“US Banks Reporting Phantom Income on $1.4 Trillion Delinquent Mortgages”
The recovery is clearly a combination of the unholy trinity of regulatory forbearance (AKA ignoring the rules and pretending nothing is wrong), borrowing to stimulate, and printing from thin air to stimulate when we can’t find suckers to loan us money. Yep, that’s what I call a recovery all right. So everything is back to normal folks, nothing to see here. Move along now and above all, have confidence in the safety and soundness of our economic and political system.
The likes of what is passing for an economy has never been seen before. It is a huge experiment in the art of confidence games. These banks are reporting phantom interest as if it were really being paid to them when they in fact already know that payments have been cut off and in many cases that someone is selling crack out the back door of the house when they are not ripping the copper wiring and pipes from the walls to sell for $4.20 a lb scrap. Sooner or later the banks will have to restate earnings or they will have to take a massive impairment charge to make up for this scammery. Of course they will already have paid themselves bonuses for doing so well and that money will never be clawed back. Ignoring the problems will not make them go away. It’s almost as if someone is trying to ensure as bad an eventual outcome as possible. Nobody can say when or how it will happen but everyone should understand that payment will eventually have to be made by someone. You can’t just continue to kick this kind of can down the road forever. When gas hits $6 a gallon a few years from now you will know where the payment came from – right out of the buying power of your pension, 401k, annuity, salary etc. The con men clearly plan to try to inflate their way out of this mess and nobody seems interested in stopping them.
