Waiting to Exhale Through Insurrection Prevention.

ORANGE, CA SATURDAY JAN 24:  I absent-mindedly got my cart a little crosswise in the Walmart checkout line.  It took two requests to cut through my mental fog: I was blocking both lanes, even if only by a few inches. I pulled my cart back and apologized to the patrons squeezing by.  They could now at least wheel their few bags out of the store.

The woman behind me in line observed that things were really busy.  I have hardly ever seen the store so jammed, I replied.  Unfortunately, it wasn't a very good economic indicator, she muttered.  No, I said, to be crowded into the least expensive store in the area wasn't exactly a sign that things were looking up.  She observed people were finally being forced to get out and buy a few necessities.  No one's cart was full.  Everyone's been holding their breath, I replied.  She agreed, everyone's budget was dialed down to minimum through fear if not necessity.  No wonder things were contracting, I observed as my time to checkout finally arrived.  

We wished each other well as I rolled my few purchases away from the check stand.  I'd been in the store over an hour, but sections of the bottom of my basket were still exposed. 

As far as I can tell we're all waiting for some signal to exhale.  I drove the truck back home to my house of 18 years.  The Miata is still down with a blown belt idler and a cracked supercharger mounting bracket, but at least one vehicle works.  Even if it's the gas hog of the fleet.

I've set up all the regular bills to pay through Wells Fargo's automatic payment system.  This guarantees payments are never late.  But I've already had one credit card line reduced to the existing balance.  Thanks fellas.  Appreciate your support.  

My life has boiled down to keeping an eagle eye on the checking balance.  Business is down.  Boats repairs and upgrades are a deferrable expense.  Some months I get buy with pulling less out of the nest egg and some months more.   I'm not out of savings, but it's pretty clear it will be easy to outlive what's still in the bank.  To say nothing of unexpected expenses, a hospitalization episode equivalent.

My son's severance pay has just run out and he has a monumental mortgage payment.   This is the longest he's ever been out of work, six weeks.  But even a scrambler isn't getting much job market traction.  There are a few pockets of income and savings scattered through our family, so I suppose we'll keep his wife and children out of foreclosure somehow.  But it places all of us in danger of being on the streets.  That is not acceptable.

We all feel defrauded.  We were sold homes at willfully inflated prices during the bubble run up.  We were peddled mortgages that only made sense under the most optimistic scenario.  An arguably fraudulent securitization frenzy was whipped up so a small number of well positioned individuals could pocket vast wealth.  Now the cards have collapsed and we're subsidizing bank asset write downs with public money.  

Writing down the value of the mortgages has not stopped banks from foreclosing on these mortgages as if they still held full value.  This doesn't seem right even if it is legal.  The perpetrators need to be taking baths, not just the victims they seduced into the base of the scheme.   Mortgage relief, a recalibration of debt to current market value, is needed.   If it's been written down and replaced with public money, that write down needs to flow through to the mortgage holder, the original unsophisticated victim.  

It is very difficult to see the mortgage bubble as much beyond a massive fraud committed by entire segments of our banking and financial institutions.  Everyone from agents and appraisers, brokers to banks to Wall street PhD's are complicit.  The gains were ill gotten, no less than how Enron stole from California electrical consumers a very few years ago.  The entire edifice of deregulation from Regan on is now revealed to be massively fraudulent and corrupt.

If foreclosures continue and people keep being thrown onto the street, we're going to have to pull the National Guard back from Iraq to keep peace in our own streets.  We feel betrayed.  If people get pissed enough,  guns will come out of their closets.  My point is we need to head off the worst case, potential insurrection, as improbable as that may seem today.  Sufficiently desperate people can be pushed into sufficiently desperate action to defend their homes, no matter how the dead hand of mortgage law reads in normal times.