Wells Fargo Bank Leads Securitization Attack On Taxpayers

Wells Fargo Is Basel 3's Best Friend In Hurting Mainstreet

Based upon an article reported in the New York Times, Wells Fargo bank wants the government to guarantee all mortgages and has threatened to make the 30 year mortgage obsolete if the bank doesn't get what it wants. This guarantee of middle class mortgages as well as subprime was discussed in an article in the NY Times dated January 20, 2011.

I have been writing about this subject of securitization and Basel 3 numerous times, but this new assault is the first public practical application of Basel 3 that I have heard of. You can forget about taxpayer rights if loan guarantees are permanently baked in to US law.This is the epitome of taxation without representation for our times!

Essentially, the US has four choices with regard to securitization:

1. Do away with securitization and do away with the 30 year mortgage.

2. Allow securitization for prime mortgages only.

3. Allow securitization and ban all securitization of interest only mortgages.

4. Do what Wells Fargo wants and allow every mortgage to be securitized, with a government guarantee.

As you can see these are quite diverse solutions. So what will happen to mortgages in the future based upon these four outcomes?

1. If we do away with securitization, we will see a massive drop in house prices, but only if the 30 year mortgage goes away. We have the banker threat that it would go away but no proof.

2. If we allow securitization of prime mortgages only, the bubble blown will be smaller, because there are fewer people qualifying. There could be a bubble, but it would likely be because too many prime mortgages become interest only.

3. If we allow securitization but ban interest only mortgages, then we will have more investment stability, and we may not need to guarantee any mortgages. At any rate, the likelihood of a bubble would decrease because you could not go to pay option arms and other toxic loans and prices would self correct.

4. Wells Fargo's idea of securitizing all mortgages with a government guarantee is the very worst outcome. But most Democrats and Republicans want this because it starts up another housing frenzy. This allows for kicking the can down the road and will create a massive moral hazard. It would be better to have no securitization than to have this outcome. This outcome gives banks the incentive to write terrible mortgages, and then rely on government bailouts if they go sour. This is madness and another attack on the stability of housing prices and is a massive assault upon the taxpayer.

Keep track, people, of where this is going, but be advised that it is risky to even get a mortgage right now. If the time comes when your neighbor cannot get a mortgage, your house price will drop like a rock!

But it is my view that Wells Fargo will get their way, as it is the Basel 3 plan, and the US taxpayer will be on the hook for any losses in mortgages. This will give banks a chance to offer easy money loans again, and generate lots of fees and all the rest that goes with trying to push up another bubble. Without a crystal ball I guess we will have to observe the outcome.

This behavior by Wells Fargo is just proof that the banks have been out to get us in collusion with the central banks since Basel 2 in 1998. Basel 2 allowed off balance sheet banking and I have written extensively about it, and now the multinational banks want to permanently cement the taxpayer to their lending schemes. This is so anti American. Never have the banks behaved like this towards mainstreet to the degree that they have done as with this ponzi housing scam that they apparently want to continue indefinitely.

Yet this is the new financial order that we face, which breaks down the sovereignty of nations to steal from their citizens. I have been warning people this is coming for some time, and this proves that the banks were culpable in the first housing ponzi and meltdown, because they got massive bailouts for loans gone sour. They just want to codify this safety net from hell.

Learn About Predatory Lending and the Loan Mod Scam

I Posted at Seeking Alpha the Following Two Posts

I have to ask my readers what was incorrect in the posting I made at Seeking Alpha:

They cannot prosecute Mozilo or any of the investment bankers higher up and then blow another real estate bubble. But they want the bubble.

I posted the link to this article and got big negative feedback. So I posted this response:

I have to ask why 4 people would give me negative feedback for my comment above? There is no reason for securitization other than for easy money. That is the only benefit of securitization, so that investors, not the originators, can be saddled with the risk. And if the investors are guaranteed a government backstop, then the quality of loan is likely to decline even more.

Big finance wants to grow even bigger. They want less spent on the poor and more spent on bailouts for themselves. That is why states are seeking to kill the unions. They want more Republican power, and ultimately more power for big finance. The Democrats actually may have some remorse for allowing big finance to take advantage of the people, of mainstreet. But the Republicans do not have such remorse. There is no conscience there. The American people don't seem to grasp this yet, but maybe someday they will.

These Guys Exposed the Banks and Are No Longer on CNBC

This Riddle Will Help You Understand This Assault on Taxpayers.

1. What is the socialization of losses and the socialization of profits called?

Answer: Communism

2. What is the socialization of losses and the privatization of profits called?

Answer: crony capitalism or corporatism.

Guess what we have now? We have number 2. We have corporatism. So the Tea Party and Glenn Beck are confused about this. They need to be taught the correct answer!

When we allow securitization for all loans with government guarantees for all loans, guess what we have? Corporatism, and you guessed right!

The Tea Party also is confused with regard to the banks. I have had Republicans say that the banks don't want loan guarantees, blah, blah, blah. But clearly, the NY Times article exposes that they very much do want loan guarantees and they are working in a NWO fashion against the taxpayers. I have said before to move your money and I call for it once again. Move it out of these big banks that do not have the interests of the people of the United States at heart.

Obama Speaks of Putting the Economy into Overdrive

But wait, now Obama is saying he is putting the economy into overdrive. But didn't we just have overdrive? Didn't overdrive destroy the US economy and attack mainstreet and the taxpayer like no overdrive has ever done before? So just what is the Obama overdrive plan?

Well, he didn't mention housing, which is good, although he did mention builders. But he didn't mention how gasoline is going up either, and it is going up through speculation. He mentioned two way trade with China, a more fair trade policy, and that is good. But we need to see how he talks about housing because overdrive in the US has always meant housing.

If this is code for investors to go out and buy homes, I think we are seeing that. But if housing does not correct in many areas where it should, we will have problems for years to come.



Comments 18 comments

Nan 5 years ago

Good information, however are all big bank on the same war path to take over the consumer and make hugh profits? They did this before and we were not aware of their scheme, until it ws too late.


bgamall profile image

bgamall 5 years ago from Las Vegas, Nevada Author

Actually, thanks for the clarification. They are all in on it. Wells is just the first to come out and try to apply Basel 3 taxpayer theft. Bernanke and the Fed are in on it too.


Hello, hello, profile image

Hello, hello, 5 years ago from London, UK

Eversince MargaretThatcher deregulated the banks we have that mess and I think this happened in America too. Yet nobody has the guts to regulate it again and in my non-existing knowledge, it would put the economy back on its feet again.


bgamall profile image

bgamall 5 years ago from Las Vegas, Nevada Author

Deregulation of banks makes it essential that people know banks cannot be trusted and are lower on the food chain than used car salesmen.


Jed Fisher profile image

Jed Fisher 5 years ago from Oklahoma

I think, a grotesque over-expansion into excess capacity in the banking system by the monster banks led to their ultimate failure, and they were insolvent and were about to go under, but our Gub'ment bailed them out and our Gub'ment is still finding new and interesting ways to ensure the survival of that failed system. Please, vote the bums out.


bgamall profile image

bgamall 5 years ago from Las Vegas, Nevada Author

Jed, even the Tea Party secretly loves the big banks. Read this that I posted to Business Insider: http://www.businessinsider.com/i-know-what-the-nex...


Jed Fisher profile image

Jed Fisher 5 years ago from Oklahoma

Excellent Business Insider article.


bgamall profile image

bgamall 5 years ago from Las Vegas, Nevada Author

Hi Jed, thanks. I wished it had more media play, but so many people just can't seem to put their arms around this puzzle.


sir slave profile image

sir slave 5 years ago from Trinity county CA.

communism isn't really the best term for socialization of corporate banking losses. the best term is corporate welfare. Ive never heard of the socialization of "profits" before. Only forced socialiaztion, like the gulf clean up!

ps; the only except that comes close is the bailouts, but in the end, any money we make off that will probably go back into soaking another rich person in some other sector of our economy!


bgamall profile image

bgamall 5 years ago from Las Vegas, Nevada Author

Socialization of profits is actually what happens under a communist regime, as the profits go to the government. For example, the Soviets made a profit from selling oil. The price of oil went way down during the late 1980's and helped to destroy the communist model. Often times nationalization caused money and profits to be made at least for a time.

Permanent nationalization is communism. Temporary nationalization of banks in the S & L crisis actually helped the financial system and should have been done to limit the power of the TBTF banks in the credit crisis. Since these banks actually had more power than the government, they survived by bailouts and taxpayer pain instead


Economic Freedom 5 years ago

Do you think that perhaps the Government should change the name of the Federal Reserve. It seems to me The "Banks Reserve" might be more appropriate. It seems they are more interested in protecting banks than Americans.


bgamall profile image

bgamall 5 years ago from Las Vegas, Nevada Author

Yes, but the Bank of England was private when formed and it was named the Bank of England to deceive.


LRCBlogger profile image

LRCBlogger 5 years ago

I'm going to have to read through all of your hubs on securitization but you really seem to understand something that most do not.

Corporate America dictates economic and political policy in this country. We've tied our lawmakers into depending on corporate donations to the extent that corporate influence over policy decisions is outrageous.


bgamall profile image

bgamall 5 years ago from Las Vegas, Nevada Author

Thanks, LRC. I believe that mainstream media would prefer to blame government, which is the conduit for bad behavior, while diverting attention on purpose from the real source of economic evil, the banksters.


omaactivist 5 years ago

Good info. I am tired of the power money has over us. Anyone ready to regain control of our government?


bgamall profile image

bgamall 5 years ago from Las Vegas, Nevada Author

Well, as you can see by the unrest in Egypt, it is difficult to fight a third world government, let alone banksters who are above governments. It is better to fight the banksters peacefully now. If the government no longer functions for the benefit of the people, the banksters will just pull their money out if a violent overthrow is attempted.

This is a very, very difficult situation, because the failure of the US would be dangerous for the world.


MikeNV profile image

MikeNV 5 years ago from Henderson, NV

Banks want all the benefits of the financial markets while taking zero risk.

When this happens we no longer have a market driven economy.

Housing prices do not reflect the value of the cost of materials now. In the 70's we had assumable mortgages... the banks got rid of these when they realized that people move every couple of years and it's much more profitable to rewrite the paper and stack on a whole new set of fees.

The Banks are sitting on Homes that have been foreclosed now because there is ZERO incentive to release them in the marketplace. They have the homes and they have the money the Federal Government gave them. The repaid loans were repaid with additional stock issues.

Seems like everytime the banks want anything they get it. And when you look back in History the Federal Reserve Central Bank was put into place on the LIE that it would stabilize the market and failure could not happen.

We are living in very sad times while the US economy implodes because of the greed at the top who are running the Ponzi Scheme.

They are intentionally devaluing the dollar, but they are taking no losses. They are simply acquiring all the Fiat money and the title to property.

I've been following with some interest the proposals for Fannie Mae and Freddie Mac. And it looks like the worst case scenario is going to happen and just like Obamacare it will be phased in over a couple of years so that the masses will not realize the full disaster that they have accepted until it is far too late.

Our economy shouldn't be slave to an artificially high housing market, but it is. Buy a home and you will likely lose money on the deal because the value of homes is going to drop like a rock. You can not have a full 25% of the population with credit scores too low to borrow and expect "recovery".

The United States needs to create FREE MARKETS by capping interest rates on loans... no more BS ARM's and no more Guarantees. Let the Bankers do what they should have been doing all along and let the housing prices reflect the true economy.

We have made zero progress by inflating the money supply.


bgamall profile image

bgamall 5 years ago from Las Vegas, Nevada Author

Well said Mike. You may be interested in this article I just wrote: http://seekyt.com/banker-corruption-is-becoming-ab...

    Sign in or sign up and post using a HubPages Network account.

    0 of 8192 characters used
    Post Comment

    No HTML is allowed in comments, but URLs will be hyperlinked. Comments are not for promoting your articles or other sites.


    More by this Author


    Click to Rate This Article
    working