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Challenge the breach

implied covenant of good faith and fair dealing n. a general assumption of the law of contracts, that people will act in good faith and deal fairly without breaking their word, using shifty means to avoid obligations, or denying what the other party obviously understood. A lawsuit (or one of the causes of action in a lawsuit) based on the breach of this covenant is often brought when the other party has been claiming technical excuses for breaching the contract or using the specific words of the contract to refuse to perform when the surrounding circumstances or apparent understanding of the parties were to the contrary. Example: an employer fires a long-time employee without cause and says it can fire at whim because the employment contract states the employment is “at will.” However, the employee was encouraged to join the company on the basis of retirement plans and other conduct which led him/her to believe the job was permanent barring misconduct or financial downturn. Thus, there could be a breach of the implied covenant, since the surrounding circumstances implied that there would be career-long employment.

Parties cannot create a binding contract where either party has reason to know that the other party cannot perform.

Remember this if you should need to challenge your mortgage servicer in court.

 

Strategic default: Morgan Stanley shows you the way forward

Morgan Stanley to Give Up 5 San Francisco Towers Bought at Peak [ Bloomers ]

Morgan Stanley “bought” (mortgaged- and with all their money too, tsk, tsk) 5 office buildings in San Fran two years ago for more than eight BILLION dollars. Let’s see, that would be waaaaay back in 2007… after the bubble peaked.

Guess somebody didn’t see that coming.

MS is actually current on the loan and is not in foreclosure. They are simply “walking away” (MS prefers the term “orderly transfer” so they can feel better about themselves) because the buildings are worth less than the amount owed.

I think more and more homedebtors, upside down in their own homes, after they hear about Morgan Stanley’s very own “orderly transfer” will turn to their significant other and say “Hon, maybe we would should get out from under and arrange our very own ‘orderly transfer’. After all, if Morgan Stanley thinks it’s a good idea…”

It’s just a business decision, right, MS? Lookie-heah, if a million contracts get broken every day how can contracts be considered sacrosanct?

If they are, then obviously this only applies to suckers homedebtors in the Fox News and CNBS (a.k.a. Minstry of Propoganda) fantasy space, where corporations get a free pass to do as they please and applauded for their ‘boldness’; but if you and I act in consort we are considered by them to be douchebags.

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“A credit default swap is like a passenger on the Titanic selling insurance on the Titanic. If the guarantor drowns, who pays the policy holder?” -Nassim Taleb

Chinese bubble

Janet Tavakoli Q and A

More with Janet Tavakoli.

Naked Power Grab

By the Fed., Inc. and Treasury. Each are actively soliciting through baby steps the ‘additional powers‘ they so crave. This is  grand-standing by the very same people, all creatures of Wall Street, who now have slipped back in through the revolving door and for now hold regulatory posts (fox, meet henhouse) for this toothless regime, should make each of us very very suspicious.

Without actually acknowledging there is a problem per se, Turbo Timmeh Shitener thinks the solution is him and his cronies co-horts having more bigger, more faster, more and more power over more and more businesses, such as hedge funds and insurance (the states are supposed to regulate insurance, but the Fed was always stepping on their toes).

I think they kinda mean somthing like a politburo.

Yet where were the feds when Made-off was running his Ponzi scheme for FORTY FUCKING YEARS eh? SEC? In da house? No? Where the fuck are ye then?

SEC sock puppets got treated to a free seven-course lunch (who sez that don’t exist?) and all the coke they could snort and hookers they could screw, and gave Bernie and his merry band of Ponzis a pass until the next year. Rinse, lather, repeat. Times forty.

Sure, TT, *more power*, you stumbled upon the answer;  Oh wait, I forgot the question. How do we stop this sort of thing from happening again?

Well, um, let’s see what happens when you cannot/do not know how to use the powers and tools already provided?

Oh right, we get a big fucking mess like we have right now.

Yeah, thanks for that, TT. You are a *star*.

Meantime we’re supposed to be relieved and reassured that the next Even Greater Depression (GD3?) forty years hence will deffo not be happening.

Color me relieved! I can stop worrying now. Everyone, no need to worry anymore, the next GD ain’t never gonna happen! Whoopee!

C’mon. The regulator guys always had the tools. The just didn’t realize they weren’t supposed to be the tools.

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“Finance should be the grease that keeps the engine going. Yet in our last decade, finance became the actual engine. That is the root of the problem. ” -Dr. Housing Bubble

Notable Quotables for $20 Alex

“Posterity is just around the corner” [Wikipedia]

“He is a nice man, but he is out of his depth.” [Spectator]

“What I don’t think people should do is suddenly stuff money in their mattresses and pull back completely from spending” [Faux Hotlanta]

“The graveyards are full of indispensable men.”  [Wikipedia]

“In today’s regulatory environment, it’s virtually impossible to violate rules…it’s impossible for a violation to go undetected, and certainly not for a considerable period of time.”  [Wikipedia]

“You cannot help the poor by destroying the rich. You cannot strengthen the weak by weakening the strong. You cannot bring about prosperity by discouraging thrift. You cannot lift the wage earner up by pulling the wage payer down. You cannot further the brotherhood of man by inciting class hatred. You cannot build character and courage by taking away people’s initiative and independence. You cannot help people permanently by doing for them what they could and should do for themselves.” [Wikipedia]

“Self-regulation is to regulation as self-importance is to importance”  [FT]

“Rome is on fire. The government is pumping gasoline through the fire hoses, and the only ones benefiting are the recipients of the trillions and trillions of dollars of your money. Fairly soon, I think it will be safe to say that the formerly prosperous middle class will become the working poor, in a land filled with half-vacant strip malls selling shoddily-made crap to a populace so numb and dazed it doesn’t know the difference and can’t remember anything better. Just as 50 years ago seems like a fairy-tale time, when a gas station attendant could support a wife, kids, a car or two, and a home on his salary, a few years ago will sound surreal to our children; imagine a time when two working parents could afford a home and a car! Imagine when there was enough work for both of them to even work steadily! Imagine owning a car! Or a home! That’s crazy talk, and we can’t change things, so why dwell on it…”  [Sanity Check]

“In characteristic Trump fashion, Trump Ocean Resort Baja will be the best of the best, and consequently always in demand” [Breitbart]

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First they came for the homeowners and I didn’t complain.
Then they came for the credit card holders and I didn’t complain.
When they came for me, there was nobody left to complain.

I feel so used

And Asshat of the Year goes to…

R.I.P.

• Shoe Pavilion [Marketwatch]
• Linens ‘n’ Things (superb – always hated that name) [Bloomberg]
• Mervyn’s [Marketwatch]
• Zima [Bizjournal]
• Even the happy hunting grounds are being foreclosed upon in Cali: Winchester Country Club, Running Horse, McAllister Ranch, Diablo (heh) Grande  [Sacbee]

Prognosis negative:

• Circuit City [Marketwatch]