Wash, Rince, Repeat

I read this article in Bloomberg the other day about the new Private Equity entities buying

thousands of single family homes with bundles of money lent to them for the purpose.   

Since there are no individuals that can get a loan on the massive numbers of foreclosed houses 

sitting on the market regardless of interest rates or valuations (One of the main culprits is 

still trying to figure out the value of the property), the loose fed money floating into the 
banking system has yielded another result; The banks and their gambling clients who STILL 

borrow from them for their casino games just as they did before the crash, take the loose 

Fed cash sitting on the books, lend it to private equity et al, who in turn will buy tens 

of thousands of the houses and convert them to rentals. Then these mega loans can be securitize 

in the same way they used to securitize the sub-prime garbage lent out to individuals during the

real estate bubble, and sell the debt in tranches to "investors" and make a bundle. Then of 

course there are derivatives and other kinds of fun financial "products" you can create from 

the debt instruments. And the beat goes on...

Meanwhile the poor suckers who will never be able to buy a house again (the vanishing home owing 

class, I refuse to call them "middle class" just because they could buy a mass produced, cookie 

cutter poorly built, low quality slap it up stick and press board built plastic siding suburban 

"house"), will rent from these new mega house owning faceless corporations, who will inevitably 

hire "nationally owned" McDonald's quality contractors to do everything from service the HVAC to 

take care of the lawns, turning what is left of the independent trade business owner who makes 

his money (and decent money at that) servicing individual home owners, into a low wage earning 
employee of some mega national home servicing company. This is when the last vestiges of "middle 

class" opportunity vanish from the landscape forever.  Think "Brazil" the movie. 

I gave this "party" we are having with entirely reckless monetary policies until April 2013 about

18 months ago.  Perhaps I was a bit ahead of the curve?  Time will tell.  But either way one looks

at the situation; the continued overly broad and dysfunctional influence of the financial "industry"

over our economy without productive investment happening, along with our ineffectual government, 

over influence by monetary "authorities" over the direction of our economy (to the extent of 

obsession), and lack of wealth creation on the part of individuals or industry, this slow motion

train wreck is likely to stop moving forward soon in a tangle of nearly impossible wreckage to clean

up.