Even Hitler knows we're screwed...

The Banking Industry’s Stalingrad

“This is a dangerous moment for the world,” writes Ambrose Evans-Pritchard. “Twenty years of mistakes have reduced the American economy to ruin. But worse is almost certainly on its way. America’s economic fate depends upon the fate of the dollar. With the dollar as the world’s reserve currency, America has been able to borrow at will to finance its large deficits. But that status is currently under threat. When the dollar ceases to be the reserve currency, the United States will be relegated to the status of a second-rate power in need of international subsidies to pay for its imports,” writes Paul Craig Roberts.

Eric King writes, “The IMF was unable to stem the tide of competitive currency devaluations over the weekend. As a result, governments and central banks around the world still have the green light to continue with their money-printing orgy. Some of the citizens of these various regions and countries have recently been acting as their own central banks by purchasing gold as insurance against the currency wars. As fears escalate, the question now becomes, when will the people of this world once again have a stable system of currency?”

Ben Davis writes, “As each day passes, the friction of the global monetary fault lines grow stronger. These fault lines will release their energy in the largest world monetary earthquake known to man, as we witness the inevitable demise of the fiat currency system—as all such systems have failed before, leaving not one survivor. As currency wars escalate, it is wise for individuals to have a presence outside of the system by owning gold.”

Jim Sinclair says, “Securitized mortgage debt is going to be the final shot that kills all kinds of financial entities in the Western world. The biggest holder of this putrid junk is pension funds.” “The collapse isn’t over yet,” writes the Taipan Publishing Group. “There is another implosion coming—a crushing leg down that will pulverize all hopes of recovery into talcum powder. And another tidal wave of public outrage will likely come with it… all thanks to our wonderful friends in Washington and on Wall Street.I wish I were exaggerating here, but I’m not. We have flat-out Disaster coming with a capital ‘D.’ There was such a frenzy to pump out home loans, the paperwork on hundreds of thousands (millions?) of such loans has been lost—or perhaps was never created in the first place.As a result of this, now that upside-down homeowners are foreclosing left and right, the major lenders are facing up to a waking nightmare—the foreclosures are not legal because the paperwork is not documented.”

“Bank of America is delaying foreclosures in 23 states,” the AP reports, “as it examines whether it rushed the foreclosure process for thousands of homeowners without reading the documents.” Nor is it just Bank of America. Last week, the Office of the Comptroller of the Currency (OCC) revealed that J. P. Morgan is freezing proceedings on 56,000 foreclosures—fifty-six thousand!—due to potentially false documentation. The reality is that an inability to sort out who owns what is the equivalent of a hundred-mile traffic jam in the mortgage and title markets.Let’s say a new foreclosed home comes on the market at an attractive price. How do you buy it if you can’t be sure the process is legal? What’s more, how do you get mortgage insurance—typically a necessity for securing the necessary financing—if the title company can’t be sure there is a right of legal transfer?“It’s a nightmare scenario,” says Professor John Vogel of the Tuck School of Business.

Link:
http://theintelhub.com/2010/10/14/the-banking-industry%E2%80%99s-stalingrad/