Before I start, let me apologize for blogging the last few days like a bipolar person that hasn't taken their mood stabilizer in a few months:)
The reason I have been so vocal recently is because I am becoming terrified by what I see when I watch what's happening in the markets.
I see the foreclosuregate freight train heading right for us. It's gaining steam by the minute, and if it isn't stopped soon it will be too late.
The way I see it, there is only one answer. It's time for the truth. Take a listen to Congressman Elijah Cummings comments about how this crisis is effecting American families and I will continue below:
This video did a great job vocalizing how I think most Americans(including myself) feel.
No one knows how bad this foreclosure mess is, and the only way to find out is by opening up the banks balance sheets and seeing what the losses are. Only then can we deal with this situation appropriately.
There was a report out today that there are $650 billion worth of mortgages that are now underwater. God only knows what this number would look like if housing prices drop another 20-30% or more as a result of this foreclosure fiasco.
We are talking trillions of dollars here folks.
Look...Everyone knows the numbers of bad...In fact they are probably way worse then any of us can imagine.
The banks actions over the past few weeks are an easy "tell" that the situation is dire.
As Elijah says above: There is NO WAY the banks would ever stop the foreclosure process via a moratorium unless there were major issues with the foreclosure process and/or the means in which their MBS securitizations were packaged.
Think about it, a moratorium is the worst case scenario for the banks. They have to sit there and pay property taxes while they eat a loan that has no income coming in.
On top of that, without anyone in the house, it's not being maintained and it becomes vulnerable to squatters, crackheads, and vandals.
In other words it's the worst case scenario for a bank. For awhile, the banks seemed hesitant to foreclose because they didn't want to take the loss. They also didn't want to foreclose because they were worried about flooding the market with too much inventory which would further depress home prices.
Now, all of the sudden out of the blue, they can't get the homeowners out fast enough! What I'd like to know is why the sudden change in heart?
Take a look at the newest game the large banks have created in order to speed up the foreclosure process and make a few extra bucks on the side as they toss desperate Americans out of their homes who have run out of options:
Folks, these criminals must be stopped!
So let's ask the obvious question: Why are the banks all of the sudden doing a full court press when it comes to speeding up the foreclosure process?
Could it be that they want to sweep this foreclosure nightmare underneath the rug as fast as they can in order to avoid the consequences of creating the largest fraud in the history?
Guess what guys, it's too late. You have been BUSTED.
The Bottom Line
The only way out of this mess is to expose the fraud and see what the damages are no matter how ugly they are.
The economy is going to continue to unravel if we keep the status quo because there is no confidence.
The congressman explained it perfectly above: Americans have lost trust in the financial markets and the enforcement of the rule of law.
They don't trust stocks, they don't trust the banks, and they don't trust the housing market. Heck, at this point they aren't even sure they know if they own their own house.
We need to get to the bottom of this before all confidence is destroyed.
The fraud must be cleansed from our banking system. Who knows? Maybe it's not even as bad as we think. Perhaps by some small miracle the banks have found a way to earn their way out of a lot of this.
History has continually shown us that markets are destroyed when there is no confidence in the system. Our situation is no different.
We are very very close to hitting Less than Zero. Let's hope we stop before it's too late: