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Karl Denninger: Some Inconvenient Questions For Our President

Since I'm in a particularly malevolent mood when it comes to politics today.... GMAC/Ally is owned by the US Federal Government. You, President Obama, indirectly through your Treasury Secretary Tim Geithner, took it over as part of GM. This happened on your watch and you cannot blame it on Bush. We now appear to know that GMAC, along with other firms in the MBS marketplace, including Fannie and Freddie, have been using a series of "foreclosure mills" that are emitting tens of thousands of fraudulent affidavits that have been used to dispossess Americans of their homes. (See Tickers here, here and here.) There is plenty of question as to whether those foreclosures are proper or whether the original securitizations were valid in the first place. Question #1: Mr. President, are you going to call a full-stop to all such foreclosures, reverse all that have occurred as a consequence of what appears to be massive and pervasive document fraud, and take personal responsibility for the mess in firms you took over as President of The United States? Question #2: When will you be directing Eric Holder, your Attorney General, to investigate and file indictments against the officers, directors, and actors in these apparent foreclosure-mill scams? Question #3: If it is proved that (1) the securitizations were not proper in the first place, and (2) not only were they improper but they were knowingly put together with either actual knowledge or reckless disregard for this fact, will you force the banks that were involved in constructing these intentionally-defective instruments to eat them? Question #4: Yes, I know that if you do what is asked in Question #3 the banks will all blow up. Every one of them. There is some $1 trillion of this bogus non-agency MBS trash out there. I don't care. Yes, I meant it when I asked if you would allow The American People some justice - just this once - from all the scams, frauds and schemes - even if it sinks your best friends on Wall Street! That'll do for starters.

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