Karl Denninger: "We're all Lootie"

The invaluable Karl Denninger has written a scathing, profane article about the highway robbery being perpetrated by mortgage lending institutions. It's a very important article, in my opinion, and I can't recommend too strongly that you click over to his site and read the whole thing. However, since I know many readers won't do that, I'll reprint a large portion of his article here. (Bold and italic print is Mr. Denninger's emphasis.)

Let's look at a short list folks. This is what you've tolerated just in the last few years.

• Your school's funds, including those in Florida, were "invested" in instruments that the people responsible - and at the highest level of State Government - knew they could not legally buy. This blew up in their face. Nobody has been indicted for this, yet the money is still gone.
• You were sold funds (money) on a predatory basis. State Law prohibited this. Your State Attorney General went to court to stop it. The Bush Administration sued to prevent enforcement of those laws, and got a Federal Judge - who they, of course, control - to block enforcement. You got ripped off, and what's worse, the housing bubble and subsequent collapse was, in part, CAUSED by this predatory lending. Your State Attorneys General and Legislators refuse to protect your rights and enforce the law, despite the 10th Amendment clearly requiring that they do so.
• Banks are illegally attempting to lock people out of their own homes. Yes, their homes - not the Banks'. The bank has no foreclosure judgment in hand when they do this, and do not have a right of possession. When the cops are called they refuse to arrest the perpetrators, claiming there is no "criminal intent." If attempting to seize someone's home without having the legal right to do so isn't criminal intent, can I ask what is?
• Banks were (and are) insolvent. Kanjorski, a Congressman, threatens FASB, the accounting standards board, telling them in open congressional hearing that if they do not change the accounting rules so that black-letter false values for "assets" - that is, fraud - is not made legal Congress will pass a law to make it so. They fold, of course - how do you stop Congress when it intends to legislate you out of existence unless you do what it wants? This results in a huge stock market rally but the rotting fish in these loans is still there and still rotting.
• Banks then try to foreclose on these notes, as the cash flow is starting to get a bit thin. But that's a problem - they never transferred the notes to the trusts when they originated and packaged the loans, and in some states that transfer not only had to be done under black-letter law, it also had to be recorded along with the payment of fees. Black-letter law, again, says that REMICs, the underlying mortgage securities, cannot take in new notes after their closing dates, and without the note there is no standing to foreclose at all. This is a rather uncomfortable situation - so to get around it, they start filing false "lost note" affidavits and "robosigned" notarizations that the people doing the signing didn't even read! (A note you destroyed or failed to transfer on purpose, instead sending them to India in crates, isn't lost!) These are acts of fraud upon the court (no longer an allegation, as courts have ruled it as thus) and perjury (any false swearing in a court is perjury) and yet the judges in these courts have not held the people doing the false swearing in criminal contempt. In short, courts are no longer places where the citizens can come for lawful redress of grievance when they get scammed if the entity doing the scamming is a big Wall Street operation.
  

So what do we have left folks?

Your State and Local Governments will not protect you against being butt-****d by Wall Street Bankers.

Your Federal Government actively conspires with the same Wall Street Bankers, holding you down on your stomach while they take turns from behind.

These offenses have now reached the level of literal physical theft of real property.

. . .

If there is no political solution, and no redress available in the courts, then your options are to either bend over, place a stick in your teeth, and redefine these acts of **** as "sex", or to in some fashion revolt.

Revolt comes in two forms. One that meets the definition of sedition and is thus black-letter unlawful (and that law, you can bet, the government will enforce) and one that is perfectly legal.

The latter act is one that I am now extraordinarily close to being forced to recommend.

I am speaking of refusing to pay.

Everything.

And everyone.

There is no crime in refusing to pay and withdrawing ALL of your money from the banks.

The problem is that The American People won't do it, even though doing it would force an immediate resolution to these problems, as every bank in America would instantaneously collapse due to the people's collective vote of "no confidence", delivered lawfully through refusal to engage in commerce with them.

How do I know America won't do it?

Because 10% of the population is unemployed as a direct and proximate result of these frauds and scams and yet there are no mass-marches on Washington DC.

No sit-ins.

No people driving 5mph on the freeway during rush hour as a pack of three cars, blocking traffic (and accepting a traffic ticket) as a very effective means of disrupting commerce and saying "no more damnit!"

Nothing.

So what you get from me, instead, is a chronology of these frauds and scams. I'll keep writing about them for the time being, but I have no faith in the people in this nation any longer.

The nation we once were - the nation that responded to a stick in our collective eye on December 7th, 1941 - no longer exists.

Instead, we've been reduced to infantile sucklers on a Government Teat.

Instead of wanting to better ourselves through hard work, capital formation and saving, we now are reduced to this as a nation:




That is what's left of America, and we smile while doing it. We're willing to screw everyone else, and so when it's done to us, we just respond with more of it ourselves, instead of well-justified outrage and demands that it stop - backed up with whatever level of insistence is necessary to force it to stop.

On this path all asset prices ultimately collapse.

Productive work ends and everyone looks for a way to rob someone. They find it - after all, robbing people isn't really that complicated, and in fact it's no more complicated than the guy who walks into the "Stop-N-Rob" and sticks a pistol up the cashier's nose. Yeah, we try to make out like it's more complex and to hide it in reams of paper and various obstructions, but what's really going on is nothing more complicated than the old gun up-the-nose trick.

This, of course, produces nothing (you're simply stealing someone else's "stuff") and as the percentage of people who turn to robbery rises, all productive work and betterment of society for all slows down and ultimately ceases.

That day is arriving, and if you're not prepared for what it will mean, and what will come as a consequence, you're going to be very, very sorry.

At the end of 2008 I wrote a Ticker in which I said "We're all Madoff."

I was wrong.

We're all Lootie.

Good luck America.

As I said earlier, there's more at the link. Very worthwhile reading - and very troubling. Mr. Denninger has been classified by many as a pessimist and a doomsayer, but every word he writes about the banks' shenanigans in the report above is absolutely and literally true. He didn't make up a thing. That being the case . . . I have a horrible feeling that he may not be wrong about the consequences.

As commentator Marty Robbins put it recently: "Onward Toward An Entitlement Society".

*Sigh*

Peter