Atrios, pointing to this article on Ireland's precarious financial condition, says "they should just default. Tell the continent to bail out its banks directly if they want." There is actually a very interesting precedent for this, Argentina a decade ago. I wrote about it 2004:

Via Tom Levenson at Balloon Juice, I just proved I am a Very Serious Person by putting the federal budget in surplus by 2015. Here is the NYTimes gizmo.

How I did it - 71% in revenue increases and 29% in spending cuts. What I raised - the estate tax to Clinton era levels (raised $50 billion), added a bank tax (raised $73 billion), added a millionaire's tax (raised $50 billion), let the Bush tax cuts expire (raised $226 billion), raised the FICA ceiling (raised $50 billion). For spending cuts I adopted these proposals - reduced Social Security benefits for high earners (saved $6 billion), enacted medical malpractice reform (saved $8 billion), reduced the number of troops in Iraq and Afghanistan to 30,000 by 2013 (saved $86 billion), made defense spending cuts (saving $57 billion), eliminated farm subsidies (saved $14 billion) and "earmarks" (saved $14 billion.)

I did not even use the "close tax loopholes" option which could have saved $136 billion. The reason I did not is because that more than ever is the phoniest nonsense of all. "Tax loopholes" never go away. Ever. And I still do not get how eliminating "earmarks" saves money. Anyway, so how "serious am I? I put the federal budget into $248 billion surplus by 2015. With bipartisan ideas even. Name me budget czar!

Speaking for me only

Taibbi writes about the foreclosure due process crisis in the United States (repeated disclosure, I work in this area for distressed homeowners) and gets to the nub of the macro issue underlying it all:

[I]t's the unpaid bills that are incidental and the lost paperwork that matters. It turns out that underneath that little iceberg tip of exposed evidence lies a fraud so gigantic that it literally cannot be contemplated by our leaders, for fear of admitting that our entire financial system is corrupted to its core — with our great banks and even our government coffers backed not by real wealth but by vast landfills of deceptively generated and essentially worthless mortgage-backed assets.

You've heard of Too Big to Fail — the foreclosure crisis is Too Big for Fraud. Think of the Bernie Madoff scam, only replicated tens of thousands of times over, infecting every corner of the financial universe. The underlying crime is so pervasive, we simply can't admit to it — and so we are working feverishly to rubber-stamp the problem away, in sordid little backrooms in cities like Jacksonville, behind doors that shouldn't be, but often are, closed.

(Emphasis supplied.) A co-conspirator in this massive fraud and scandal is the United States Treasury Department led by the incompetent and corrupt Tim Geithner. When the history is written on the Obama Administration, this could well be the lede.

Speaking for me only

The better jobs report released today has many people scrambling to figure out who will get credit for the the coming economic recovery. My take is decidedly different. The improvement in the jobs situation is very tepid, but certainly better than it was in 2009. But the incoming GOP House is poised to insist on policies (slashing government spending in particular) that will certainly do great damage to the economy, particularly with regard to job creation. The question in my mind is not who gets the credit, but rather who will be blamed for the coming 1937-like economic slump, particularly with regard to jobs.

The answer to that question will not only be critical to deciding who wins the 2012 election, but whether the nation can escape this economic malaise.It is my view that the GOP policies will be enacted and the key for Democrats is to make sure that the policies are seen as GOP policies. Then in 2012, Dems and Obama need to run against the result of the GOP policies. Which I expect to be near catastrophic for the economy.

Speaking for me only

Better news:

The economy generated a net gain in jobs for the first time in five months in October, as businesses stepped up their painfully slow pace of hiring.But the unemployment rate, measured by a separate survey of households, remained stuck at 9.6 percent for the third straight month.

The Labor Department said Friday its survey of employers showed a net gain of 151,000 jobs last month, the first increase since May. Private employers hired 159,000 workers, the best since April.

While this level of job growth will not lower the unemployment rate, at least it stops the bleeding. It also puts the the incoming GOP Congress on the spot. The Obama Administration has stopped the bleeding (or so the numbers suggest) -- slashing government spending will almost certainly accelerate unemployment - if in the next 2 years unemployment goes up, it will be on the GOP's watch. Dems and Obama need to state clearly their views of what needs to be done and then when the GOP prevails on the policy, the GOP will own the result.

Speaking for me only

Not only are we not going to get any more stimulus (in fact, the likelihood is a decrease in federal government spending), quantitative easing is a bad idea:

[Joe Stiglitz:] [T]he way I’d think about using monetary policy first is in a cost-benefit analysis. The likely benefit of monetary easing is very low for all the reasons I’ve said. Now, if it were costless, you might say, sure, the Fed messed up, it feels guilty, it wants to show it’s worried about unemployment, so why not let it do what it can do? But this is not costless. The first cost is the potential of currency wars [. . .] The second cost, which people haven’t talked about, is that the reason the private market for mortgages has dried up is that everybody knows the moment the government withdraws from the mortgage market, the effect will be that there will be a capital loss on the mortgages -- and the same thing goes for our long-term bonds. [. . .] The third point is that to avoid recognizing the loss, the Fed is likely to do silly things, like rather than buying and selling government bonds, they’ll pay interest on deposits banks make to the Federal Reserve in order to absorb the liquidity.

See also Krugman and DeLong. But what the hell do they know? They were only right about everything on the economy.

Speaking for me only

Via John Cole, a success for the mortgage servicers and the banks apparently ends in foreclosure:

I sent [my loan modification papers] three months ago and was told it was complete. And for the past three months, right up to the last time I checked (last Thursday) they were still at the reviewer. For three months everything has been fine, and suddenly they’re not only not fine we’ve backed up a step.

[. . .] It’s quite apparent BoA doesn’t want to do a workout, and will reject even due to its own mistakes. I expect to lose the house – I’m rather resigned to it, actually. Angry, but resigned. But I will never trust any of the banks that are involved in this mortgage mess again. I cannot trust them to act in good faith.

(Emphasis supplied.) Meanwhile, back in Washington, the Obama Administration says ""Treasury did have a robust and does have a robust compliance system in place," Barr said of HAMP, which was the administration's main effort to help three to four million strapped borrowers stay in their homes. "When we have found problems we have ordered them to be corrected and they have been corrected." You see? This is a HAMP success story!

Speaking for me only

Krugman:

[T]he new British budget announced on Wednesday and the rhetoric that accompanied the announcement might have come straight from the desk of Andrew Mellon, the Treasury secretary who told President Herbert Hoover to fight the Depression by liquidating the farmers, liquidating the workers, and driving down wages. [. . .] The British government’s plan is bold, say the pundits — and so it is. But it boldly goes in exactly the wrong direction. It would cut government employment by 490,000 workers — the equivalent of almost three million layoffs in the United States — at a time when the private sector is in no position to provide alternative employment. It would slash spending at a time when private demand isn’t at all ready to take up the slack.

[. . .] What happens now? Maybe Britain will get lucky, and something will come along to rescue the economy. But the best guess is that Britain in 2011 will look like Britain in 1931, or the United States in 1937, or Japan in 1997. That is, premature fiscal austerity will lead to a renewed economic slump. As always, those who refuse to learn from the past are doomed to repeat it.

Via Atrios, Naked Capitalism discusses the new PR push in the foreclosure fraud scandal - the Wall Street Jorunal "reports" that it's all those damn lawyers' fault:

Let’s parse some sections of the article, starting from the top: "The paperwork mess muddying home foreclosures erupted last month. But the legal strategy behind it traces to a lawyer’s gambit in 2006 that has helped keep one couple in their home six years beyond their last mortgage payment."

[. . . T]he efforts of various attorneys who have been chipping away as aspects of this problem are incorrectly lumped together, as if there was really only a single, simpleminded strategy, a mere “lawyer’s gambit” which by implication, was copied by other low life attorneys. And this effort was to keep a deadbeat borrower illegitimately housed. Funny, this James Kowalski, the attorney behind this dastardly act, did what members of the bar normally do (at least if they are competent): they look for weaknesses in fact and law in the case presented by the other side. And part of the process involves, stunningly enough, depositions! Kowalski’s evil deed was that he was early, perhaps first, to find a robo signer, back in 2006.

(Emphasis supplied.) What the plutocrats are demanding, and what the Obama Administration seems to be accepting, is a continued moratorium on the rule of law and due process. It is a disgrace.

Full Disclosure, I am one of the demon spawn lawyers involved in foreclosure cases representing homeowners, and am speaking for me only

HUD Secretary Shaun Donovan:

[A] national, blanket moratorium on all foreclosure sales would do far more harm than good -- hurting homeowners and home-buyers alike at a time when foreclosed homes make up 25 percent of home sales.

For instance, in Cleveland, where there are over 18,000 vacant homes, lives Millie Davis who recently earned her Master's Degree in Urban Planning from Cleveland State University and just bought her first home - one that had fallen into foreclosure and sat abandoned for years. Had a blanket moratorium been in place, that sale would have fallen through [. . .] These homeowners are at risk, too - and the best hope they have is for the "Foreclosed" signs in front of the vacant, abandoned properties on their block to come down, so that the value of their homes can start rising again.

(Emphasis supplied.) I am insistent on following the rule of law and providing homeowners due process, not a moratorium on foreclosures. I am for ending the moratorium on the rule of law that persists in this country regarding foreclosures. But beyond that, Donovan's statement makes no sense. The current climate of clouds over titles to homes is not a result of a potential national moratorium on foreclosures. Quite the opposite. It was due to the moratorium, blithely accepted by the Obama Administration, on due process and the rule of law. The Obama Administration has simply been incompetent regarding the mortgage crisis (from HAMP on down.) There is a crisis of confidence in the country about this issue, and a cause of that is the incompetence of the Obama Administration.

Speaking for me only

Via Atrios, Cleveland Plain Dealer:

Michael Rendes of Berea had his mortgage sold last year to Bank of America. The bank foreclosed on him in November, after insisting for months that it didn't hold his loan and wouldn't accept his payments.

Via D-Day, see also this.

Via Atrios, who cares about the rule of law?

It’s actually a bit sickening to hear defaulted borrowers describing the misdeeds of banks as “mortgage fraud.” What some banks have done might well be fraud—but the fact of that fraud doesn’t erase the other fact that the borrower agreed to make payments or face the penalty of losing her home.

"These companies that are too big to fail apparently also think they're also too big to comply with the law of the land and it's beyond outrageous," D’Amelio’s lawyer tells CNNMoney. Maybe I’ve missed something here. Can someone please explain why banks being ‘too big to fail’ should mean that D’Amelio should get to live in a house she hasn’t paid for?

Citi does not own the note on the house. Fannie Mae does. Foreclosure is a process by which the actual creditor gets to try and recover monies owed to it. Citi does not own the debt. Fannie Mae does. Citi has no right to seek to recover monies that are not owed to it. How hard is it to understand this basic point?

Speaking for me only