returns these investments offered. These loans and investment securities were easy to sell because many people wanted cash from their home or a better house even if they couldn’t afford it under the old rules, the investors just wanted good returns.

    To direct the anger and ease the anguish at home a melodrama was created with all the archetypes represented. Snidely Whiplash was easily portrayed by the greedy mortgage lender while a few Femme Fatale examples displayed the financially ignorant homeowner as victim while the smartly dressed advocate/lawyer stood on the county courthouse steps waving the County Rights banner.

    I don’t know if Hugh is a property lawyer, I’m not, but it seems to me that a county’s rights and jurisdiction ends at the county line so whatever their little rules stipulate doesn’t apply to interstate or international commerce. The reactions to the MERS Corporation then and now is interesting because they are an electronic virtual system of mortgage recordkeeping that seems to produce something like the Uncanny Valley effect in some people To finish the foreclosure process they were required to produce paper documents from the ether to satisfy more of an emotional need than a legal one. They were directed to produce papers and what was on them wasn’t that important just the papers themselves. Has anyone thought about what would have happened and might still be happening if that process was stopped? No one was going to recover a home because they were already lost. Many more of these homes would have been open to vandals and copper strippers for longer and that does wonders for the neighborhood and their property values.

    The judge’s decision to throw out the class action suit against MERS is telling. His finding was that the plaintiffs had failed to show that any harm was done to them by MERS so there was no reason for a trial.

  35. wendy davis

    david dayen wrote about MERS a lot at fdl. trying to find one of his diaries again brought me this hit at 4closurefraud sept. 2016: ‘Five Questions with David Dayen About Foreclosure Fraud, Activism, and Hope’

    but my personal fave excuse the O administration failing to prosecute banksters was lanny breuer’s: deferred prosecutions, esp. as the fallacy of the reasoning was almost comical.

  36. realitychecker

    @ Chris

    At the beginning our ‘specialness’ was based entirely on our being under rule of law, rather than rule of men.

    Nowadays, because I am a lawyer, I ask people what they think about the rule of law, and they look at me as though I just landed from a different planet.

    We have fallen a long, long way from our founding ideals. And it really does matter, but appreciating how much it does matter requires some ability in conceptual thinking, and that is a skill we have cheerfully abandoned in the last few decades.

    How do you make an unthinking population start to think again?

  37. realitychecker

    @ Peter

    We seem to see so many things alike, I hate to have to say this, but reading your thoughts on the mortgage crisis just convinces me that you have uncharacteristically succumbed to finance industry PR, and really don’t even begin to understand all that was involved. I am not willing to write book length comments to illuminate these issues for you, but I respect your intelligence and integrity enough that I will simply urge you to do a lot more reading from the other side’s POV.

    Cynthia Kouril, David Dayen, Glenn Greenwald, Greg Palast (IIRC), are good places to start if you really care to get it right.

    I wouldn’t blame you if you felt it was not worth your time and effort to do such reading at this point, but you should at least know that your current view is missing many essential aspects. Many, amigo, many.

    I only got into the details as much as I did back then because I was both a lawyer and a pretty intense trader of stock index futures, and had to understand the real facts because my work required it. FWIW, I also unambiguously called for the housing crisis and accompanying stock market collapse in the spring of 2005, way ahead of many who got famous for seeing them coming in 2007.

    That period did not represent a business as usual event.

  38. Chris

    @realitychecker — that doesn’t quite answer my question. Was there ever a time when it could accurately be said that the US was a nation of laws, not of men? I know what the Founders’ ideals and intent were, but did even they adhere to those principles? Hard to say.

  39. Chris

    >>How do you make an unthinking population start to think again?

    I suspect education helps. Real education, as in how to think. So this, then, is probably a generational problem. At minimum.

  40. highrpm

    How do you make an unthinking population start to think again?

    since [reflective] thinking involves our cognitive structures, one best turn down/ off the reflexive structures. pictures and music bypass the reflective brain and go pretty straight through to the reflexive brain, triggering emo transferences and the like. so…for starters, stop patronizing hollyworld. and brick the t.v.

  41. realitychecker

    @ Chris

    You can’t overstate the radicalness of what the Founders actually did, when contrasted, as fairness and reasonableness require, against the ‘divine right of monarchs’ mentality that had prevailed until their time.

    Nothing is absolute in the behavior of human groups, and I’m pretty sure you already know that. It is hard to find in history such a monumental step as the one the Founders took.

    In any event, look how far from both the absolute ideal and the actual practice we are now, and you will have to acknowledge that we have gone a long way down. That is what matters.

    As to education, first we must un-educate from the crap we have pumped into the population’s brains in the last few decades.

    If you frequent comment threads, you have already witnessed and realized how hard that is.

    Then to re-educate with critical thinking as a core value. It’s probably an unachievable goal, except for the most gifted few.

    Still, we must try to open up what minds we can, n’est-ce pas?

  42. Peter


    You can play the Dudley Do-Right character and I’ll twirl my missing mustache. The melodramatic activists had two great evil frauds to display as trophies. One, the county clerk registration and the other the hinky paper trail used to finish moving this mess into the past anything else was buyer beware.

    I still wonder what people thought would be accomplished by stopping the process because the owners of the notes were not easily identifiable and creative processing was employed. I think the parties involved in this were reprimanded by the government and told to do a better job in the future and apparently they have.

    Reading WD’s post at Shadowproof shows where this type of drama can lead. She states that there were ‘ illegally obtained profits from MERS fraud’ when it was obvious that nearly everyone involved in the crash suffered major loses. This includes the Banksters, the loan companies who failed and the homeowners, there would have been no need to bail out the financial system if there had been profits from foreclosure.

    Even in normal economic times a foreclosure turns a profitable, paying investment into a liability for whomever holds the mortgage. The other cracked logic charge that came out of this mess was that it was planned to strip equity from the hapless homeowners. With housing values dropping 30 to 50% in some areas that stupid notion was supplanted by the hard fact that whomever then owned those notes had just taken a 30 to 50% loss if they could sell the property.

    There is no need to dig up the resentments and so called frauds created by that crash but I think its a good thing for the MOTUs to see the barbarians at the gate even if they are chasing butterflies. It is a shame that all this activism and money couldn’t have been put to useful work possibly even assisting some people before they fell into foreclosure who just needed a short bridge to where they could recover and meet their obligations.

    A house down my street just sold in a short sale where the homeowner who was making payments but not living there was forced to go into foreclosure before the sale could proceed. The owner of the note whether a bank, a mortgage lender or investor were forced to take about a 30% loss on their loan and the homeowner lost any down payment or equity.

  43. Hugh

    The 2007 housing bubble bust and the 2008 financial meltdown were the culmination of the largest frauds in human history, all ten thousand or so years of it. The criminality was pervasive and occurred at every stage of the process from the mortgage origation companies and banks at one end all the way through to the CDO cubed, CDS, and synthetics at the other, and on to the rocket dockets and forgery mills of the foreclosure process. That no one went to jail for any of this should be the biggest documentary exhibit we need of our rule by kleptocrats. That some latter day judge throws out a lawsuit against MERS is not some exoneration of MERS or anything else, but yet a further example of how all branches of government continue to be owned by the perpetrators.

    County assessor offices are set up by state law and that these properties were commonly transferred multiple times among banks and financial companies domiciled in other states and then bundled into trusts, most commonly in New York, means that federal law also applied to them.

    A long time ago, I wrote first a Bush scandals list and then an Obama scandals list because my contention was that knowledge is memory and that far too often in our society great wrongs and the names of those that committed them were simply flushed down the memory hole, allowing the original malfactors to repeat them and perpetrate new ones. It’s not even 10 years from these crimes, the largest ever of their kind, and it seems they have already been forgotten. I often say people don’t know their own history. Most of the history they think they know is mythology perpetuated by those in power largely to justify their power. But this phenomenon isn’t just about events from two hundred years ago. It extends up to events from only a few years ago. In such an environment, is it any wonder that the powers that be can lead us around like dogs on a leash?

  44. Jay M

    It is like 0bama discovered he had a bully pulpit when he became a lame duck. Perhaps all the desperate attempts at bipartisanship counted as advocacy to him. You have to give him props for intentions, but a lot of bad policy partly because of a hands off management style poured down the foreign policy sewer and backed up as the IS and operations services went rogue.

  45. Arthur

    On another website there was a story how the Republicans are going after birth control. Actually, I think that’s pretty great. A booming Trump economy and a brand new Prohibition. Hell, that last one was damn entertaining. I can see it now: A delivery of condoms and birth control pills to 2122 N. Clark on St. Valentine’s Day. Just remember to leave the dog alone.

  46. gnokgnoh


    It’s still happening. 100% on your comment.

  47. realitychecker

    @ Peter

    You’re not getting it, my friend.

    You’re not dealing with the fraudulent AAA ratings that made it possible to sell the crappy mortgage-backed securities to funds that were statutorily barred from buying less than AAA rated assets–that’s regular low risk investors money that was targeted.

    You’re also not dealing with the hundreds of trillions of dollars in all the derivative vehicles that were nothing but bets on the success or failure of the underlying mortgage backed security trusts.

    I’ll stop there, cuz you should be smart enough to follow the implications for yourself. So far, you are not even getting close to the magnitude of what happened.

    Hugh gets it.

  48. Hugh

    On a different subject, I read today that the Democrats were going to hold a series of four regional forums soliciting the views of “the people” on why they lost the election and have been losing so many state houses. My initial reaction was if they have to ask the question, they will never understand the answer. Then I went through my own laundry list, and thought only four? Finally, I just shrugged realizing it was all kayfabe anyway.

  49. Peter


    The people who put together these investment packages did a clever cut and paste job to get Moody’s, I think it was, to put a triple A rating on them and I don’t recall any prosecutions for that only opinion pieces whining about it in the news. It would seem investors at this level would do their own due diligence even with Moody’s stamp of approval.

    I would imagine that CDO’s and CDS’s are still widely used because one is where new money comes from for new mortgages and the other is insurance. I think.

    I still haven’t heard any opinion here about what remedies were possible that could have helped people in foreclosure or how stopping the process because of paperwork would have helped anything. The activists stirred up a lot of dust and gave people false hope but I don’t recall them actually accomplishing anything.

    The only reason I’m commenting about this dead subject is that bottom feeders are back trawling this old wreckage trying to find treasure while claiming to represent the victims of illegally obtained profits. One West is the bank they are attacking which was rebuilt by Steven Mnuchin out of Indy Mac which collapsed due to its loses from the mortgage crisis.

    Getting overheated about your inability to lock up the rascals who have most of the power leads nowhere. Capitalism won, that fact isn’t changing anytime soon and you can’t really call them kleptocrats because that would mean you had something for them to steal.

    The boom-bust cycles may be over with no boom possible anymore and we may be able to ride the upper levels of the Great Recession/bust for decades especially if Trump can bring manufacturing back while keeping the greedy banksters well fed.

  50. Hugh

    Let’s see, Peter doesn’t know what a CDO is, or a CDS. He probably has never heard of a mezzanine tranche. He doesn’t know the relationship between the ratings agencies and the banks. He doesn’t know the history of Indy Mac, Mnuchin, and One West. He doesn’t know that there were remedies like the Swedish Model which were known at the time or that the Fed could have bailed out the homeowners for a lot less than it cost them to bail out the banks. He doesn’t know any of these things, but he can declare that this is all a dead subject, apparently because the crooks won, and when the crooks win, there is nothing for us to see and we should all just move along. But Trump will fix everything, yesirree, because Peter’s blind faith says he will. And even if he doesn’t, if there is no Trump boom, Peter’s blind faith says Trump gave it his best shot. Every grifter on the planet dreams of people like Peter.

  51. V. Arnold

    January 9, 2017

    Not knowing is not a “crime” in and of itself, however posting as an informed individual on any given topic; when indeed one is not, is just bluster, ignorance, and big ego.
    The rudeness and lack of civility (guilty) is also not hopeful for the future.
    A lot of that going around lately (the last 17 years).
    No substitute for community and face to face.
    The view here, from the hermitage, is thus; very discouraging, all in all.

  52. Ché Pasa

    There could have been a household — not just a homeowner — bailout at about the same cost, maybe less, than the bank bailout, that would have stopped the GFC in its tracks and eventually would have made most banks whole but would have messed up the looters, and so it was too radical to even discuss at the time. It’s still a notion that cannot be broached in polite or gangster company. At all. Though households are still groaning under enormous debt loads.

    The neoliberal defenses of the bank bailouts and essentially nothing for households but more debt have become iron law, and there is nothing at all the incoming regime is expected to do about it — except make it worse.

    The end of neoliberalism and austerity? It is to laugh. And cry.

    The opportunity is always there, but if it doesn’t benefit the oligarchs and kleptocrats directly and fully, they are opportunities not taken.

  53. Tom

    And Fiat Chrysler just announced they will be opening plants in Michigan and Ohio and employing 2,000 people to run them which will generate 14,000 additional jobs.

    They saw the bitchslappings and they are towing the line.

  54. realitychecker

    @ Peter

    I think you do capitalism a great disservice when you characterize what the mortgage and finance industries got away with as a triumph for capitalism. Capitalism is defensible (and I defend it) if and only if there are rules that are obeyed and enforced. What happened was not a triumph of capitalism, but rather an atrocity against capitalism. I am bewildered by your apparent inability to comprehend the seriousness of it. I’m not going to dwell on it further, because I don’t want you to feel like I am attacking you, but because I respect your thinking in so many other areas, I am begging you to expose your mind to the contrary arguments that you are glossing over.

  55. Ian Welsh

    What happened in the financial crisis was not capitalism operating as it should. When capitalism operates as it should, people whose actions have driven their companies to bankruptcy and who have massively mis-allocated funds are allowed to go bankrupt.

    I covered the crisis and its lead-up in detail, most especially at FDL, where I wrote almost all of FDL’s articles on the issue.

    Because there was a vast amount of fraud, most of which retail investers could not reasonably be expected to understand, the case can be made they should have been bailed out. Because the banks did understand the risk they were taking and knew they were engaging in fraud, they should not have been. (The auto companies should have been bailed out under all circumstances, because they were almost entirely not complicit and were viable minus an exogegnous shock they could not control.)

    I would, frankly, also have been willing to accept “no bailouts for anyone”, but if you actually followed the crisis, you know that would have meant that the mortgage paper would have been selling for 10 cents on the dollar. A perfectly acceptable thing to do there would simply be to have the Fed buy it all at that price or a little higher (blanket offer, 15% of), wait a year, then double that price and offer to sell/refinance it to the homeowner.

    What was done was the worst of all worlds. If you want capitalism, fine, let’s have capitalism. If someone goes bankrupt, they go bankrupt. No goddamn bailouts. I’ll live with no bailouts for the poor if I can have no bailouts for the rich.

    Those who have noted a certain degree of ignorance are sadly correct. A little less knee-jerk, some of the people here are pretty much experts on what happened to cause the financial crisis and what was done afterwards.

  56. This was all inevitable. Consider what it means to embrace, endorse and perpetuate a rapacious, indifferent capitalist Empire. The years of planning, machinations and sheer effort to orchestrate and benefit from the plundering of the world’s resources. The deep delusions and deceptions that ‘all men desire this’ embedded directly into our institutions and political processes. The Manifest Destiny mantra that swept over an entire people and never left.

    Fast forward to ‘corporations of Empire are now people’ and ‘rights of the State triumph over everything else’ and the meek acceptance and blind obedience to every dictate, mandate and decree streaming forth from the ‘city on a hill’ that presupposes we are but cogs and wheels in the Leviathan’s maw, here only to serve and to pay for their obscene privilege, while we struggle endlessly on the dwindling crumbs.

    It was all inevitable. It is the logical outcome of the greed and indifference of men.

    The path taken was the wrong one, but this knowledge is almost unknown.

  57. realitychecker

    @ Survival Acres

    Sorry to tell you, but human greed has and will infect and affect for the worst every form of human or economic governance.

    The solution is not to choose one ideology over another, but to severely punish the transgressions that are inimical to whichever regime is in place.

    Consequences are the magic ingredient in every instance. They must be sure, they must be harsh, and they must be close in time to the transgression.

    If those criteria are not maintained, there’s no point in whining about the poor results.

    This is basic psychology. We don’t need any geniuses to debate it.

  58. Willy

    I like Sanders and Trump because the real issues were finally discussed on the big stage (not too surprised, but oligarchic players aren’t entirely oblivious to what’s going on after all). I like Hillary and Obama (and their people) because we get to observe how their kind reacts to this discussion (for some reason appearing more oblivious about ‘the way of things’ than the former).

  59. Peter


    I won’t go much further with this dead story because little if anything has been settled. This is especially true for those people who see nothing but fraud and kleptocracy in this crisis and demand a few capitalist’s heads on pikes to jeer at on their way to the salt mines.

    When I wrote that ‘capitalism won’ it wasn’t a value statement just a fact that’s undeniable and they are the ones who help to write and interpret the rules not you or I or anyone else who petitions the government. The financial sector did a lot of losing before they won/survived this crash and while they may not represent this good capitalist you invent I think they are responsible for about 40% of our GDP. I don’t know if the government actually gave them money but the magic fed loan window kept them liquid until the crisis passed.

    The mortgage business has been pruned and consolidated since the housing bubble expanded it with irrational exuberance but it is still necessary and they still sell subprime loans, ARMs and other innovative products. They also securitize these mortgages and sell them to investors just as was done before MERS created the much larger market for these investments.

    There was a lot of bloviating about what should have happened after the crash to punish the miscreants of capital but even now no one seems willing to ponder what would have happened if the financial sector was allowed to collapse or even what stopping the so called fraudulent foreclosures would have caused.

    I enjoy a good debate especially looking back on a topic with some detachment from the emotions and agendas of the moment. I was a supporter of the pitchfork movement and I bought much of the hyped fraud everywhere you look meme. The so called fraud in the robosigning paperwork fiasco now seems more like expediency than crime and it seems the courts agreed with that assessment. I had an ARM based on LIBOR in the ’90s, talk about an IED, and experienced many of the same problems people faced during the crash, five years before the crash. I briefly supported the egalitarian, but simpleminded, notion that if the banksters got a bailout the poor victims of foreclosure deserved one also.

  60. realitychecker

    @ Peter

    You’re making me feel like I wasted my time learning about the law and the financial markets. (Sigh.) I don’t know why you are looking at this complex situation in such a binary way. But I do know that you are coming off as an ideologue rather than an analyst, and seem determined to stick with a POV on this topic that is outrageously limited and jaundiced.

    OK, it’s not my job to change your mind. But I wish you would open it.

  61. Tom


    When a chain of title is broken, the borrower owns the home free and clear. So the foreclosures were illegal theft on a massive scale.

    The banks should have been liquidated, the upper management thrown in jail, and Credit Unions put in place to replace the banks.

  62. Lisa

    Peter “The people who put together these investment packages did a clever cut and paste job to get Moody’s, I think it was, to put a triple A rating on them “…

    Yep I onnce did a project, pre the GFC examining their risk models …and they were technically hopel;ess greatly underestimting risk. I also did a an earlier paper in 2004 that showed the same result ….. and a better way of calculating what is called VaR. I showed that using the standard models they were underestimating risk by at least 3 orders of magnitude ..1,000 times…

    So let alone the blatant criminality there was within the banking, insurance, etc worlds an incredible level of risk underestimation.

    It got worse, in some later work I showed that correlation of risks meant collapse, that in reality what was thought of independent things, were actually tightly (with a time lag) correlated (very in fact). So the true risk levels were at least 4 (maybe 5) orders of magnitude.

    For the CDS’s, which were a form of insurance, the risk levels were in effect infinite because they worked around insurance laws and regulations and the potential payers didn’t (as in real insurance) have to hold proper reserves.

    The corruption and criminalty involved was just icing on the cake for what was in reality a financial system designed to blow up…as it still is today by the way.

  63. Lisa

    In 2004 I thought I had made my fortune by my new (albeit pretty crude) models that calculated risk more accurately …. what an idiot …I was totally ignored, shunned in fact. Too many people and companies were making too much money to change…so it went its merry was into disaster.

  64. Ann Thomsen

    The left calls for a boycott of LL Bean because one of 50 family board members contributed to Trump. The House Black Caucus puts up a painting of Police as Pigs… GOP rep takes it down… now Dems call the cops, report it stolen.

    Black waitress says “no tips for blacks” on receipt… each of these has been a hoax, but no matter…

    Toxic America 2016. Each side hates the other so much, that the constitution be damned… each side wants blood… by any means available.

    Enter Meryll Streep. Talk about bringing a spoon to a gun fight….

    Um, China is buying Hollywood. TPP failed, so Lime Torrentz and Pirate Bay continue to destroy the movie and music business.

    Trump will be in many negotiations with the Chinese. If he’s as vindictive as Obomination… [and many say he is lethal]….

    Mrs Gumm is in deep doo doo…. gosh I hope so…. and Rosie, and Sheen, and Whoopie, and …

    Blacklisting…. the new politics of HATE. Ah, Multi culturalism…. stick unlike people together… make the winners support the losers… who then try to kill the winners and bring in more losers… and Voila !!

    We are entering Kill or be Killed time in America. I know what side I’m on.

  65. Peter


    It appears that everyone is susceptible to overstimulation during a bubble all the way from homeowners to Wall Street and the regulators too. I agree with you and most everyone here about the character of the actors involved, they were crooked, usurious, clever, arrogant and even unethical but none of those things have been shown to be criminal.

    There is no reason to trust anyone in our buyer beware economy and there is no reason to believe there will be another economic bubble here anytime soon. This means the dangers from too much or too clever risk taking are moot for now. Your being closer to China where there is a huge construction bubble occurring might mean you will hear the giant sucking sound and feel the effects of that bubble imploding as it must.

    This is why I can’t be tempted to join the somewhat fanatical crusade against the fraudsters and criminals that RC and others try to create because that road leads to groupthink, magic thinking and madness as we have already seen.

  66. realitychecker

    @ Peter

    Oh, Peter, wake up already. Capitalism is not supposed to be jungle capitalism, and the fucking sheriffs are not supposed to be in the pocket of the criminals. But that is what happened, and it is outrageously simple-minded for you to say that because it happened that way, it must not have been criminal.

    I guess you never heard of prosecutors throwing a case. That is exactly what happened. Funny that you can see it with Hillary, but not with Obama. Any honest prosecutor could have had slam-dunk victories in both instances.

    I’m not sure whether you are exhibiting an undiscriminating zeal for capitalism, or the bias of one who has an interest in the mortgage and finance industries, I have asked and got no answer, but something must be explaining your uncharacteristically skewed writing on this subject.

    It’s painful to see. Sorry, amigo, but it really is.

  67. Lisa

    realitychecker : It is more complex than that, the criminality, the political corruption all contributed but the GFC would have happened anyway even if everyone had been squeaky clean. The fundamental system was flawed and still is, the current zero (or near zero) interest rate regime is killing businesses, enabling asset speculation and overvaluation and responsible for things like the absurdity of the US shale oil/gas industries (which have never made a profit, even at $100 a barrel).

    The problem, at its heart, lies in the ability of banks (etc) to generate unlimited money (through the creation of debt), turbocharged by the ability through unregulated derivatives to gear that up to absurd levels, the globalisation of finance accelerated that even more.

    The checks and balances on all that put in after the Great Depression were swept away and they were inadequate anyway and needed to be updated for the modern financial systems.

    This was warned about beforehand by quite a few people (such as Steve Keen).

  68. realitychecker

    @ Lisa

    I know all about how complex it is, Lisa, I was doing very intensive S&P 500 futures trading in those years and called for the housing collapse in early 2005 and nailed the market top in 2007, and you have made some very good points here, as I have in other comments, as Hugh has, as Ian has, as others have, and all of us in total have still not covered every single aspect of all the factors that were at play.

    Many people were wrong out of stupidity and misunderstanding risk, many stayed ‘stupid’ but got rich because the money from manipulating the gullible was so good. All market tops happen when too many have too little understanding of the risk.

    Many committed acts that should have had them hit with criminal liability, but the PTB were more concerned with keeping the financial sector stable than with enforcing the criminal law. That’s what I’ve been trying to get Peter to understand.

  69. Lisa

    “Many people were wrong out of stupidity and misunderstanding risk, many stayed ‘stupid’ but got rich because the money from manipulating the gullible was so good. All market tops happen when too many have too little understanding of the risk.”

    Sums it up perfectly.

    Derivatives made it all worse, because the originator of the crisis, the sub prime market, was only $1.2 trillion. Even the general US housing finance market was only about $3.5 trillion.

    The trouble was all the ‘bets’ (basically) made on it which magnified the whole thing. There were CDOs, CDOs squared and even CDOs cubed as well as the hellish unfinanced pseudo insurance CDS’s


  70. realitychecker

    @ Lisa

    And, even now, many cannot even conceptualize the significance of anything beyond the actual paper mortgages and the actual foreclosure actions.

    Madness. Very apt.

Powered by WordPress & Theme by Anders Norén