"INCURABLE RECESSION": BEAR MARKET AGAIN UNTIL HOUSING CRISIS FIXED

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“The same bankers are feeding the legal system with fraudulent and futile fabrications of documents for transactions that never existed, as loans were “securitized” but somehow never moved from their originators. Promissory notes failed to reveal the true terms of the deal just as bogus mortgage bonds failed to reveal the truth to investors. Even combining the promissory notes and the mortgage bonds, the documentation is insufficient to describe the real transactions in which money exchanged hands. Investors are left thinking they are owed money when their agents have already collected it. Borrowers are left thinking they owe money when the debt has already been paid several times over.” Neil F Garfield www.livinglies.wordpress.com

EDITOR’S NOTE: Eventually the general consensus will be that the Banks did this to us and the banks will bear the brunt of the fix — without that, the $2 trillion they are officially holding and not investing and lending to the national and world economy will continue to sit as a hammer over our lives. Add to that what I estimate is another $2.6 trillion that these management of the mega banks control in off-shore hidden “reserves” and it is easy to see why the death grip, valued at $4.6 trillion (over 1.3 of our GDP and more than 100% of all profits) is causing a bear market. The recession never ended and for many the uneven distribution of apparent wealth has made the situation more like the great depression.

Blaming homeowners or borrowers simply won’t cut it. Even if the 100 million defective mortgage transactions were caused by consumers or prospective borrowers all awakening one morning with the singular idea of bringing the world economy to a standstill, it was within the power of the banks and government to prevent it. This current condition that has persisted for 4 years arose because of deadbeat bankers not irresponsible borrowers.

The bankers, playing with OPM (other people’s money) turned themselves into marketing machines and sold money from investors (what was left of it after Wall Street grabbed its hidden share) to borrowers in completely unworkable deals based upon fraudulent and futile fabrication of property values, borrower income, and the true effects of loans that were certain to go under water for decades, and certain to reset to payments that exceeded the actual annual income of the borrower. They knew it and they did it anyway because they were able to without regulators taking an interest in what was actually happening out there in the banking world. They wanted to do it because with the foreknowledge of voluntary and involuntary defaults, they were able to bet on the system going bankrupt.

The same bankers are feeding the legal system with fraudulent and futile fabrications of documents for transactions that never existed, as loans were “securitized” but somehow never moved from their originators. Promissory notes failed to reveal the true terms of the deal just as bogus mortgage bonds failed to reveal the truth to investors. Even combining the promissory notes and the mortgage bonds, the documentation is insufficient to describe the real transactions in which money exchanged hands. Investors are left thinking they are owed money when their agents have already collected it. Borrowers are left thinking they owe money when the debt has already been paid several times over.

The truth is revealed. And the tide has turned. The economy and prospects of the world depend upon the United States fixing its housing problem regardless of what it takes. Housing drives the consumer markets. The consumers’ collective spending drives 70% of the economy. Either fix housing or write off 2/3 of our GDP and resign ourselves to third world status.

S&P 500 enters bear market territory

(Reuters) – The S&P 500 entered bear market territory after the open on Tuesday, down over 20 percent from its 2011 high, as European officials considered making banks take bigger losses on Greek debt and fears of contagion in the world’s financial system grew.

COMMENTS:

WILLIAM LARKIN, FIXED INCOME PORTFOLIO MANAGER, CABOT MONEY MANAGEMENT, SALEM, MASSACHUSETTS:

“My take on it is that Europe, from a leadership standpoint, is looking a little more unstable, so you’ve got that feeding in, and we are also coming into earnings season. There are a lot of excuses to disappoint, and guidance going forward is going to be very challenging, which means that a lot of the valuations are likely to get dinged in here. From that standpoint, why not raise some cash, be more defensive going into that. It is too much of a headwind.

We are going to see lower (Treasuries) yields if it is possible. If you had asked me a year ago that yields would get this low I would say that you are crazy. 2.72 percent on the 30-year? That is beyond my comprehension.

Cash looks great. Right now you have to be very careful.”

MICHAEL WOOLFOLK, SENIOR CURRENCY STRATEGIST, BNY MELLON, NEW YORK

“There are two separate issues here. Are financial markets pricing in more risk and uncertainty? Yes, no question. Will things get worse before they get better? Yes. The same pattern we’ve been seeing of people allocating away from stocks and toward cash and bonds should continue until a Greek resolution is in place. That’s the most important issue. But this does not imply a double-dip recession in the United States. There is stimulus in the pipeline here that should help maintain growth in the future despite all these ongoing debt difficulties. A double-dip scenario in Europe is also unlikely given continued export-led growth in Germany.”

SAID JOSEPH TREVISANI, CHIEF MARKET ANALYST, FX SOLUTIONS, SADDLE RIVER, NEW JERSEY

“The dollar gets stronger, there are more safe haven flows. Nobody is going to dollar assets for return, just for safety.”

LINDSAY PIEGZA, ECONOMIST, FTN FINANCIAL, NEW YORK

“We saw a lot of back and forth between the U.S. and China about this impending trade war. Just the fact that we’re going back and forth over raising further barriers to growth is causing anxiety.

“Another factor is Dexia — the Belgian bank coming under structural problems and needing to get bailed out. The European banking community is continuing to hold this unsavory debt on their balance sheets and they continue to try to work through that.

“More and more analysts in the U.S. are suggesting that there is no solution to the European problem and they’re just pushing the problem down the road.

“If we do see a European recession that would be very very bad for the equity markets. That will dampen global growth prospects.”

ERIC GREEN, SENIOR PORTFOLIO MANAGER AND DIRECTOR OF RESEARCH AT PENN CAPITAL MANAGEMENT IN PHILADELPHIA, WHICH OVERSEES $6.5 BILLION

“The bear market is just a number that the media likes to use; I don’t see people changing strategies because of it. It feels like we’re getting oversold, but the weakness has persisted a lot longer than people were anticipating.”

Tags: bankruptcy, bear market, borrower, countrywide, disclosure, foreclosure, foreclosure defense, foreclosure offense, foreclosures, fraud, LOAN MODIFICATION, modification, quiet title, rescission, RESPA, Reuters, S&P 500, securitization, TILA audit, trustee, WEISBAND
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