While I was away on business, my wife called to tell me we had received a note from Fannie Mae saying that our mortgage, which we recently refi’ed , had been sold by our bank to Fannie Mae, but to keep on paying the note to our bank. This means most likely that Fannie bought our mortgage in a bundle of Mortgage Backed Securities (Collateralized Debt Obligations). I double checked with the county recorder and, in fact, there is no Assignment of Mortgage placed of record there, which means Fannie may have bought the note but has no record title ownership interest; just a big contract a foot thick that went into their files. So now our mortgage is among the 75% of mortgages backed by Fannie Mae which the Secretary of the Treasury last Christmas Eve quietly announced would be backed by unlimited funds from the US Government, i.e., our tax dollars. I guess you could say that now the mortgage is backed by the full faith and credit of my income taxes.
So, the U S Government, which has nationalized Fannie Mae and Freddie Mac, is the nation’s mortgage banker, owning or backing fully 75% of the residential mortgages in the United States: socialized mortgage banking.
I hardly object to socialism as a concept, in fact in the face of rampant capitalist plundering of the private markets, and now of US tax revenues, my predisposition to socialism is clearly justified.
The news that the Fed has turned a $56 Billion profit for the Treasury may sound good, but against $19 Trillion of unaudited collateral the Fed has taken to make that profit, it puts things in perspective.
A lot of that collateral is Mortgage Backed Securities packages put up by the same guys who gamed the system all the way to Collapse, then took taxpayer money and put it in their private reserves. The horses are out of the barn, but no one can be certain all the horses have left. Put another way, for all we and they, know, the music hasn’t stopped, but everybody seems to be in quiet agreement that there aren’t anywhere near enough chairs to go around.
So it’s small comfort that Fannie Mae is backing my mortgage. Why? Because as much as I would like to get things out in the open by, for instance, auditing the Fed, I can imagine why the Fed is fighting tooth and nail to stop that. It’s called Insolvency. And this time it isn’t just Wall Street that may have cooked the books we’re talking about here, but the Supply Siders who have been running the show, and by that I mean the economy, into the ground for the benefit of sneering greedy heartless unscrupulous disloyal fraudulent thieving bastards.
And now Bernanke has placed a Dr. Parkinson in charge of regulating the markets for the Fed. Dr. Parkinson was previously instrumental in stopping all efforts at government control of clearly fraudulent markets during the Bush Administration that led directly to the Crash. Dr. Parkinson, to put it mildly, is not in favor of regulation. Like Bernanke, and his appointment manifests Bernanke’s ongoing mindset, the markets are self-correcting when left to themselves. Indeed, they are so corrective that they just might correct all of us into bankruptcy.
A benevolent explanation would be that Bernanke, and by extension the White House who have renominated him, believe that things can be fixed but only by increments because the true nature and extent of the liabilities undertaken by the US Govt, if known, would panic the global markets. There is a much darker explanation, of course, which is that as an institution the US Govt does not want to reform the markets, having been co-opted to the extent of inseparability, and are thus bringing 300,000,000 hostages along with it to make sure the truth never sees the light of day.
So, rhetorically, one has to consider the question raised by Oliver Wendell Holmes’ dictum about sunlight being the best disinfectant. While I don’t want the United States to turn into a third world barter economy overnight, if I don’t want sunlight, then what makes me any different from the parasitic bacteria inhabiting the corner offices on Wall Street?