this morning, an interesting commentary from Dennis Gartman
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THIS HAS TO BE WRONG ON SO MANY DIFFERENT LEVELS: This is America and in America
we do indeed have the right to earn a living in any way possible, so long as it
is legal. It may be the single most important freedom we have, for it is the
very basis of property rights and liberty… but (and you knew there had to be a
“but” coming, didn’t you?!!), sometimes businesses are set up that just catch us
off guard. Such is the new business put together by one Mr. Stanford Kurland,
who was, until quite recently, the President of Countrywide Financial… the
“un-tanned” member of the management team, as it were. Mr. Kurland, along with
some benefactors from Wall Street who helped raise the capital for him and his
venture, has formed a company… Private National Mortgage Acceptance,
euphemistically referred to as “PennyMac”… that will buy distressed mortgages
from the nation’s banks and financial institutions who want to rid themselves of
these bad memories. Mr. Kurland says that PennyMac’s intention is to restructure
these newly acquired mortgages so that the mortgagees can “stay in their homes.”
This seems rather like the auto mechanic who chooses to toss sand into your
auto’s crankcase when you are not looking, and then offers to fix “the sand in
your crankcase.” Or the airconditioner repairman who, upon inspection of your
air conditioning unit chooses to cut a wire or two, and then offers to fix the
unit because he knows where the problem lies. We are certain that Mr. Kurland is
a nice man. We suspect he likes children and dogs, kicking neither, and that he
salutes the flag on Memorial Day. We shall bet that he calls his mother weekly,
and sends thank-you notes immediately. However, was it not CountryWide’s pushing
of the mortgage envelope that helped create many, if not most, of the problems
facing the housing/banking/broking industries at the moment? Is he not in some
way culpable? Isn’t the fox now offering not only to watch, but to fix, the
henhouse? And is it not strange that he has
had no trouble finding the money to do so?
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