The Game Is Rigged

My brother, Adam, is a smart guy. At our sales meeting Friday, on the topic of whether "short sales" are a viable business model, he pointed out how ridiculous it is we're settling for the current state of affairs: politically, economically and otherwise.

He's fed up with media spin and complacency. The lack of "awareness", as he calls it. And he shares his passionate opinions and rants with whoever listens.

And you know what? I agree with him.

But I don't share his passion. 

I'm more "successful" today than I was a year ago.  During this "Great Recession", faced with the the worst real estate market since the Great Depression -- an industry in crisis -- my brothers and I have managed to carve out a decent slice of the "America Dream".  And, at this stage of my life, it just makes more sense to "get to work" than participate in an idle debate of "why" things are the way they are.  In fact, I spend a lot of time practicing acceptance and adjusting myself, my mindset and my approach to this circus like global economy that makes Adam so uneasy.

And that got me thinking...

What if I were born 10 or 15 years later?  Would I be a street beggar, simply because the opportunity to succeed in business has been marginalized by the market corruption of bankers.  Would I join the lot of folks driven to the margins and off a cliff? Many of whom are sadly conned into believing it's their fault.

Here's what I believe, Adam.

The Game Is Rigged

If you are in debt for consumption driven reasons it is worth noting that the game is rigged. These people (the owners of the country) have done, are doing, and will continue to act as criminals to rip you off. There is no reason to go out of your way to make yourself easy prey.

Are you anti-American? Do you have an axe to grind? Did you somehow fail at life? These are questions we are trained to think when anyone complains about scams embedded in the political economy.

Certainly we (aka "consumers") are to blame for some stuff, but we had no idea how much fraud was embedded in the financial engineering going on beyond the headlines. We didn't know that the central banker believed that there was no reason police fraud. Most people are too busy to be macro-economic experts on the side, and yet if you made the mistake of trusting the bankers in some cases they may have destroyed your life savings or left you living a meager life as a debt serf.

"I believe that banking institutions are more dangerous to our liberties than standing armies . . . If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] . . . will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered . . . The issuing power should be taken from the banks and restored to the people, to whom it properly belongs." —Thomas Jefferson

Back when the FBI warned that there was an epidemic of mortgage fraud (in 2004), the US federal government shifted some of those resources to policing other areas like homeland "security." When states tried to protect their citizens against predatory loans the federal government used preemption to block them, allowing the fraud to continue. As Alan Greenspan states: there was fraud, it was intentional, and it was indeed a series of criminal acts.

None of that is a matter of debate.

And none of the banking executives are in jail.

It's Not Our Fault

In 2006, Richard M. Bowen, Citigroup’s former chief underwriter for their consumer-lending division, said he warned his superiors of concerns that many types loans in securities didn’t conform with representations and warranties.

In mid-2006, I discovered that over 60 percent of these mortgages purchased and sold were defective,” Bowen testified on April 7 before the Financial Crisis Inquiry Commission created by Congress. “Defective mortgages increased during 2007 to over 80 percent of production.

It's worth reading bold faced type twice.

The bankers KNEW they were committing fraud that would create trillions of Dollars in losses.

Rather than suing them for the appraisal fraud, accounting control fraud, securities fraud, mortgage fraud & foreclosure fraud, instead we have a government that assists them in the fraud by papering over their mistakes and forcing other institutions to waive the right to sue over the fraud.

Everyone else is forced to eat the socialized losses that mirror the "profits" generated by the banks in years past. We have a central bank holding rates at 0 while running the printing presses in overdrive. That is destroying pension accounts and the living standard of the elderly as their life savings is literally stolen from them to prop up a bunch of criminal thugs on Wall Street.

Money Is An Arbitrary Value System

The goal is not to create value or stability, but rather to engineer instability, with sharp market moves which can be profited from on the way up AND on the way down:

Bubble, Crash, Bubble, Crash, Bubble ...

We will continue this cycle until we catch on. The problem isn't only that the Fed is treating the symptoms instead of the disease. Rather, by irresponsibly promoting reckless speculation, misallocation of capital, moral hazard (careless lending without repercussions), and illusory "wealth effects," the Fed has become the disease.

The average person is fed backwards looking misinformation by the media, which is sponsored by those selling the bag to others.

It's A Club; And We Ain't In It

The federal government sided with the criminals on the way up. And it is siding with the criminals on the way down. They would rather debase the currency and steal your savings than let their criminal buddies on Wall Street go bankrupt.

Society is nothing more than a system of laws and the culture they promote. Betray someone's trust and they become less trusting toward everyone else. That creates friction in the marketplace which shrinks the economy and living standards. Make heroes out of criminals & at some people a lot of people are going to say "screw it, the laws do not apply to me either." When that happens (as it will) then at some point there will be a sharp increase in violence.

This is not about promoting communism, or some other such label. What we have now in the capital markets is far worse than communism, as they have privatized profits AND socialized losses. If you believe in capitalism OR communism then what is happening now is broken.

And yet the people who just privatized the profits and socialized the losses are to be worshiped and followed. You should be thankful that the government bailed them out & you should just suck it up. The role of government is to protect the wealth of the opulent from the stupid majority. It has always been.

The stupid thing about it is that all (or at least most) of that pain & suffering is easily avoidable by letting the people who preach free market values to eat their losses and fail. By pushing those off onto everyone else, ultimately the government just creates uncertainty and makes people less trusting. And as society breaks down, the government won't be able to sort out the issues, as they already gave away all the money to a bunch of brigands on Wall Street.

They will dance while your family starves.

They (the owners of this country) don't want a population of citizens capable of critical thinking. They don't want well informed, well educated people capable of critical thinking. They don't want people who are smart enough to sit around the kitchen table figuring out about how badly they're getting f*ck*d by a system that through them overboard thirty years ago.