Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
I chose the summer of 2005 to sell my house in Northridge, CA, which had almost tripled in "value" since purchase in May, 1999. I was self employed and work had dried up and I could not believe real estate could keep going up after what I was seeing in LA: first time buyers were largely frozen out by pricing unless they had access to family money or had two incomes over ~$80K/yr; and the offers I was getting via phone for re-fi deals smelled very fishy and sounded like boiler room operations. The LA Times was running stories about fraudulent apprasials, ets.

We sold in November and moved to Arkansas, which had not had a bubble in real estate. I bought a larger house on a larger lot in a city with about 38% of the sale price of my LA house. Prices in LA continued to drift higher for about another year, but I was glad we were out, even if I had to live in motel and SRO hotels when I returned to LA to work. I just did not want to be trying to sell a house that represented the majority of my net worth into the teeth of a collapsing housing market, which I fully expected.

The real trick for me was getting the confidence to buy the home in 1999, as every US financial policy since the election of Reagan seemed to me to be based on fraud and lies, which, as it turned out, was indeed the case. But my income had jumped and I was being eaten alive by taxes without the homeowner's exemption.

I agree with the whole of your analysis above. The real challenge is cutting through the evil spell that passes for reality in the contemporary USA. This included what passes for the "mainstream" economics that is taught in universities, presented in the "mainstream" media and used in public policy. The general public has sold their soul to finance based on the bought and paid for propaganda of self interested billionaires through their "think tanks" and campaign contributions.

Functionally, it is not fraud if no one is willing to prosecute it. We need a moment in the USA like just happened in the U.K. with News Of The World. If Murdoch's whole empire collapsed, including Fox News, that would help, but not be sufficient. The whole framework of people's thinking must change significantly in order to make the necessary changes.

Having experience former prosecutors such as yourself and William K. Black forcefully make the case is important, but has not yet been sufficient. I keep hoping that some case will blow the system open and bring it crashing down. The consequences will be severe, but we as a nation are dying of gangrene and the rot is in high finance, especially the TBTFs and their hirelings in Washington D.C. and various state capitals. Both the Republicans and Democrats, as parties are fatally compromised. We need a reform movement driven by a wave of popular revulsion. Let it come in 2012.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Jul 12th, 2011 at 11:50:24 PM EST
We sold then, too.
by rifek on Wed Jul 13th, 2011 at 03:28:45 PM EST
[ Parent ]
Blessed are those who sold before 2007.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Jul 13th, 2011 at 08:35:21 PM EST
[ Parent ]
Black, unfortunately, remains a voice crying in the wilderness.  I don't like a crash, but I believe that proceeding with a thoroughly corrupted system is worse.  We have marginalized our entire civilization to the point where every significant choice is between two evils.  But without prosecutions, we can suffer through a crash and gain nothing, because the same folks will be in control coming out as were going in.
by rifek on Thu Jul 14th, 2011 at 09:11:49 AM EST
[ Parent ]
Having the heads of Jamie Dimon, Lloyd Blankfein, Tim Giethner, Hank Paulson, Ben Bernanke and over half of our elected representatives displayed on spikes attached to light posts or buildings might substitute for appropriate prosecution. Yves Smith reported over a year ago on conversations amongst some knowledgeable New Yorker's as to whose head was likely to be the first to be on a pike.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Jul 14th, 2011 at 10:24:35 AM EST
[ Parent ]


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