Squatting in Mansions


Great times are looming for bargain-hunters, if you have cash: the Washington Post reported on June 21 that the percentage of all mortgages currently in default has reached an all-time high of 1.2%, replacing the previous high of 1.18% set in the fourth quarter of 2002. Adding the 4.53% that are “delinquent,” 30 days late or more, means that nearly six percent of all mortgages on the books today may or not be paid. That could mean billions of dollars in the short-term, and all sorts of chain-reaction damage in the medium, which could cut into property values across the country. My problem is that I cannot wholeheartedly endorse home-ownership at this particular time because the specter of economic catastrophe looms, its shadow only recently falling upon the vaunted housing market. I know this from having read myself-which more people should do, when possible.

Among the columns submitted and rejected for publication in recent months was a gem from January. It’s premise was that the US housing market, which has helped sustain the nation’s financial health and had to that point escaped the negative trends then (and still) common among other core economic indicators, was not far off from serious problems itself. I got that impression from parsing the annual report by the Office of Financial Housing Enterprise Oversight (OFHEO), whose major duty is the regulation of Fannie Mae and Freddie Mac. The report, “Systemic Risk,” took the unusual step of requesting federal authority to place Fannie and Freddie, the second- and fourth-largest financial services institutions in America, into receivership, if such a thing were ever necessary. The mere suggestion was sufficiently scandalous to get OFHEO’s head run out of his spot, and the press generally ignored the hint.

Now, a half-year later, events once thought inconceivable are now moving into position, which is bad news for the housing market. Only two weeks after Freddie Mac’s president was fired for “irregular accounting practices,” Fannie Mae is now under pressure for having possibly invented up to $4.6 billion in profit for FY2002, writes the esteemed Alex Berenson of the New York Times. If Fannie and Freddie are forced to restate earnings reports or worse, it would severely compromise the ability of regular Americans to finance their homes, and of lending institutions to flip that consumer-debt into working capital by selling mortgages to the FMs. We should hope the scandal goes no deeper than Fannie’s covering up losses caused by interest-rate cuts last summer, because a deeper, more “systemic” sort of rot could pop the last remaining bubble undergirding our shaky economy.

As I write (June 23), the week’s big issue is whether the Fed will lower its interest-rate by 25 or 50 basis points, a one-quarter or one-half point cut to stimulate investment. There are a certain number of people who will continue to play the markets regardless of what happens, because it’s their job. Others are less certain to stay in as more difficulties arise, and some of them represent the kind of Big Money that must be kept happy for fear of mass panic. It already seems that much of the world’s short-term planning is based on the presumption that a US economic collapse is at least possible.

Master speculator (and marijuana decriminalization czar) George Soros is holding a short position on the US Dollar, meaning he expects it to continue losing value against other currencies, including the Euro, which was near its all-time low three months ago when I predicted exactly the kind of huge gains it has since made. Warren Buffet’s Berkshire Hathaway group has turned its biggest profits ever during the last two years, simply by exploiting the markets’ general unwillingness to tell the truth about exactly what fueled the 1990s boom market: a credit bubble that has left the country with more debt than disposable income (according to); a sustained assault on American labor; and an unprecedented explosion of new technology that incited fundamental changes in how we live. None of these factors will be present to assist in the next economic recovery, but you can’t say that in public. Why? Because it is the average American’s willingness to spend beyond his or her means that drives this freakish incarnation of our political-economy, which requires strict controls to be placed on the information they are given. Unless one reads, say, the NYT, Wall Street Journal and the Financial Times of London daily, supplemented by EIR fringe-work and selected volumes of Murray Rothbard, it is likely that one will be unaware of what’s really happening until it is too late.

Shelton Hull is a freelance journalist and writer based in Jacksonville, FL. He has been published by Counterpunch, Folio Weekly, Ink 19 and Section 8 Magazine, among others. Please send comments to sdh666@hotmail.com

December 01, 2015
John Wight
From Iraq to Syria: Repeating a Debacle
Conn Hallinan
Portugal: the Left Takes Charge
Mike Whitney
Putin’s Revenge? The Fight for the Border
Sami Al-Arian
My Ordeal: One of America’s Many Political Trials Since 9/11
Steffen Böhm
Why the Paris Climate Talks Will Fail, Just Like All the Others
Gilbert Mercier
Will Turkey Be Kicked Out of NATO?
Bilal El-Amine
The Hard Truth About Daesh and How to Fight It
Pete Dolack
Solidarity Instead of Hierarchy as “Common Sense”
Dan Glazebrook
Rhodes Must Fall: Decolonizing Education
Colin Todhunter
Big Oil, TTIP and the Scramble for Europe
Eric Draitser
Terror in Mali: An Attack on China and Russia?
Linn Washington Jr.
Torture and Other Abuses Make Turkey as American as Apple Pie
Randy Shaw
Krugman is Wrong on Gentrification
Raouf Halaby
Time to Speak Out Against Censorship
Jesse Jackson
It’s Time for Answers in Laquan McDonald Case
Patrick Walker
Wake Up Zombie, Kick Up a Big Stink!
November 30, 2015
Henry Giroux
Trump’s Embrace of Totalitarianism is America’s Dirty Little Secret
Omur Sahin Keyif
An Assassination in Turkey: the Killing of Tahir Elci
Uri Avnery
There is No Such Thing as International Terrorism
Robert Fisk
70,000 Kalashnikovs: Cameron’s “Moderate” Rebels
Jamie Davidson
Distortion, Revisionism & the Liberal Media
Patrick Cockburn
Nasty Surprises: the Problem With Bombing ISIS
Robert Hunziker
The Looming Transnational Battlefield
Ahmed Gaya
Breaking the Climate Mold: Fighting for the Planet and Justice
Matt Peppe
Alan Gross’s Improbable Tales on 60 Minutes
Norman Pollack
Israel and ISIS: Needed, a Thorough Accounting
Colin Todhunter
India – Procession of the Dead: Shopping Malls and Shit
Roger Annis
Canada’s New Climate-Denying National Government
Binoy Kampmark
Straining the Republic: France’s State of Emergency
Bill Blunden
Glenn Greenwald Stands by the Official Narrative
Jack Rasmus
Japan’s 5th Recession in 7 Years
Karen Lee Wald
Inside the Colombia Peace Deal
Geoff Dutton
War in Our Time
Charles R. Larson
Twofers for Carly Fiorina
John Dear
An Eye for an Eye Makes the Whole World Blind
Weekend Edition
November 27-29, 2015
Andrew Levine
The Real Trouble With Bernie
Gary Leupp
Ben Carson, Joseph in Egypt, and the Attack on Rational Thought
John Whitbeck
Who’s Afraid of ISIS?
Michael Brenner
Europe’s Crisis: Terror, Refugees and Impotence
Ramzy Baroud
Forget ISIS: Humanity is at Stake
Pepe Escobar
Will Chess, Not Battleship, Be the Game of the Future in Eurasia?
Vijay Prashad
Showdown on the Syrian Border
Dave Lindorff
Gen. John Campbell, Commander in Afghanistan and Serial Liar
Colin Todhunter
Class, War and David Cameron
Jean Bricmont
The Ideology of Humanitarian Imperialism