Busted: Bankers and The Global Economy

February 24, 2010

U.S. Consumer Confidence Remains Low Despite Projected Optimism

The measure of U.S. consumer confidence fell in February to the lowest level since April 2009 as the outlook for jobs diminished. This is an obvious sign spending will be slow “as the economy recovers.” The banking community is gridlocked and recent short-term gains in the business community indicate an upturn. Meanwhile, a real recovery depends on consumers. Why?

Since consumer spending accounts for approximately 70 percent of overall U.S. economic activity depressed consumer confidence will undoubtedly lead to less consumer spending and sluggish growth in the economy. The economy that I refer to is the real economy as opposed to the Wall Street economy. The fact remains that if consumers have a lack of confidence in the economy, they are not likely to engage in spending sprees if they can and they certainly won’t make major purchases like appliances, houses and automobiles.

Despite media hype and the government spending, Americans are not seeing any real change in the economy. Politics seems to continually pin its hopes on Wall Street and stock market as a measure of confidence. Wall Street, now absorbed into the banking system, continues to function within the same dynamics as before the meltdown. Bundling securities continues unabated even though this, in large measure, has resulted in substantial reverses in resolving bank debt and cleaning up the meltdown mess. Lawmakers remain weak willed even though hands have been figuratively slapped for financial illiteracy by the Federal Reserve, the new kingpin of financial law.

This is no different from allowing the “Big 3” Credit Tracking Agencies to run the show in managing consumer credit, a definite conflict of interest since these businesses and the Federal Reserve have so much to gain from the system in place. This is illustrative as to why so little has been accomplished. The system has its’ hands in its’ own pockets. Corporations have adopted functions of government as lines continue to blur. The system grows with little benefit to anyone as corruption further stagnates the system. Politics is working in the same way to involve health care on a larger level. The government may have a system of checks and balances, but the founders of the country did not count on the corporate oligarchy now in place.

October 26, 2008

Leadership Needed in U.S. Foreclosures

New statistics now share that 2700 Americans lose their homes every day due to the banking and mortgage debacle combined with a sharply declining United States economy. That number is up from 1200 a day one year ago. What do you think? Clearly, Americans are losing ground.

Digital Economy has shared a wealth of information and perspective regarding the foreclosure crisis consuming the American populace. Sheila Bair, head of the FDIC, says that the nation is way behind the curve on getting anything done about the foreclosure crisis. The do-it-yourself attitude of the U.S. government has been no help at all. I’m not sure why the FDIC would bother commenting on the foreclosure crisis, but hey, I’m game. What she said next is much more important: “We need to act quickly, and we need to act dramatically to have more wide-scale, systematic modifications.…”

Sheila Bair is voicing something that Americans and politicians have been mouthing for the last year with little results. Part of the problem is the opaqueness of the mortgage system coupled with that of the securitized and bundled loans so prevalent in the U.S. The Federal Reserve would tell you that rules are the problem. Yet, the truth is that there is no speedy way to deal with the crisis. The mortgage process is outdated and hopelessly compromised by the new age of banking greed. Expediency is important to politicians and as a result, the crisis gets nothing more than plenty of lip service.

Naturally, there are plenty of excuses why foreclosure resolution is so difficult:
Homeowners walking away
Job losses
Negative equity
Availability of credit for new loans
Investor speculation
Complex investment banking instruments (mortgage-backed securities)

The credit market is such that no homeowner is able to get a loan, especially from a competing bank. Bankers don’t want any more trouble from strapped homeowners than they already have. If Congress and the Bush Administration had acted faster with determinant action, much of the carnage could have been avoided. Instead, they have placated the public with voluntary programs such as the Hope Now Alliance. Hope Now isn’t bad, it just isn’t powerful enough or fast enough. No meaningful provisions have been adopted to force the mortgage and banking industry to hold more responsibility for the loans they created.

Now, the nation faces a global meltdown of epic proportions. Can you imagine 2700 houses a day being dumped on the U.S. housing market? The fact is that little real U.S. leadership has been shown. Along with the commensurate lack of leadership, bankers and mortgage servicers are still being allowed to run amok. So far, too little, too late is the result of laissez-faire economics that the Bush administration has adopted. Yet the same laissez-faire politicians are providing taxpayer money as bailout grist for bankers and businesses that they deem as too-large-to-fail. America needs something more than a hands-off approach to business/consumer regulations and relations. Americans need real leadership and action with real protection provisions in place. Even if some American citizens are dead wrong in how they have handled their finances, Big Government needs to step up to the plate and hold back the tide of banking greed and process, while forcing foreclosure resolution to work. It is all in the rules and how they are enforced. So far, your United States government has lacked the will to act strongly and decisively. America needs real leadership, not excuses. ~ E. Manning
Selling Short to Avoid Foreclosure
Good New for Cheated Homeowners
Selling Short to Avoid Foreclosure

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