It began simply enough. A bank used my land for a down payment to my tenants, for a $60,000. loan.
They had not been good tenants. Unable to pay $405. a month rent, the bank gave them a $600. a month loan.
A simple title search would have shown the land they used as a down payment didn’t belong to them. But in the War of 1998, such small technicalities didn’t matter.
When I demanded bank records, the bank said they were “lost or missing”.
So I chased them. From Gainesville, to Virginia. Then to New York where the records had allegedly been shipped to a Texas warehouse. Finally, they were sent to Tampa. The man in charge was on vacation but a young lady checked it out. “Oh my God! You are right, I can’t find title insurance to show the customer owns the land. My boss will call you straight away!!”
He didn’t. But when I left word I was coming over with a sheriff, he decided to inform me he didn’t have custody. He had shipped the records to Jacksonville the day before.
That worked for me, the head of the Florida bank was there.
When she was advised a “bolt” was “upside down” in national mortgages, she disappeared quicker than the records did.
A deluge of consumer complaints to Tallahasse led insiders to wonder. Why was everyone out to lunch, jetting about in private planes while the “factory” was churning defective mortgages out all over the nation?
I was called Chicken Little for running about saying the sky was falling from the undoing of Glass-Stegall.
Finally, I discovered the secret fax number to Dallas where the President flew in to check on all the Rico complaints. A lovely lady called me very upset. She said she had just gotten back from a much needed vacation to big trouble.
She said Ken Lewis had slammed a folder with my faxes on her desk, demanding she “Get Rid of this!!”
Her call was to find out how she could help me. I asked for copies of the Jacksonville file. She called me a few days later saying Jacksonville said no and she should not call again trying to violate “customer privacy” laws.
Instead of confronting a defective process as General Yeager did, the CEO and President not only made money selling junk, they were a paid salvage yard to pick up the scraps and make money on the crashes.
It was so crazy, so profitable, banks and sovereign nations around the world wanted a piece of this new “innovative banking”.
They got in, as the pioneers one by one slipped quietly out. When people owe more than equity owned, we had always called that being “upside down”.
When I sought regulatory, legislative, judicial, academic, media assistance I was told no. Because all the planes were flying high, as new ones were being manufactured and launched by the minute. “SOMEBODY else would have spotted this instead of you. I don’t have time for this!!!” I heard time after time.
“Fine. But write this date down and mark my words. You will see it!!” I angrily replied on more than one occasion.
“When? You have been badgering us for years!! When?!” was the scoffers fall back question.
When Blue Sky is over and everybody crashes in the storm was my default answer.
One day though, before leaving, my best friend in the world told me nobody liked me. That hurt. But I could think of a hundred reasons why.
But when I asked why I didn’t see this answer coming….
“We don’t believe in Blue Sky.”
One bolt. Upside down. A Global catastrophe. We still will not have a final body count for many, many more years. Today is a stormy day for the markets. It won’t be the last. Because if we failed to realize Blue Skies were not going to last forever, we shouldn’t believe dark and cloudy ones will either.
This Too Shall Pass.