Some profound seismic infarction deep in civilization's very soul - brought on, no doubt, by the sludgy buildup of vast swindles and frauds - now propels deadly tsunamis toward the land masses where money dwells. And when they break over the shorelines of banking and capital, little may be left standing.
The latest rogue wave broke about ten days ago, when an orgy of foreclosure revealed massive irregularities in mortgage contracts and property titles, suggesting a slovenliness so arrant and broad that even the states' attorneys general woke from their narcoleptic raptures of golf to shut down transfers of distressed property. But this was only after the banks themselves declared "moratoria" in a perhaps vain attempt to forestall further discovery of their countless misdeeds. And somewhere along in there the title insurance industry had a whack attack.
During this period a new cliché issued from a million pie-holes: the rule of law. Well, as Joni once sang to we happy Boomers, "...you don't know what you got 'til it's gone...."
To systematically ignore the niggling, stodgy lawful protocols regarding contract documents - notarization, due diligence, various dotted "i"s and crossed "t"s - was easy on the way up Fraud Mountain. On the ride down, though, it turns out all those niceties comprised the braking apparatus, Now the cargo of swindles is accelerating out-of-control and breaking apart. Suddenly this cliché - the rule of law - begins to assert its meaning for this nation of slobs, morons, and grifters, to the degree that even lawyers begin to understand what's at stake (as opposed to just how much they can get paid), though the bankers may never learn.
The upshot is that the real estate industry is on ice indefinitely. Nobody dares to buy or sell property because there is no way of knowing who actually owns it, whether the chain of title is on-the-level, whether (or not) there is a document somewhere with coffee mug rings and taco sauce stains denoting the past and current owners of, say, a half acre of sawgrass scrub with an abandoned harlequin brick ranch-house full of mold feasting on damp sheet-rock in the unspeakable South Florida humidity.
The US real estate racket was already in enough trouble with the collapse of bubble pricing and then the consequent effect on untold tons of mortgage-backed securities and derivatives of them buried in the vaults of banks, insurance companies, municipal investment accounts, pension funds, and other repositories of trust. It certainly has been known for years that the value of these clever instruments is somewhere south of where they represent themselves to be - but since the crash of 2008 accounting legerdemain kept a lid on that putrid stew. The new wave of mortgage and title fraud now threatens to drive their value down to zero, that is, quite a bit lower than even the previous worst-feared estimates of mark-to-market apocalypse.
These bundles of bonds of bundled mortgages are now so infected with impropriety that the bundlers themselves might just have to buy them back and eat the losses, and in so doing watch the value of their companies whirl down the drain, and then, after losing their jobs, their incomes, their private jets, and all the other blandishments of the high life, face prosecution and any number of years assigned to a steel slab bed and a ping-pong career in some correctional facility. That is, if we are even able to recover some fragment of the rule of law from the landfill of good intentions.
The trouble is, that the damage is so severe through every institution concerned with the operations of money (including the US government) that none of these fatal monkeyshines can be mitigated. Or, to put it as Barack Obama's predecessor did, so neatly, "...this sucker could go down." After all, what are the practical remedies for property the ownership of which can't be established? And upon which are claims and obligations that underlie the very value of money in this society? The rights of property form the basis of Anglo-American law. Subtract them and all bets are off. Literally.
Schemes akin to a debt jubilee are already being floated - which might sound dandy in theory, but would very neatly thrust the USA back to a standard of living equal to that in the year 1690. In other words, you can shake off your debts, but be prepared to spend the rest of your days picking stones out of your daily lentil ration before turning in on a bug-infested straw pallet next to the hog-pen, care of which is your new career.
Or perhaps your idealism runs along a different track and you would prefer to just let the government come in and take ownership of virtually everything and then decide who ends up getting what? While I am personally not tortured by nightmares of what the Tea-baggers imagine "socialism" to be (i.e. fears that the gubment will insert a computer chip in your gonads, confiscate your Go-Go Ultra X Electric Travel Scooter, and restrict your monthly admissions to the Talladega Superspeedway) I can easily see functional limitations on something like the old dictatorship of the proletariat - especially when said proletariat has been reduced in this country to some kind of a lumpen slobeteriat of methadrine-addled, tattooed psychopaths with axes to grind.
Or maybe you prefer the realm of anarchy, where a few plucky souls decide to stop playing ball with their creditors, on the grounds that they can probably get away with it due to all those slip-ups and oversights in contract review... and the idea goes viral across the nation that nobody has to make his or her payments on anything owed... and screw those bankers, anyway. "You want me? Come and get a piece of me!" Well, that route has its disadvantages, too, pretty much quickly resolving in the end-of-civilization-as-we-know-it, since after the first delirious weeks of non-payment everything based on money comes to a halt. Enjoy that one while you can.
In any event, meanwhile, property transfers will cease and the money bound up in them will not circulate, and interest not paid and - well, it's a chain of consequence leading to banks not functioning, businesses going down, people not getting paid, goods not being shipped, and something like a long emergency getting underway. The outcome is not any different from the anarchy option, except you must remember that a lot of the things that end up broken will never be put back together again.
This is therefore what the late, great Eudora Welty might have called... a still moment - the boundless interval of grave recognition that something momentous is occurring. Where we stand is something like the doorway of a surrealist painting leading to a blue sky dotted with puffy little clouds - which is deceptively reassuring, until you realize that the solid earth is nowhere in sight. The truth is, nobody has a clue what happens next, most particularly the folks in charge of things.
All we know in this still moment is that the hoary old rule of law no longer obtains. It's on everybody's lips because everybody knows that some epochal slippage has occurred, and in the dark maw exposed by that slippage a lot will be lost.