Busted: Bankers and The Global Economy

September 11, 2008

The Con Game of Securitization and Wealth

crisis through securitization

crisis through securitization

According to Federal Reserve’s Vice Chairman Donald Kohn, “One reason for the loosening of standards was the expectation that house prices would continue to rise and even more certainly that they could not fall in all regions at the same time, supporting diversification through securitization.”

This small sentence combined with a summary of all the accumulated evidence maintained by the Federal Reserve shows the propensity for a lack of regard for economic concerns over the immediate concerns of profit.

“Rising prices would enable lenders to recoup their funds even if the borrower was unable to service the loan, mostly because the borrower would be able to obtain extra cash through refinancing. Expectations of house price appreciation facilitated and interacted with the increasing complexity of mortgage securities, including multiple securitizations of the same loan, which made it virtually impossible for ultimate lenders to monitor the creditworthiness of borrowers. This was a task they had outsourced to credit rating agencies. The absence of investor caution and due diligence was especially noticeable for the highest-rated tranches of securitized debt.”

securitized vomit

securitized vomit

Who started the securitization of loans to begin with? Give the government geniuses at Fannie Mae and Freddie Mac credit for the wunderkind of shaky banking ‘o so many years ago. That is why authorities in banking and in government are quite mum about the evil and deception of securitized bonds. What is worse, they have no intent to change a thing.

The Federal Reserve is still brainstorming new ways to “ameliorate systemic risk. That said, a host of difficult judgments are inherent in how we establish such a system.” That is the trillion dollar question. In the words of Donald Kohn; “How we can structure these requirements and other aspects of regulation to damp, rather than reinforce, the natural procyclical tendencies of the financial system?”

economic usury

economic usury

If the U.S. economy were equated to an automobile engine, we would be running on half the cylinders. The Federal Reserve and other surrogate economists don’t have a clue and are now discussing “solutions” among themselves. Global bankers long for a solution to the trillion dollar question and they want to continue doing the same old things as long as it makes them money for the short-term. The idea is not what is good for any economy, but what is good for quick profits for themselves. That is what banking around the world has come to represent: corporate profit behind the scenes and personal profit while that is possible. Never forget that the Federal Reserve and global central bankers are corporations bent on making a profit, part of a “franchise” of banks that loosely report to Swiss and Roman bankers. They live off of the world; therefore economies are simply tools for wealth. That is the danger nations, governments and peoples face.

Don’t fool yourself. Global bankers are running the world to your peril. However, the sophisticated United States government and others are all for making a profit while they can, oblivious to the danger or convinced that they will live forever while central banking pumps them dry. ~ E. Manning

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August 1, 2008

Oasis Wealth & Fraud: Simply Unsustainable

Since World War II, the United States has been the center of global finance. It has used that position to virtually dictate the conditions under which many other nations get access to capital. Letting weak and mismanaged companies fail has been high on the list. As of late, this reality is no longer the case as bailout fever ensues to glorify national confidence.

Henry Paulson, the U.S. Treasury boss, has not reigned in criticism of other countries that have nationalized corporations in the past. Since March, he has been in the position of recommending the same ideal himself. How times change. Fascism has come home to roost in America.

The U.S. economy is a shambles for most, perhaps subsistence at best. However, this does not include the up-and-coming flank of investors and administrators that are tapped into commodities futures. Unhappily, this too is a desert vision of an oasis. Eventually, thirsty investors will be gobbling down sand in an effort to sate their thirst for money and profits. This has already happened with the mortgage crisis. As the environmentalists would say: “this is isn’t sustainable.” The multi-level marketing scheme will become oversaturated and lose its potency. Eventually, the poison of fraud takes hold of those that practice it.

The U.S. is now enjoying the reality of an economic hangover from unbridled credit, financing and speculation compounded by ignorance and mismanagement. Wages haven’t kept pace for what seems like an eternity for all but the wealthiest. This was conveniently ignored as long as the nation thought borrowing would sustain the national lust for the appearance of wealth. The desert vision wasn’t sustainable and now, like the Japanese, Americans are thirstily looking for the next oasis. Surely corporate wealth and the corporate oligarchy will sustain us. Most plans for unbridled wealth are unsustainable. Is yours? ~ E. Manning

July 6, 2008

Banks: Hungry for Profit at Any Cost

Troubled banks and financial firms want to make a profit by any means possible. There has been plenty of talk lately about how the nation’s largest banks and securities firms are looking to shed some of their assets. Citibank is one international bank holding company hungry for capital at any cost to investors.

To avoid hurting shareholders, banks and securities firms, facing escalating loan losses and pressure from federal regulators, are increasingly considering asset sales as a means to raise cash. The result has been a fire sale of rumors and behind the scenes chatter.

For the possible investor, you can bet that banks aren’t cutting into truly productive muscle. This provides a problem, not only for banking accountability, but for the reality of decent investment material. The market is definitely one of “let the buyer beware”.

Why are the banking firms letting the behind the scenes rumors out the door? That is part of the game. There are few qualified buyers out there. Bankers want the buyers to come to them first. Perhaps they can grub out a few more dollars for their precious assets.

May 19, 2008

Mortgage Vultures and Congress

In a recent hearing on mortgage servicing, Senators probed Countrywide Mortgage on exactly how mortgage servicers make their profits. Servicers earn revenue through a fee that is a percentage of the mortgage, float income from interest on temporarily-held funds, and through retained fees like late charges and other fees paid by borrowers.

Senator Charles Schumer described the addition of these fees as “piling on”. Mr. Schumer is convinced that a “vulture mentality” is developing among mortgage servicers as defaults rise. Senator Schumer called Steve Bailey of Countrywide to task for attempting to deny that mortgage servicers profit everyday from delinquent homeowners, even when borrowers and loan holders might benefit if the family retained its home, rather than struggle to pay an avalanche of default costs. (more…)

April 20, 2008

Is Credit a Human Right?

U.S. banks have been quietly considering getting into the microcredit market in the effort to be more visionary in their growth. Besides, over the long haul, bankers see the growing microcredit market as a possible threat to their supremacy in the financial sector.

Banks in France, notably banks that began as village banks are deeply linked to the well-being of their community. For U.S. banks, that mindset is a considerable change in concept. French banks like Credit Agricole began to loan small amounts to the rural poor trapped by the old system of moneylenders. (more…)

March 10, 2008

Central Banking Works Fine

Filed under: central bank, federal reserve, money — Tags: , , , , , , , , — digitaleconomy @ 12:25 pm

In this brilliantly back-patting and self-aggrandizing speech by Fed Vice-Chairman Kohn, he admits that there is little that needs to be done to maximize the profitability of central banking. That is most certainly true. The central banking power block has the world exactly where it wants: in control and draining the economies of the world for its’ own corporate profit. Am I being unkind? My apologies. I am calling this the way it is.

Federal Reserve link

Monetary policy should be able to adjust quickly to such changes; agreements that must be renegotiated can tie policymakers’ hands.” Don’t tie up your hands with obligations or agreements. Be free. It’s all about performance and bringing in that currency and gold to the vaults of International Banking.

February 21, 2008

Wild West Banking

Filed under: banking, government, investment, money — Tags: , , , , , , , , , , — digitaleconomy @ 11:20 am

The “sub-prime” and “Alt-A” mortgage crisis has its roots in an escalating real estate market along with wild speculation and the intense desire for profits at any cost. If you are not clear on the speculative bonanza that brought about the mortgage and banking crisis, I invite you to review this short video which covers Countrywide, the Northern Rock Banking Debacle and some of the speculations in banking. The failures rank from the bankers to the bond rating agencies to the money-lust of the investors. The bonds were seen as a “low risk” deal. Nobody scrutinized the bond rating agencies or how the banking packages were assembled. As seen over and over lately, the conflict of interest has been huge. In general, bank regulators have been clueless regarding the reality of the new internal banking instruments designed by the bankers to make a fast buck.

Observations and Commentary by Elvis Manning

The Credit Crunch and World Banking

Make Bankers Pay?

The Fed and the Subprime Mortgage Debacle

The Great American Mortgage Scam

 

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