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:
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?