Interview with Karl Denninger

Part 1

Part 2

Wakey wakey

For lyrics click on

Battle Royale with cheese

The shit is wide, the shit is deep, but one man has employed a boat full of lawyers to fight the power:

This shit is global

“Countrywide’s lawsuit was filed in the name of Countrywide as loan servicer, and MERS as mortgagee. I thought it strange that some unknown entity (MERS) was in a fight with me. I started doing research. This is what I found (explained in layman’s terms). Countrywide had sold the note to a trust that had been set up by the gurus on Wall St. There were 16,000 notes in the trust owned by god knows how many investors. They of course could do this because for the first time in the history of world finance, these “gurus” had separated the mortgage (collateral) from the note. MERS holds my mortgage which is recorded per law at my county court house. They don’t and will never be my, or your, note holder. This separation of the note and mortgage gives Wall St. the ability to “transfer/sell” my note at a click of a mouse thus circumventing the age old process of recording the transfer in my county court house. This slight of the hand is the fraud that created the entire secondary mortgage market and eventually the trouble we are in today. Countrywide is my loan servicer…which means they are nothing but a bookkeeper and collection agency. The holder of my note was yet to be determined.”

[How I am beating the crap out of Countrywide/MERS]

I think he means “sleight of hand” but pedantics aside, he absolutely nails it- that moment in time when our goose went into the oven at 450 degrees.

It is not done yet, but someone should check because I think I smell something burning.

I like the way in which the author reveals the sort of institutionalized chicanery that has evolved throughout the financial system unchecked, and employed like a truncheon on the back of the head of the unsuspecting little guy walking along Main Street.

…

Additional perspectives on MERS:

Mortgage Electronic Registration System Loses Legal Shield
[ Barry Rtitholtz ]

Has a MERShole opened up?
[ Karl Denninger ]

Mortgage Electronic Registration Systems (MERS): A System Designed to Create the Mortgage-Backed Security Bubble
[ Dr. Housing Bubble ]

Waking up to discover the mortgage market was a giant criminal enterprise
[ Matt Taibbi ]

…

–
Debts are not always repaid. The financial markets are not always in equilibrium.

Could not have said it better myself

More:

Naked Capitalism Market Ticker

High Frequency Trading nothing better than a bucket shop

Benron is just getting tired of his shit

Dirty assets

And Asshat of the Year goes to…

Don’t be fuelish

I know, the phrase above is a bit of a trite 70’s concotion which, like WIN and disco, is just as meaningless today as it was then. But since I’m long bell-bottom futures, you gotta know I’m dusting off the boxes of clothing and accessories (“Pet Rock“) and preparing for a return to my fave decade. I knew they would come back around!

What’s this, a 28″ waist? Nostalgia: it ain’t what it used to be.

Crap.

You know, I’m starting to notice things we “of a certain age,” once upon a time used to disdain.

For example…

I go out to the store for my twice weekly shopping round (Ralph’s, .99 Only, Target, Costco, Petco, Albertsons, all or any combination) and there each and every time, in the parking lot or on a side street -often times more than one vehicle – is someone sitting in their car,  parked, idling their engine.

What are they doing?

• Talking on cell phone
• Putting on makeup
• Waiting for passenger to return
• Passenger(s) waiting for driver to return
• Listening to radio
• Getting blow job
• All the above

I know, it’s hot (this is SoCal we’re talkng about, 25 miles from the ocean). Wah. I see this occur on milder, 70-degree days as well. Such wimps.

I understand that what we are experiencing this time out is not a shortage of gas and oil, that the price, which has quadrupled since 2001, has more to do with speculation by hedge funds, IB’s borrowing from the Fed against toilet paper holdings to try and offset some of their (seemingly endless these days) losses, and the catalyst, a 16:1 ratio that encourages rampant speculation on the commodity futures market:

“A conservative calculation is that at least 60% of today’s $128 per barrel price of crude oil comes from unregulated futures speculation by hedge funds, banks and financial groups using the London ICE Futures and New York NYMEX futures exchanges and uncontrolled inter-bank or Over-The-Counter trading to avoid scrutiny. US margin rules of the government’s Commodity Futures Trading Commission allow speculators to buy a crude oil futures contract on the Nymex, by having to pay only 6% of the value of the contract. At today’s price of $128 per barrel, that means a futures trader only has to put up about $8 for every barrel. He borrows the other $120. This extreme “leverage” of 16 to 1 helps drive prices to wildly unrealistic levels and offset bank losses in sub-prime and other disasters at the expense of the overall population.” [Mike Whitney quoting William Engdahl]

But c’mon, people, don’t keep giving these mother fuckers your hard-earned, still-worth-something-but-not-as-much-as-it-used-to-be dollars. As Karl Denninger so elegantly puts it:

“One final thought – you can’t rape the willing. If you consent, whether by overt act or silence, then the financial boning you’re taking isn’t rape – its consensual sex.” [Market-ticker]

Park in the shade and roll down a window, fer cryin’ out loud!

–
“Chance favors the prepared mind.” -Louis Pasteur

Double-dealing Dimon

“In the ‘moral hazard’ department JPMorgan appears to have ‘rented’ out its access to the TAF to Target!

‘Target Corp., the second-largest U.S. discounter, will sell 47 percent of its $8.2 billion in credit- card loans to JPMorgan Chase & Co. for $3.6 billion to raise cash for stock buybacks and reduce its exposure to consumer defaults.’

“Anyone care to bet if that credit-card paper will immediately wind up in the TAF?

“You don’t think Dimon would have created an arbitrage opportunity for himself via his seat on the board of the NY Fed, while (further) contaminating The Fed’s balance sheet with crap credit card paper, do you? You don’t think Dimon has been negotiating this with Target while debating the extension of those credit facilities as a board member of the NY Fed, do you?

“Oh, and Target then uses this money to buy back stock, thereby propping their stock price, and offload the risk of consumer defaults to the taxpayer!

“Both Bernanke and Congress are now permitting The Fed to essentially create a stock buyback and credit support fund for a retailer?

“You’re kidding me, right? We’re not just ‘backstopping’ banks but are now creating the ability to factor consumer credit card debt?

“Excuse me while I go barf in Bernanke’s shoes.”

[Market Ticker]