Busted: Bankers and The Global Economy

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 The mortgage process is outdated and hopelessly compromised by the new age of banking greed.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

July 18, 2008

June 27, 2008

Confidence, Mortgage Debacle & Fed Loans

Even though the Euro is on top of the world monetarily, European confidence is reported to be at the lowest level in 5 years. Whose confidence is being measured? There is no telling, but the guess would be the bankers, economists and investors. Because of the wonder of the mortgage securities debacle, the plight of many professionals globally in banking and investment circles is less money and fear of money trouble. Its all based on the outlook of growth, not only of collective economies, but of the financial system at large. Growth is a question mark on many fronts coupled with inflationary pressures.

Curiously, The Federal Reserve Bank of New York extended a $28.82 billion loan to JPMorgan Chase for the acquisition of Bear Stearns made in March. The Fed also released the minutes of two meetings on March 14 and March 16 that involve that loan. You would think that JPMorgan is prosperous enough to be able to cover that loan entirely after 90 days instead of having taxpayers float the loan for the credit, which is the reality of the situation. While JP Morgan is paying modest interest, the U.S. taxpayer is paying for interest put against the national debt. The Fed is collecting from both sides on money that they created from thin air.

The line of credit extended is based on collateral (more…)

June 19, 2008

FBI Begins Kicking Booty in Banker Fraud

The Federal Bureau of Investigation isn’t wasting time. America needs some fall guys. Who better than lying and scheming financial salesmen? Finally, crooked bankers, financial gurus and investment brokers should be shaking in their boots. The FBI is on the stick and hasn’t been wasting much time. Obviously, the preponderance of evidence is huge or the government wouldn’t moving this quickly. Previously, the FBI stated that the first arrests could have taken two years or more.

The first criminal cases of the credit crunch are two former Bear Stearns hedge fund managers, Ralph Cioffi and Matthew Tannin. The men allegedly misled investors in two funds that collapsed last summer on mortgage-backed securities.

Why fall guys you ask? The FBI will have to be up on their numbers (more…)

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