Remember states’ rights? Sit back and watch the power of money

January 13, 2011 | By | 2 Replies More

Mix Lux sees what’s coming. Will it be another bailout for the banks in the form of a federal invasion of states rights? Will it be a federal law that says that banks don’t need to obey state law? It could be ugly, and it might involve the transfer of massive amounts of money to banks that caused the current foreclosure problem.

Lux cites to the writings of someone named “Numerian“:

With increasing desperation, banks along with their enablers in Washington are going to try to jerry-rig a way out of this problem. Unfortunately for the banks, ex post facto laws are strictly forbidden by the Constitution, which is now being treated with new-found reverence by the Congress. It may be impossible to construct a law that solves problems like this that already exist. Perhaps the banks will get lucky, and some courts will begin to find in their favor, though that is certainly not the trend at the moment. Maybe the US Supreme Court will accept the banks’ argument that the securitization process in itself established a valid foreclosure claim even though mortgages were not properly assigned as required by state laws. This, however, would require the Supreme Court to make up a legal doctrine out of the blue (as the banks have done), thereby overturning all state laws and court rulings going back well over 100 years. Only a Supreme Court bought and paid for by bank lobbyists, and willing to prostitute itself publicly to its paymasters, would issue such a ruling.

This means that the likely progression of events – the path we are now on – will lead to a near complete collapse of the housing market, because the big banks and the two government enterprises responsible for supporting the housing market will be fatally crippled wards of the state. The US government itself, including the Federal Reserve, will be equally crippled. Try as you might, you will find no words in the Bible – no phrases applicable to The Flood or to the destruction of whole cities at the hands of a vengeful God – that appropriately capture the financial gravity of this situation. But if we are forced to come up with some metaphor, Financial Armageddon will have to do.

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Category: Consumer Protection, Fraud, Law, Social justice

About the Author ()

Erich Vieth is an attorney focusing on consumer law litigation and appellate practice. He is also a working musician and a writer, having founded Dangerous Intersection in 2006. Erich lives in the Shaw Neighborhood of St. Louis, Missouri, where he lives half-time with his two extraordinary daughters.

Comments (2)

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  1. Tige Gibson says:

    It sounds a little ideological. If he's trying to compare this to the civil war, wouldn't it presume that there's a persistent financial advantage to some states over others in doing this, even if by those "states" we refer to the upper 1%? Is everyone that stupid? Instead of slavery this would be about banking? Afterwards the civilized world would be free of banking as we are of slavery now? Just a little ideological.

  2. Erich Vieth says:

    Naked Capitalism has it right. Here's what's going to happen, and Obama is going to lead the charge, once again going in the wrong direction:

    "This is how the administration will probably try to play foreclosure-gate. Their proposal, not surprisingly, is yet another bailout.

    The big difference between the original and the new, improved version of the bailout model is that the payouts to the banks were at least in part visible the first time around. This is an effort yet again to spare the banks any pain, not only at the cost of the rule of law but also of investor rights.

    This proposal guts state control of their own real estate law when the Supreme Court has repeatedly found that “dirt law” is not a Federal matter. It strips homeowners of their right to their day in court to preserve their contractual rights, namely, that only the proven mortgagee, and not a gangster, or in this case, bankster, can take possession of their home."

    and here's more:

    "The Massachusetts Supreme Judicial Court Ibanez decision is clearly the trigger for the release of this plan. The SJC said its decision was merely articulating well established law. Consistent application of these principles will mean more losses for the banks. This memo is clearly an attempt to stop this as soon as possible. The real message of this document is clear: we can’t permit justice to prevail if it will hurt bank profits and balance sheets."

    http://www.nakedcapitalism.com/2011/01/dc-puts-it

    I can't remember when I've agreed with someone so completely on a complicated issue. I think of George Carlin's voice: "The game is rigged."

    And while you're reading the above post, check out the comments. Lots of smart people who see through all of the crap. My favorite comment was written by Richard Kline: http://www.nakedcapitalism.com/2011/01/dc-puts-it

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