The Market Ticker – “Put It All Back” Gains Mainstream Credence

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EDITOR’S COMMENT: Wray has it right. This is the way it should turn out. And if the shoe was on the other foot it would happen because consumers usually take the hit. Yet it seems unlikely that this scenario will play out in the manner that Randall imagines. It should happen because it would turn the economy right-side up, because it would reflect reality and because it would enable us to regain the confidence and hope of the world powers.

Politics doesn’t seem to work that way. It seems to me we might get close to this type of resolution if the courts continue to respond to their duty to enforce the law rather than react from ideology or fear. One thing I know for sure is that without people standing up for their rights, they won’t have any rights to stand up for — because things tend to escalate. If Wall Street actually gets away with this, in the end, then they will do more of the same and it is always bigger and worse.

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The Market Ticker – “Put It All Back” Gains Mainstream Credence

Today, December 27, 2010, 1 hour ago | genesis

From Randall Wray @ Bengiza (also writing at Huffington Post)….

It is time to push the reset button.

All foreclosures should be stopped immediately. The REMIC trustees should be audited to see if they have properly followed the requirements of the PSAs and laws applying to REMICs. If they do not have the notes, the securities should be put back to the banks. If the banks cannot absorb the losses, they must be closed and resolved. The FDIC in turn will end up with the mortgage backed securities and underlying mortgages. Working with Freddie and Fannie, all of these should be modified, into new fixed rate mortgages with a clawback to reset principal to current market value of the homes, and with new notes. Investors are going to take losses so there will be fall-out that government will have to address. There will be hundreds of billions of dollars of losses. Congress must find a way to mitigate effects on the economy as well as on investors in MBSs and other assets related to real estate. This is a big problem, but it is not insurmountable.

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