Chink in the Armor
Welcome to the Machine

A Workingman's Guide to MERS and the Shadow Banking System

In the last year and a half I have come to learn a lot of confusing truths about the way the money in this world really works.   The mainstream media is talking more and more about the foreclosure scandal and at the heart of it all is MERS.   Mortgage Electronic Registry Service.  It’s the biggest littlest company you have never heard of and in the thirteen years of its existence,   it has utterly destroyed the real property ownership records system in every county in the United States.

The purpose of The Workingman's Guide to MERS & Mortgage Banking is to provide the every day average Joe & Joie the information they need to understand this tremendous scandal unfolding ahead.   More importantly,  use this information to arm yourself with truth so you can cry BULLSHITTE when the talking heads try to spin the story for you.  And they will. 

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The Machine on Meth: How Mindbox,  MERS & The Shadow Banking System Bankrupted the US

It’s the Phones, It’s All in These Damn New Phones

 I have been searching for a way to tell you the story I am about to tell you and I have been going crazy trying to figure out a way to share my path of discovery over these last six months.  My writings have been erratic and I feel like I have been remiss in my duty to you in not sharing with you these realizations.  But I have to warn you in advance,  Dad,  has gone mad.

 Six months ago,  a man came to me with fantastical stories of how the banks are really the victims rather than the architects in this most  strange of all strange worlds of financial implosion.  I’m not really sure I can agree with all of that,  but as he took me further down the rabbit hole I came to realize it’s the phones.  It’s all in the damn new phones.

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Exotic Poison

The right,  but not the obligation.  That’s the basic concept of an option,  put or call.  You have the right to execute a given contract,  but not the obligation.  It’s the most basic of all derivatives.  The value of the contract is based upon a given price for delivery on a date in the future.

This is a legitimate business tool.  United Airlines wants to be able to lock in the price of fuel 90 days in the future.  So they buy the right,  but not the obligation to purchase a set amount of Jet A from the pipeline at date specific.  They pay a small portion or premium for that right.  The rest of the money isn’t due until and unless they exercise the option.  If the price goes up,  they are in the money because their price is lower than the spot.  If the price goes down,  they buy at the lower price,  but are out the premium paid for the option purchased.

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Blow Brothers Cotton

An objective look at today's housing market leaves one scratching their head.  Seriously,  nothing makes sense.  On the one hand you have rising prices (in some markets) and even a return to the flippers.  On another,  foreclosures,  defaults and deliquencies are rising.  We recently heard that the tendency to recidivism in Obama's HAMP  mortgage modification racket ... excuse me,  program is also rising.  Recidivism is the percentage of those pesky homeowners to re-default after a "trial" modification period.  Lately we have been hearing about those dreaded ARMs making a return,  teaser rates to pick up those few who were left behind 5 years ago and have since had an opportunity to save up a little money for a modest down payment.

Nothing makes sense unless you understand what they are doing .  And the best way to figure out what they are doing is to look at what they have done.  A good place to look is the Cotton Futures Exchange in an age before there was instantaneous information exchange.  How does this Cotton market compare to the 1997-201X housing market?  It's a perfect allegory.

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