Michael Collins

I wrote the story below in response to an outrageous trick Congress just tried to play on the public. As many of you know, the Senate passed 0/congress/bills/111/hr3808/text">HR 3808 The Interstate Recognition of Notarizations Act of 2010 unanimously on September 27. The bill was a carefully crafted, stealth "silver bullet" for the big banks to deal with their increasing legal problems with foreclosures. President Obama exercised a "pocket veto," which means he let it die after Congress adjourned. (Image)

While my story focused on the process and contempt shown to citizens by Congress in that process, I became aware of a much broader issue. We may well be on the verge of a real estate value meltdown as a result of very bad behavior, illegal in many cases, by the big banks combined with the legitimate push back of mortgage holders.

If banks can't foreclose and people can do a strategic default and walk away (0r live free in their residence), what will happen to real estate values?

The larger question emerged in reviewing bank bad behavior.

If there are fundamental flaws in many, maybe most mortgage, flaws of a serious legal nature, what if a strategic default movement spreads beyond just those facing foreclosure? That's where Armageddon comes in

Where have we seen this before? The White House has a lot of talk. Then a pay czar is appointed. After some period, a damning report is issued. Then we have the public scolding, while legislation, policy and amendments are ignored and defeated, often by the very same administration.

Any action on the latest outrage du jour? Nah.

Such is the the Obama administration's pay czar's report. To be fair, the Pay Czar was given no power to actually get the ill gotten gains back. He also was limited to institutions who received TARP funds, not the real bail out going on at the Federal Reserve.

The Special Master for TARP Executive Compensation, Kenneth R. Feinberg, a.k.a. Pay Czar, was chartered to monitor executive compensation of bailed out financial firms. This covered 419 banks who received TARP funds. 17 of those banks handed out ill-advised executive compensation tallying $1.6 billion dollars. $1.6 billion dollars equals 26,666 $60,000 a year salaries. In other words, to feed the executive pig, 26,666 people went without a job.

EP is deviating just a tad from economics and delving into the wild world of underwater engineering and environment disaster. This is what people want to talk about, this is what is on their minds.

We're in horror. We're helpless, dependent upon continual press releases and attempts while real solutions to stop the leak are dismissed.

The next attempt is a top kill, which is to push drilling mud and cement into the leak hole. This latest attempt is high risk and could make the leaks worse. Realize this is 5,000 feet deep in the water, with corresponding water pressure in addition to a massive gushing oil plume. The damaged blowout preventer is 5 stories high. Blasting fluids with high pressure, twice as dense as the surrounding water, has the potential to create another hole if the blowout preventer has weakness in the metal or other interactions. Ugh, my sympathies to the engineers. This has never been tried in water.

My, my, my. Today we have a preview of President Obama's State of the Union address. What is most offensive is the claim this administration is trying to help the middle class.

We are being bombarded with these misleading headlines:

Right. So, guess what policy initiatives are in the speech? Tax cuts.

A doubling of the child care tax credit for families earning under $85,000; a $1.6 billion increase in federal funding for child care programs and a program to cap student loan payments at 10 percent of income above "a basic living allowance."

His initiatives also include expanding tax credits to match retirement savings and increasing aid for families taking care of elderly relatives. That program would also require many employers to provide the option of a workplace-based retirement savings plan.

Are these people shitting me? I'm sorry but we have massive unemployment. What a sorry ass excuse to help for the middle class. U.S. workers need jobs and they need good jobs now. Who cares about tax cuts! When your income is zero, what do tax cuts matter?

What should be in Obama's State of the Union Address?

How about these?

1. Demand China float their currency. 83% of the non-oil trade deficit is due to China and their mercentile trade practices. It's pretty obvious too. China's GDP was 10.7% for Q4 2009. China holds the most U.S. treasuries. Meanwhile U.S. manufacturing shrank from about 15% of the economy to 12%.