Why Do The Rich Default on Their Mortgages? Because In California and Arizona, They Can

For OpEdNews: David Fiderer - Writer

Why throw away good money after bad? It's a frequently-asked question in the five most expensive real estate markets in the mainland United States--San Jose, San Francisco, Orange County, Los Angeles and San Diego--where over a million home mortgages are under water. That's nine times the number in all of New York State. In fact, that's more than 30 other states combined.

"If you default, your credit score will take a hit," advises Jane Bryant Quinn on CBS MoneyWatch. "But as long as you pay all your bills on time, both before and after the default, your walk-away will become less important after a couple of years." No one is counting on a strong recovery of home prices any time soon. Even during normal times, real estate markets go through multi-year cycles. The value of a typical home purchased in Los Angeles in 1990 fell by 25% within five years; by 2000, the cumulative home price appreciation after a decade was exactly zero.

Of America's 11 million homeowners with negative equity, a majority live in the four sand states where the real estate bubble was concentrated--California, Florida, Arizona and Nevada. Over three million live in California and Arizona, where a borrower can hand over the keys to the lender and walk away. These are two antideficiency states, where the lender has no recourse beyond the collateral property. So of course it makes sense that wealthy homeowners would default on their mortgage loans. They live where in places home prices were the highest and the fell the steepest, and where the consequences of default are the least onerous. The New York Times overlooked the "where" and "why" of the story.

The wealthy are also less dependent on consumer credit. They can buy cars for cash; and charge expenses on their debit cards. So for them, it's easy to make a fresh start. But the mortgage debt doesn't go away. It's simply pushed off to the banks insured by the Federal government. The rest of us pick up the pieces.

In Phoenix, total home mortgage debt exceeds the market value of all homes with mortgages. The 58% of homeowners with negative equity are seriously under water, while the remaining 42% with positive equity worry about continued deterioration of their home values. (CoreLogic's disclosures do not include homes with no mortgage.)

"Even if the economy is the, quote, No.1 issue," said John McCain when he was running for President in January 2008, "the real issue will remain America's security. And if they choose to say, "Look, I do not need this guy, because he's not as good on home loan mortgages,' or whatever it is, I understand about that, I will accept that verdict," he told Florida voters. "I am running because of the transcendental challenge of the 21st century, which is radical Islamic extremism." Since then, Phoenix home prices have fallen by 38 percent. No wonder he wants to talk about immigration.

Obama's recovery chief thinks Recovery.gov is a 'great success,' says data errors aren't important

G. Edward DeSeve, the man running President Obama's economic recovery effort has a post up today on Recovery.gov that deserves a special place in the Out-of-Touch Government Officials Hall of Fame.

DeSeve is Special Advisor to the President, Assistant to the Vice President and Special Advisor to the OMB Director for Implementation of the Recovery Act.

Titled "Looking at the big picture on the Recovery Act," DeSeve claims all those "mistakes," like the thousands of jobs created in congressional districts that don't exist or counting raises as jobs created by stimulus funding, "are relatively few and don't change the fundamental conclusions one can draw from the data."

DeSeve might as well have said "nothing to look at here, folks, now move along." Or perhaps "hey, it's close enough for government work, so what's the problem?"

As anybody who knows elementary statistics can attest, entering one piece of bad data can render an entire database useless, or worse, produce analytical results that bear absolutely no relation to reality.

DeSeve also claims some of the mistakes are "frustrating typos and coding errors that don't undermine information at the heart of the data." But when hundreds of "frustrating typos and coding errors" are found in a database, competent database analysts and statisticians know you go back to the original source, correct the errors, and then start doing analysis and drawing conclusions.

DeSeve and his bosses in the White House want us to just ignore such data-entry problems and accept the Obama administration's fairy tale conclusions about what the data allegedly tell us regarding the amazing success of the stimulus program.

Third, DeSeve claims that having so many errors is okay because "transparency is going to be messy but it is better than the alternative." That's like telling a lung cancer patient that his surgeon today didn't finish med school but, hey, letting him cut you open is better than the alternative, which is dying.

The reality DeSeve is avoiding is that, for whatever reason and regardless of who is at fault, Recovery.gov's data is worthless as an indicator of the value of the Obama administration's economic stimulus program. It is incredible that he would argue to the contrary after multiple mainstream media organizations dug into the numbers and found endless examples of mis-counting, mis-representation, and outright fraudulent claims.

Such as here, here, here, and here.

And that's just a sample of what's been found so far by mainstream media journalists, bloggers, and investigative journalism outfits. If President Obama is genuinely interested in restoring honesty in government and public trust in its statements, he will fire DeSeve, shut down recovery.gov., and apologize to the American people for allowing this farce to go on as long as it has.

By the way, if you want accurate data about the stimulus program, check out recovery.org, which is maintained by Onvia, a private company that specializes in tracking government data, funding, contracts, etc.

Consumer Prices Drop, Sentiment Sours

WASHINGTON (Reuters) - Weak energy costs pushed U.S. consumer prices down for a third straight month in June while consumer sentiment dropped to a near one-year low in July, highlighting the sluggishness of the economic recovery.

However, prices excluding food and energy rose 0.2 percent, their largest monthly gain since October, the Labor Department said on Friday. Analysts said that suggested deflation risks were easing and called it further proof the economy was not slipping back into recession."We are seeing some loss of momentum in growth, but it's not the start of a double-dip. The core inflation number should lessen deflation fears, the economic recovery is still intact," said Jim O'Sullivan, chief economist at MF Global in New York.

The Consumer Price Index dipped 0.1 percent last month after falling 0.2 percent in May. Analysts had expected consumer prices to hold steady.

Energy prices fell 2.9 percent and food prices were flat.

But a rise in rental costs after months of stagnation allowed the core CPI to move higher. The core rate had risen 0.1 percent in May and markets had expected a similar gain last month.

Analysts said the rental costs' increase was encouraging and reflected a labor market that was starting to create jobs, although at a pedestrian pace.

A second report showed consumer sentiment early this month pulled back from a near 2-1/2 year high on worries about income and jobs. The Thomson Reuters/University of Michigan's consumer sentiment index plummeted to 66.5 from 76.0 in June. That was below market expectations for 74.5.

Prices for safe-haven U.S. government debt rallied as investors viewed the data as suggesting the Federal Reserve would keep interest rates near zero well into 2011. The U.S. dollar fell to a seven-month low against the yen.

The dour confidence report and weak revenues from corporate giants Bank of America , Citigroup and General Electric hammered stocks on Wall Street. Major U.S. stock indices ended down more than 2.5 percent.

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U-Haul Price Gouging Floridians Shocking Details Revealed

Click this link .... http://www.youtube.com/watch?v=HaDcP10ChQs

Goldman Sachs Mafia Pays Hush Money to the S.E.C. Police

The New York Times reported yesterday that the criminal gang at Goldman Sachs is paying a $550 million "fine" to the Securities and Exchange Commission to "settle" their fraud case. If approved, the settlement would "represent only a small financial dent for Goldman, which reported $13.38 billion in profit last year."

Meanwhile, Goldman Sach's shares rose 5% in after-hours trading alone on the news adding about $3.5 billion in value to their market cap. Ah, life is good for the banksters at the top of the pyramid, especially when the media is on your side too. The New York Times piece went on to say:

Even so, the settlement is humbling for Goldman, whose elite reputation and lucrative banking business endured through the financial crisis, only to be battered by government investigations that shed light on potential conflicts of interest in its dealings.

'This settlement is a stark lesson to Wall Street firms that no product is too complex, and no investor too sophisticated, to avoid a heavy price if a firm violates the fundamental principles of honest treatment and fair dealing,' said Robert S. Khuzami, the commission’s director of enforcement.

The crime that Goldman Sachs is sweeping under the rug in this case is for a single mortgage security, Abacus 2007-AC1, that they pushed on clients while privately dumping it. The case had nothing to do with their deceptive lending practices, the bait and switch on the TARP bailout, or their front-running software that assures them that they can never lose on their stock trades.

The Times reported the details of the crime and subsequent "hush" deal as vaguely as any loyal mainstream media outlet would:

The commission contended that Goldman misled investors, who were making a positive bet on housing, because Goldman did not disclose Mr. Paulson’s involvement in creating the deal. Mr. Paulson has not been accused of wrongdoing.

Though Goldman did not formally admit to the S.E.C.’s allegations, it agreed to a judicial order barring it from committing intentional fraud in the future under federal securities laws.

In addition, Goldman acknowledged that the marketing materials for Abacus 'contained incomplete information' and that it was 'a mistake' not to have disclosed Mr. Paulson’s role. As part of the agreement, the bank also said it 'regrets that the marketing materials did not contain that disclosure.'

Then came the public statements to make us all feel warm and fuzzy that Goldman is now on the up-and-up with the American people. First, Goldman issued their PR statement, “We believe that this settlement is the right outcome for our firm, our shareholders and our clients.”

After the settlement announcement, wannabe tough guy Senator Carl Levin released the following in a written statement that is so ironic it could be a stand-up comedy routine:

'Goldman played fast and loose in the Abacus deal, misled its clients, and got called on it today. A key factor in the settlement is that Goldman acknowledges wrongdoing, in addition to paying a fine and changing its practices . . . I hope the Goldman settlement together with the new financial reform law — which prohibits additional unethical practices and conflicts of interest — signal an end to the abusive practices that contributed to the 2008 financial crisis and the beginning of needed Wall Street reforms.'

The hand slapping followed by pats on the back for job well done is truly disgusting to witness. They really think the public so stupid to believe that Congress actually wrote the financial reform bill for the benefit of protecting the American people. What a joke -- as Ron Paul clearly points out here:

Pink Floyd’s Waters And Gilmour Tear Down “The Wall”

Pink Floyds Unite for Palestine

For the first time in half a decade, rock legends Pink Floyd reunited for a Palestine awareness benefit concert in England to raise money for young Palestinians, MSNBC reported Tuesday.

Feuding PINK FLOYD stars DAVID GILMOUR and ROGER WATERS put their differences aside on Saturday (10Jul10) to perform together at a the Hoping Foundation awareness benefit in England.

The two rockers hit the stage at Kiddington Hall in Oxfordshire, England to the amazement of guests in attendance. It was the first time the duo had shared a stage since Pink Floyd’s Live 8 appearance in 2005.

The former bandmates, who were accompanied by Guy Pratt and Waters’ son Harry, among others, played Floyd favourites:

“Wish You Were Here”

“Comfortably Numb”

“Another Brick in the Wall”

as well as a cover of Phil Spector’s “To Know Him Is To Love Him.”

The event raised over $500,000 (£333,000) for the charity organisation which aids Palestinian kids.

A slew of musicians, including Elvis Costello and The Pixes recently cancelled concerts in Israel in protest of Israel’s policies toward the Palestinians and the deadly attack on a Gaza-bound aid flotilla on May 31st.

Waters has been involved in pro-Palestinian activism for years. In 2006 he spray painted “tear down the wall” on Israel’s West Bank separation wall in the city of Bethlehem. He also worked with the United Nations to produce a short film about the wall’s impact on life in the West Bank.

Walled Horizons – Narrated by Roger Waters (Pink Floyd founding member) Part 1

Walled Horizons – Narrated by Roger Waters (Pink Floyd founding member) Part 2

Walled Horizons is narrated by and features Roger Waters (founding member of the rock band Pink Floyd), who visits the Wall in the Palestinian territories and comments on his observations as a musician and a songwriter who has written on walls. The film explores how Palestinians in urban and rural areas have been impacted by the Walls construction since the International Court of Justices Advisory Opinion in 2004, which declared the Wall’s route in the West Bank illegal. Several senior Israeli security officials are interviewed in the film, two of whom were directly responsible for planning the Wall route and who explain the Israeli position for constructing it. The film was made by the United Nations Jerusalem. http://www.ochaopt.org

Rockefeller Study Envisages Future Dictatorship Controlled By Elite

Rockefeller Study Envisages Future Dictatorship Controlled By Elite

Blueprint for life under the new world order revealed: Global pandemics that kill millions, mandatory quarantines, checkpoints, biometric ID cards, and a world of top-down government control

Global pandemics that kill millions, mandatory quarantines, checkpoints, biometric ID cards, and a world of top-down government control. These things are not lifted from the latest sci-fi blockbuster movie, they’re part of the Rockefeller Foundation’s vision for what the globe might be like in 15-20 years’ time under a new world order tightly controlled by the elite.

This is one of four scenarios for the future of the planet outlined in the Rockefeller Foundation’s “Scenarios for the Future of Technology and International Development,” a study produced in association with the Global Business Network.

Entitled “Lock Step,” the scenario depicts,”A world of tighter top-down government control and more authoritarian leadership, with limited innovation and growing citizen pushback.”

After global H1N1 pandemic originating from geese infects 20 per cent of the global population and kills 8 million people, the economy grinds to a halt and governments impose authoritarian measures to respond to the crisis.

“During the pandemic, national leaders around the world flexed their authority and imposed airtight rules and
restrictions, from the mandatory wearing of face masks to body-temperature checks at the entries to communal spaces like train stations and supermarkets,” states the study.

Tellingly, even after the pandemic fades, these draconian measures remain in place and even intensify, as leaders take a “firmer grip on power” and citizens willingly sacrifice their sovereignty and privacy, leading to “a more controlled world” bossed by “paternalistic states” who impose biometric ID cards for all citizens. “Enforced cooperation” with global regulatory agreements forges the path towards global governance even as a backlash ensues following public displays of “virulent nationalism”.

Eco-fascism is also brought to the fore in the “lock step” scenario, which discusses how “high-emission” cars will be banned and every home will be forced to install solar panels by law.

The implementation of top-down authoritarianism causes entrepreneurial activity to wither and the economy stutters, but by 2025 people start to grow weary of “so much top-down control and letting leaders and authorities make choices for them” and an organized “pushback” against this tyranny begins to gather momentum.

“Even those who liked the greater stability and predictability of this world began to grow uncomfortable and
constrained by so many tight rules and by the strictness of national boundaries. The feeling lingered that sooner or later, something would inevitably upset the neat order that the world’s governments had worked so hard to establish,” the study concludes.


The important thing to understand from the scenario outlined by the Rockefeller study is that China is praised as the model for how governments globally should respond to crises. The most draconian and dictatorial policies, including mandatory quarantines, are praised in the scenario as having “saved millions of lives, stopping the spread of the virus far earlier than in other countries and enabling a swifter post pandemic recovery,” while allowing people freedom of mobility is scorned as having worsened the crisis.

Ironic therefore it is that just this week, the Associated Press reported on how the Chinese government has already virtually imposed checkpoint quarantines on its poorer citizens, by “gating and locking some of its lower-income neighborhoods overnight, with police or security checking identification papers around the clock, in a throwback to an older style of control.”

The Rockefeller study is not a warning against preventing the kind of tyranny contained in this scenario from unfolding, it’s a blueprint for how globalists want to exploit global crises like bio-terror attacks and pandemics in order to completely destroy society and rebuild it under a new world order in their image.

The Rockefeller scenario bears more than a passing resemblance to a 2007 UK Ministry of Defence study which forecast that by 2035, people would have brain chips implanted, that the middle class would become revolutionary, and that society would be gripped by chaos and civil unrest as a result of increased globalization, immigration and a more authoritarian state.

It is crystal clear from reading the “Lock Step” scenario that the oppressive society portrayed in the study is not presented as an admonishment of how governments would cynically seize upon a pandemic to set up a police state and empower themselves as dictators, it’s a ringing endorsement that this approach would be the correct thing to do.

This is the post-industrial society demanded by Bilderberg luminaries like European Commission chief Jose Manuel Barroso.

This is what the globalists want – pandemics, warfare, chaos and crises that they can engineer and then exploit to lock in place a dictatorial society ruled by the elite from their ivory towers, while the citizens are reduced to impoverished, squabbling, dependent peasants tightly controlled with sophisticated big brother technology, far too concerned about where their next meal is coming from to have time to overthrow their new rulers.

http://www.prisonplanet.com/rockefeller-study-envisages-future-dictatorship-controlled-by-elite.html