Bear Stearns: Take the $ and Run


by Antenna Wilde

That 30 billion dollar bailout we taxpayers just gave to Bear Stearns? Bye-bye.

Ah yes, the Savings and Loan scandal is ringing in my ears, though the coming storm should put it to shame. 30 billion is just a spoonful of Nyquil, and the blame falls directly on the banking industry. This is no surprise, as the only way banks can make money is by either: a) collecting interest on loans. And/or b) making loans to people who default, and then taking the collateral—in this case the real estate, plus any already made payments.

Now the banks would like us to believe that, they too have suffered some loss from this subprime crisis. In reality, they created it by pushing legislation in the eighties, like the Alternative Mortgage Transactions Parity Act of 1982. (with help from the Democrats, I should add) It’s nothing new, and sadly, this article may remain relevant 20 years hence. The real winner here is JP Morgan, but I can assure you that Citigroup and BOA are quite excited about the upcoming foreclosures.

When banks report “profit losses” they are talking about interest they aren’t getting from people who went broke. Don’t worry, they have the real estate now, which is the only thing of value anyway. And it’s true that, normally, this might strain their coffers, but the the central bank is filling them back up. Free money! That’s right, the banks make lousy loans, foreclose on the homes, then cry to the Fed, “We’ve been duped!” Then Big Brother skips to the rescue—with money from the real bank; our bank… the only one that has any “real” money.

So that’s one way the bankers get richer, because they’re certainly not interested in the “money” they loan out: it doesn’t exist. If you find this too long a video, skip to the last 20 minutes:

http://video.google.com/videoplay?docid=-9050474362583451279

Sherry Cooper—a chief economist at BMO Capital Markets, said, “What is different this time is that the dominoes are falling in so many different sectors, markets, industries and countries … all at the same time and there is yet no end in sight.”

Great, thanks Bush Senior for deregulation, and Clinton for signing the Gramm-Leach-Bliley Act. Dubya’s helping too! Just like the days of Daddy Bush and the S&L scandal, bankers create a moral hazard by manipulating the system to sell people on bullshit like Option ARM (adjustable rate mortgages) and make huge foreclosure profits at ZERO risk. Yeah, the boys at the top are making a killing—hooray for assholes!

And if you were dumb enough to believe that the subprime rate wasn’t set to double after they hooked you… sorry Charlie, no bailout for you. SOMEBODY has to pay the price. Although the Federal Reserve is partially owned by the banks in question (that’s right, private) it was not created to steal from the poor and give to the rich, but that’s essentially what’s happening—and hang on to your soon-to-be-liquidated seats—cause it will happen again.

Solution: 1) Education. 2) Election Reform. 3) Monetary Reform. That’s it. But in the meantime, if we could just pass ONE bill that says, if we DO bail out the CEOs, Trustees and Lendors for intentional predatory lending, they have to go to a federal, pound-me-in-the-ass prison for 20 years without parole. Any takers?

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9 thoughts on “Bear Stearns: Take the $ and Run

  1. Great clip of Trump. Well said sir.

    I have no gripe with Donald Trump, just threw his name out there because he is extremely wealthy and as I said I know damned well he doesn’t pay 22% of his income in federal taxes. I’m sure his tax amount is an astounding figure, but when you weight it as a percentage of his income, the inequity comes clear. The working and middle classes in this country are outrageously overtaxed. I did taxes for another person who only made $15k last year, and his tax burden ended up being only 4%, even with no dependents. So would it not figure that my friend who made $30k would have to pay a maximum of 8% in federal taxes? Nope. In the Bush economic plan, only the very wealthy and the grindingly poor get tax breaks; it’s the typical Republican agenda – to keep us renting not owning, paying landlords instead of being land owners, and to keep us so worried about scraping by that we don’t have time or energy to focus on what is going on in DC or in the middle east.

    Those economic stimulus payments aren’t falling on our heads from the money fairies, either; they are coming right our of our own pockets. That whole deal is like being robbed and butt-raped in an alley, then having your attacker give you back 5 bucks of what he took from you for cab fare home. That person is not your friend. Neither is George W. Bush, nor is John McCain, as he wants to be president so bad he’d sell his soul for it (and already has IMHO).

    Hey, wake up America! Your purse is gone and your asshole is bleeding! This was not a dream date!

  2. Yes….yes…. as I said 8 years ago, get ready because the W.Bush 2000’s are going to make the Reagan/Bush 1980’s seem like the fat and prosperous 50’s. All this shit we have all been through before, picking a war in the middle east for oil, government accountability reduced to nil, right down to the S & L bailouts while mom & pop lose their home, their retirement, their investment dollars, and social security is as ridiculous a misnomer as peacekeeper missle. Jeezus do we never learn?

    It kills me because I just filed taxes for a friend who is a school teacher and had to pay more than 22% of her taxable income out in federal taxes; she made about $30k last year. As a percentage of her income, she is paying more to the feds than Donald Trump. And what is she getting out of it? The right to scrape by, be stripped and humiliated at an airport, and have her phone tapped or thrown in jail without habeus corpus if someone decides she has a middle eastern sounding name?

    Who in Washington is standing up for the common American worker? The majority of US citizens are being taxed without representation. I thought there were laws against that, or has Bush re-written the constitution on that point as well?

  3. The broker doesn’t care, I agree. Its just another opportunity to make some dough. I should quit my god forsaken low paying teaching job and become a mortgage broker. Lets face it, it’s a dog eat dog competitive world out there, and corruption is at large!

  4. It’s true part of the problem was people lying on the forms, but what does the mortgage broker care? they’re not lending THEIR OWN money, and they still get commissions on every sale, regardless if the people eventually default.

  5. Banks gave out money to people who really shouldn’t have qualified for
    mortgages in the first place. Now that IS a crime. However, when i took
    out student loans for college, for example, I recall being forced to sit through a lecture on the
    loan process, how interest factors in, and why defaulting is bad etc. in order to graduate! Banks will
    do nothing of the kind to educate borrowers. In fact, they will (or used to until all hell broke
    loose) use your “stated” income to determine how much money you could qualify for!
    Thats insane! “I make 500,000 a year, sir, and i’d like to buy that ocean
    front mansion!” Lots of people got themselves into wayyyy to much house and
    lost everything. Take, for example, my friends Sally and Karl…now under foreclosure
    in NH and hiding in Stripmallville, Fl. trying to start over by claiming the
    foreboding chapter 11. or is it 7??? Anyway, the bank gave them enough rope
    to hang themselves because they (the bank) speculated that the housing market was still
    in an upward momentum AND “believed” the borrowers (falsely) stated income. Who’s to
    blame? I’m not sure. Should we as taxpayers be financially responsible for the over-borrowing,
    uninformed, and uneducated people who don’t grasp the standard loan process? What happened to
    the old fashioned practice of living within your (true,not falsely stated) means???

  6. I agree without reservation, except on one point:
    I think all CEOs should have to go to prison *before* they do anything wrong, for about week, so they can have some appreciation for it, and hopefully treat the rest of humankind with respect to begin with.

    And another thing — which is a blog (or two) in itself: why, since the corporation is a ‘citizen’, when they do something ‘wrong’, don’t we lock them away, in the form of shutting down the business for 90 days, (or they could post bail), or shut them down in the future if found to be guilty?

    If corporations could be ‘locked up’ for periods of time, like a real citizen, they would be much more likely to become ‘law abiding citizens’ instead of the spoiled, self serving, bullies they are now. Currently they break laws, get slapped on the wrist and pay a pittance in ‘damages’. If corporations were really treated like citizens, they wouldn’t be such assholes.
    — djimi

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