Joe Nocera has the quote of the day (2 actually) in his NYT column this morning: Big Problem for Banks: Due Process:

“That’s why most people, myself included, have no sympathy for Bank of America’s legal predicament — and no patience for its “we’re not the bad guys here” arguments. It is absolutely true that the homeowners that Bank of America wants to foreclose on are in default on loans they should never have gotten in the first place. (Gee, whose fault was that?) But it simply does not follow that the bank therefore has an absolute right to take back the home. Under the law, it has to prove it has that right — by filing documents that show that the owner of the mortgage has conveyed that right to it. That’s why this affidavit scandal isn’t some legal nicety. It’s about the single most important value of American jurisprudence: due process.”

That has been why I have been hammering the fraudclosure issue so hard — my focus is on the rule of law, property rights  and due process. The banks expediency needs does not mean that they get to throw away centuries of laws because they are inconvenient.

Nocera admits that he wants to see the banks pay for their sins:

“I admit it: I want to see the banks feel some pain. Most people do, I think. Banks did terrible things during the subprime bubble, and they still haven’t paid any real price. I find myself rooting for judges to rule against banks in foreclosure cases. I would love to see these big investors put the serious hurt on Bank of America, which will encourage other investors to pile on. I know this colors my thinking. I can’t help it.

Yet I also know the flip side. If the foreclosure lawyers start winning a lot of cases, if judges halt foreclosures on a widespread basis, if investors start to extract billions upon billions of dollars from the banks — and if banks become seriously weakened as a result — we’ll be right back where we were two years ago. The banks will need to be saved for the good of the economy. The taxpayers will have to come to the rescue. That’s an appalling prospect too.”

I disagree. We still have the option of doing what should have been done on the first place: The next time they come to the taxpayers begging for a bailoutm we go Swedish on them:  Pre-packaged bankruptcy, fire management, wipe out shareholders, haircut bondholders, erase all of the outstanding debts and toxic paper.

He ends the article with this bon mot:

Banks: We can’t live with them, and we can’t live without them. It stinks, doesn’t it?

I would rewrite that:

Banks: We don’t have to live with them in their corrupt, incompetent form, but  we can’t live without them. So we best clean uo the mess before these bastards cost taxpayers yet another trilliomn dollars . .  .

>

Source:
Big Problem for Banks: Due Process
JOE NOCERA
NYT, October 22, 2010  
http://www.nytimes.com/2010/10/23/business/23nocera.html

Category: Corporate Management, Legal

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

47 Responses to “Why Is Due Process a Big Problem for Banks?”

  1. gremlin says:

    the banksters are like the goths in the roman empire, safer if we could just put them to the sword or keep them across the danube, but it’s too late, they are already here.

  2. MidlifeNocrisis says:

    Well said…. now we just have to figure out how to release the stranglehold that the banks have on our Government leaders.

  3. Chief Tomahawk says:

    How about a little celluloid fictional payback too? One more Dirty Harry film where a retired inspector Callahan learns his retirement condo has been errantly foreclosed upon, his retirement funds were allocated (without his knowledge) into CDOs by a fund manager who falsified statements for 8 years, etc., and are reduced to the point he needs to go back to work. Callahan briefly tries out as a ‘store greeter’, but is let go because he pulls out his magnum and shoots three would-be robbers to foil their crime. Callahan then gains cable news celebrity for his bravery and is summarily rehired by San Francisco metro, who promptly trades him to the newly resurrected ‘enforcement division’ of the SEC.

  4. machinehead says:

    ‘Next time … we go Swedish on them: Pre-packaged bankruptcy, fire management, wipe out shareholders, haircut bondholders, erase all of the outstanding debts and toxic paper.’

    Bravo! But it’s essential that this process for TBTF entities be taken OUT of the hands of the Federal Reserve, which after all is a bank cartel created to serve banks.

    Where can we find an objective, non-conflicted third party? It’s like Diogenes search for an honest man. But an obvious start is not to let Federal Reserve roosters wearing ill-fitting fox suits guard the henhouse of TBTF banks.

  5. Tarkus says:

    Supposedly Receivership is in the Fr-odd bill.

    The karma of the previous malfeasance is circling. The situation the TBTF banks created was never cleaned-up, just tarped-over. The “unintended consequences” of that is the current loopback.

  6. NickAthens says:

    BARRY, this time you are dead on..YOU NEED A BIGGER DRUM!

  7. AndyC says:

    http://globaleconomicanalysis.blogspot.com/2010/10/california-pension-promises-exceed-550.html

    Look at the situation with pension funds, how much of a beating did they take with these bogus triple AAA MBS securities that Wall Street foisted off on them?

    Now these pension plans have an opportunity and a duty to CLAW IT ALL BACK, so that’s what they should do!!

    All of the major banks have already failed anyway and we are just waiting for them to fail even more spectacularly once again in the future when the swaps market or the CDS, CDO, currency markets or whatever they are currently speculating in now (at fantastic leverage) blows up

    Better to just blow them up now in an orderly fashion then to let them keep speculating and blow up without warning.

  8. Suweebebbe Jeebus says:

    The criminal bankers (redundant, I know) and their paid in full political lackeys have been successful so far in pulling off the really ‘Big Sting’ of the average American citizen.

    Unfortunately, there appears no credible evidence that they will ever be made to pay for their avarice and the pain and suffering that they have caused.

  9. franklin411 says:

    This whole thing reminds me of the brouhaha over strategic default.

    When the bank acts like a business and defaults on a bad investment, acting within the boundaries of their contract, that’s considered a smart business move.

    When a person acts like a business and defaults on a bad home loan investment, acting within the boundaries of his mortgage contract, that’s considered blasphemy, treason, free love, miscegenation, IWW-ism…the whole 9 yards!

  10. Moss says:

    The disease was never treated in the first place. This will be treated in the same way. They certainly won’t let this ‘administration error’ make the trillions already spent look foolish.

  11. bramb says:

    Barry Ritholtz has the Quote of the Day:
    “Banks: We don’t have to live with them in their corrupt, incompetent form, but we can’t live without them. So we best clean uo the mess before these bastards cost taxpayers yet another trilliomn dollars . . .”

    Barry, why are there very little people arguing like you are? There must be someone – in politics – that feels similarly and is heard by people (and who is not bankrolled by the banks).

  12. [...] Wall Street: The Big Picture Banks: We don’t have to live with them in their corrupt, incompetent form, but we can’t live [...]

  13. VennData says:

    BR asks, “Why Is Due Process a Big Problem for Banks?”

    I might also ask why were their bondholders sacrosanct during the Paulson/Bush bailouts? …why do they still – mostly – have their jobs? …why did they set a record in salaries last year?

    …the World Wide Chamber of Commerce and other lobbyists who are financing those delightful ads you see ridiculing the people who also ask those same questions.

    And you think Washington’s “anti-business.” ROFL!

  14. vaughn says:

    My single favorite of the whole sublime debacle…
    “We need a banking system…Who says we need THESE banks?”

  15. rktbrkr says:

    Does anybody know if MERS is regulated? (BR?)

    They are private, a creation of the banks and they seem to have set up a shadow real estate recording system to beat the states and counties out of their filing fees and now under closer examination they may for produced questionable titles for 2/3 of the homes purchased the past decade or so.

    The big banks seem to have failed at the fundamentals of their business, prudent credit evaluation and accurate (and legal) documentation of transactions.

  16. vaughn says:

    ” The next time they come to the taxpayers begging for a bailoutm we go Swedish on them: Pre-packaged bankruptcy, fire management…..”

    Uh uh…
    JAIL management.

    We bailed out criminal enterprises and then we’re surprised when they engage in further criminality…
    as the poster above suggests, this implies an unseemly state of fascism existing in amerika….

    Great column Barry

  17. Addingle says:

    What should we think about the due diligence that Ken Lewis et al did (or did not do) for the bank’s acquisition of Countrywide? Surely they must have been able to find the incidents of fraud.

  18. bergsten says:

    Apparently, despite all of the money BofA saved by (allegedly) cutting corners in foreclosure proceedings, they are now going to start charging for personal checking accounts.

    They seem to blame this move on “new regulations.” I suppose this could be true — I haven’t read through each and every line of the regs — perhaps there’s one buried in there saying you must “nickel and dime” what few depositors still trust you with their money.

    I tell ya, I’m starting my own bank.

  19. franklin411 says:

    @Bergsten
    Thanks for the link to that completely outrageous article. I’d suggest going to a credit union and opening an account there. You avoid having to pay those unnecessary fees, and every single penny of capital denied to the commercial banks is a victory for America, imo.

    I like the attitude of the article, anyway. It’s like a mugger who switches his M. O. to identity theft. “It’s your fault I’m an identity thief,” he complains, “because you sent all those cops out on the beat to crack down on mugging!”

  20. stonedwino says:

    Best damn post ever Barry. Most Americans have been paying and are still paying one way or another…it is time the big banks obey the rule of law and legal process and if the need be feel the pain. If that means they go belly up again – I totally agree – go Swedish. No more bail-outs for any reason. “You pay now bitch!”

  21. Ltdata says:

    I agree with your article. I have 2 related comments though.
    As a professional I have ethics requirements to follow or I lose my hard-earned certification. Bankers and lending officers have no professional organizations and no ethics requirement?
    Shouldn’t Fannie and Freddie have policed their mortgage purchases better? Don’t they have minimum lending requirements, internal controls, and an internal audit department to stop fraud?
    See also, “Dumbest of this weeks 5 dumbest: The never ending Fannie-Freddie bailout.”
    http://www.thestreet.com/story/10897542/1/dumbest-of-this-weeks-5-dumbest-the-never-ending-fannie-freddie-bailout.html

  22. rgfct says:

    One solution might be to turn the Post Office into a Postal Bank. By charter all it can invest in are a blend of maturities of U.S. Treasury securities that matches in duration the deposits. And it can handle transaction accounts. Presto, we can now do away with the FDIC in total. And if you want to take on risk of lending money to ( making a deposit in ) any other bank — that risk is your problem. That — along with my other idea of forbidding any member of congress and any federal employee who earns more than $75,000/year from hiring ANYONE to do their tax returns — will never happen. So in the meantime, find a bank that never took a dime of TARP money, is solvent, and local to you. My pick is Hudson City Savings Bank — where checking is free with a $10k balance and is today earning 0.74% interest. Over 50 times what the TBTF banks are paying. Full disclosure — I have my mortgage with them and am a very modest shareholder.

  23. dss says:

    Normally I have a great respect for Nocera’s columns, but why does he insist upon ignoring the elephant in the room? The Swedish option is the only solution if we really want a fresh start.

  24. mbelardes says:

    BR, I know you read the comments so I this is probably better than emailing you.

    Have you seen “Inside Job” yet? I know you hate, and I do mean hate, homework assignments (Rule 5C: Assignments). But I was wondering what your take is on the film or if you would take a chance to review/recommend it. I felt it was accurate. Obviously they use snippets of interviews that could be out of context but the facts are facts and some of the facts/clips were absolutely amazing/infuriating.

    Professor Frank Partnoy is in the film and did a question and answer after the flick was over. The film ends with a “fight back” theme. I asked what does that mean? How can we “fight back.” I mentioned I’m 27 and sick of voting. I work for a firm and I’m in law school (one of his students). I don’t even see the first place I can even start “fighting back” short of running for Senate, becoming CEO, or managing a billion dollar activist hedge fund.

    Partnoy admits he is cynical about the possibility of change. A room full of people outright demand it though. We thought we got it with Obama. Now here we are, two weeks off of elections and little to nothing.

    I don’t know. I’m just saying this blog has taught me a lot about the past and I’m young enough to try and do something with the future and there are a lot of young, smart, ambitious people that need direction on how to reshape the future.

    There was a question, “Is government smart and fast enough to even regulate effectively?” Partnoy said it is no way near fast enough. I won’t quote him on what he said about smart enough. But that question is almost rhetorical.

    There is an amazing and massive demand for change, action, direction or whatever you want to call it. It is like a quite bubbling up of angst and resentment for so much. But this isn’t the 1970′s student protests. This is a widespread ideological and intellectual war being waged by keystrokes. There has got to be some sort of information technology-type solution to this. 20 years ago this very communication wouldn’t even be possible. During the S&L Crisis, the average person couldn’t converse with others so easily to debate and discuss problems and solutions. The freedom of information has to be the answer.

    We have to find a better solution than just voting for the other person every few years.

  25. Pocket QQ says:

    I wonder how many people would be forced into the loop of destitute if everyone decided to short their mortgage by a penny? Imagine that income model.

    http://www.youtube.com/watch?v=5znh58WITU8

  26. Eric W says:

    Let’s talk a little asset forfeiture when we prosecute for fraud. That ought to make up for some of the bailouts, and help reduce the deficit!

  27. deadhead says:

    Mr. Ritholtz said: “That has been why I have been hammering the fraudclosure issue so hard — my focus is on the rule of law, property rights and due process. The banks expediency needs does not mean that they get to throw away centuries of laws because they are inconvenient.”

    Thanks much for saying this, sir. This is absolutely brilliant and critically important for the USA to have a future.

    Secondly: “The next time they come to the taxpayers begging for a bailoutm we go Swedish on them: Pre-packaged bankruptcy, fire management, wipe out shareholders, haircut bondholders, erase all of the outstanding debts and toxic paper.” Thanks much for saying this as well. I’ve become an even bigger fan after reading just these two paragraphs.

  28. marion says:

    The amusing thing is that the banks are busy financing Republican candidates all over the country–people who are against regulation AND AGAINST BAILOUTS. They’ll be in for a rude shock when they come around with their hands out.

  29. rat89 says:

    “Banks: We can’t live with them, and we can’t live without them. It stinks, doesn’t it?”

    Actually, what’s wrong with his last line is this: We can live without them – as the entities they have become in the wake of the repeal of Glass-Steagall. Obviously, we can’t live without a banking system. But it is of no benefit to us, or to society as a whole, to have integrated entities that combine banking with investment banking, and insurance, etc. We can easily do without “banks” that trade against their customers. We can easily do without banks that hard sell loans and other types of credit to people who either don’t really need it or worse, can’t afford it, on terms that will weaken the borrower.

    I have seen two types situations with elderly people occur in the last few years. In one, the bank offers a heloc, or second mortgage on a house that is owned by an older person whose payments on the first mortgage already equal 70% of their fixed income. By taking the second mortgage they got access to cash they never should have had, got deeper into debt making a so-so situation worse, and got underwater with the combination of the two loans, forcing a short sale on the house.

    In the other, the person had assets under management for an annual fee at one of the big bank/brokerage cos. He was cross sold a home equity line of credit on his house “just in case he ever needed funds in an emergency”. He had/has tremendous equity built up, and a very small outstanding first mortgage. He doesn’t need the heloc, which had a pre-payment penalty if he were to close it within three years. The pitch was “just in case you ever need $30,000 for something”. I asked him “how much did you withdraw from your managed asset account last year?”. His response: “about $30,000″.

    Here’s what the bank did: By selling him this heloc, in the event he did borrow the $30,000 using it, they make money in two ways – by gaining interest on the borrowings in the heloc, AND by NOT LOSING assets under management which are bringing in an annual asset management fee. The kicker – the spouse was in unstable health at the time, so if this client had to sell the house for personal reasons within the three years he would have to pay the bank the pre-pay penalty. To add insult to injury, the managed asset account was being churned without any real returns to him.

    The conflict of interest is immense. So, no we don’t need the banks. Not these banks. Some banks, but not the banks that were bailed out with our money, and who became even more TBTF by swallowing up entities like Countrywide.

  30. soloduff says:

    BR et al.: If you want to “go Swedish” on the big banks the next time they need bailing out–an understandable fantasy–I’m afraid you’ll have to move to Sweden. Americans as a political entity or entities show no sign of reversing their political retardation, moral lobotomization and utter imbecility in all things pertaining to civic virtue. Witness the latest excrescence of the body politic, the Tea Party phenomenon, a protofascist pus that is in process of being co-opted to the ends of the status quo, which of course includes the big banks. (This tactic was employed in the 1930′s Europe with dubious success, but our rulers are nothing if not persistent when it comes to doing the wrong things.) Your calls for due process are only indicative of how little there is of same for the little people, leaving due process the nearly exclusive preserve of those who can buy it.

  31. tel1 says:

    Banks!?!? Banks!?!? We don’t need no stinking banks!!!!!!!

    BR,

    Your Swedish solution sounds like a good one except for one thing: Sweden is a Socialist state whereas we live in a Fascist state. Dude, get real!!! The people who run things here would never allow it.

  32. Tarkus says:

    “Why Is Due Process a Big Problem for Banks?”

    Because, so far as I’ve seen, they don’t have to follow the law. They just have to pay our “representatives”.

    Not many on Capitol Hill have spoken out about this.
    When money is involved, most are PAINO – Party-Affiliated-In-Name-Only.

  33. tel1 says:

    bbbbbbbb

  34. ToNYC says:

    There seems to be profound cognitive dissonance when it comes to the FRS member banks monopoly. As monopolists, they need only to coerce permission and effect regulation stand down. Can we forget Henry Paulson of GS forever put Ken Lewis’s back to the wall were he to exercise free choice in the teeth of Fed Reserve monopoly orders? ZIRP is daily denying a return on US citizens savers (the lifeblood of the real economy) in the face of free cash jumping in front of their potential reward. The banks have failed and the Bernanke FED fraud ZIRP is there to give them time to off their toxic product insufficiently distributed as yet to the taxpayers, savers, and pensioneers of this once free economy. Invented credit gives them all the time the need to suck the air out of the jar and collect the withered assets.

  35. philipat says:

    I live in a country with no rule of law, and believe me you don’t want to go that route.

    Although being able to bribe a traffic cop does save time and effort!!

  36. tel1 says:

    fgfgfgfg

  37. Laocoon says:

    Agreed – we definitely need rule of law and there are no shortcuts for enforcing it.

    I’m likewise surprised and dismayed that Joe Nocera didn’t seem to get or stress the vital importance of due process [in this case, due diligence and contract compliance].

    Large-scale transfers of notes and mortgages have, for the last 20 or more years, caused many participants to try to create ways around the hard work and cost of enforcing ownership rights and perfection of the security interests in mortgages/collateralized loans. These schemes haven’t worked.

    Ritholtz is right that there just isn’t any way around it. The issues of property rights reside at the state and local level, and no stroke of the pen in Washington can supersede the grunt work at the county courthouse to cure documentation deficiencies. It’s a hard slog ahead, it will take a long time, and the total cost cannot be estimated at this time.

    As far as FNMA/FHLMC vs the banks goes, certainly there should be consideration of minimizing the ultimate cost to the taxpayer if we end up on the hook for this from either side, but it’s not that easy.
    The contractual obligations of the parties to each other should be settled, but, most imporantly, the rights of third parties [homeowners and bondholders] are deeply involved and should be enforced as key legal issues. Legal issues first, public policy second.

    I don’t like the operational complexity of the note/mortgage system, either, and would love to see reforms that would maintain strong property rights while streamlining the process. However, the process we have now is the only thing between the order of enforceable property rights and the chaos of wealth destruction from a totally broken legal system.

    There has been too much whining this week by TV commentators about how it’s just a paperwork glitch. It’s not. It’s the underpinning of household wealth.

  38. Random Blowhard says:

    We CANNOT live with them in their current corrupt and incompetent form, they will trigger a full blown economic collapse that will end the United States existence as a first world power if we do.
    Rule of Law or the United States of Argentina – Pick One.

  39. ToNYC Says: October 23rd, 2010 at 8:54 pm

    There seems to be profound cognitive dissonance when it comes to the FRS member banks monopoly. As monopolists, they need only to coerce permission and effect regulation stand down. Can we forget Henry Paulson of GS forever put Ken Lewis’s back to the wall were he to exercise free choice in the teeth of Fed Reserve monopoly orders? ZIRP is daily denying a return on US citizens savers (the lifeblood of the real economy) in the face of free cash jumping in front of their potential reward. The banks have failed and the Bernanke FED fraud ZIRP is there to give them time to off their toxic product insufficiently distributed as yet to the taxpayers, savers, and pensioneers of this once free economy. Invented credit gives them all the time the need to suck the air out of the jar and collect the withered assets.
    ~~

    some things need to be re-read, and, others need to be re-read and understood..

    until more People bother to unpack, and understand, what ‘ToNYC’ is alluding to, this Scene isn’t going end happily, but for a few..

    LSS: the horrific Fraud, that is “Central Banking”, has been well known for a loong time..

    We, as we’re, currently, constituted, are, just, too utterly afraid to admit that it’s being run, again, on our Watch..

    QOTD: “”If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around [the banks], will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered.” -Thomas Jefferson

    http://search.yippy.com/search?input-form=clusty-simple&v%3Asources=webplus&v%3Aproject=clusty&query=The+Case+against+The+Fed

    http://search.yippy.com/search?input-form=clusty-simple&v%3Asources=webplus&v%3Aproject=clusty&query=The+Federal+Reserve+Fraud

    “…We MUST deal with the money problem in a principled way, else we never get back on the course of sustainable prosperity.

    By “money production,” the author is speaking not in the colloquial sense of the phrase “making money,” but rather the actual production of money as a commodity in the whole economic life. The choice of the money we use in exchange is not something that needs to be established and fixed by government.

    In fact, his thesis is that a government monopoly on money production and management has no ethical or economic grounding at all. Legal tender laws, bailout guarantees, tax-backed deposit insurance, and the entire apparatus that sustains national monetary systems, has been wholly unjustified. Money, he argues, should be a privately produced good like any other, such as clothing or food.

    In arguing this way, he is disputing centuries of assumptions about money for which an argument is rarely offered. People just assume that government or central banks operating under government control should manage money. Hulsmann explores monetary thought from the ancient world through the Middle Ages to modern times to show that the monopolists are wrong. There is a strong case in both economic and ethical terms for the idea that money production should be wholly private…”
    http://mises.org/resources/3747/The-Ethics-of-Money-Production

  40. Neildsmith says:

    Commenter mbelardes asks how to “fight back”. Here are a few things to try:

    Don’t buy a house. Don’t use credit / debit cards. Don’t trade stocks / bonds. Don’t borrow money from a bank to buy a car (thanks Mom!). I’m pretty sure this would be a lot easier than disbanding the Federal Reserve or getting Congress to take down the TBTF banks.

  41. farmera1 says:

    People above were asking about MERS.

    Info on MERS from Wikipedia. I have no real idea as to the veracity of this info. but I would suspect it is fairly accurate.

    http://en.wikipedia.org/wiki/MERS

    “The MERS eRegistry is a system of record that identifies the owner (Controller) and custodian (Location) for registered eNotes.[8] Built by MERS with the endorsement of the Mortgage Bankers Association and launched in 2004, the MERS eRegistry satisfies the “safe harbor” requirements of E-SIGN and UETA legislation.[9] Both Fannie Mae[10] and Freddie Mac[11] require the registration of eNotes on the MERS eRegistry before they are eligible for purchase.”

    As long as the Mortgage Bankers Association endorses MERS, what could possibly go wrong.

  42. hoofin says:

    The thing that troubles me the most is that the federal government has already been subsidizing the banks to the tune of $100 billion a year through the mortgage interest deduction on Schedule A. Yet now, there is a need to clean up and wipe out balances on mortgage debts, and everyone is getting up-in-arms about the fact that federal money might be used.

    Well, what makes the mortgage interest deduction so sacrosanct? Sure, it is a benefit to the taxpayer, but the ultimate cash ends up as profit on the bank balance sheet. So, so what if the federal government picks up most of the difference on a mortgage work-out?

    I agree that the banks have to follow due process. However, in most cases, the money was legally lent and the borrower legally sought it. Everyone thought houses were worth more than the passage of time shows they were really worth. Is this honestly new? Hasn’t this sort of thing happened before? The foreclosure lawyers are looking for every legal excuse. Maybe the solution is just to write off the difference, and if the people still can’t pay, then the house is gone.

    The vast majority of mortgagees in the 1970′s had their mortgages inflated away in the tripling of the price level in that time. It’s not like people haven’t been handed a “gimme” before.

    ~~~

    BR: Either you believe in due process or you don’t. If you believe in it — and I am unsure you do — it applies to Criminals as well as defaulters.

    As to Schedule A, since 1913, all interest on loans were deductible, including mortgages. Most of that interest deductability has been whittled away, leaving only mortgages and a few sundry items.

    Its much more accurate to say the entire real estate complex is being subsidized. I don’t have a terrible problem with that, as it promotes economic growth in a cost effective, efficient way.

  43. wngoju says:

    BR for President! Wait – I said that ten or twenty posts before…

  44. wngoju says:

    @soloduff: Shhhhh…

  45. AHodge says:

    perfect perfect
    “we go Swedish on them: Pre-packaged bankruptcy, fire management, wipe out shareholders, haircut bondholders, erase all of the outstanding debts and toxic paper”

    and if the prospect of haircuts and debt writedowns scares anyone,
    spend the money you saved on something useful, or cut taxes
    and BTW you have also reduced the total debt problem, their creditors are too big to be owed.

  46. AHodge says:

    its not too late
    see if they have a legal collateral claim to foreclose
    AND put all the bad mortgage paper back to them,
    AND swaps that didnt perfom,
    mortgage insurance that didnt insure,
    structured finance that lost its “structure”
    so the Cooks take back their own rancid cooking,
    AND write down all the bad Opaque paper out there
    and see whos insolvent and wind them up

    and thats not so much swedish
    just sensible