This is not going to be much of a diary as I am going to ask you to take a look at Naked Capitalism where Yves Smith has been doing a fantastic job fighting the Obama and Tom Miller (Iowa AG) propaganda.
In today's installment Smith presents 12 reason that you should hate the mortgage settlement (the normal 10 top reasons was not enough).
Here are a couple of the main ones:
1. We’ve now set a price for forgeries and fabricating documents. It’s $2000 per loan.
Banks get to break the law with impunity and get a small slap on the wrist for their trouble. Compare this to what happened to peaceful protesters in New York or other OWS locations. One rule for the 1%, another for everyone else.
2. That $26 billion is actually $5 billion of bank money and the rest is your money.
Why? because most of the mods will be to securitized loans (held by pension funds etc), not to bank held mortgages BECAUSE ... banks hold a lot of second liens ... so if the first mortgage (held by the pension fund) is modified it makes it more likely that banks will get paid on their second mortgages (which otherwise would have been worthless in a foreclosure). You lose, they win ... even though they are supposedly settling. AMAZING.
12. We’ll now have to listen to banks and their sycophant defenders declaring victory despite being wrong on the law and the facts. They will proceed to marginalize and write off criticisms of the servicing practices that hurt homeowners and investors and are devastating communities. But the problems will fester and the housing market will continue to suffer.
And this is the crux of the entire Obama approach to the economy. Sweep all the problems under a rug and wait and hope for things to get better. But they won't. Not until we get real reform and those responsible for the mess get prosecuted and a new foundation constructed upon which to build a new economy.
To those that say ... wait a minute, the economy is getting better, let me remind you why. The deficit is running at about 10% of GDP (that means the limited growth we see is all due to borrowed money), interest rates are at record lows (adding fuel to consumption as people continue to refinance mortgages etc), and the Fed has been printing money like there is no tomorrow. So what is really astounding is not that the economy is slowly improving, but that it is NOT improving more given how much stimulus is being applied, stimulus that at some point will stop and REVERSE. (It is a bit like having some very wet logs on a campfire and applying lighter fluid and using a blow torch and cheering wildly when you get a few wisps of smoke.)