Apparently I got written up on Balloon Juice by Often-Wrong himself, which is a privilege. Specifically, he was responding to my admittedly intemperate post responding to his derisive comment that a national foreclosure moratorium made no sense.

Aww. I hurt his fee-fees.

So: what substantive point did he make about the reasons I outlined in the post?

None, that I can tell.

His defense? This is really good, so get some popcorn and come back.

I’m not siding with the banksters, I just don’t understand what good would come from a national moratorium. Forty state AG’s are on the ball, what exactly could a national moratorium do? The idea is to stop the bad foreclosures, not grind every single transaction in this sector to a damned halt.

You aren’t hurting the banksters when you do something like that. You’re hurting every single buyer and seller in the market. It would be catastrophic. On top of that, under what legal authority does the White House declare a moratorium on a specific type of business transaction? How would that happen? Who would be in charge of it? Geithner? Warren? Under what legislative or Constitutional authority?

And finally, I’ve spent pretty much every single day bashing the banksters. The idea that I’m now just siding with them to either show blind devotion to Obama or any other reason is just insane. This was one of the first blogs to really pitch a fit about the Notary bill last week. I’ve said it before, I’ll say it again- I say and do enough stupid shit that you don’t need to make things up about me. And there really is a fringe of the American left that has almost the same DNA as the teahadist right. “Just do it! You’re President! Make it happen!”

There seem to be 3 points here, so I’ll address them in turn.

1: Shutting down the foreclosures would lock up the mortgage market! What good would it do if 40 states are already investigating?

Answer: No fucking shit, man. That’s the entire point. This post from Market-Ticker (which I meant to write about in the last post but, geez it was long) has a great set of basic steps to start weeding through the foreclosure mess. You want to know what the very first one is?

Halt all foreclosures and sales – stand-still – until this process is completed. Those who currently have possession will continue to have it for the time being.

See, here’s the thing; the market isn’t functioning now. It’s rapidly worsening, digging itself in deeper by the day. It’s not a little technicality when you sign a false affidavit or ‘borrow’ someone else’s notary stamp, and the courts aren’t likely to see it that way. Combine that with the countless tales of horrific abuses, easily located by anyone with half a brain and Google, and you quickly realize that this is an emergency. Whether the Feds or the states intervene, the outcome is going to be the same; the mortgage market is DOA until this is sorted out. Title insurers are already balking, and 40 states are digging. Real estate lawyers probably need a smoke after the repeated serial orgasms they get after reading the news each morning. Face reality for a change: this moratorium is happening.

We have but two choices: do it in an orderly fashion, with rule of law, or let it happen in anarchic disarray, and cross our fingers. Hoping that the same individuals who hired hair stylists to forge legal documents by the thousands will suddenly have a change of heart and ‘fix’ this is fantastic delusion akin to believing Saddam Hussein was an imminent threat to the United States of Americ… oh wait. Darn.

Look who I’m talking to.

As for what good it would do? Well, for one thing, in case you were unaware, the overwhelming majority of new mortgages are eventually sold now to Fannie and Freddie, who are, err, us. The Federal, United States of America ‘us’. Majority owned by the Federal Government. The big banks wronged us as a nation, continue to wrong us as a nation, and so it might be a good idea to handle it, as a nation. What, we should keep buying their toxic mortgage shit through Fannie and Freddie? You like backdoor bailouts that much?

Also: 40 states are investigating. That means 10 aren’t. That’s 10 more than 0, which is the number of states where this shit didn’t go on, and 10 more than we can accept.

Also: Investigations take time we don’t have anymore. We’re not talking about imprisonment or execution without trial here (that’s Obama’s game, not mine). We’re talking about putting a temporary pause on the massive fraudsters who have already admitted, except for Wells-Fargo, to filing false, robo-signed, improperly evaluated documents with the courts across our nation. They confessed! I think we’re justfied in stopping their theft for a while until we can sort out the damage they’ve done, and continue, daily, to do, to homeowners, communities and investors across this country.

2nd Point from Cole:

You aren’t hurting the banksters when you do something like that. You’re hurting every single buyer and seller in the market. It would be catastrophic. On top of that, under what legal authority does the White House declare a moratorium on a specific type of business transaction? How would that happen? Who would be in charge of it? Geithner? Warren? Under what legislative or Constitutional authority?

This one’s easy: none. Under no ‘legislative or Constitutional authority’ do you have to declare a moratorium. You simply make it happen.

How? Well, I can think of two ways that could be done without passing a new law, though it’s sad that that option is discounted so easily with one party in control of both houses and the Presidency.

One: Fannie and Freddie put the screws to these parasites, like they threatened to do today, only harsher. Currently, under already existing authority, Fannie and Freddie want to clawback losses on bad foreclosures. Good, do that. But also, why don’t you also tell the banks that, if they’re still foreclosing in a week, Fannie and Freddie won’t buy a single mortgage from them. Eat shit and die, in other words.

Voila! One ‘business’ refuses to buy defective goods from another. The free market works, hallelujah.

Two: Prosecutions. Make a lot of good cases and haul a few (dozen) executives off in leg-irons. Make it publicly known that the DOJ’s new big priority is filling a few wings of medium security prisons with bankster criminals. That should do it, and would be a useful tonic to our lawless aristocratic class. Added bonus: it’ll be hilarious to watch on tv. Downside: very slow.

I’m not an econoblogger here, though, I’m sure there are more elegant solutions. My background is CJUS, originally. When I think of dealing with banks, I think of dealing with organized crime. You hit them with the biggest stick you can find that doesn’t actively break the law, and if they get up, you hit them again, until the problem is reduced to a manageable level.

This isn’t a manageable level. I’m well aware a moratorium hurts buyers and sellers; I’m looking to buy soon, which is why I want this fixed. When I buy my home I want to be able to obtain clear title, with title insurance, so that I know it’s mine, fair and square. I want to pay my mortgage on time each month, and I want no hassles. I don’t want to be unjustly foreclosed upon, I don’t want to buy a house that the seller doesn’t actually own, and I don’t want to be stuck five years down the line unable to resell if I need to move.

Mr. Cole’s Third Point:

And finally, I’ve spent pretty much every single day bashing the banksters. The idea that I’m now just siding with them to either show blind devotion to Obama or any other reason is just insane. This was one of the first blogs to really pitch a fit about the Notary bill last week. I’ve said it before, I’ll say it again- I say and do enough stupid shit that you don’t need to make things up about me. And there really is a fringe of the American left that has almost the same DNA as the teahadist right. “Just do it! You’re President! Make it happen!”

I read BJ to see what Obama supporters are laundering into the lefty blogosphere, so naturally, I see this a lot. “I’m against Special Interest X. I say bad things about them all the time, I just don’t support any concrete actions against them.”

The template works for health care reform, for the big banks, for gay rights, you name it. Make bold statements of personal distaste, then portray any actual action as extremist or fringey.

Right. That’s productive.

So to recap: 1) He can’t see what good comes from stopping rampant fraud if the states might get to it, someday, eventually, most of them 2) He can’t see how you could stop buying shit (it tastes so good!) from con men with billions of taxpayer dollars laundered through Fannie and Freddie, and 3) He’s not backing the banksters, and I’m a genetic Tea Partier in disguise for suggesting that the Obama administration do something about this or get out of the way of people who give a shit, and perhaps tell David Axelrod to shut his useless gob.

Nice.