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Friday, September 19, 2008

Who's Gulty...We're Beginning To Hear The Truth

For over a year now, I have been saying that much of this economic crisis and the fraud surrounding it has come from the top. The top being the government, as in lack of oversight by the Securities and Exchange Commission (SEC), top executives of the major Wall Street bankers, the rating agencies and various insurers.

Focus was initially put on mortgage brokers. Wall Street and the banks selling their creative programs tried to avoid any direct involvement by doing so.

While bashing and destroying the mortgage broker industry, the other cause of the problem was put on the sub prime mortgage programs. Mortgage brokers were described as “putting people” into these bad and sometimes fraudulent programs as if they had created them and had the power to do so.

From the very beginning, I have said that the creators were Merrill Lynch, Bear Stearns and Lehman Brothers. They were sub prime. They did, in fact, create the entire sub prime products and markets along with creative financing, limited documentation or no documentation programs. It was their underwriting guidelines and rules that everyone followed.

To allow these Wall Street to securitize loans, thereby creating money out of thin air, they had to show that these investments were secure. The rating agencies, Standard and Poors, Fitch, Moody’s all readily and willingly rubber stamped every issue AAA.

To further this effort the risk was spread even further by insurers reinsuring most of this debt putting another layer of “false” guarantee on risky paper. This debt was leveraged up to 60 times. In other words, for ever dollar of debt obligated 60 additional dollars were created. So if you got a mortgage for $100,000 the banking industry got back $600,000 and all the risk was spread so far and wide that no one can ever put it all together. Instead, we pay to keep it going.

Then it was said that if only all loans followed Fannie Mae and Freddie Mac guidelines that none of this would have ever occurred. Wrong again, as I stated a year ago, Fannie and Freddie were doing the same and I predicted that they would follow the demise of the Wall Street banks mentioned above.

Not even close friends and associates believed me. Sheltered by their own false sense of investment security, no one believed any of these large companies could fail.

Well, here we are. More then a year later and all that I said would come to pass has done so. I am not trying to say, “I told you so” nor am I trying to rub salt into anyone’s wounds. What I am attempting to do is to get people to open their eyes, look at more then just the headline gathering news, sound bites and distorted, cover up stories primarily from main stream media. Perhaps they voluntarily report what the government wants them to.

Bottom line is that we, as a nation are in deep trouble, deeper then we are still being told. But there are those who are beginning to surface publicly attempting to expose the truth and the dangers of our current situation.

Regardless of your political leanings and views, regardless of party lines and regardless of what candidates you may vote for, the fact remains that there are those speaking out the things we as Americans need to know.

John McCain is doing that. In fact in his speeches in Tampa and Ohio he almost reaffirmed all that I have written and said over the past year.

Ron Paul sees and talks the truth. He along with the not so recognized official other party candidates for President see and expose the truth.

Glenn Beck of CNN reports on the realities and true situations of what is occurring not only in our financial markets but in our political system as well.

There are cadres of others who stand with the above and behind them as well. People knowledgeable and experienced in politics, government and economics. People much more credible then I attempting to get the story out so that we, the people, can take back control of the government and right all the wrongs.

We are seeing some very dangerous times. Nationalization of private companies – AIG, Fannie Mae and Freddie Mac – funding of private companies by the government - $65 billion to J. P. Morgan/Chase for the purchase (really a free acquisition) of Bear Stearns – and the creation of debt by a private company – The Federal Reserve.

Dangerous indeed. If the government can nationalize private firms under the guise of a bail out, then they can nationalize everything. Is that not how the Soviet Union functioned? This is the beginning of the elimination of Capitalism.

Allowing some companies to survive by public funds (really debt) is another serious situation. What we are saying is that if you are large enough we will allow you to continue and prosper as long as you listen to our (the government) guidance and desires. As in the Soviet Union, some were allowed to prosper and enjoy a lifestyle not available to the masses.

The Federal Reserve has taken liberties to loan money that will not be available to repayment for years, perhaps centuries. This just secures the financial futures of the owners of the Fed, their families and heirs for ever. Oh yes, I say owners. The Federal Reserve is a private company owned by people not know to anyone publicly. For every dollar they give out or create, we owe them back $1.20. For every dollar that is already issued and in circulation, we pay them $1.20. Don’t kid yourselves, these payments are and will continue to be made until We the People do something about it.

No one says it better then Paul Muolo, a reporter for SourceMedia as reported in National Mortgage News. Follow this link in his latest column What We’re Hearing.

You Decide.

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