Endless extortion of settlements over bond reps and warranties (our laws always allow a lawsuit WHENEVER a security loses value - you can always argue something material was omitted) and settlements over mortgage servicing (for what again??) and settlements over loan origination (REALTORS are the ones who talked buyers into purchasing more house than they could afford, which was the crux of the problem - lenders barely spoke to borrowers and followed the massive Truth in Lending Act on every single loan) and settlements over mortgage foreclosures (NO ONE was sued who wasn't massively past due; requiring an affidavit upon initial complaint is a litigation anachronism no longer followed in any other form of litigation). And on and on and on.

ALL of these government extortions from the private financial system being based on powerfully-amplified but false political rhetoric about the meltdown. Yes, it IS that easy to sue for nothing in this country and force a settlement - just ask physicians.

Today? STILL no explanation of what the safe harbor rules will be for qualifying mortgages.

Years later, and still no safe harbor established for QMs to replace the one the President destroyed.

The average FICO score today is above 750 and the average loan-to-value is below 70%.

THIS is completely due to the President's attacks on existing loan contracts. It makes it impossible to underwrite a loan which might contain ANY risk of default, keeping consumers a trillion dollars under water on their home values due to lack of demand from non-approved (and therefore non-existent) buyers.

Predictable enforcement of the Rule of Law is massively more important to the economy than is the Fed.

We have NEVER been through something like this before. And it may take a half a century to emerge from it. Simply because the die has been cast and bankers can easily predict politicians doing it again in every future recession - resulting in massive contractions of the money supply on the eve of every future recession as lenders ANTICIPATE it and dramatically curtail lending immediately upon signs of ANY softening of the economy, making swings in the business cycle far worse than they have ever been at ANY point during the last eighty years.

Before Obama, the Fed did indeed have a role to play. In every prior recession.

But that was before America entered this Strange New World of Politicized Rule of Law enforcement.

Politicized Rule of Law enforcement.

Not even Roosevelt did anything like this.