Singing the Vegetable Opera (James Kunstler)

[Tace]

James Kunstler -- Clusterfuck Nation

March 5, 2007 -- The jive-finance economy had a few acidic burps last week -- or, at least, that's how it may seem in the days ahead as the equity markets finally upchuck the toxic notional junk "money" they have been gorging on in recent years. Has there ever been a financial collapse with brighter or louder warning signals? I suppose the expectation (or hope) is that the quasi-mythical "plunge protection team" -- a "working group" of federal reserve officials and bankers -- will jump in and administer some soothing pepto-bismol, but frankly I don't see how that's possible this time.

The poison at the bottom is a fetid mass of "non-performing" mortgages, billions upon billions of loans that strapped borrowers are not paying back, loans which, in the meantime, have been rolled over, rebundled into jive "securities" (ha!) and sold, and rolled over again and used as "leverage" for massive exotic bets and bloated arbitrages involving mere abstract figments of electronic digital pulses completely removed from any reality-based productive investment activity.

Among the leaders at the supply end of this racket has been General Motors -- that's right, the company that used to manufacture cars, the company about which one plutocrat once remarked what was good for was good for the country. In fact, General Motors' main source of earnings for a long time now has been money-lending, not car-making (which only loses money). They started decades ago with GMAC, their own car-loan operation -- which makes sense if you are serious about selling cars -- but in the 1990s, with foreigners way out-selling GM's shitty cars, the company's financial wizards decided to venture into home loans and thus Ditech was born.

That's right, Ditech, the outfit that advertised incessantly on TV, promising that house-buyers could sleepwalk their way into mortgage approvals -- and thus frustrate all the smarmy, over-fed, punctilious bankers who obstructed such requests with pain-in-the-ass qualifying protocols and burdensome paperwork. Last week GM put off filing regular required financial reports because of disarray in its Ditech operation. Ditech is responsible for as much as $80 billion in mostly sub-prime house loans -- i.e. given to people with dubious prospects for repayment. But GM's Ditech is but one of scores of entities now choking on non-performing paper (and many of Ditech's rivals are now bankruptcy road kill).

more

http://www.worldnewstrust.com/index.php?option=com_content&task=view&id=1448&Itemid=10029

[murray hill farm]

1. This GM stock...not called Dietech...but

something like New Century something, is down alreaady today..one day by 60%....very bad sign.

[murray hill farm]

3. It is called New Century Finance...

closed on Friday at $14.65, it is now at $5.10....down 65% just today...it is going down.

[Kolesar]

2. Kunstler thinks he knows everything about everything

[applegrove]

4. What a nightmare!