Dylan Ratigan On Property Rights Gone Wrong And America’s Descent Into Central Planning Hell

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homeDARPAcontributorsnewsforumszh-tshirtstoredonaterssmanifesto Is Residential Real Estate Recovering? Posted by: Econophile Post date: 10/12/2010 – 13:41 There are still huge headwinds facing the residential real estate market. Shadow Inventory is not getting better, and now we have the robo-signing scandal which will only further delay recovery. Since all real estate is “local”, some markets are clearly starting to find a floor. But a “recovery” whereby prices stabilize is a couple years away. Testy Tuesday – Trichet Talks Tough at High Noon Posted by: ilene Post date: 10/12/2010 – 13:22 If only our own Fed were somehow held accountable to the people of this country – even symbolically… The Robo-Signing Mess Is Just the Tip of the Iceberg, Mortgage Putbacks Will Be the Harbinger of the Collapse of Big Banks that Will Dwarf 2008! Posted by: Reggie Middleton Post date: 10/12/2010 – 06:02 The media is staring at the wrong target. Each major media outlet is copying what is popular or what the next outlet broke as a story versus where the true economic risks actually lie. Here’s what’s truly at stake – the United States is now at risk of losing its hegemony as the financial capital of the world! Navigation PollsDonate To Zero HedgeRecent posts Shopping cart View your shopping cart. User login Username: * Password: * Create new accountRequest new password Zero Hedge Reads Angry BearBearish NewsBoom Bust BlogChina Financial MarketsChris Martenson’s BlogContrary InvestorCoyote BlogCredit WritedownsDaily CapitalistDaneric’s Elliott WavesDealBookDealbreakerDr. Housing BubbleFalkenblogFibozachiFund My Mutal FundGains Pains & CapitalGlobal Economic AnalysisGonzalo LiraImplode-ExplodeInfectious GreedInvesting ContrarianJesse’s Café Américain Market FollyMax KeiserMinyanvilleMises InstituteNaked CapitalismOf Two MindsPension PulseShanky’s TechBlogThe Daily CruxThe Mad Hedge Fund TraderThe Market TickerThe Technical TakeThe Underground InvestorWall St. Cheat SheetWashington’s BlogWealth.netWhen Genius Prevailed Home Dylan Ratigan On Property Rights Gone Wrong And America’s Descent Into Central Planning Hell Tyler Durden's picture Submitted by Tyler Durden on 10/12/2010 13:58 -0500

Dylan RatiganFannie MaeFederal ReserveFreddie MacGross Domestic Product

Now that the Fed is officially targeting a path for the level of nominal gross domestic product, which is essentially the politburo’s chief central planning task, and is just one step away removed what China does constantly by starting with a GDP assumption and trickling it down through the economy, it is only fitting that America, now on the verge of being a fully-blown communist country, is also abrogating property rights, courtesy of the much discussed foreclosure scandal. Dylan Ratigan provides a concise explanation of just how our bankers have managed to bring us to this last descent into central planning hell.

From Dylan Ratigan

Property Rights Gone Wrong

Most mortgages in America are now backed by our government. And in order for a bank to get that backing from our government it must fill two criteria:

1. The borrowers must be verified by the banks and their agents as qualified.

2. Lenders must fill out paperwork accurately and make sure that when the home’s title changes hands, so does the documentation.

But in the past two decades, a whole lot of the time, that never happened.


For banks and servicers, the motive was money. Banks profited by packaging and selling those toxic home loans. Then they profited again by betting against those same securities. A bet, in essence, that a fraudulent loan wouldn’t be paid back.

But why would politicians allow this?

The simple answer is to stay in office.

Giving people huge government incentives to buy houses made them happier and thus made their politicians more likely to keep their jobs. And at the same time, the financial services sector — the banks making all the money — were donating to their political campaigns.

In 2008, the financial sector was the top donor to both the Democratic and Republican candidates.

So where are all these toxic loans now? We own them! At the Federal Reserve, Fannie Mae, and Freddie Mac.

And the banks and politicians will do whatever it takes to prevent a legitimate foreclosure proceeding…one which would easily reveal the lack of qualifications and bad documentation in the loans sold to the government.

Finally, the last and most important why:

Why isn’t the government dealing with it now?

Simply because it could reveal systematic criminal and civil fraud at the highest levels of America’s banks and in its political corridors.

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by Millennial
on Tue, 10/12/2010 – 14:02

I was thinking to myself today while showering and cutting my wrist while singing CRAWLING IN MY SKIN!!!!!! from Linkin Park 


In a free market would fractional reserve banking inevitably occur as banks seek rent/profit?

Further in an anarcho-capitalist society who would control the banks from doing this?

Login or register to post comments by Conrad Murray
on Tue, 10/12/2010 – 14:07

This is off-topic and I asked in another thread a few minutes ago:  I was wonering how long the wait was between sign-up and ship-out for you.  Also, what’s your MOS?

Login or register to post comments by Millennial
on Tue, 10/12/2010 – 14:17

5 Months for enlisted. 9-12 months Officer Candidate School depending on several factors. This is all when I enlisted, trust me I wanted to go OCS but time and financial constraints didn’t allow me. I’ll sign up for OCS as quickly as possible when I’m done with Basic.

However, my buddy enlisted like a week ago, he won’t be leaving til like late April/May. So what’s that? 7 months? 

I’d imagine OCS people would be nearing 13 months. 

I know a lot of OCS people and umm unforunately most of them have teaching or business degrees. It’s kinda sad.

My MOS is 21B or Combat Engineer. The longer you wait to sign up the worst your job opportunities. I was stupid and fucked around for a year before I signed up.

Login or register to post comments by Conrad Murray
on Tue, 10/12/2010 – 14:37

That’s in line with what I’ve been hearing regarding the wait, which is just fine becasue who wants to do BCT in the winter?  Blah.  Spring, FTW.  Going to talk to recruiter tomorrow.  Hope to be signed up by month’s end.  Feel free to email me: UrbanRoman@hushmail.com

Login or register to post comments by Stevm30
on Tue, 10/12/2010 – 14:18

At first it would – but as bank runs and failures occur, the general population will become increasingly skeptical of banks.

Eventually new banks will be compelled to assuage the fear of the public by publishing their reserve ratio, and/or conducting rigorous third party audits.

In the free market, banking, as we know it, would not exist – market pressures would force banks to either have 100% reserves, or, to require CDs from all depositors – matching their debt maturity with credit maturity to stay solvent.

We are in an unprecendented period in world history.  Take a person from most any other country, most any other time, an average person, and he/she will understand, to a far greater extent, what money is and how it works… today the average citizen in completely ignorant of these dynamics – ignorance that has permitted the banksters and politicians to do so much damage.

Login or register to post comments by tmosley
on Tue, 10/12/2010 – 14:20


The depositors, via bank runs if the banks are poorly run.

As time passes, the age of the bank will become very important, as a bank that has been around for a hundred years is almost certain to be well run, where one that was started last week has no such seal of approval from its customers.  More than likely, people would choose what level of risk they are willing to accept , and get a return that is proportional to risk.  Current levels of leverage would probably get you a 50% yearly return in a free market (absent the bank’s fees), but you would have a good sized chance of losing your money as the bank goes insolvent.  Alternatively, you could get a bank that uses very little leverage, but you only get a 10% return.  Certainly nothing to sneeze at, but pretty low return for capital in a government-free system.  Of course, if you want no risk, you can put in in a vault and pay storage fees.

Login or register to post comments by Catullus
on Tue, 10/12/2010 – 14:30

I think the general austro libertarian analysis is that while fractional reserve banking should not be outlawed, it would be an exceedingly foolish thing to do absent the federal reserve. It would be akin to gambling. The presense of the federal reserve or central bank willing to counterfiet bank notes enables the banks to engage in what would otherwise be gambling.

In an anarcho capitalist society there would probably still exist fractional reserve banks. They would probably attempt to leverage up and make money on a short term opportunity while limiting the ability of depositors or creditors from withdrawing frequently. Kind of like hedge funds now operate.

But this has been the critique of the people on this site and elsewhere — with backing by the fed, depository instituions are just massive hedge funds with a creditor that has a printing press.

Login or register to post comments by the not so migh…
on Tue, 10/12/2010 – 14:04

“highest levels of America’s banks and in its political corridors.”


That pretty much sums up who they are covering for.

Login or register to post comments by midtowng
on Tue, 10/12/2010 – 14:04

We aren’t going communist. We are going fascist.

Login or register to post comments by minus dog
on Tue, 10/12/2010 – 14:05

Sounds about right.

Login or register to post comments by saxman717
on Tue, 10/12/2010 – 14:07

More like Fascommunist — buckle up and bite down hard!!!!

Login or register to post comments by Conrad Murray
on Tue, 10/12/2010 – 14:14


Login or register to post comments by SheepDog-One
on Tue, 10/12/2010 – 14:17

Actually not fascism since that is the govt taking over corporations and running them…in our case the corporations have taken over a communist govt. Whats it called technically? Hell I dont know, but its not good.

Login or register to post comments by tmosley
on Tue, 10/12/2010 – 14:22

Hardly matters, both have the same endpoint, and the path looks largely the same.

Login or register to post comments by janchup
on Tue, 10/12/2010 – 14:18

We did that already.

Login or register to post comments by Ragnarok
on Tue, 10/12/2010 – 14:28


Login or register to post comments by uberfinch
on Tue, 10/12/2010 – 14:05

I am disappointed by the bombast in this post.  Let’s try to disobey Godwin’s law (or a Red version of it).  America is not “on the verge of being a full-blown communist country.”  It is worth being accurate about what is happening, because it remains frightening and unnerving, but it is not communism.


Login or register to post comments by Millennial
on Tue, 10/12/2010 – 14:09

It may not be communism in the ideal or classic sense, but it is socialism.


Nationalize the mortgage industry, nationalize two auto companies, nationalize the banks, nationalize airport security into the TSA (9/11), Amtrak, and whatever, there’s not a small list.

Wait til we “have” nationalize the Fed and the banks, and then GE.


Login or register to post comments by SheepDog-One
on Tue, 10/12/2010 – 14:09

Yes it is communism, you didnt refute that at all. Just said youre disappointed.

Login or register to post comments by hambone
on Tue, 10/12/2010 – 14:21

Not socialism, not communism, not capitalism…let’s call it kleptocracy (a government characterized by rampant greed and corruption)?

Login or register to post comments by tmosley
on Tue, 10/12/2010 – 14:26

Can you point out which plank/planks of the Communist Manifesto that has yet to be implemented in the United States?

I can, but there aren’t many, and most of those not implemented are in fact well on their way.

Login or register to post comments by Millennial
on Tue, 10/12/2010 – 14:05

As for regarding the article I am increasingly convinces Terminators should run our government. They don’t feel anything so they would apply only logically sound conclusions to humans emotional/social problems in terms of law. They won’t be influenced to stay in power via robbing paul to pay john.

Login or register to post comments by Oracle of Kypseli
on Tue, 10/12/2010 – 14:10

Bring in MacCrystal. He can deal with them in in a NY minute.

TPTB is boxed in. No way out.

Ratigan, your voice is resonating. Bravo!


Login or register to post comments by SheepDog-One
on Tue, 10/12/2010 – 14:10

TPTB know its only a matter of short time until the people come after them.

Login or register to post comments by Bam_Man
on Tue, 10/12/2010 – 14:15

It won’t be MacChrystal because he is retired, but a military coup and martial law are looking a lot more likely than I would ever have thought.

Login or register to post comments by Ivar Kreuger
on Tue, 10/12/2010 – 14:11

Read Issac Asimov for an interesting take on robots running government.

My .02’s, how could they be any worse?

Login or register to post comments by Dagny Taggart
on Tue, 10/12/2010 – 14:23

Something in between R. Daneel Olivaw and the Terminator/Skynet?

Login or register to post comments by Conrad Murray
on Tue, 10/12/2010 – 14:09


If you’re reading this, get Karl Denninger on your show.

Login or register to post comments by NOTW777
on Tue, 10/12/2010 – 14:14

guess he had to take a break from calling the tea party racists

Login or register to post comments by Ragnarok
on Tue, 10/12/2010 – 14:16

How could Ratigan understand this yet still believe in Global Warming?  Oh well, anything that gets the message across to those who get their news from progressive news outlets is helpfull.

Login or register to post comments by Alcoholic Nativ…
on Tue, 10/12/2010 – 14:21

There goes that word again.  Progress has become a bad word to some people


Retarded teabagger stooges.  Will they ever stop self flagellating?

Login or register to post comments by Ragnarok
on Tue, 10/12/2010 – 14:34

Progressing towards what?  Progressives tend to progress away from the individual and towards gov’t/elite/cartel control. Libertarians don’t progress because Liberty is an absolute.



Login or register to post comments by shushup
on Tue, 10/12/2010 – 14:17

And Mr. Market is happy and going up – so all is right with the world.

Login or register to post comments by Alcoholic Nativ…
on Tue, 10/12/2010 – 14:18

This is teabagger nonsense.

Bla bla bla, the government is Communist, bla bla bla why isn’t the government doing something about this!


Login or register to post comments by papaswamp
on Tue, 10/12/2010 – 14:20

Aritcle from CNBC (of all places) seems to think this will extend beyond mortgages in foreclusure..


Login or register to post comments by lynnybee
on Tue, 10/12/2010 – 14:21

My wish is to have DYLAN, CHRIS WHALEN, KARL DENNINGER & WILLIAM K. BLACK become AMERICA’S DREAM TEAM & fix this mess ………. & I’ll bet my gold that they would succeed……… DYLAN is tops with me.

Login or register to post comments by michigan independant
on Tue, 10/12/2010 – 14:23
What I have learned.

Freedom is more of a burden and an obligation than an option or a right.

 To divorce political or social rights from moral obligations perverts and corrupts freedom. Christ himself teaches us “Render unto Caesar what is Caesar’s”—not because every Caesar deserves it, but because Caesar’s concern is not with the most important thing in our lives. Caesar is dead, pray for those in power. There has been a persistent question raised among free-market intellectuals in the West: If capitalism did not offer higher living standards than socialism, if a centrally planned economy gave a higher living standard than a free market economy, would you still support capitalism as an economic system? Unique among intellectuals in that he would likely express a stronger preference for capitalism if it offered a lower living standard than socialism!

The failure of socialism as a moral failure rather than an economic failure, and that the superiority of a free market lies in its absence of coercion and its potential ability to foster conditions conducive to personal spiritual development, not in its attainment of higher levels of material comfort for ordinary people. Once the state program is established all criticisms are off limits. This precludes any honest assessment of any aspect of life, since all must pay continual homage to the wisdom and felicity of the party and the system. This pretense and hypocrisy undermines the development of good character and is spiritually debilitating.


Login or register to post comments by Alcoholic Nativ…
on Tue, 10/12/2010 – 14:32

You used way too many words to simply state you are retarded.

Login or register to post comments by shushup
on Tue, 10/12/2010 – 14:24

Apple will cross 300 today.

Nothing else matters.

Login or register to post comments by laughing_swordfish
on Tue, 10/12/2010 – 14:26

Where is Douglas MacArthur now when we need him?

Login or register to post comments by treemagnet
on Tue, 10/12/2010 – 14:27

Not to worry, about 100,000 really smart, clever, and very hungry lawyers are warming up in the bull pen with a “kill ’em all” attitude.  Finally, a use for lawyers – can’t wait for the class action 60 second spots airing every other minute for the next three months.

Joke: Why don’t sharks eat lawyers?


A: professional courtesy

Login or register to post comments by doolittlegeorge
on Tue, 10/12/2010 – 14:30

the problem with the “banksters” is that the CEO got that job “because he eliminated that deparment.”  Well…that department turned out to be important.  Now they don’t have the “money for that new department that I eliminated as CEO.”  Sooooooo….

Login or register to post comments by Jack Ryan
on Tue, 10/12/2010 – 14:35

The key to any capitalist society is the ability to both succeed and fail.  If failure is taken off the table by ‘the system’ then the people who succeed must pay for the failures.  This reduces the incentive to succeed and increases the incentive to move to Switzerland.  The irony is that the rich will be fine and the poor will stay poor.  It’s the middle class that’ll get screwed even further from existance and the housing problem expanded.  Just let the banks foreclose on ’em, let the market clear.  The lenghtening of the process with governmental involvement will only lenghten the down cycle. 

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