Sunday Afternoon Update.

You knew this was coming.

This infamous clip from 'Hitler's Last Days' has been used for housing bubble parodies before and now has been re-worked for the Foreclosure Crisis. Hitler is portrayed as a big banker furious with the whole fiasco blowing up and is so up-to-date it even works President Obama's pocket veto of the Interstate Recognition of Notarizations Act (HR 3808) which would have made the entire robosigning fiasco legal (see last Thursday's post).

I expect that this week will see the entire issue intensify. Will it be the proverbial straw on the camel's back of the faux recovery and house of cards that has been constructed?

As the start of all this last week I explained the Mortgage Electronic Registration Systems (MERS) to you. This was how banks, trusts and lending institutions digitized the land title process (and by-passed local state real estate laws) for title transfer.

MERS has now come out with a statement that not only acknowledges, for the first time, its involvement in this whole fiasco but has made it all too clear just how deep the problem truly runs.

MERS's defense is remarkably like that of the high frequency traders involved in the flash crash of the stock markets. In essence they argue that its all just technological advancement, and if you want to blame it on someone, blame it on technology.

• "What we're seeing now is that the foreclosure process itself was not designed to withstand the extraordinary volume of foreclosures that the mortgage industry and local governments must now handle."
  

The explosion of securitization over the past 10 years has created a massive $10 trillion in first level debt and exponentially more in layered debt after that.

As more people realize that the fake title transfer aspect of foreclosure fraud is just the tip of the iceberg, I believe you will see that the repercussions are severe.

As overnight trading begins (16:00 Pacific Time), Gold has jumped up over $7 an ounce ($1353.40), Silver by $0.30 an ounce ($23.55) and the US Dollar index has dropped below 77.00. The charts are on the right hand side of this blog and will be watched with keen interest.

Meanwhile, if you are in Canada, you can click on this link for clip #1 from the Daily Show with Jon Stewart. As part of his first segment on October 7th, Stewart offers an interesting look at the Foreclosure Crisis. Then there is this link to clip #2 which is from the second segment of the same show.

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