MERS can't assign mortgages, judge rules

A personal victory today for me - and possibly hundreds of thousands of homeowners - thanks to U.S. Bankruptcy Judge Robert E. Grossman in Central Islip, New York, who ruled, last Thursday, that Merscorp has no legal right to transfer mortgages.

Anyone following the fiasco that is the housing market knows Merscorp better by MERS, as they were the "nominee" on millions of mortgages written in the housing "boom" of the 2000s. What the judge's ruling does is essentially invalidate most mortgages written between 2003 and 2008 (and some before and after that), because that was the time period in which the largest lenders - Countrywide (now BofA), JP Morgan Chase, WAMU and others used MERS to end-run the county recording offices and save on fees, then packaged and resold these mortgages to witless investors.

Now, the banks have no standing in courts to foreclose and the buyers of those ugly securitized mortgages want their money back. Banks are being forced into a corner, even after being bailed out by the Federal Reserve, TARP and taxpayer money. The ruling from that bankruptcy court and others should serve distressed homeowners well in fights with the banks over ownership rights as they set strong precedents and are are likely only to be overturned by individual state legislatures.

Even then, any new laws validating the banks' practices would have to be applied retroactively, an activity expressly forbidden by the US constitution (remember that?).

This is, in reality, the end of the game for the big banks, which should have been allowed to fail in the beginning. The American public has spent Trillions of dollars keeping these bodies afloat and they are still sinking, and fast. Little by little, Americans are learning to stand up to the banks, city hall, the states and the federal government and demand their rights.

The ruling from this past Thursday stands as a marker in the struggle for resumption of the RULE OF LAW, which has been kept bound and gagged by the current and former presidential administrations. The American public is tired of being lied to and robbed from and the time has come to choose sides. Either you side with the government, the banks and their crooked politics and practices or you side with the people, and seemingly, the courts and the lawyers.

This is a nation governed by the rule of law, not by force or money or politics. Choose now!

Meanwhile, the circus kept running at Wall and Broad.

Dow 12,268.19, -5.07 (0.04%)
NASDAQ 2,817.18, +7.74 (0.28%)
S&P 500 1,332.32, +3.17 (0.24%)
NYSE Composite 8,405.15, +30.26 (0.36%)

Despite the marginal gains, advancing issues led decliners overall, 3686-2856. There were 286 new highs and 23 new lows on the NASDAQ and 355 new highs and 11 new lows on the NYSE. Selected stocks are clearly stretched to the limits of affordability, though with price discovery a lost art in the algo-following world of computer trading, this alone will not foment an imminent collapse of values. However, the volume on the NYSE made another new low point today, just a week after setting the low mark of the year. Rising indices without full-blown participation is the very first tool in the analyst bag, though the rules have been changed so dramatically over the past few years that nothing is certain today.

Still, market manipulations cannot last forever. The rules of economics will eventually take out all of the excess and malinvestment. It has to or the entire market is a fraud.

NASDAQ Volume 1,985,633,750
NYSE Volume 3,959,988,500.00

Note the divergence in commodities. Oil continued down again today, losing another 77 cents, to $84.81, while the precious metals gained. Watch for oil prices to continue their plunge back below $80 and beyond. demand has dried up once the price for US unleaded gas exceeded $3.15 on a national basis. Since the $4.00 shock of 2008, American drivers have made adjustments: buying more fuel-efficient vehicles, driving less, driving smarter, conserving, car-pooling.

Besides the obvious adjustments, the US economy simply is not strong enough - nor is the world economy, for that matter - to justify high fuel prices. There is little to no growth and slack demand. Ergo, oil and gas prices should fall accordingly.

As for the PMs, well, they've resumed their ominous climb. Gold gained $4.70, to $1,365.10, but still remains stuck in a range, though the bottom is in at $1350.00. Silver popped another 54 cents, to $30.53, approaching the 30-year-highs last seen in December.

The lid is about to come off the entire global system of financial fraud, again.

Mubarak Flees Egypt; Stocks Rally in US

Nothing like the deposition of a dictator to raise the animal spirits of the ruthless Wall Street crowd. The self-proclaimed Masters of the Universe are probably plotting now on how to best liberate the newly-free people of Egypt from their valuables.

Meanwhile, back at the exchanges, stocks started lower again and then rapidly moved up, similar to yesterday's trading, though with a little more lift. In addition to the news out of Cairo, the Primary Dealers were once again treated to a little $7 billion POMO, courtesy of their favorite Central Banker, Chairman Ben Bernanke.

Actually, with an overthrown government in the Middle East and $7 billion in walking-around money, one would think that today's results were less-than-adequate. Then again, stocks were extremely overpriced in October of last year, and it's been straight up since then, so there must be a dearth of new suckers... er, investors.

Dow 12,273.26, +43.97 (0.36%)
NASDAQ 2,809.44, +18.99 (0.68%)
S&P 500 1,329.15, +7.28 (0.55%)
NYSE Composite 8,374.89, +37.76 (0.45%)

Volume was pretty thin again, but advancing issued lambasted decliners, 4637-1883. NASDAQ recorded 237 new highs and a mere 25 new lows. On the NYSE, the numbers were skewed even more, with 318 new highs and only 10 new lows.

NASDAQ Volume 2,074,279,250.00
NYSE Volume 4,690,140,000

With tensions subsiding in Egypt, oil traders took down the price by $1.15, to $85.58. By the same rationale, gold fell $2.10, to $1,360.40, and silver was off by 10 cents, to an even $30.00 at the close of trading in NY.

With the markets up, winter coming to a fast end, Mubarak out and nothing but good times ahead, we evoke the spirit of depression-era impresario Ted Lewis, asking the musical question, Is Everybody Happy?

Dow Ends Win Streak... Barely; Mubarak to Stay, Same with Bernanke

Houston, we have a problem. The markets are no longer liquid enough even for machines to move them. Today's trade, on the back of a gloomy outlook from Cisco (CSCO) after the close on Wednesday, was pathetic, and fitting, upon the widespread rumors that the NYSE would be sold to the Deustch Bourse and that President Mubarak of Egypt would step down.

None of that seemed to matter very much, as well as the rosy picture painted by the release of the current first time unemployment claims, which came in at 383,000, far better than expected.

The markets (or, those who control the markets) would have none of it, at least for the first half-hour of trading, that is. as all major indices dropped right from the opening bell, hitting bottom right about 10:00 am, 1/2 hour into the session. The Dow shed 83 points, but immediately rallied back up 50 points, shaving off the losses and trapping the retail investors who sold in the early part of the day.

For the remainder of the session, stocks vacillated in a narrow range, finally ending nearly unchanged, with the Dow down, the S&P and NASDAQ barely in the green. The Dow snapped an 8-day win streak with a 10-point loss. Ho-hum. It was a day of futility all around as nothing newsworthy seemed to either occur nor move stocks in any clearly-defined direction.

Dow 12,229.29, -10.60 (0.09%)
NASDAQ 2,790.45, +1.38 (0.05%)
S&P 500 1,321.87, +0.99 (0.07%)
NYSE Composite 8,337.13, -6.86 (0.08%)

Advancers and decliners were nearly at a stalemate, with winners ahead slightly at the close, 3281-3170. NASDAQ new highs totaled 175, with new lows at 30. On the NYSE, there were 180 new highs, with 18 new lows. Volume was dull on the NYSE, but rather strong on the NASDAQ, due primarily to heavy selling from Cisco, which reported nearly flat second quarter earnings, but scared some with downbeat forecasts. The 13% drop in the stock was probably a bit exaggerated as seems to the theme these days. Anything even slightly positive or negative results in big moves one way or the other in the most-tightly-wrapped market ever.

NASDAQ Volume 2,512,622,250.00
NYSE Volume 4,705,256,500

Commodities mostly treaded water as well. Oil gained two cents, to $86.73. Gold was off $3.00, to $1,362.50, but silver shed 18 cents, to $30.09.

Put this one in the books and store it for future reference. One gets the feeling that there's quite a bit of tension out there in the trading pits and something big is about to occur. A major sell-off or resumption of the rally would not be much of a surprise over the next two to three sessions.

Miracle Rally Sends Dow to 8th Straight Gain

Over the past two days, I've tried to make the case that I am optimistic instead of pessimistic and that the recovery we've been told over and over and over again ad nauseum is actually real and not fully backed by the free printing of money.

Oddly enough, we have in America a free press, but it is largely the one used by the Treasury and the Fed to create money, not the one that enlightens opinion with words of wisdom. I have tried my best to drink the Kool-aid that says all is well, the Fed has the economy under control and that unemployment really is only 9%, when all along I know there are dangers lurking everywhere, the Fed is actually out of control (lost all control when they dropped interest rates to ZERO), and that unemployment in America is much closer to 20% (maybe even above that) than 10% when factoring in all the part-time jobs, heuristic and hedonic measurements and adjustments made by the BLS and other government statistic-throwers.

I simply cannot profess to any kind of fundamental economic theory that would have me believe that the best way to solve a debt and solvency crisis is with more debt and by keeping insolvent companies (banks, GM, Chrysler) afloat with taxpayer dollars. Neither can I avow to any belief in the Federal Reserve, knowledgeable in the fact that the Fed, since 1913, has reduced the buying power of the US dollar by 97% and that since 1971 - when Nixon closed the gold window - the world has been operating with a fantasy reserve currency, backed only by the good faith and credit of the United States of America, the world's biggest borrower and instigator of costly wars for the national "good."

Label me a pessimist if you must, but not before reading this somewhat over-the-top (but not by much) article on why small businesses aren't hiring.

Then read the comments, including this one:

I am a self employed business owner, and my brother is also a small business owner. Neither of us will hire an employee under any circumstance, even if the economy was improving or even just steady. Here is why; the local, state, and Fed governments are out of their f---ing minds with rules, regulations, fines, direct and indirect ( hidden ) taxes. Hiring an employee is almost a form of self destruction where you are forced to provide guarantees to the employee and the state to provide for their well being. OSHA, Labor dept, DOT, Workers Comp., Unemployment, Health Care rules for Cobra, retirement , EPA, Dept. of Environmental Conservation, IRS, State Taxation, etc. etc. and f--k all of that bull---t. Been there, done that, will not do it again. This article describes myself and almost all the self employed people that I know to perfection. When help is needed, hire other self employed guys and gals, 1099 them and you are done. Keep overhead to an absolute minimum.

Maybe then, you'll begin to understand my anti-corporate, anti-government opinions.

Some of the biggest news today was that concerning the proposed merger of the NYSE/Euronext and the Deutsche Boerse. As it turns out, merger is an incorrect term by which to identify this transaction. Rather, the NYSE is selling itself to the Deutsche Boerse, meaning that even though there will be co-headquarters in New York and Berlin, the Germans will hold the controlling interest - about 60% - meaning one of our most basic institutions, the venerable New York Stock Exchange, will be largely owned by foreigners.

While this is not new nor novel - recall the Japanese buying up most of Manhattan's expensive real estate in the 70s (at inflated prices) - the precedent it sets is troubling. What will we sell next? The Empire State Building, the Statue of Liberty, the Capitol, the White House?

Some may argue that the latter two edifices are already foreign-owned, the title is still officially held by the US government, for now, though, as economics becomes more and more a dark science, that is subject to change. As it is, I am writing from a home heated by fuel supplied by a company based in Spain - a deal backed fully some years ago by Senator Charles (Sellout) Schumer - so, if our energy resources are to be parceled out to foreigners, why not the rest of the country. After all, there's no security risk in that, no?

Maybe having a bunch of rich German bankers running the NYSE is a good thing in disguise. The low volume of trading (Tuesday was the lowest of 2011 so far) is a signal that the exchange may not even be worth what the Germans are supposedly offering, which is about a 10% premium from where the stock (NYX) closed on Tuesday. Maybe it's time for Americans to throw up he white cloth en masse and surrender to the economic forces of the rest of the planet, put up big "for sale" signs in all the harbors and ports, and say goodnight. The party is officially over. Call it a day. Stop pretending that we're "exceptional" and sell us off for parts.

Maybe some of us could actually get a job in the deal. Of course, it would be a wages more commensurate with those in Thailand or Nigreia, but, hey, it's a buyer's market. Maybe the banks can sell off all that unsold REO for pennies on the dollar and retire their debt, along with their businesses. Let's be honest. America is for sale and the parceling out of the NYSE is just one, big, obvious example of just how broke we really are.

Speaking of broke, one thing that the crooks and manipulators on Wall Street simply could not see happen was breaking the string of positive closes by the Dow, which managed, miraculously, devoid of any news, to shake out of its dolorous decline of more than 40 points around 2:45 pm, and close slightly positive for the 8th day in a row. Now I know that America is bankrupt, financially as well as morally.

Strange as it may seem, only the Dow ended in plus territory and it was the only one riding a winning streak. Somebody at Goldman Sachs must have a bet, heavily-leveraged, that the Dow will continue going up for ten straight days. Only two left!

Dow 12,239.89, +6.74 (0.06%)
NASDAQ 2,789.07, -7.98 (0.29%)
S&P 500 1,320.89, -3.68 (0.28%)
NYSE Composite 8,343.84, -36.01 (0.43%)

Declining issues still stomped all over advancers, 4089-2399. New highs outnumbered new lows on the NASDAQ, 162-20; and on the NYSE, 196-13. Volume was down in the pits again, just barely above Tuesday's 2011-low level.

NASDAQ Volume 1,898,219,125.00
NYSE Volume 4,424,957,000

Oil futures finished slightly lower, down 23 cents, to $86.71, as OPEC production reached its highest level in two years and gasoline supplies in the US were at their highest levels in 21 years, due to diminishing demand.

Gold gained $1.40, to $1,365.50, while silver was flat, at $30.28.

In Washington, our comedy channel, otherwise know as congress, proposed some "big" spending cuts in the 2011 budget, which, by the way, is already five months down the road. These cuts of anywhere between $35 billion and $74 billion, are minuscule compared to the overall size of the proposed federal budget ($3.8 trillion) and less than 3% of the proposed deficit.

These aren't cuts, they're a mockery of the American public and the laws of economics.

Lastly, the video not to be missed, in which the difference between homeowners who don't pay mortgages and bankers who cheat at every turn is discussed:

Bankster vs. Deadbeat

Stocks Causing a Boom, or a Mirage?

If you're invested in stocks, you'll be happy to know that the Dow recorded its seventh straight gain today. It's been an incredible run from the last day of January through the first six trading days of February, with the most-watched stock index up a whopping 410 points over the seven-session run and up more than 2200 points since this leg of the rally began on September 1, 2010. That's a nifty 22% gain in just over five months - a very neat trick.

Stocks in general have been a great place to be for the last 23 months, since the bottom on March 9 2009, with the major averages all up more than 80%.

Should one argue with such success? Maybe not. Maybe Ben Bernanke knows exactly what he's doing by continuously inflating the money supply, even though his critics argue that he's causing severe inflation and a bubble in commodities or that his practices will eventually implode in a hyperinflationary event that will kill the US dollar.

So far, the commodity trade has been profitable, and it may be nearing bubble status, though it seems to have calmed recently. The long term effects of Bernanke's runaway money-printing policy will not be evident for many more months, since he's planning on continued bond repurchases (his preferred method of handing out the gelt) through June of this year.

Before that, we'll have great gnashing of teeth and showing of fangs by aroused congressmen, mostly of the Republican variety, and a renewed debate over raising the debt limit to something beyond $15 trillion. The show on the hill will no doubt be one for the ages, but in the end will likely amount to little more than theatrics, of which the congress is highly skilled. Many in the chambers of our two legislative branches could have just as easily made themselves famous in Hollywood or Broadway. Arguably, the path to stardom and the ultimate pay scale is much better in Washington, however.

One cannot argue with the stock market performance, however. Whatever your political stripes or economic theory, the gains have been potent and powerful. Whether they will last, once the Fed pulls the plug and stops its endless printing regime, is open to debate.

Dow 12,233.15, +71.52 (0.59%)
NASDAQ 2,797.05, +13.06 (0.47%)
S&P 500 1,324.57, +5.52 (0.42%)
NYSE Composite 8,379.85, +43.21 (0.52%)

As expected, advancing issues soared past decliners, 4978-2538. NASDAQ New highs: 168; new lows: 19. NYSE new highs: 266; new lows: 11. Volume was very low again.

NASDAQ Volume 1,816,377,500
NYSE Volume 4,428,776,000

Commodities piqued some interest today on both sides of the ledger. Crude oil was down 54 cents, to $86.94, continuing a trend. Gold gained $15.90, to $1,364.10, while silver headed again toward recent highs, up 93 cents, to $30.27.

Meredith Whitney has drawn the ire of legislators on Capitol Hill for her call for a Muni bond crash.

Ms. Meredith see looming shortfalls in state budgets fomenting failure in a slew of public works projects, ending in defaulted bond offerings. Others feel there's more to it - like unfunded future liabilities - and that many states face an uphill battle, though their fates could be relieved by a robust economy.

We bring you both Meredith Whitney and James Pethokoukis in the very same video: