Fed Policy Should Deal With Mortgages They Own

SOMEONE must see the absurdity here. Wall Street profits and bonuses are up “defying gravity.” Where is the money? I guess in the hands of Wall Street while the rest of the country languishes in debt and dim prospects of a recovery.  Show us the money. Where is it, Wall Street? what are you doing that is earning so much money? Or, as I suspect, are you simply ‘repatriating” money you stole during the mortgage run up when you stole part of the money you accepted from investors?

The FED bought mortgages. Or at least they bought mortgage securities which supposedly, according to pretender lenders in court, give them the right to foreclose. That sounds like the owner of a mortgage. The FED has already determined that those mortgages are bad in numerous ways, not the least of which is that the liens probably don’t exist. So the FED has demanded a refund from the banks who sold them this garbage on false pretenses. What a surprise, after lying to the investors, lying to the homeowners, they actually lied to the FED as well! Who would have thought?

MEMO TO FEDERAL RESERVE: If you need to supply the US Treasury with $600 billion then do it. But if you expect that to improve liquidity in the marketplace, stop kidding yourselves. You have made a demand for refund and they the banks are not going to do it. So, as owners of the mortgages, why doesn’t the FED settle the mortgages for what they are really worth. Go to the homeowners, using existing and new infrastructures to reach them, and if the mortgage lien is valid, make a deal. If the mortgage lien is not valid, make a deal. The resulting change in the homeowner’s net worth will be the same as a fiscal stimulus without the necessity of printing money.

If the mortgage liens are invalid, as I think they are, it is easy to prove by simply looking at the whatever REAL paperwork exists. Since the FED owns the mortgage bonds, there are no investors to settle with. Arriving at a new mortgage deal which the Fed can sell to Community Banks and Credit Unions, will more than offset the printing of new money. As was said in congressional hearings a couple of days ago we can either settle this mortgage mess rationally, or we can save the capital structure of the megabanks. We can’t do both. The validity of that comment seems to be unquestioned. THAT is an admission that the capital structure of the megabanks is vapor and sooner or later they will fall anyway.

Our society cannot withstand a 15 year recession. It can end now with three simple words: TELL THE TRUTH.

Tags: Fed, Federal reserve
Posted in bubble, Corruption, Eviction, securities fraud |