'After the Storm,
Plant on the Seashore',
Atlantic City, NJ,
2003.
The Soviet (Russian, USSR) economy collapsed in the mid-to-late 1980s. The US economy faced an enormous stock market crash in 1987. The purchasing power and value of the US dollar was falling. The federal debt had risen to a then frightening amount of over $25 BILLION dollars.
Wall Street, possibly in the giddiness of a bad joke about there being nothing else to sell, began to sell 'debt'. Over the next 2 decades, most US citizens have seen the consequences of these money maneuvers as the economy falters.
Many Americans have a lower standard of living. There are higher prices on everyday items as the dollar purchases less and less. There are fewer stable jobs. There has been a misguided attempt to bring money in to the US, 'to expand the economy', by encouraging uncontrolled immigration. Unfortunately these replaced Americans in jobs, were able to preferentially obtain mortgage, business and other loans, take over businesses, in part through 'race-based' agendas. These new immigrants, legal and illegal, then landed in the welfare offices as the 'housing construction boom' and other projects they were brought to work in as cheap labor or independent contractors collapsed.
One Wall Street strategy that has hurt the American economy, continues to to so in the 'unpaid mortgage as security' bundled debt sales. At the end of his administration, Bush worked out 1/2 billion dollar 'bail out' deals for major banks like Citibank, already in bankruptcy earlier in his Administration. Shortly after taking office, Obama continued this 'bank bail out' with another 3/4 of a billion dollars.
One of the early mortgage security package brokers at Salomon Brothers, Lewis Ranieri, told 'Parade Magazine's Joel Brenner he no longer felt proud of his role in the mortgage-based securitization market of the 1980s. Ranieri is still in the mortgage market, offering refinance packages to individual distressed home mortgage holders. As he explains it, he helps homeowners stay in their homes or offers rent/home sales plans rather than force them into the streets homeless, as often happens during the 'foreclosure' crisis.
To the financial non-expert, mortgage securitization has enormously increased inflation, the costs of basics like rent and home ownership, and relocation of people in the US.
It has added another layer to the American economy. On the lower layer is the 'real economy' where people work for $10 per hour or less, rent a modest apartment or home, drive a reasonably priced car.
The next level is the 'Wall Street investment economy', the hundreds of thousands to million dollar range, of banks and bankers, generating mortgage and business loans, stocks and bonds markets.
The new higher level is the 'house flipper' market, the hundreds of millions to billion dollar range, of mortgage securitization brokers, some banks and investment bankers, new alternative bonds brokers and lenders, who operate business to business among those who are included in the new wealth of the 'house-flipping' markets. Governmentalists are there too, working the details of the mortgage deals, which often force the original homeowner out into the streets and make new mortgage monies available to financial friends.
At this level, the brokers scrape the profit from the top of the table. Unlike the original homeowner, these brokers are not mired in the taxes, insurance premiums, refinance fees on a particular house.
The 'house-flipper' brokers do the package deals, work the paper, walk out of banks with bigger checks than msot people in the 'real economy' dream of. These brokers got rich in the 'house-flipping' economy while others went broke, homeless, if unemployed or underemployed, now without the house, less likely to attract another business or home loan for themselves.
When criticizing these money maneuvers, 'Raters Ignored Proof of Unsafe Loans...', insiders ignore the 'big picture'. Financial analysts refer to the layers of detail of scales related to the financial maneuvers, many times removed from the basics of the transaction. And the analysts tend to blame the lower level of transaction, an individual homeowner with an 'unacceptable FICO' score to qualify for a mortgage loan, involving a very small fraction of the multi-million transactions being questioned.
Where is the headline: 'Broker Steals House for the Afternoon, Borrows a Million, Boards Plane for Antigua'?
The audacity of these brokers who owned nothing, to not only get rich on someone else's house and house payments, is astounding. But adding insult to injury, the brokers punish the actual homeowners with negative credit reports to block loans to the actual homeowners, while taking the available loan monies for themselves.
The 'debt brokers' have made similar maneuvers in the credit card industry. The credit card payer's credit card bank or lender will not 'work with' the actual customer to keep the account. Why? Because the credit card company, at least on paper, appears to make more money by 'selling' the credit card account amount, putting that on their financial summary, and getting a loan against it for themselves from the credit card bank or a friend at another bank.
The greed for 'big money' at the current highest level of the economy, in business and governmentalists offices, has produced an unprecedented aggression, meanness, and unfairness in the US economy and society in general.
The Clinton Administrations (1992-2000) 'brought in' ethnic, racial, and special interest groups to help bill- and tax-collect for social welfare program benefits, including houses, to be given to them. Fueled in part by the anger of ethnic and racial minorities, there is no remorse for causing hardship 'by taking' from someone else--their house, their car, their job, libelling them, annoying or threatening friends, family or employers--by those who purport to be 'doing their jobs' in government-affiliated financial companies as bill collectors who seek to profit by taking from someone else.
With the huge increase in governmentalist involvement in home foreclosures and remedy programs which do not result in refinance for the original owners, the US has become Stalinesque. In the 1930s, between World War I and II, Stalin and his army forced people out of their homes during that phase of the Communist revolution in Russia and the Soviet satellite republics. In the US today, it is with an army of angry ethnics and others who use 'white collar' weapons--computers, billings, telephone calls--to ruin US citizens, particularly white mainstream Americans, financially, professionally, and personally.
Email mkrause381@gmail.com or mkrause54@yahoo.com to comment or request a copy of this or other blogs on http://monthlynotes21.blogspot.com (http://monthlynotes.blogspot.com through 21.) on www.google.com. See http://monthlynotes18.blogspot.com and 19 for bloglists of monthlynotes titles and URLs.
References: 'Cleaning Up the Mortgage Mess' by Joel Brenner, Parade Magazine, May 23, 2010.
'Raters Ignored Proof of Unsafe Loans in Securities, Panel is Told' by Gretchen Morgenson, The New York Times, September 27, 2010.
See http://monthlynotes20.blogspot.com for blogs on 'Can the Credit Consumer Survive the Credit Report Industry?'
Graphic: 'After the Storm, Plant on the Seashore', Atlantic City, NJ, 2003.
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