tag:blogger.com,1999:blog-2222630007427380394.post6666300991938160914..comments2023-12-20T04:18:41.617-06:00Comments on The Hunting of the Snark: Laws Are For The WeakSusan of Texashttp://www.blogger.com/profile/00076915322771385454noreply@blogger.comBlogger31125tag:blogger.com,1999:blog-2222630007427380394.post-37231836740669102782011-08-29T23:00:30.675-05:002011-08-29T23:00:30.675-05:00Whereas your alternative is one where home-owners ...<i><br />Whereas your alternative is one where home-owners don't get any of the benefits of a revived secondary market and end up with zero in their houses.</i><br /><br />Excluded middle. *BOOP*Mandoshttp://politblogo.typepad.comnoreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-5411810423237998532011-08-29T19:55:20.392-05:002011-08-29T19:55:20.392-05:00Whereafter we will end up in the same place, only ...<i>Whereafter we will end up in the same place, only worse, because the underlying roots of the insolvency have not been addressed.</i><br /><br />Whereas your alternative is one where home-owners don't get any of the benefits of a revived secondary market and end up with zero in their houses.<br /><br />Try putting that one before the voters, buddy! Thankfully the rest of the world is not as utterly and perversely insane as you are in your moralistic fantasy.<br /><br />Try again.Mylesnoreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-22285739565883523232011-08-29T14:42:52.807-05:002011-08-29T14:42:52.807-05:00They are only tied for morons who think that the c...<i><br />They are only tied for morons who think that the current illiquidity-insolvency link is due to anything other than legal liability. Once you settle legal liability for an one-time sum, the link is gone.<br /></i><br /><br />That you believe that the only significant link between illiquidity and insolvency is the one of legal liability is a continuing testament to the paucity of your vision.<br /><br /><i><br />No, as you know full well, there is no quicker, cheaper, more effective, and more comprehensive way of helping homeowners than reviving the secondary market into a decent shape. This is orders of magnitude faster and more comprehensive than principal reductions.</i><br /><br />Whereafter we will end up in the same place, only worse, because the underlying roots of the insolvency have not been addressed.Mandoshttp://politblogo.typepad.comnoreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-69009197516454716312011-08-29T01:14:28.113-05:002011-08-29T01:14:28.113-05:00In the case of banksters and the mortgage market, ...<i>In the case of banksters and the mortgage market, the liquidity and solvency issues are closely and very obviously tied---in a sense, attempting to ignore that was the original sin underlying the CDO trouble.</i><br /><br />They are only tied for morons who think that the current illiquidity-insolvency link is due to anything other than legal liability. Once you settle legal liability for an one-time sum, the link is gone.<br /><br /><i>Yes, fight for liquidity. But not by all means.</i><br /><br />By your "yeah liquidity NBD" logic we should have just the whole financial system collapse in Sept. 2008. Great idea, buddy.<br /><br /><i>The banksters have created a situation in which there are no good outcomes. The least worst solution is to restore the moral balance.</i><br /><br />The least worst solution is that all home-owners get to walk away with at least some equity in their house. The bullshit "moral balance" whatever is a tiny, minuscule non-problem when considered in comparison with making sure homeowners don't end up with zero.<br /><br /><i>There were and are other ways to compensate the homeowners themselves, to some extent.</i><br /><br />No, as you know full well, there is no quicker, cheaper, more effective, and more comprehensive way of helping homeowners than reviving the secondary market into a decent shape. This is orders of magnitude faster and more comprehensive than principal reductions.<br /><br />Try again.Mylesnoreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-86250702814718268442011-08-29T00:20:42.629-05:002011-08-29T00:20:42.629-05:00In other words, fighting illiquidity at all costs-...In other words, fighting illiquidity at all costs---at the cost of the social contracts that bind together society in a just order---has clearly resulted in ever-increasing insolvency. Yes, fight for liquidity. But not by all means. <br /><br />Not that keeping these particular bankster <i>enfants</i> constantly <i>gâtés</i> is the only way to maintain liquidity...<br /><br />But everyone already knew that Myles has a pathological worship of winners. He even once told us on CT that it was wrong to free the slave if it disrupted extant economic relations. That's territory even the stoutest Randroid fears to tread.Mandoshttp://politblogo.typepad.comnoreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-83102827878313994172011-08-29T00:07:55.335-05:002011-08-29T00:07:55.335-05:00There were and are other ways to compensate the ho...There were and are other ways to compensate the homeowners themselves, to some extent. Excluded middle fallacy again. But some of the damage has been done. For that damage, caused by banksters, the banksters must be held to account.<br /><br />In the case of banksters and the mortgage market, the liquidity and solvency issues are closely and very obviously tied---in a sense, attempting to ignore that was the original sin underlying the CDO trouble. Doubly so when fraud is in the mix. If there are no consequences to fraud, then the negative feedback loop continues.<br /><br />I'm sorry, "moral hazard" in this case is no "cheap trick." Your anger about it cuts to the chase: it is exactly the central issue that you wish vehemently to avoid. The banksters have created a situation in which there are no good outcomes. The least worst solution is to restore the moral balance.<br /><br />I am very much an economic moralist. There Is No Alternative. Social justice and strictly enforced banker probity.Mandoshttp://politblogo.typepad.comnoreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-68067691056799323192011-08-28T23:36:37.749-05:002011-08-28T23:36:37.749-05:00(By the way, you literally just spent the entire p...(By the way, you literally just spent the entire post talking about the problems relating to an insolvency when the problem here is illiquidity.<br /><br />Seriously, cut the populist demagoguery bullshit.)Mylesnoreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-91651984124691092762011-08-28T23:34:48.414-05:002011-08-28T23:34:48.414-05:00For so long as a certain large portion of the mort...<i>For so long as a certain large portion of the mortgage market was replete with moral hazard, this was going to happen anyway. These people were in the business of generating fictional confidence, and they had zero incentive to stop.</i><br /><br />Hey buddy, try to distinguish between <i>illiquidity</i> and <i>insolvency</i>. That moron Schneiderman is creating an illiquidity where one need not exist.<br /><br />Try again. And try not to use cheap tricks like "moral hazard."<br /><br /><i>That assumes that there is no "upside" to serving justice and law in itself. That is the middle you have excluded.</i><br /><br />You have to be a really perverse and creepy moralist to think it's worth freezing the entire secondary mortgage market and stiffing millions of houseowners out of their equities just to send a few bankers to jail.Mylesnoreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-34616829584748175792011-08-28T22:29:40.571-05:002011-08-28T22:29:40.571-05:00Alright Myles. I'll play your game. Let'...Alright Myles. I'll play your game. Let's say I concede the point: that arresting banksters would absolutely necessarily freeze up the mortgage market, properties would drop in value, all the creatures of the land will be destroyed in fire and water, and the hell-hounds shall be loosed upon the remnant life. etc, etc.<br /><br />For so long as a certain large portion of the mortgage market was replete with moral hazard, this was going to happen anyway. These people were in the business of generating fictional confidence, and they had zero incentive to stop. At worst they would get away with their existing loot. The fiction was ending on its own and with catastrophic results.<br /><br />Better it end in a manner that serves justice as an end it itself.<br /><br />That assumes that there is no "upside" to serving justice and law in itself. That is the middle you have excluded.Mandoshttp://politblogo.typepad.comnoreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-37546342259003367982011-08-28T21:39:04.411-05:002011-08-28T21:39:04.411-05:00Hint: we don't need the bankers to get people ...<i>Hint: we don't need the bankers to get people into houses.</i><br /><br />We do need bankers if people's equity in houses are to be worth anything.<br /><br />Whatever this "excluded middle" is, Schneiderman surely isn't doing it. He's pretty much provably keeping the secondary market frozen.<br /><br />Which means he's a moron.Mylesnoreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-17006417970759504902011-08-28T21:27:08.015-05:002011-08-28T21:27:08.015-05:00Quoth Myles: "The legal process is by right a...Quoth Myles: "The legal process is by <i>right</i> and <i>necessity</i> lengthy, complicated, and uncertain."<br /><br />This is nonsense. <br /><br />I am fairly sure that you do not know law, but even so it is pretty shameful for you to indulge in this kind of pseudo-intellectual bullshit.<br /><br />But on the bright side you do sometimes make me laugh.Petehttps://www.blogger.com/profile/03830774223073462725noreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-39774723430064529672011-08-28T20:17:30.465-05:002011-08-28T20:17:30.465-05:00I am firmly and ever an economic populist and a cr...I am firmly and ever an economic populist and a critic of the religion of economics. Whether I "know" economics, if there is a single thing to be "known" as a truth, is another matter.<br /><br />Hint: we don't need the bankers to get people into houses.Mandoshttp://politblogo.typepad.comnoreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-35261981984267041602011-08-28T19:42:44.957-05:002011-08-28T19:42:44.957-05:00Fallacy of the excluded middle.
There is no middl...<i>Fallacy of the excluded middle.</i><br /><br />There is no middle between taking bankers to court regarding the mortgage market and not taking them to court. It's binary. The legal process is by <i>right</i> and <i>necessity</i> lengthy, complicated, and uncertain; and whatever the legal process will necessarily be reflected in the secondary market for mortgages.<br /><br />Presumably you actually do know economics, Mandos, so it's pretty shameful for you to engage in this kind of populist bullshit.Mylesnoreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-58797233696583425062011-08-28T11:25:47.609-05:002011-08-28T11:25:47.609-05:00Fallacy of the excluded middle. Like there's ...Fallacy of the excluded middle. Like there's absolutely no alternatives between killing the mortgage market and letting the malfeasant get away with their loot.Mandoshttp://politblogo.typepad.comnoreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-20502907294157889682011-08-27T16:02:00.717-05:002011-08-27T16:02:00.717-05:00You're pulling the most ridiculous crap out of...You're pulling the most ridiculous crap out of your behind I've seen yet, Myles.<br /><br />(I'll admit don't follow your postings diligently.)<br />~ifthethunderdontgetya™³²®©https://www.blogger.com/profile/06252371815131259831noreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-31411216605680153362011-08-27T15:38:57.732-05:002011-08-27T15:38:57.732-05:00Well, then, what stops the canadian banks - which ...<i>Well, then, what stops the canadian banks - which all have operations here in the US and don't have swords hanging over their heads from taking all that juicy market share? </i><br /><br />Canadian banks <i>are</i> expanding in American banking. Just not at the speed that you think. They aren't expanding that much because US retail banking is not as profitable as South American banking, where the Canadian banks are extremely dominant.<br /><br />This is to not counting the giant bling red fact that Canadian banks wouldn't be able to ramp up their operations in the US mortgage market unless they participate on the secondary markets, and <i>as long as Schneiderman keeps the mortgage resolution and thus secondary markets frozen</i> they wouldn't dare participate.<br /><br />The relevant question here isn't the issuance of new mortgages at all: it's what to do with existing mortgages and how to get them liquid again. As long as there is legal liability they aren't going to trade and the secondary market for mortgage securities will remain seized up.<br /><br /><i>Do you really think you don't need the rule of law??<br /></i><br /><br />The rule of law doesn't exist unless you have the material economic conditions to back it up. There was no rule of law when FDR tried (and luckily failed) to pack the Supreme Court in the midst of the Great Depression.Mylesnoreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-9419710642028930422011-08-27T14:53:38.820-05:002011-08-27T14:53:38.820-05:00The fradulent mortgage market, with forged documen...The fradulent mortgage market, with forged documents and massive hidden losses. You want to keep that going. Do you really think that none of this will ever touch you or anyone you care about? <br /><br />Do you really think that you are God's special little snowflake, who will never suffer the depredations and rapaciousness of the rich? <br /><br />Do you really think you don't need the rule of law??Susan of Texashttps://www.blogger.com/profile/00076915322771385454noreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-68168663583951266142011-08-27T14:50:39.413-05:002011-08-27T14:50:39.413-05:00No, what's stopping the mortgage and housing m...<i>No, what's stopping the mortgage and housing markets from returning to equilibrium is the massive, giant legal liability hanging over everyone's heads. </i><br /><br />Well, then, what stops the canadian banks - which all have operations here in the US and don't have swords hanging over their heads from taking all that juicy market share? <br /><br />I have been hearing this BS argument - oh, if only there was no legal liability, they would lend. If lending is so damn profitable why should an existing lawsuit for prior pratices stop future actions? Do companies simply stop all operations everytime someone threatens to sue them? Did Philip Morris suddenly stop making cigarettes once the lawsuits started? <br /><br />In any case, if lending is so damn profitable, why don't the credit unions - who have no swords over <b>their</b> heads -- lend their heads off?<br /><br />You must be a Street trader. Only they are capable of such blind faith in the banks' own PR.cynichttps://www.blogger.com/profile/02438583188725326668noreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-38088229683559630252011-08-27T14:33:39.663-05:002011-08-27T14:33:39.663-05:00So a group of people break the law with abandon wh...<i>So a group of people break the law with abandon while committing fraud and your concern is that someone is holding up the deal to let them get away with it with a small fine. </i><br /><br />You can either take this to a court of law and sue the bankers for forever and have the mortgage market keep being frozen until all the litigation is finished, or you can wrap up all the legal liability in one deal and get the mortgage market going again. The average homeowner will be screwed a lot more under the first scenario than the second.<br /><br />Take your pick. Personally, I think this really shouldn't be a problem as long as Obama is willing to play hardball with Schneiderman (rip his campaign funding, whatever), but we'll see.Mylesnoreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-87144139428236194392011-08-27T14:10:46.346-05:002011-08-27T14:10:46.346-05:00So a group of people break the law with abandon wh...So a group of people break the law with abandon while committing fraud and your concern is that someone is holding up the deal to let them get away with it with a small fine. <br /><br />When everyone is not subject to the law, nobody is. You have no problem with screwing homeowners and letting the rich get away with theft, but the rich go where the money is. <br /><br />You think that being born upper class means you will stay upper class. You could not be more wrong. When the middle class is gone the ultra-rich will bleed dry the upper classes. That's where the money will be, after all. Do you think they would suddenly stop stealing when the middle class is gone?Susan of Texashttps://www.blogger.com/profile/00076915322771385454noreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-27581743309585552332011-08-27T13:30:52.678-05:002011-08-27T13:30:52.678-05:00The only thing stopping JP Morgan from going out a...<i>The only thing stopping JP Morgan from going out and offering mortgages to all and sundry is that no sane investor will touch MBS anymore unless it comes in a bullet-proof wrapping. JP Morgan cannot provide the bullet-proofing - ergo no mortgage for you.</i><br /><br />No, what's stopping the mortgage and housing markets from returning to equilibrium is the <i>massive, giant legal liability</i> hanging over everyone's heads. What the DoJ+49 state AG's are trying to do is to basically compartmentalize this massive cloud of legal liability and take it off the banks by settling it once and for all for a fixed penalty (right now the number is $20bil).<br /><br />What Schneiderman is trying to do is to block that deal to clear up that legal liability cloud once and for all and sue the banks to hell or high water, because he's not happy with $20bil and is really trigger-happy about sending bankers to jail (cool dude, let's freeze the entire fucking mortgage market so you can send a few guys to jail). Which will take forever and a day. In the mean time, the mortgage and housing markets will keep being frozen, because unless and until the legal liability cloud is cleared up nothing will be happening. JPMorgan can't do anything until it has its assed covered on the legal liability front.<br /><br />I mean, whatever floats the moron's boat I guess.Mylesnoreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-17795712892253433832011-08-27T10:50:30.080-05:002011-08-27T10:50:30.080-05:00Mataconis is without a doubt the worst excuse for ...Mataconis is without a doubt the worst excuse for a writer joyner could have found to join the otb team outside of red state.<br /><br />-awsAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-6119348262883341692011-08-27T09:53:39.701-05:002011-08-27T09:53:39.701-05:00Wow. Never really saw the Myles effect before.
S...Wow. Never really saw the Myles effect before.<br /><br />So, he thinks that Schneiderman is 'paralyzing' the mortgage market? really?<br /><br />The only thing stopping JP Morgan from going out and offering mortgages to all and sundry is that no sane investor will touch MBS anymore unless it comes in a bullet-proof wrapping. JP Morgan cannot provide the bullet-proofing - <i>ergo</i> no mortgage for you.<br /><br />It has nothing to do with Schneiderman and it never did. Myles is simply either being totally disingenous or totally naive.<br /><br />(according to SIFMA data - RMBS issuance went from $725 billion in 2006 to 12 billion in 2010) Banks have simply gotten used to taking the risk right out of their balance sheets as soon as a mortgage is issued so they don't issue a mortgage they cannot also sell immediately.cynichttps://www.blogger.com/profile/02438583188725326668noreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-34791961181210247962011-08-26T16:33:49.758-05:002011-08-26T16:33:49.758-05:00It's kind of like how the government doesn'...It's kind of like how the government doesn't bother prosecuting drug users, because it's just not an effective way to combat the culture of drug use.Lurking Canadiannoreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-19234717976407078022011-08-26T16:08:41.923-05:002011-08-26T16:08:41.923-05:00'The point here is that "not applying the...'The point here is that "not applying the laws" is just something the administration does when it feels like it. It's not some special banker-only thing.'<br /><br />The Obama admin. had been cracking down on illegal immigrants trying to stop crime. More people were deported than all the other previous administrations combined. <br /><br />Then they noticed that crime among illegal immigrants hadn't changed appreciably. <br /><br />Now they're shifting scarce resources to go after actual criminals rather than casting a wide net and hoping the net catches criminals. <br /><br />They tried one method of enforcement, it didn't work, so they're trying another. I know it's been so long since we've seen competent governance in action that it's a bit disconcerting. <br /><br />To call that "not applying the laws" is not only ignorant of how executives administer the enforcement of laws but is to carry so much water that your spine should be telescoping.<br /><br />On McArdle: I can barely type a response to her stupid little missives because I get so mad I can't think straight. I don't know how you do it.Benhttp://noompa.wordpress.comnoreply@blogger.com