FedUpUSA

Archive for October 15th, 2010

The system for financing mortgages and regulating that financing has failed, completely and utterly. The mortgage and real estate markets are now in collapse.

Yesterday I wrote about how positive feedback loops lead to collapse. Welcome to the U.S. housing and mortgage markets.  As I have documented here numerous times, the entire U.S. mortgage market has already been socialized: 99% of all mortgages are backed by the three FFFs–Fannie, Freddie and FHA–and the Federal Reserve has purchased a staggering $1.2 trillion in mortgage-backed assets in the past year or so to maintain the illusion that there is a market for mortgage-backed securities.There is, but only because the mortgages are backed by the Federal Government and propped up by the Federal Reserve.

The mortgage market is completely dependent on government guarantees and quasi-Government purchases of securitized mortgages. If the mortgage market were truly socialized, then the Central State would own the banks which originate, service and own the mortgages.

But then the private owners and managers of the “too big to fail” banks would not be reaping hundreds of billions in profits and bonuses. And since the banking industry has effectively captured the processes of governance (that is, Congress and the various regulatory agencies), then what we have is a system of private ownership of the revenue and profits generated by the mortgage industry and public absorption of the risks and losses.

Could anything be sweeter for the big banks? No.

The incestuous nature of the system is breathtaking. The Fed creates the credit which enables the mortgages, the Treasury guarantees the mortgages via Fannie, Freddie and FHA, the Fed buys the mortgages ($1.3 trillion in mortgages are on their balance sheet) and the private banks collect the fees and profits.

One of the core tenets of the Survival+ critique is the State/Financial Plutocracy partnership. There are many examples of this partnership (crony capitalism in which the State is the “enforcer” which collects the national income and distributes it to its private-sector cronies), but perhaps none so blatant and pure as the mortgage/banking sector.

But now the entire legal basis for that privatized-profits, socialized losses system has dissolved. The foreclosure scandal is not just a “scandal” in which various frauds were brought to light; it is the failure of the entire system of originating mortgages that props up the entire real estate market.

I recently reported on the depth of the crisis for AOL’s Daily Finance: The Foreclosure Crisis: Eroding Trust — and Ending the Recovery?

The Mainstream Financial Media has been forced to gingerly poke around the delicate topic, and surprise, it is difficult to put a positive spin on the crisis:

Document Questions Cloud Recovery: Agents Fear Housing Could Stall as Uncertainty on Foreclosures Unnerves Buyers, Especially Investors.

“Title companies would be crazy to ensure title on anything remotely associated with a foreclosed property because we don’t know how this is going to resolve itself,” said Mark Hanson, an independent housing analyst in Menlo Park, Calif.

The result: Not only could sales slow on foreclosures now listed for sale, but it could also become harder to sell or refinance properties that have been foreclosed upon at some point in the past few years.

Real-estate agents are particularly worried about the situation’s impact on investors, the buyers who fix up foreclosed homes for resale. Investors accounted for 21% of all home sales in August, according to the National Association of Realtors. 

Little-Known MERS Faces Big Challenges in Foreclosure Battle:

Success in challenging MERS’ role in a foreclosure could mean the owner of a mortgage holds a loan without claim to the house as collateral, Mr. Weissman said. That result could set off a chain reaction reducing the value of mortgage servicing rights, an asset many banks keep as an investment.

Are We Headed for Housing Armageddon?

So to summarize:

1. The banks which depend on revenues collected from mortgage servicing are facing the possibility that millions of distressed mortgages will enter legal limbo and not be paid; additionally, millions of underwater homeowners realize they can stop paying their mortgages with no near-term consequence because the foreclosure system is frozen.If you doubt this, please read Gonzalo Lira On The Coming Middle-Class Anarchy.

2. The mortgages which the banks are holding on their books as income-producing assets at full face value are in effect either worthless or depreciated to some significant but unknown degree. If this fact were reflected in their balance sheets, all the big banks would all be insolvent.

3. Evictions based on foreclosures can be halted, delayed or even cancelled. Consider this alternative response to wrongful eviction: Evicted Family Breaks Into Their Former House (WSJ.com)

4. Pending sales of properties that were foreclosed are now of dubious legality.

5. Anyone buying a house in foreclosure, or a house that was foreclosed, cannot get title insurance.

6. Investors who have been propping up the housing market by snapping up properties in foreclosure (REOs or “distressed properties”) face high risks and uncertainties in buying any real estate that was in or is in the foreclosure pipeline. That means markets will lose 30% to 50% of their buyers.

7. Buyers who closed on foreclosed homes now face legal challenges to their ownership and potentially even “clawback” of the property as the previous owner can claim he/she was defrauded by a flawed/defective foreclosure process.

8. Real estate attorneys can rejoice: everyone will get sued, in every court in the land. Banks will get sued, title insurance companies will get sued, realtors will get sued, foreclosure mills will get sued, MERS will get sued, and so on. The attorneys general of the states will all sue the banks and mortgage mills, claiming billions in damages.Anyone who thinks this is all trivial technicalities is wrong.

9. The real estate market will collapse as the imbalance of buyers and sellers swings to extremes. Buyers vanish as trust in the institutions of real estate finance and property rights has collapsed, and millions of distressed/defaulted mortgages don’t get paid. Underwater sellers have a stark choice: either dump the house for cash (assuming the bank allows a short-sale and eats a massive loss) or stop paying the mortgage and see what happens.

That sets up a new positive feedback loop in a very tenuous market: millions of underwater homeowners will realize their homes are plummeting in value and “recovery” is hopeless. Millions more who were on the edge will be pushed underwater as prices fall. The incentives for the newly underwater are clear: stop paying the mortgage, since price “recovery” is hopeless and the foreclosure process is frozen.

The imbalance between few buyers and millions of properties on the market or in the shadow inventory has only one “capitalist” resolution: the destruction of price down to levels that clears the inventory.

Las Vegas offers a example of this clearing: condos are selling for 15% or 20% of their bubble-era valuations–and this is with massive Federal subsidies of the mortgage market.

10. There is a fundamental legal battle playing out between the property rights and rules of law embodied in state laws, and the Central State/Federal laws which enable MERS to transfer ownership of mortgages as securities. You can’t have both systems at the same time; either transfers of mortgages and ownership and the procedure of taking real property (foreclosures) meet state laws or these laws have been rendered moot.

Either there is due process of law or you have a kleptocracy/”banana republic” oligarchy. At present, that is the decision we face as a nation. If the banking Elites and their partners in the Central State (Fed and Treasury) are allowed to “win” and gut the property laws of the states, then the U.S.A. will be revealed as a kleptocracy/”banana republic” oligarchy.

If state laws are upheld, then the “too big to fail” banks are insolvent and they will fail. Then the question of kleptocracy arises once again: will the banks be allowed to fail as per Classic Capitalism, that is, their owners and managers will have to absorb the losses of that bankruptcy/failure, or will the Central State use its powers to collect taxes and cover the private losses of the Bank/Financial Power Elites? Privatizing profits and socializing losses has been the entire game plan since the global house of cards collapsed in 2008.

It’s decision time, citizens. Either the banks/Central State “win” and we are a kleptocracy/ “banana republic,” or they lose and the U.S. mortgage/ banking sector implodes and is either formally socialized (i.e. owned lock, stock and barrel by the Central State) or rebuilt from scratch without big banks, Federal guarantees and the Fed’s incestuous interventions. (“We create the credit that enables the mortgage, you issue the mortgage, and then we buy the mortgage.”)

There is no “fix” or half-measure that can patch this over now.The non-mainstream media can speak the truth directly. For example, here is the excellent Acting Man blog:

Total Chaos:

The biggest question of all, is there anyone working on a solution? I know the answer to that: No.We now have socialized housing. If you disagree, just imagine the consequences if government intervention were withdrawn. Real estate markets would collapse immediately. The government is the market. There is no exit strategy. 

The feedback loops are in full runaway mode, and the end-state will be a collapse of one system or the other: either the incestuous banking cartel/Fed/Treasury system of “private profits, socialized losses” implodes, or property rights and the real estate market implode.

Right now, both are imploding, and each system’s implosion reinforces the other’s collapse.

Of Two Minds

This October, millions of Americans are going to watch horror movies and read horror stories because they enjoy being frightened.  Well, if you really want to be scared, you should just check out the real horror story unfolding right before our eyes – the U.S. economic meltdown.  It seems like more bad news for the U.S. economy comes out almost every single day now.  Unfortunately, things are about to get a whole lot worse.  The mainstream media has been treating “Foreclosuregate” as if it is a minor nuisance, but the truth is that the lid is about to be publicly lifted on years and years of massive fraud in the U.S. mortgage industry, and this thing has the potential to cause economic chaos that is absolutely unprecedented.  Over the past several days, expert after expert has been coming forward and warning that this crisis could completely and totally paralyze the mortgage industry in the United States.  If that happens, it will be essentially like pulling the plug on the U.S. economic recovery. 

Not that there was going to be a recovery anyway.  The truth is that economic statistic after economic statistic has been pointing to incredible trouble for the U.S. economy.

For example, the U.S. government just announced that the U.S. trade deficit went up again in August.  According to the U.S. Census Bureau, the U.S. trade deficit was $46.3 billion during August, which was up significantly from $42.6 billion in July.

So how much coverage did this get in the mainstream media? 

Well, just about none.

We have gotten so used to horrific trade deficits that it isn’t even news anymore.

But these trade deficits are absolutely killing our economy.

How long do you think that the U.S. economy can keep shelling out 40 or 50 billion more dollars than we take in every single month?

If you look at the countries around the world that have become very wealthy, almost all of them have gotten that way by trading with the United States.

Meanwhile, many of our once great manufacturing cities are turning into open sewers.

Every single politician in the United States should be talking about the trade deficit.

But hardly any of them are.

Is it because Americans have all become so dumbed-down that we don’t understand these things anymore, or is it because we are so distracted by the various forms of entertainment that we are addicted to that we just don’t care? 

But the trade deficit is not the only economic statistic that is getting worse.

According to the Department of Labor, for the week ending October 9th the advance figure for seasonally adjusted initial jobless claims was 462,000, which represented an increase of 13,000 from the previous week.

We have an unemployment epidemic going on in this country, but what did the mainstream media do in response to this news?

They yawned.  Instead, many of the “financial experts” were busy talking about how wonderful it is that the Stock Market is going up, up, up.

Well, as one reader recently reminded me, if you want to evaluate an economy by how much the stock market is going up, then the economy of Zimbabwe has had an absolutely wonderful decade!

The truth is that the stock market is not a good barometer for what is actually going on.

What is really happening is that the U.S. economic system is literally coming apart at the seams. 

Yet another piece of really bad economic news that just came out is that the number of home repossessions by banks set a new all-time record during the month of September.  The record total of 102,134 bank repossessions was the first time ever that bank repossessions climbed over the 100,000 mark for a single month.

The good news is that bank repossessions are about to come to a screeching halt.

The bad news is that it is because the U.S. mortgage industry is about to become completely and totally paralyzed by this foreclosure fraud crisis.

The following are three basic points to remember about this foreclosure mess….

A) Massive Fraud Was Committed At Every Stage By The Mortgage Industry

In a previous article entitled “Foreclosure Fraud: 6 Things You Need To Know About The Crisis That Could Potentially Rip The U.S. Economy To Shreds“, I attempted to describe just how widespread the fraud in the mortgage industry has been….

The truth is that there was fraud going on in every segment of the mortgage industry over the past decade.  Predatory lending institutions were aggressively signing consumers up for mortgages that they knew they could never repay.  Many consumers were also committing fraud because a lot of them also knew that they could never possibly repay the mortgages.  These bad mortgages were fraudulently bundled up and securitized, and these securitized financial instruments were fraudulently marketed as solid investments.  Those who certified that these junk securities were “AAA rated” also committed fraud.  Then these securities were traded at lightning speed all over the globe and a ton of mortgage paperwork became “lost” or “missing”.

Finally, when it came time to foreclose on these bad mortgages, a whole lot more fraud was committed.  Thousands upon thousands of foreclosure documents were “robo-signed”, but the truth is that investigators are starting to discover a lot of things about these mortgages that are a lot worse than that. 

B) Nobody Really Knows Who Owns Or Who Has The Right To Foreclose On Millions Upon Millions Of Mortgages

The legal rights to millions of U.S. mortgages has been scrambled so badly that it might actually be impossible to fully sort this mess out.  In particular, MERS (Mortgage Electronic Registration Systems) has created a paperwork nightmare that may never be able to be completely remediated. 

On a previous article, a reader named William left a comment that did a great job of describing the very serious problem that we are now facing because of MERS….

MERS – potentially the most serious problem because it affects who really owns the loans. Securitization mandates that loans be transferred into REMIC trusts within a strict timeframe. Late transfers are not allowed. In spite of the supposed “ease” of transfer through MERS, it now appears that perhaps 60% of US loans were never properly transferred. Absent remedial legislation, it is impossible to do so now. And the former owners may be out of business or bankrupt. So how do we get these loans to the trust beneficiaries who were supposed to own them? This is no simple paperwork correction. The train has left the station, with no more to follow.

C) Unprecedented Chaos Is Going To Erupt As Faith In The Mortgage System Completely Dies

So what is going to happen as a result of all of this fraud and confusion in the mortgage industry?  Well, basically everybody is going to sue everybody.  It is going to be absolute mayhem. 

Charles Hugh Smith recently put it this way….

Real estate attorneys can rejoice: everyone will get sued, in every court in the land. Banks will get sued, title insurance companies will get sued, realtors will get sued, foreclosure mills will get sued, MERS will get sued, and so on. The attorneys general of the states will all sue the banks and mortgage mills, claiming billions in damages.

Meanwhile, virtually nobody will want to buy any house that has been foreclosed on in the past ten years or so until this mess is sorted out (which could take years and years). 

Meanwhile, title insurance companies are going to avoid foreclosures like the plague.

Meanwhile, all of the investors that have been propping up the housing market by buying foreclosures are going to be fleeing the market in droves.

Meanwhile, the financial world is going to be trying to figure out which U.S. lending institutions are still solvent.  The value of most mortgage-based assets is now totally up in the air.

Meanwhile, millions more homeowners across the United States will be emboldened to quit making payments on their mortgages as they realize that those holding their mortgages may not have the legal right to foreclose on them.

And that is where the true horror of this entire situation may lie.  What is going to happen if millions upon millions of Americans holding underwater mortgages look at this situation and decide that they really don’t have to be afraid of the threat of foreclosure any longer?

If a massive wave of homeowners suddenly decides to simply quit paying their mortgages, it would basically wipe out nearly the entire mortgage industry.

That would likely mean more government bailouts, more government control, much higher mortgage rates and eventually a serious crash in housing prices.

This crisis is incredibly complicated and it has a ton of moving parts, so it is extremely difficult to describe accurately.  But the reality is that this mess has the potential to hurt the U.S. real estate market much more than “subprime mortgages” ever did.

Hopefully this crisis will not be “the straw that broke the camel’s back” for the U.S. economy, but with each passing day this thing looks even more horrifying. 

One way or another, real estate law in the United State is going to be changed forever as a result of this crisis.  It is going to be extremely interesting to see how all of this plays out.

The Economic Collapse

FiredogLake is reporting this morning that six Senators have demanded criminal and regulatory action by the FHFA regarding the blatant fraud in the mortgage industry. 

The six Democrats – Sherrod Brown, Barbara Boxer, Sheldon Whitehouse, Debbie Stabenow, Tom Harkin and Mark Begich – pushed back on the idea that these are merely technical errors, as the FHFA letter intimates, rather than systematic violations of the law:

There have been attempts to dismiss the reported violations as minor technical paperwork errors, and to employ the defense that these were harmless errors because the homeowners were in foreclosure and would have lost their houses anyway. These are not technicalities, they are not isolated cases – it is likely that over 200,000 foreclosures have now been suspended – and these improprieties cast doubt on the foreclosures in question.

Rather than a few rogue employees disregarding company policy, the policies themselves were flawed, indicating that there is a systemic problem with the manner in which loss mitigation and foreclosure operations are being conducted by most, if not all, mortgage servicers. This pattern of behavior has undermined the integrity of the housing market, creating uncertainty for home sales and the availability of title insurance.

We shouldn’t be reassuring the banks and their servicers that they’ll make it through this all right, we should be filling out criminal charges. The banks basically never changed their policies from the questionable lending practices of the subprime mortgage scandal – they couldn’t be trifled with basic legal procedures, and they hired a bunch of incompetents to push the paperwork. When the defaults rose, the same gang of idiots failed to provide any relief for homeowners through mortgage modification. And now they’re breaking the laws surrounding foreclosure, to cover up for their other fraudulent activities with proper mortgage assignment.

While this has started to become an election issue, with familiar battle lines, it should be noted that only Barbara Boxer among these six is up for re-election. I do think this issue resonates and is pretty clear:

To Cuban-born Jose Martinez, 65, a lifelong Republican from the Miami area who works in liquor manufacturing and export, “It seems like a joke that we are a country with laws and the banks keep stealing.”

As for remedies, the Senators suggest forcing the servicers to work with homeowners to modify loans, to impose “tailored moratoriums” for certain lenders as per their authority as regulators of banks and non-bank institutions that are the parent companies of the servicers, and to “review and reform” the financial incentives that make it beneficial for the servicers to foreclose. They are looking at the issue in a comprehensive way and beyond the “technical errors” argument which is clearly false.

 As has been tediously and thoroughly documented on this website now for more than 2 years, there is no ‘procedural error’ – this was blatant, intential and orchestrated fraud from the very top down to the bottom of the mortgage industry.  While it is easy to just ‘blame homeowners’ , the fact is, homeowners were not the predators. 

This is WRONG HEADED thinking!  It is NOT illegal to default on a debt, but it IS a CRIME to commit fraud – and the latter is what the banks have done, the former is what the homeowners have done.   While there is no denying that there were some homeowners that lied on their mortgage applications, that number pales in comparison to the number of lenders, brokers and banks that lied to prospective buyers in order to put them into homes they knew darn well they couldn’t afford.  The more mortgages they could write, the more money they made.  Prospective buyers were no longer people they were helping to purchase a home in a price range that was sustainable, they were a profit stream.  Often times it wasn’t the buyer who lied on the application at all, it was the lender who altered documents before submitting the loan for underwriting without the knowledge of the buyer!

The other problem with the idea of blaming the homeowner is that the homeowners were NOT the experts.  The lenders were – and when they told people ‘this is how you do it’ and ‘yes you can afford this’ and ‘this is a fantastic deal’ – how were laypeople supposed to know better?   Being naive and uneducated about the home-buying process is not a criminal act.  All these creative toxic loans were crammed down the public’s throats which caused home prices to skyrocket far out of the reach of average wages. While inflation in food, energy, clothing and everything else also increased at a historic rate at the same time, wages were FALLING.  Often times, people had NO CHOICE but to take on more credit than they were comfortable with because the government policies were not only creating rampant inflation, but they were mandating that banks lend to people who they deemed ‘underserved’  – minorities, poor people, the unemployed - basically the government forced banks to lend to those who could not afford to pay.  For reference, at the peak, home prices had inflated to more than 7 times wages.  This is historically and definitively unsustainable….yet banks were processing loans with 60% DTIs and this was advertised to the public as acceptable! 

Nowhere was this more evident than in the State of Ohio.  The State itself attempted to kick subprime lenders out of Ohio because it had become exceedingly clear that the predatory lending practices were entrapping people by putting them into loans they could not pay for and ultimately ending up with entire neighborhoods where the vast majority of houses were in some stage of foreclosure.  Unfortunately, the Federal Government told the State of Ohio, that they could not stop these lenders from operating in the State because that would be ‘discrimination.’  So, basically the federal government gave these lenders a license to commit fraud and forced the State of Ohio to accept it. 

As for the lenders, at first they weren’t so sure that lending to those that couldn’t pay would be such a great idea.  So, to offset this risk in lending to people they KNEW couldn’t pay, they came up with mortgage backed securities and other ‘creative investment vehicles’ that they could buy and sell like stocks.  As fast as they could bundle and pool these things together, they would sell them to individual investors, pension funds and anyone who was looking for big returns….because after all, home prices only go up, right?  Thing is, long after people got weary of taking on more debt, the demand for mortgages became driven ENTIRELY by the banks THEMSELVES because the toxic instruments they created were a cash cow….as long as home prices were going up – they kept inflating the values of the securities so they could continue to profit from them. 

It was when ALL private sector demand stopped because no one could take on any  more debt, that the wheels started to come off back in late 2007.  Then the banks and Wall Street were bailed out with taxpayer money and we’ve now seen them again inflate the prices of fuel and commodities with their taxpayer money that they gamble with – but because the hole is so large, the over $1 Trillion in taxpayer money is not enough to prevent the over $14 Trillion in leveraged security instruments from imploding.

THAT is the summary of the true depths of the fraud we are dealing with.  Long after real demand for home mortages stopped, the banks continued to leverage these instruments, fraudulently inflate their values and sell them to investors.  Because profits depended upon doing this in bulk, the rule of law was abandoned in transferrence of title.  MERS (Mortgage Electronic Registration Systems) was invented by the banks themselves in order for them to more rapidly offload these ‘investments’ without the pesky business of continuity of the chain of title of the collateral (that would be your home).  Now, quite frankly, no one with any sort of mortgage transaction since 2002 can be sure of whether or not their title is clear, nor can they be sure they are actually paying the entity to which they truly owe money! 

Meanwhile, the banks and lenders are foreclosing as quickly as they can, often times facilitating this process with ‘recreated’ (forged) documents, robo-signers and false affidavits as has been documented extensively here on FedUpUSA.  Multiple courts across the country have discovered much of this fraud, and some banks have now claimed to be temporarily halting foreclosures to ‘sort out this procedural error’, but even that is a lie.  Foreclosures especially continue unabated and at an accelerated pace in non-judicial states where the lenders can be sure they never have to prove their standing or right to foreclose.  Essentially, what the banks are doing amounts to asset stripping the public.  They deceived the public with the loans themselves, the loans began to default, so they got Congress to give them more than $700 Billion in bailout money and now that the fraud is beginning to be exposed, they are taking possession of the collateral as quickly as possible, even if they have no legal rights to do so.  Asset stripping at every possible level.  This will continue until or unless we stop it.

Clearly the enormous economic crisis we face today was largely created by the banks/lenders and Wall Street and the stupid policies of our government.  Homeowners were the victims here.   At the very least they deserve: 

#1.  Their day in court to discover exactly WHO owns their mortgage; they have a right to know to whom they are actually indebted (and it is not the servicers).  This is a legal right of every debtor under the FDCPA – The Fair Debt Collection Practices Act

#2.  The opportunity to negotiate with the actual party to whom they are indebted  (in most cases, the servicer was ALREADY PAID when the note was sold and has absolutely no motivation or consideration for negotiating a fair market price – this is why HAMP was such a failure!)

#3.  The opportunity to have clear title to the asset that they purchased – and if that title is not clear, they are entitled to restitution under USC 15 § 1641 , which allows for the sanction of expunging  interest on the debt which encumbers that property wherein a title has been fraudulently transferred.  In addition, wherein the chain of title has been broken, there should be a release of that collateral, making the mortgage loan an unsecured debt (like a credit card), which also makes the debt dischargeable under Chapter 7 Bankruptcy.

As for the political angle of all this - it sure seems to me that the Republicans are vastly missing here.  Is it that they truly want to snatch defeat from the jaws of victory this November?  The surest way to lose much of the momentum they have been building this election cycle is to be completely silent on the issue of fraud, or worse, seen as defending fraud!  I make no secret of the fact that I am and always have been a staunch conservative and I believe that part of that ideology includes a moral and ethical obligation.  Hasn’t the Tea Party been demanding a return to principles over politics and party?  This election hinges upon which party gets their constituents to the polls and up until this point all the enthusiasm has come from the re-engergized Tea Party groups.  I am now seeing some of the liberal base become re-engergized in response to the issue of the massive fraud that has been perpetrated upon America by the banking sector and Wall Street.  Certainly, the fact is not lost on me that much of the blame for enabling this to happen resides with Congress and much of the way was paved by liberals with their mandates to loan to those that could not afford it.  It also is not lost on me that Wall Street and the banks gave more to Democrats in the past 4 years than any time in history.  Coincidence?  I think not.  But in a strange twist of irony, we now have Democrats leading the way in pursuit of the prosecution of fraud in this industry. 

So, why are Republicans missing?  This could be an issue that they slam-dunk Democrats with – but we have only deafening silence.  Could it be that Wall Street and the big banks are now giving all that money to the GOP?  Will Tea Party voters allow Republicans to be bought, in direct conflict with the values that they have been espousing?  Can the Republicans afford to risk losing voter support to gain all that Wall Street money they’ve long been missing?

Somebody better wake up – we have only 3 weeks to go.  Either all this effort by the Tea Parties to clean up our government and demand morals and ethics will be wasted as we end up with more of the same crap we have had just under a different label or the Tea Partiers really DO stand for something.  Either the Republicans are worth surviving as a party with principles or they are not.