Money Party to Citizens: Drop Dead!!! Collins/Scoop

[autorank]

Link: http://www.scoop.co.nz/stories/HL0802/S00005.htm

M. Collins: The Money Party (4)

Money Party to Citizens: Drop Dead!

Tens of millions are just a lost job away from homelessness.
Mission accomplished for The Money Party. (Nathan Rein CC

"The FBI is investigating every level of the conspiracy that it
believes perpetuated the housing boom…" TimesOnline Jan. 31, 2007

Michael Collins
"Scoop" Independent News
Washington, DC

Now they've done it. The Money Party road show just hit a speed bump at 90 mph and that speed bump was us. There are no more "booms" to hype. No more schemes to hook investors into the stock market. The high tech boom is dead and biotech turned into road kill thanks to a president who talks to God and believes that evolution is just "a theory."

All they had left was the housing bubble. Ram home prices up by flooding the market with buyers. Get them in that home anyway you can. The finance guys will figure it out. We saw "interest only" mortgages to sell people more home than they could afford. And the highly "recommended" adjustable rate mortgages that mature in record time plus other schemes were there to qualify those who should have bought less for more than they'd ever hoped.

What a great deal that was. The economy is now tanking. Only 18% of middle class families have three months worth of accumulated income, the amount needed to have a chance of surviving a financial crisis.

As foreclosures go through the roof, the know-it-alls in The Money Party public relations shop (the mainstream media) trot out their paid liars to blame the people.

This housing "boom" turned bubble had a crushing impact on the economy. One analyst noted, that "By 2005, this bubble had been creating fifty percent of all economic growth in the U.S." That growth is gone and now we're looking at people losing their homes just as massive layoffs are planned and implemented.

This is an important point to remember about the party. It's never their fault, never. Not once has any economic failure been their fault. It's our fault. We're supposed to be smart enough to see that these great "opportunities" are nothing more than the bad ponies you'd never bet. The Money Party can't help itself and we were supposed to know better.

This is a very big lie that we must believe. If we didn't, who knows what would happen?

But wait! Apparently the paid flacks forgot that the financial deity, former Federal Reserve Chairman Arthur Greenspan, endorsed the housing bubble in no uncertain terms. In 2004, Greenspan told a credit union association crowd that "the refinancing phenomenon" had been supportive for the economy and that the use of home equity "helped cushion" declining stock prices. Then Greenspan showed his supposed genius with this advice to home buyers and owners:

"American consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage. To the degree that households are driven by fears of payment shocks but are willing to manage their own interest rate risks, the traditional fixed-rate mortgage may be an expensive method of financing a home." Understanding household debt obligations, Federal Reserve Board, Feb. 23, 2004

The message was clear. Get an ARM!

Here's the back story. Greenspan got first rate analysis in 2001 from Ned Gramlich, a widely respected economist and Federal Reserve Governor. Gramlich warned, "that a fast-growing new breed of lenders was luring many people into risky mortgages they could not afford." Greenspan dismissed this advice and other warnings that followed. Predatory loan offerings; not to worry. It's all good.

The New York Times reported this epitaph of the Greenspan housing boom from a 2006 Gramlich speech to the Federal Reserve:

“Why are the most risky loan products sold to the least sophisticated borrowers? The question answers itself - the least sophisticated borrowers are probably duped into taking these products.” New York Times, Dec, 18, 2007

Why? Because that's what they do. It's their nature. The Money party just can't get enough and it will get it anywhere it can in any way it can.

So we're in a situation where a false housing boom was created by sticking the least qualified home buyers with very risky loans. The big banks and Wall Street got together and created securities and bonds based on "subprime" mortgages along with hedge funds and other schemes based on commercial real estate in order to profit from this madness.

These were highly rated and widely sold. When the housing market collapsed, the securities and bonds lost most or all of their value, and the screwing of the citizens expanded. The financial collapse is now devouring the middle class and pummeling the financial intuitions that started the scheme in the first place.

The Times of London indicated just how low The Money Party had sunk:

"The FBI is investigating every level of the conspiracy that it believes perpetuated the housing boom and ultimately resulted in millions of Americans losing their houses, investment banks losing billions of dollars and the chief executives of Citigroup, Merrill Lynch, Bear Stearns and UBS resigning." TimesOnline Jan. 31, 2007

Will anything come of this investigation? Who knows? But we're in a serious crisis that requires skill, insight and honesty to find solutions.

We should all be encouraged that the team in charge of fixing this mess is making progress. Who better to trust than Bush and Congress?

END
The Money Party (1). The Essence of Our Political Troubles
The Money Party (2). Lousy Leaders and How to Get Rid of Them
The Money Party (3). Big Lies that You Must Believe

Permission granted to reproduce this article in part or whole with attribution of authorship and a link to this article in "Scoop" Independent News. Reproduction of images requires recognition of the Creative Commons or other copyright.

Link: http://www.scoop.co.nz/stories/HL0802/S00005.htm

[scarletwoman]

1. k&r -- Got nothing to add, this all pretty much speaks for itself. Thanks, autorank. (nt)

[autorank]

13. Thanks!!! The Money Party does the same thing over and over & gets the results they want.

:shrug:

[helderheid]

2. Bookmarked! (and rec'd)

[autorank]

15. We've had better two week periods.

Maybe a non member of this party will get a real shot in 2008!

[Me.]

3. Here's Whay I don't Get

What is their untimate gain, people are walking away drom the houses, as they have no equity they have nothing to lose, the market (in which they are all invested) is going to bottom out and the banks are losing big time. There is only so much money they are going to be able to infuse back into the banks. Sooner or later it'sll going to drop out from beneath them. What was their ultimate gain and why didn't they see it coming.

[truedelphi]

8. I ask that myself.

People were making the payments when the interet rate was low, say 1 percent or so.

Then the ARM automatically shoots up to 12% or more, and guess what, the house buyer is overextended. In part because that whole over inflated market was about getting people to over extend - to NOT buy the house they could afford but the one fifty thousand above what they could afford (or more!)

Why not go up to 3% and get the friggin' three percent rather than bankrupt the homeowner, the entire mortgage, banking business etc.

[Me.]

11. Also

As they had no equity, nothing to lose they chose to pay their credit card bills and walk away from the houses.

[truedelphi]

12. K & r'ed n/t

[autorank]

18. They got so greedy. Their greed is now devouring them.

What geniuses. It's like firing a bullet in a metal room. Pretty soon, it comes back and nails you.

Just to report an FBI investigation of the very top money center and investment banks in the nation
is an event in and of itself. I know many, including me, are skeptical of the investigation, but
that's not the point. The announcement is rock solid and that quote...omG!

[Me.]

10. Sorry

For all the typos.

[leftchick]

4. number five!

thanks auto. :)

[robinlynne]

5. Thanks autorank!

[Mnemosyne]

6. This entire series has been brilliant, Mike!

Did those CEOs resign from shame or fear? Hell, we KNOW they know no shame, let's go with fear of prosecution. Are they moving out of the country also?

Why can I not believe they will ever pay for their treachery and greed? We have no reason to trust the FBI.

I wonder when we made the transition from bank services to "products"? I actually heard a repig on c-span mention "product" in reference to the "stimulus" package on the floor of the House.

All we are is consumers, no longer citizens of this country. A friend that worked at a group home said the residents are called "consumers" now and they aren't allowed to 'color' only shade in shading books! :crazy:

Excellent piece, as usual! :applause::woohoo::applause:

[puebloknot]

7. FBI: Hmmm! The letter "I" can stand for many things:

Incredible (having no credibility)
Incredulous (suckers)
Incompetent (really special agents)
Imbecilic (graduated from the academy in the 10th percentile)
Idealistic (cut you a deal any day)
Intelligent (gents with some street smarts)
Intelligence (what he said)
Investigation (in-house jargon for brown-nosing)

You can trust me on the above; I used to work for one of the "intelligence" agencies, back in the day.

The FBI is on it! It's all good -- just like "24."

Just thinkin' about all this puts you in an "Enron State of Mind," don't it?

Who needs a home and a job, anyway? Back in the Great Depression, folks just got creative and rode the rails (or walked along them), and did the Buddhist begging bowl thing. If it's good enough for the Dalai Lama ... He got evicted, too!



(Thanks for the truthiness, as always!)

[autorank]

20. The one word used by the Times - CONSPIRACY - is their gift to us.

Now when people say 'conspiracy theory' we can just say - oh like the FBI's theory of the
"housing boom" conspiracy by the bankers. It's the truth. TimesOnline Jan 31, 2008

:hi:

[puebloknot]

22. This month's Rolling Stone has a chilling article about the FBI.

They're creating "terrorists" so they can use the awesome power of "The Bureau" to meet their quotas!

But, then, I'm just one of those "conspiracy theorists." If the Rolling Stone article has any credence, the Bureau conspiracy theorists do the mind stuff, and then send the technicians out to do the work!

[autorank]

27. Good point.

And thanks for reminding me. I have not read that and they're investigative journalism is right on
target. We'll see if any top dogs do the perp walk. The white collar prosecutions have been, how
do you say, lackluster.

[malaise]

24. Bingo n/t

[Kurovski]

9. Very timely.

Thank you, sir auto. ;-) K&R.

[autorank]

14. They get it coming and going.

But they're getting the fruits of their ill gotten gains in the form of losses. Who do they call
when they're in trouble?

:hi:

[reprehensor]

16. Yeah, things are a little dodgy...

To say the least.

Nice piece.

[autorank]

17. Gracias

Dodgy is the right word. Deception, deviousness, unrequited greed.

This is such a sorry tale with so many tragic outcomes. Look at the blanket on the stairs.
Look at the bottom of the blanket. Those are shoes. Someone is sleeping in that blanket.
Good grief!

[countryjake]

19. Thanks for this! K&R and bookmarked n/t

[foxer]

21. Didn't you make a "signing statement" when you got mortgage

Just claim nothing applies to you.....

[autorank]

26. That's hilarious. Outstanding idea.

What an excuse. And there's a precedent.

Just recite this to the bank when they call:

"I'd like to show you my signing statement... insufficient funds invalidate this agreement. It's a presidential thing, you wouldn't understand."

[earth mom]

23. Excellent work as usual!

:thumbsup:

[autorank]

25. Hey Thanks!

So many outrages, so little time;)
:hi:

[earth mom]

28. I hear that!

:hi: