Peter Hebert's 2010 Year in Review‏

Here We Come A-wassailing (or Here We Come A-caroling). Christmas, carols, Canadian brass, Mannheim Steamroller, Kate Rusby

 

 

 

Dear friends,

I am writing to wish you a Merry Christmas and a Happy New Year. The hyperlinks in this email take you to a radio interview and news video clips.

 

This year I launched my first book Mortgaged and Armed and worked to complete my second book The Collapse of Home Prices and the Foreclosure Crisis. I chose to delay publishing Predator Nation until later in 2011 since it is a more complex book, and time permits better perspective and more in depth research.

While Mortgaged and Armed was in the final stages, I discovered that the book's cover artist David Dees was on the Anti-Defamation League's list for being a controversial "extremist." I had a brief WTF moment, read the organization's remarks, and disagreed with them. I then discovered to my surprise that Dees has a global following, because he is provocative, talented, and has the ability to cut through the special interest, media, government, and corporate-driven nonsense through in your face art. Dees' greatest fault is that he questions prevailing assumptions including the politics of Zionism. I do not agree with all controversial or satirical political art, but would rather see more of this than tolerate any smears of artists or suppression of our most valued free speech right. This year, I concluded that the Anti-Defamation League (ADL) and the Southern Poverty Law Center (SPLC) are threats to free thought and free speech in the United States, because their roles are to smear, suppress, silence, and sideline. They use fear mongering as means to raise revenues. Another target of ADL and SPLC was the "extremist" Robert Schulz, the chairman of We The People Foundation for Constitutional Education. Schulz is the man who sued the federal government to challenge the constitutionality of bailing out AIG. One man's "extremist" is another man's advocate for free inquiry, personal liberty, and government and corporate accountability. Those who cannot refute controversial messages attack people and characters, which is one step short of book burning. When political cartoonist G.B. Trudeau ran a Doonesbury strip in 2009 that showed the White House with the words, "It feels like 1933," his prescient remarks, I believe, went over the heads of most Americans.

Also this year, I learned how to make video thanks to Apple's MacBook Pro. I developed an experimental promo video for my books. I spoke at various real estate offices and civics groups to discuss the issues of the day. At the prodding of my brother Jonathan, I bypassed mainstream new outlets and reached out to the alternative media as part of my book tour to discuss mortgages, foreclosures, and the industry. That resulted in appearances with George Noory of Coast to Coast AM, Jack Blood of Deadline Live, and Keith Barrett of Truth Jihad. (The latest radio interview with Jack Blood on December 16, 2010 starts at 1:08 minute mark in the link). At the prodding of Jo McLaughlin, I resumed submitting articles to trade publications. That resulted in a series of pieces for Scotsman Guide and The Niche Report. In the coming year I will broaden my media network, publication venues, and social contacts in order to reach a more diverse audience.

I wanted to share some thoughts on 2010.

Congress passed the Wall Street Reform and Consumer Protection Act. That Act blamed the U.S. Department of Housing and Urban Development for the failure of Fannie Mae and Freddie Mac. The executives who mismanaged these two agencies were not fingered for accounting fraud or incompetence. This "financial reform" was short sighted and has nothing in common with New Deal reform. Predatory lending remains legally undefined. Reverse mortgages were exempted from the Act. The Act was silent on the dual track foreclosure and modification process. The Act continued the voluntary government loan modifications to pay banks $1,000 per modified loan, but lenders overwhelmingly pursued their own proprietary modifications or foreclosures due to the profit motive. 

The Financial Crisis Inquiry Commission, the nation's official sideshow, failed to deliver its report to Congress in December 2010 due to rumored political infighting. It is probable that the Commission will also blame the U.S. Department of Housing and Urban Development. At issue is President Clinton's housing initiative, which pushed homeownership from 65 percent to a whopping 67.5 percent. The homeownership rate, however is one of serval mainstream media driven rabbit hole arguments since foreclosures will push the homeownership rate below the 65 percent level by the time the crisis is over. 

The collapse of home prices is still underway. There is a 40 month inventory of 7 million bank owned properties across the United States. Excess inventory, tighter credit, and consumer reluctance meant that home prices will continue to drop in many housing markets.

The foreclosure crisis and the circumstances around this is worse than many realize. Foreclosures are at three times the level of 1933. At the pressure of the banks, the Federal Reserve sought to abolish a defense to foreclosure afforded under the Truth in Lending Act. When borrowers discover they were defrauded, under this consumer protection law, they have a three year right to block the lender's ability to foreclosure, they can refinance, and get a refund of fees and interest paid. Those refunds have hurt the banks, and the banks pressured the Federal Reserve to end the consumer's defense to foreclosure. Also, it came to light that Fannie Mae, Freddie Mac, and many banks created and became members of the Mortgage Electronic Registration System, or MERS. In so doing, it appears that the banks circumvented the public records system and undermined their security interests and standing in court. Moreover, they defrauded the local jurisdictions of filing fees needed for public services. Finally, it came to light that the banks, their staff, and their attorneys had been routinely defrauding the courts in foreclosure actions as alleged by the states' attorneys general. Due to local print journalists and legal aid attorneys, the attorneys general from all states began an investigation.

The Federal Reserve came under much scrutiny. Ben Bernanke appeared on 60 Minutes to defend quantitative easing, and with nervously twitching facial muscles and verging on tears, said that the Federal Reserve was not printing money. Bernanke, however, was silent on disclosing M3, which is the true money supply measure that the central bank stopped publishing on March 23, 2006. A Bloomberg opinion poll indicated that 39 percent wanted the Federal Reserve to be more accountable to Congress and 16 percent wanted the central bank abolished. Only 37 percent said leave things as they are. Though the Wall Street Reform and Consumer Protection Act has an audit provision of the central bank, it is not an audit. It is just a limited disclosure. Congressman Ron Paul (R-Texas) was appointed to the head the Domestic Monetary Policy Subcommittee. Paul's complaints about the Federal Reserve are that it is a private banking cartel and that it has been operating in a cloak of secrecy since 1913.

Securities and Exchange Commission fraud on investors became apparent in Capitol Hill testimony concerning the big banks. The big banks are holding second mortgages in their own portfolios.  Many are tied to homes with negative equity. If the accounting rules required the banks to value these second mortgages as worthless, the banks would lack the regulatory capital to operate. They would be insolvent. This accounting fraud, enabled by the federal government, permits the banks to operate, prevents another immediate bailout, but defrauds naive investors who own bank stocks. 

Consumers have cut back on the use of credit in favor of cash. This has had the impact of stalling economic recovery since consumers are no longer over leveraging. At issue is the tension between the real, cash-based economy and the synthetic, debt-based economy promoted by the banks. When the Federal Reserve pumped record amounts of "money" into the banking system, no mainstream media outlet conveyed the truth that the banks made more credit available, which consumers do not want. That, however, did not stop mindless consumer stampedes at some stores on Black Friday. In 2010, employees and customers got trampled, but no one died as was the case in 2008.

The economy has structural problems. The champions of globalism exported American jobs abroad, and without incentivizing legislation, they are not coming back. The true unemployment rate is over 17 percent, not just under 10 percent. The difference is due to government and media reporting U3, not U6, as the measure for unemployment issued by the Bureau of Labor Statistics. Since 70 percent of the American economy is driven by consumers, this makes our current circumstances worse than during the Great Depression when consumers only drove 25 percent of the economy. No mainstream media outlet addresses these troubling facts. Instead, government and the media present a misleading picture of the real world.

Conspiracy theories, I believe, may have come from the periphery and smack into the center of American thinking. At one time, it was considered lunacy to think that the Federal Reserve was a private banking cartel that was formed in secrecy. In fact Ezra Pound got himself into trouble for promoting that idea and other ideas as well. Ezra Pound's legal defense when tried by the government for sedition was insanity. The government's response was to offer him a tax payer-funded pre-frontal lobotomy. Ezra Pound's supporters, however, rebuffed the government's gracious attempts at forever silencing the loan voice in the wilderness. Today, the spirit of Ezra Pound is alive across the United States. That is the spirit that loathes an out of control federal government, corporate driven war mongering for profit, and a debt based money system that only benefits the banks and the ridiculously affluent.

Conspiratorial fears of a New World Order became tangible and took on apocalyptic dimensions with news reports of plans to microchip the population by 2017. The corporate motives are driven by profit, because corporate-friendly legislation mandates the widespread use of new technology. The government's motives are control, security, and real time surveillance. The G-20 meetings and the police state tactics underscore the disturbing direction central bankers are taking the developed nations. Those familiar with the Bible know that Old and New Testament prophets warned that in "the end times" there would be a short lived global government, those within it would terribly suffer, the global government would fail, and the tyrants of globalism and their willing subjects would be removed from the earth so that "the meek shall inherit the earth." The words of the prophets are written on both the subway walls and the hearts of millions of people.

The mid-term elections permitted Americans to release some pent up steam and anger due to the policy failures in government. In London, Madrid, Athens, and Rome student riots became bloody, fiery, and smokey as unabated street warfare broke out. In London, students shouted, "Off with their heads!" as Prince Charles and his wife Camilla, the Duchess of Cornwall, drove by in their Rolls Royce. A year ago in Italy, Italian prime minister Silvio Berlusconi was attacked. In Greece, Kostis Hatzidakis got his had repeatedly bashed and bloodied. Russia Today's media coverage and raw video footage from citizen journalists provided the world with a window into the breakdown of social democracies burdened by excessive government debt and structural adjustments imposed by creditors. It's the 1960s all over again, but this time the students are not protesting against foreign wars. They are protesting against the financial sector's warfare against households and governments (the thesis of Mortgaged and Armed and Predator Nation). They are not in the moral right for violent rioting. In all murky times, however, oftentimes doing the right thing is wrong and doing the wrong thing is right. Without dissent and protest, the financial sector will plunge governments, businesses, and households into ruin and government would declare a code red national emergency. The Chinese proverb holds true for all of us, "May you live in interesting times."

As Emerson, Lake & Palmer noted in their classic song I Believe in Father Christmas, "the Christmas we get is the Christmas we deserve."

Wishing all of you a Merry Christmas and a Happy New Year.

Peter Hebert