The Coming Tsunami of Home Foreclosures Will Be Another Predictable But Officially Denied Shock to the U.S. Blockheads at the Top

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As Barbara
Tuchman has said so wisely, we always have the government Blockheads
with us who insist on repeating the same catastrophic mistakes over
and over again. BO — Blockhead Obama — has shown us this truth with
remarkable regularity. When he came into office he promised to end
all of those insane, blockhead programs of Bush II, then immediately
went along with them, repeated them and increased them. He even
repeated the JFK “new guy stupidity” of believing his top generals
and Gates when they promised him that “one more for the road” in
Afghanistan would turn back the tide of rage caused by the daily
U.S. slaughters of women and children. He quickly sent in 20,000
more troops and a secret number of secret police and “contract military
workers” to gain a “Great Victory.” Now the Blockheads with all
the childish salad of Gedunk [Phony] Medals on their chests tell
him “one more for the road” will do it — maybe. Like JFK, he is
not totally stupid and is beginning to wonder if he’s the Big Dupe
of the salad boys who are only interested in their own phony medals
for vanity and their careers.

The Wall St.
Journal finally has a good article about the coming tsunami of finalized
home foreclosures. A vast, unknown number, maybe a few million,
have been caught in the vastly complex, variable moratoria, slowdowns,
and dodges on legal foreclosure procedures. Some homes have been
in this “suspended animation” for almost two years, sometimes with
occupants not even paying but living in the homes like squatters
month after month because of the official and unofficial slowdowns.
The Fed and many government agencies have also been pouring trillions
into mortgage markets to get rates down, down, down, so people have
vast incentives to wait, wait, wait and hope for deliverance or
at least a better deal when the hammer falls. Real estate analysts
already think there are about four million more to come and many
more if we don’t go into the Promised Land of a V-Recovery.

I suspect,
as I have been arguing for the last several years, that it will
be much worse than four million even if the Fed levitates the paper
markets much higher than their current Bubbles with more trillions
in hidden government money, subsidies, tax cuts, rate cuts, guarantees
and all forms of “welfare state” mana from on high. As I argued
at the beginning of this Great Housing Crash several years ago,
on the basis of facts provided by real estate analysts which were
open to all who looked, the sub-prime ARM’s [Adjustable Rate Mortgages]
would go first, then the non-sub-prime ARM’s, then the vast prime
market with no rate adjustments. We are already seeing soaring prime
arrears and plunging rates of successful “workouts” of arrears problems
after negotiations with banks, etc. As these homeowners exhaust
their savings waiting and praying for Godot in D.C. to save them
with more trillions, and as they are hit by soaring unemployment,
furloughs, job hour rate cuts, declines in real income and assets,
and so on, they are finally giving up and trying to sell, walk away
or go into foreclosure proceedings to hold on for more months while
they hassle with banks. As unemployment, furloughs, hourly rate
cuts, and all the rest bite harder and harder, more and more will
throw in the towel and go with the tsunami flow. House prices will
go down, down…More and more desperate people will try to sell
faster and faster, so prices will go down….

The Blockhead
Keynesian Ideologists in their sacred temples in D.C. thought they
could reverse the great tsunami of Reality by Playing Let’s Pretend
Green Shoots Are Breaking Out All Over. So they poured trillions
down the Financial Black Hole to create some teeny green shoots,
but mostly to distort markets so the Media hacks would think there
was real light at the end of the tunnel and people would run out
and buy, buy, buy, sending prices higher. Some Big Speculators getting
nearly free short-term money from the Big Banks getting all the
free money they want from the Fed did buy and buy. But when the
prices turn down, down, they will sell, sell and send prices down,

Oh, what a
vastly tangled web of Lies and Illusions the officials do weave
when first they seek to deceive on a monumental scale. It can sometimes
work briefly, but Reality will out in the end. Markets must clear
and vast markets like the U.S. housing market are like the Indonesian
Tsunamis several years ago — you can’t stop these vast forces of
nature with papier-mch walls of illusions.

As all of this
new tsunami of suffering crashes ashore, people will be shocked
and probably terrified again. That may be more dangerous than last
fall, especially if the commodity, stock and bond bubbles created
by the Fed in the same ways crash at the same time. My guesstimate
is that will be the time of Maximum Danger Of Implosion in the short
and medium terms. The system will Implode because its foundations
have been destroyed, but it could take many years of lurching up
and down and sideways. The vast Lies and Illusions of the Blockheads
might cause a far worse Crash and Terror much sooner, thus an Implosion
much sooner.

Vast webs of
Lies and Illusions have vast costs that must be paid eventually
when reality bites back hard, as it will do. There is still a Real
World out there, regardless of what BO says and does.

25, 2009

D. Douglas [send him mail]
is a retired professor of sociology from the University of California
at San Diego. He has published widely on all major aspects of human
beings, most notably The
Myth of the Welfare State

Best of Jack D. Douglas

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