Saturday, October 16, 2010


CNBC's John Carney says Congress will save the big banks' bacon in the lame-duck session -- and, well, I've got to disagree with Zandar, though it pains me to do so, but I think what Carney says sounds very, very plausible.


... the politicians will not let the financial stability of the largest bank in the nation be threatened by contractual rights. Not when there's an easy fix available that won't cost taxpayers a dime.

Here's what is going to happen: Congress will pass a law called something like "The Financial Modernization and Stability Act of 2010" that will retroactively grant mortgage pools the rights in the underlying mortgages that people are worried about. All the screwed up paperwork, lost notes, unassigned security interests will be forgiven by a legislative act.

... The lame duck session of Congress will pass a bill that essentially papers over the misdeeds of the banks that originated mortgage securities. Every member of Congress and every Senator who has been voted out of office will cast a vote for the bill. And the President will sign it....

If you're skeptical about the possibility that this will happen, you have greater faith than I do in the ability of the political system to resist doing favors for bankers.

Zandar replies:

...Carney is completely underestimating the American people. The second this happens, you will have an event which will put the Teabaggers, the Centrist Daleks, and the Dirty F'ckin Hippies on the same side, and it will be a dangerously beautiful thing. It would be a visceral reaction out there: Congress just passed a law allowing the banks to get away with stealing people's homes.

Madness. You thought people hated TARP? This would be riot-inducing, not to mention morally and legally wrong as hell. It would be over for this administration, not to mention Congress.

I just don't see how this happens. It can't.

Well, maybe I can agree with "It would be over for this administration, not to mention Congress" -- or certainly for Democrats in Congress.

I see this happening one of two ways: (1) the bill passes with very, very little discussion or fanfare, the way that sneaky bill to nationalize notarization standards passed, except the president will sign it this time, because the election's over; or (2) the teabaggers and the other righties wail and stomp and throw feces and declare that the evil socialist Kenyans are engaging in more evil, but somehow Republicans in Congress don't put their power to bottle up legislation to work, which means this thing goes through, and only Democrats get blamed for it.

If it's the latter (and that's certainly what I expect), it'll be because nearly all the Democrats will be too freaking stupid to either (a) resist voting for the fix or (b) announce that they're not sure they can vote for it, thus forcing a few Republicans to vote for it and share the blame (because you know that, despite all their teabagger talk, the Republicans, being corporatists, will actually want it to pass, so they can't actually allow it to fail, not if they want to keep getting cash from their corporate masters for future election seasons).

Teabaggers won't really care. They say they hate what's happening in D.C., but, really, they just love their own hate. They'd rather have a new outrage to feel righteously indignant about than actually take to the streets to prevent that outrage. Besides, they have Stockholm syndrome regarding fat cats -- they love rich people. They don't hate banks for taking largesse from the government; they hate the government for giving it. Oh, and they hate people who are facing foreclosure, as we learned from their response to the Rick Santelli rant.

The "Centrist Daleks"? They hate the struggling homeowners, too. They've completely swallowed the banks' line that, a little messed-up paperwork notwithstnding, all these people are just deadbeats who deserve to be on the street.

And us hippies? Who the hell cares what we think? Ever?

And the rest of the public will just be confused and turn away to see how the new judges are doing on American Idol.

I hope I'm wrong and Zandar's right. But lately pessimism has rarely steered me wrong.

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