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Relief Slows To Homeowners Facing Foreclosure

John McCain: The Fundamental Deregulator

Oh, Burn!!

Burn is an exclamatory response, generally by a third party, after someone has just received an insult.  It is slang for disrespecting someone or to make fun of someone.  It is so humiliating or insulting to the point where you cannot return with a comeback.

I have thought, "Oh, BURN!", or its equivalent, a couple of times over the last decade.

The first was during bankruptcy deform, in which these large financial institutions pushed through Congress and the White House reforms that were not needed, and for which there was no motivation for no better reason than to make bankruptcy harder for consumers to file.  Phil Gramm, who is now John McCain's economic adviser, was a United States Senator during part of the debate over bankruptcy reform, and I recall him getting on national TV, and sending out mailers, referring to those who file bankruptcy as "deadbeats".  This practice was repeated by his successor, John Cornyn, who liked to refer to those who file bankruptcy as "deadbeats".  I always thought, no matter what the arguments or what the position taken, that these two otherwise disrespectful men went out of their way to not only advance their contributor's goal, but to intentionally disparage, belittle, dishonor, derogate, defame and slur those who felt they needed this protection.

Certainly the Republicans were not the only ones to blame for this fiasco.  Many Democrats were complicit.  And, were John Cornyn could almost be forgiven because, I doubt from his demeanor in office, that he is very bright.  However, is not Phil Gramm's excuse.

The second "Oh, Burn" moment came when I read about the $700 Billion bailout of the large financial institutions so as to prevent them from filing bankruptcy.  None, or little, of that money is going to help ordinary folks that might have been affected by the conduct of these banks.

You can say what you want about the pros and cons of the bailout, but the philosophy of it show an hypocrisy that is huge and shows a blatant type of contempt for common people.

What this monetary philosophy entails is the privatization of profits, but the socialization of risk or losses.  When there is money to be made or bilked, the government should get out of the way and never interfere, but the government should be made solely responsible for the risks and losses associated with the escapades of the financial institutions.

This was the same argument people like Gramm, Cornyn, Bush, McCain and many on both sides of the divide in Congress argued in regard to the so-called bankruptcy reform measures in Congress.  They argued that in essence that by allowing middle class people to just file bankruptcy when times got tough for them, without regard for the better times they might have had in the past, that the government was allowing these people to privatize profits and to socialize their loses, and that was wrong in their minds at the time.

Now, after middle class people are forced into 5 year repayment schedules not based on their actual budgets or earnings, we are creating what is now a trillion dollars of relief for Wall Street, while ignoring Main Street, and while denying ordinary people the right to achieve the same result when they find a financial meltdown unavoidable.

The 10 Largest Bankruptcies In History

With Lehman Brothers filing the largest bankruptcy in history, there are a couple interesting points to make.

First, in a democracy, what is a right for the biggest and most powerful corporations among us, should be a right extended to the least consumer among us.  After all, this is also Biblical, is it not?  "Whatever you do for the least of these my brothers, you do it to me".  Matthew 25:40.

Second, it is interesting to view the top 10 biggest brothers (bankruptcies) of all time to give you the size and enormity of that right.  These are:

1.    Lehman Brothers - $639 billion in assets.
2.    Worldcom - 103.4 billion in assets.
3.    Enron - $63.4 billion in assets.
4.    Conseco - $61.4 billion in assets.
5.    Texaco - $35.9 billion in assets.
6.    Financial Corp. of America - $33.9 billion in assets.
7.    Refco - $33 billion in assets.
8.    Global Crossing - $30.2 billion in assets.
9.    Pacific Gas and Electric - $29.8 billion in assets.
10.  United Airlines - $25.2 billion in assets.

OBiden -- How Both Oboma, Biden, and McCain For That Matter, Handed Bankruptcy Reform

Barack Obama voted against BAPCPA, but also voted against capping interest rates on credit cards, so that is a mixed bag.

McCain and Joe Biden, Obama's VP nominee, both voted for BAPCPA.

Joe Biden, however, was one of the leaders pushing BAPCPA and fending off almost all attempts to amend it.  This is certainly different from his image as an average Joe, who comes from and is always concerned for the working and middle class.

Biden even went as far as attempting to remove the language from BAPCPA that would have precluded a bankruptcy discharge for debts arising from portests at abortion clinics.

All of this prompted many to refer to Biden as "Senator MBNA", refering to his close relationship with the company, from his home state, and the large donations he received from and as a result of the company.

Federal Regulators Seize IndyMac Bank

The real estate market is obviously not going to wait for Congress to act.  It is making decisions on its own as to what banks and companies will survive the real estate meltdown.

According to CNNMoney, in what in what is likely to be the most expensive bank failure ever, troubled mortgage lender IndyMac Bank was taken over by federal regulators.  The operations of the Pasadena, Calif.-based bank were shut down by the Office of Thrift Supervision and transferred to the Federal Deposit Insurance Corp.

The clean up of this bank is expected to costs the Deposit Insurance Fund between $4 billion and $8 billion, and worse still it is expected that 10,000 IndyMac customers could lose as much as $500 million in uninsured deposits.

IndyMac, with assets of $32.01 billion and deposits of $19.06 billion, is the fifth bank to fail this year. Between 2005 and 2007, only three banks failed.  IndyMac marks the largest bank collapse since 1984, when Continental Illinois.

Most media is reporting extensively on what will happen to depositors in the bank.  The bigger question it seems is what does this do to already pressed mortgage borrowers (debtors).  As these troubled mortgage loans are sold off the collections activities against the borrowers are likely to become more aggressive.  This will undoubtedly have a big impact on bankruptcy filings and bankruptcy based litigation.

You Have Gotta Love The Mortgage Lender Implode-O-Meter

It is sad really.  Millions of Americans are losing their homes.  Most of these loses are simply unjust because borrowers were enticed into programs that have harmed them.  The lenders should have known better.  I would contend that they did know better, they thought they could just pawn the loses off on others.  Well, at least one website is gleefully tallying the number of these outrageous lenders that have run into trouble themselves.

As reported byThe New York Times newspaper, The Mortgage Lender Implode-O-Meter has become so recognized that at the recent Mortgage Bankers Association conference, a speaker addressed how to stay off the website.  “No one wants to be number 266,” said Jim Reichbach, a vice chairman and leader of Deloitte’s banking and securities team. “This is a death toll that is equivalent to the casualty ticker of the Vietnam War.”

When you see so many honest people that have been duped in a way that has cost them their homes, and you have seen what mortgage lenders have tried to do to the bankruptcy laws, it is hard not to feel excited watching these blood suckers parish due to their own schemes.

Global Inflation Is Rising, Rising, Rising

Inflation is a bad, bad thing.  It hurts most everyone.  As gas prices, food prices and the prices for essential rise uncontrollably, people and companies simply cannot keep up with the market pressures.  People or consumers have to go further in debt, more debt does not get paid, more people are forced into bankruptcy, and then companies and creditors are squeezed.  They immediately get more aggressive, more strident, more litigious.  Operations are set in motion to collect, collect, collect, and everything just appears to spiral out of control.  Once they get their organizations headed in a particular direction, as we know, creditors and companies cannot seem to turn the system off or train it to make distinctions.  The automatic stay and discharge injunctions will be violated.

According to a report by HuffPo there is currently no where to hide from the bogeyman that is inflation.  Prices in one in four countries, many of them in emerging markets, are accelerating at a double-digit pace, which puts them at least two and a half times the 4 percent annual U.S. headline inflation rate, according to new research from Morgan Stanley.  With this, the U.S. economy has slowed to nearly a standstill in the last year because of the mounting inflation and the collapse in the housing and mortgage markets. Other industrialized countries have seen about a 2 percent average rate of growth while emerging economies have topped 7 percent.  That growth is now being threatened by inflation.  Food prices have jumped 39% from February 2007 to 2008, led by wheat, soybeans, corn and edible oils, according to the International Monetary Fund.

Morgan Stanley economists Joachim Fels and Manoj Pradhan said they were "flabbergasted" by their findings that 50 countries had double-digit inflation rates. On that list were six of the 10 most populous countries in the world, including India, Indonesia, Pakistan, Bangladesh, Nigeria and Russia.  In total, those facing such pricing pressures accounted for 42 percent of the world population.  "In other words, close to three billion consumers are currently experiencing double-digit rates of price increases," they wrote in a note to clients.

And, the problem is that soaring inflation is not easy to tame. Some countries, such as India where inflation is running at around 11 percent, may have no choice but to boost interest rates.  Many emerging-market economies also link their currencies to the dollar, and because of the U.S. Federal Reserve's loose monetary policy stance right now the central bank has aggressively cut interest rates in response to the credit crisis and that has helped feed inflationary pressures.

The longer inflation remains elevated, the more damage it will do to long-term economic growth.

As we have often seen, as goes the World eventually goes the United States.

$100 Million Bankruptcy Attorney - I Doubt It

CNNMoney reviewed what it might cost to build the $6 Million Man, who was played on TV by Lee Majors in 1974 in today's dollars.  It is a strange comparison because there really was not a $6 Million Man in 1974. There was only just an estimate of what it would take to put Lee Major's back together as one if it were possible.  And, let us face the fact that in 1974 we all thought $6 million was a heck of a lot of money.  As frivolous as money has become today (even though we do not have it) $6 million seems like chump change almost.

Nonetheless, in 2008 inflation adjusted dollars, Lee Majors would be the $26 Million Man.  But, the real cost of a modern-day cyborg in 2008 would be quite different, according to Greg Chirikjian, professor of mechanical engineering at The Johns Hopkins Institute and a big fan of the original TV show.  According to Chirikjian, research and development costs to design a bionic man would be $50 million to $100 million today. But with a completed design, production costs would only be several hundred thousand dollars per person.

What I find interesting about this discussion is that in 1986, for example, an attorney was allowed to be paid $2,500.00 in legal fees through the Chapter 13 Plan to represent a family in a Chapter 13 bankruptcy in the Eastern District of Texas.  Today, even with the extraordinary new requirements to which an attorney must plan and respond, that fee is now only $3,000.00.  Considering the inflation adjusted costs only that fee should likely be about $9,000.00 today. It is not.  And, if you consider the additional work, it should be higher still.  Judges say that consumers cannot afford these fees over a 5 year period.  However, they were able to pay the equivalent in 1986, and a larger percentage of bankruptcies survived to completion at that time.

The Drew Carey Bankruptcy Party

This clip from the 3rd season The Drew Carey Show about his bankruptcy party.