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Banking Scam Elites Keep Ponzi Bubbles Alive at Mainstreet Expense
Table of Contents
- You Can Spot Ponzi Schemes by Banks and Governments
- How to Spot Ponzi Housing Bubble Schemes
- My Seeking Alpha Article About the Aussie Housing Bubble
- Some of My Other Housing Bubble and Financial Articles
- More on the Importance of Glass-Steagall In Preventing the Existence of Too-Big-To-Fail Banks
- Crisis on Wall Street in the News
You Can Spot Ponzi Schemes By Banks and Governments
Bank scam elites caused the housing bubble in the United States, the dot com bubble, the housing crash and the dot com crash. Be sure to read the section toward the bottom of this page on the importance of Glass-Steagall, and it's repeal, which is a key to understanding the housing bubble bank scam in the USA. While this scam was international in scope, the ponzi lending scheme reached it's apex with the US housing market, hurting mainstreet in the process.
The first known speculative bubble in history had to do with a certain kind of tulip that became massively expensive before a massive crash took it down. With the Tulip, it is argued that speculators were permitted to avoid taking hold of the tulips, which caused the crash. Prior to this, Tulips futures were not options. One had to take delivery.
It is often mainstreet, and their investments, house values and over all wealth that is hurt when a speculative bubble bursts. This is not always the case, because mainstreet benefited when the oil price of $147 per barrel could not be maintained, although the bubble caused by Goldman Sachs and others not needing to take delivery of the oil was very painful to Americans. This along with the housing bubble were the two cancers of Wall Street that threw us into a recession that may last for years.
Certainly, the first easy rule in spotting a bubble is that the easy money is gone from the market. Easy money loans, for example, have fueled the Australian infrastructure market, but now that is gone. The banker elite are looking around for others to come in and invest to keep the ponzi going. They have their eyes on the superannuation or retirement accounts of Australians.
Another easy rule in spotting a bubble has to do with stock manipulation. When stocks are offered as initial public offerings, or IPO's, the investors can make a killing, leaving the buyers of the IPO to often struggle. The easy money gets out and the patsy comes in and buys. We saw this a lot in the dot com bubble. Goldman Sachs and other companies were underwriting crap companies, and the initial investors got out, only to leave the bagholders, well, holding the bag. Now we are hearing about the possibility for funding drying up for the 30 year mortgage. Talk about leaving homeowners in these mortgages holding the bag! They would be major bagholders with houses not worth anywhere near what they paid for them.
Will the Financial Cabal Get What They Want from Greece and the PIIGS Like They Did From Our Homeowners?
How to Spot Ponzi Housing Bubble Schemes
Ponzi housing bubbles work a little differently. Easy money is needed to generate the bubble after a sound time of lending. When the bubble starts, wage and rent ratios to price of the house makes little difference. The market starts out by requiring money down, a good credit report, and a history of responsibility. As the market matures, there is easy money being made available, with no money down, no credit check, and no skin in the games. Of course, the ease of qualification puts more demand in the market place and prices go up. Easy money pushes up prices, until it doesn't. The investors who flipped or made money selling the easy money paper get out of the market, and it crashes.
Repeal of Glass-Steagall and Creation of Basel 2:
The key to the housing bubble is quite simple. While Fannie and Freddie did assist in buying mortgage backed securities and by guaranteeing risky loans and Democrats fought for this, the truth of the matter is that both Republicans and Democrats voted to repeal Glass-Steagall by a landslide of 90 to 8 through the Gramm-Leach-Bliley Act of 1999. This allowed banks to gamble with deposits and mortgages and swaps insurance on those mortgages. This cause the massive amounts of swaps to be written as thebarrier between banking, insurance and brokeragewas destroyed by the legislation. This allowed massive swaps on the crap CDO's that entered the system, and this is what caused the massive mortgage bubble that resulted in the credit crisis and crash.
The Community Reinvestment Act has been around for years. It was used to help in subprime, and certainly it contributed to the bubble, but it was not the cause of the bubble. Without Wall Street being able to leverage up and gamble with your deposits, and that was pushed primarily by Republicans (Gramm, Leach, Bliley), the Community Reinvestment Act and subprime never would turned into a ponzi!
So, when you have the diabolical Tea Party leaders who are corrupt elitist Republicans blaming poor people for the credit meltdown, you are seeing history being rewritten. The truth is, and Fox News wants to protect the banks so they won't admit this, the lenders that were set up by Wall Street, and Wall Street itself were primarily to blame along with those who sponsored the repeal of Glass-Steagall which included almost all Republicans and almost all Democrats!
The three senators who sponsored the repeal of Glass-Steagall were all Republicans. That is the root of the housing bubble folks. The Tea Party fails to put the blame on the lenders and the Wall Street investment banks, where the problem centered! Fox has an agenda, and it is a lying agenda. The Community Reinvestment Act was around for 20 years and there was no bubble folks.
The Tea Party wants to blame the borrowers but as you can see they were not driving the car. The lenders and their puppet masters were driving the car. The responsibility for the US housing ponzi rests with Wall Street in collusion with the private central banks who allowed off balance sheet banking at Basel 2.
Basel 2 was supposed to have high capital requirements for banks, yet really that was a smokescreen set up by the Bank of International Settlements and her children, the central banks. In fact, Basel 2 allowed bad loans to be hidden in an Enron fashion, but without Enron penalties, and low capital requirements. The combination of low capital requirements and Bush tax cuts for the rich created huge liquidity as private debt in developed nations including the USA exploded.
I have heard insiders come on to that Metaprogramming network, CNBC, saying that keeping Glass-Steagall would not have stopped the housing bubble and crash. That is a lie. They are liars. Banks were able to make and purchase bad loans through using deposits (because of low capital requirements) and by writing insurance swaps against each other to protect themselves. This explosion of derivatives made lack of sound underwriting and liar loans possible!
The credit crisis was really a swaps crisis. The banks insured themselves against crap CDO's that they purchased, but then the insurance became suspect as it isn't regulated. When banks have a bunch of bad loans, they don't trust each other and the swap spreads rise.
Republicans and Democrats Both Pushed Repeal of Glass-Steagall So Banks Could Gamble With Deposits. The Sponsors Were Republicans
My Seeking Alpha Article About the Aussie Housing Bubble
The Aussie housing bubble is being driven by no money down private lending. And it was reported that ING was going to offer the perpetual loan. This would make the borrower a "mortgage partner for life". Can you believe it? A reporter who I was corresponding with emailed me and state he called ING. ING state that they had not yet decided whether to use this loan. This is an example of finding the patsy to keep the ponsi going. It will be interesting how many patsies will be found who will have no skin in the game, just to keep this ponzi intact. We need to watch the Aussie housing bubble and ING carefully, and warn our Aussie friends.
Keep in mind that the New Financial Order is behind ING. ING was originally BBL, a contributor at Seeking Alpha tells me. BBL was owned by Baron Lambert, the great grandson of Baron Rothschild. Of course Lambert gained fame in the insider trading scandal that took down Drexel, Burnham, Lambert. So then, perhaps the most powerful financial family on the face of the earth was interested in offering ponzi loans to Aussies! And apparently, the rest of their European friends are waking up to the Aussie housing market. The sharks are now swimming in the pool and Aussies may see a short term boost but once it has run its course, the crash will be horrible for Aussies!
Apparently these same people control Amro, the TBTF bank that had to be bailed out after losing a bet with Goldman Sachs. But then, Amro probably didn't much care. The ones who cared were the partners of Amro who lost their shirts.
There may be, though not proven, a link between Warren Buffet and Amro and ING. But my source seemed pretty sure that was the case. Guess that nice grandfather, Warren Buffet, is big on derivatives, big on ratings agencies who cheat, like Moody's, and big on ponzi's. If anyone has more info about this connection please post it in the comment section. Here is how the ponzi premium rental scheme (you own nothing) was supposed to work before they had second thoughts:
ING Direct, Australia’s fifth largest lender, is preparing to sell loans that have no fixed term and no requirement to repay any capital along the way.
At current rates, the interest-only loans would cut repayments on a $300,000 mortgage by $5000 a year.
“People are needlessly being denied the chance to buy a property while prices spiral rapidly out of their reach” ING Direct CEO Don Koch said. “There is an urgent need to provide more affordable options and borrowers should be able to choose whether they want to repay the capital, or not.”
Mr Koch wants to position the bank as a “mortgage partner for life”, with borrowers carrying the same interest-only loan from property to property for as long as they wish, accumulating equity from rising house prices asrising house prices as they go.
Then, as they near retirement, they could sell their property for a big enough profit to pay off the original loan and buy a smaller place outright, leaving them mortgage-free. Or, they could keep the mortgage going and repay the original capital from their estate, after death.
Of course, what happens if this bubble crashes and takes many decades or a century to restore value up to the bubble levels? You never pay the loan off. If you bite for this I have a bridge to nowhere in Alaska that Senator Ted Stevens left me that I want to sell to you cheap!
Understand this: if you give money that is that easy, and the housing goes high enough, it could be hundreds of years for real estate to come up to bubble levels when it crashes. This is what happened in the Tulip Bubble in Europe many centuries ago.
Some of My Other Housing Bubble and Financial Articles
- Proof That Basel 2 Caused Ponzi Housing and Foreclosuregate
I get railed on now and then as I post at Seeking Alpha that off balance sheet banking allowed at Basel 2 in 1998 resulted in the ponzi housing bubble. One fellow who posts comments, Pier 0188, said while...
- Basel 3: Is This Taxation without Representation the Final Destruction of US Sovereignty? Part One
Patrick Henry said, "Give me liberty or give me death". The liberty he was talking about was freedom from the Bank of England and control over the money supply. Well, Basel 3 is about to take away our freedoms again. I have argued that the central...
- Go to hell IMF: We don't want your austerity plans or tax increases
Americans must understand the IMF and German government view of things in order to protest IMF imposing plans for the US economy. The Value Added Tax, a hidden tax, is an idea right from the International...
- Tea Party Republicans: I Wish I Could Believe You When You Say You Want to Cut the Lifeline to the B
I hope readers would take a look at all the sections of this hub. I am mainly trying to point out here that this is a complex set of economic problems that exist in the United States. Feel free to comment...
- Fight and Make War Against the New International Order
The New International Order is found in the western world. It is an order that could draw in Russia and China but they are wary. However, China has called for one international currency for use in foreign...
- We Already Have One World Government
My letter follows below. Clearly, the New World Order is a business and economic order. But it is a business order that fleeced the American people in the ponzi loan scheme. This is the problem with it. On...
- Are you ready for the perpetual mortgage? - Redfin Real Estate Forums
Australia is a super hot RE market now and I guess they are too busy to see the carnage about a 15hr flight away? ING Direct, Australias fifth largest lender, is preparing to sell loans that have no fixed term and no requirement to repay a
- GrammLeachBliley Act - Wikipedia, the free encyclopedia
This act allowed banks to gamble with your money and repealed Glass-Steagall. Acorn and the community reinvestment act of 1970s did not cause the housing bubble.
- "Ponzi" Schemes
- Tulip mania - Wikipedia, the free encyclopedia
More On The Importance of Glass-Steagall In Preventing The Existence of Too Big To Fail Banks
Glass-Steagall separated the commercial banks from the gamblers on swaps (insurance) and separated the commercial banks from investment banks. The separation of commercial banks from insurance and Wall Street stocks was passed during the great depression, as the fusion of these things hurt America then. This repeal of Glass-Steagall created the monster of massive derivative betting being tied to commercial bank deposits, and created a "Too Big To Fail" banking system that made it possible for crony big banks to get bigger because of the crash, get bailed out, and get made whole while mainstreet languishes. This selfish act of bailing these banks out to protect the derivative infrastructure rather than just bypassing these big banks makes Bush and Obama look like damn fools.
Swaps became a vehicle for massive betting. Ordinarily betting is regulated and insurance is regulated. But betting and insurance in this scam became part of the free market. But we know it wasn't free market capitalism, but rather a system controlled by the biggest banks in the world.US swaps are estimated at being well over 50 trillion dollars in the US alone.
That it is possible to bet on an asset that you don't even own are called naked swaps. Betting on the demise of a third party is inherently dangerous. If I bet on the failure of Greece, for example, and people get wind of it, they may be less inclined to purchase Greek bonds. Sometimes I think that Goldman Sachs got in trouble with the central banks for shorting sovereign debt, but of course, that is a theory and not proveable since Ben Bernanke and his foreign cronies won't ever tell us that!
The repeal of Glass-Steagall not only merged insurance and banking, but also banking and investment banking. Securities from mortgages could now become widespread. This securitization is resulting in such fraud as Foreclosuregate.
Add to all of this the ability to hide assets with off balance sheet banking permitted at Basel 2 in 1998, and you had the framework for massive mortgage fraud. Enron people went to jail for hiding their transactions off balance sheet, yet it was legal for banks to hide bad loans, which resulted in shareholders of the banks being thrown under the bus when the crash came.
The 90 senators who voted to repeal Glass-Steagall should all be put in jail for a long time. But of course those same senators are now trying the "fix" the problem of too big to fail.
Once it was repealed, deposits of commercial banks were used to make leveraged bets on crap mortgage backed securities that were rated AAA but were failing. They wrote massive derivative swaps to protect themselves against failure. This is indeed a derivative crisis, and that is what could destroy the financial system. I suggest we bypass this financial system.
I wrote this at Seeking Alpha about the real deliberate causes of the bank ponzi scheme and bubble:
It is funny. Basel 2 was supposed to raise capital requirements of banks, but in 1998 when off balance sheet accounting was permitted, the banks actually were permitted to operate with very low capital requirements. All that was left to start the housing bubble in the US was the repeal of Glass-Steagall, so that banks could write swaps to protect themselves from buying and writing crap loans, and the table was set.
The housing bubble was not done by accident. It was a deliberate plan to reflate after what they knew was going to be a dot com crash. This was well known in 1998 because these banksters knew that crap IPO's were being written and investors were getting ripped off. So, off balance sheet banking was just another way to fool investors. This was no accident.