As much as $1.4 TRILLION of mortgages in the U.S. are at risk of default, or at best, falling into late payment status and the ripple effect is hitting the big players, the small players and overseas ~ but the common denominator is greed: Allen L Roland
As I have said for months, The Cheney/Bush Administration is destined to take down the Republican Party, the housing market and the American economy before it ends its eight year reign of lies, manipulations and deceptions ~ which is now beginning to be seen by an AWOL mainstream media and slowly awakening American public.
For the mortgage market is on the verge of free fall ~ As much as $1.4 TRILLION of mortgages in the U.S. are at risk of default, or at best, falling into late payment status and the ripple effect is hitting all the big players, small players and overseas. For example, two Bear Stearns hedge funds that invested heavily in mortgages have been wiped out. And at least two overseas funds, plus Macquarie Bank in Australia, have taken major hits on U.S. real estate and mortgage investments.
The common denominator is GREED.
Two excellent examples of how this administration has lied and deceived with their statistics ( both of which I have commented on in the past year ) was the Fed dropping the M3 last year, 'the money supply' statistic from its monthly report and then dropping energy and food from the monthly inflation figures, with those two items showing a 25% and 33% increase respectively.
This is exactly the same as only counting the soldiers killed on the ground in Iraq ~ but not the one's who died in transit to hospitals or after 24 hours. Once again, it's the Cheney/Bush administration reality mantra ~ It's not a matter of what is true that counts but a matter of what is perceived to be true.
Joseph L Elkhorne, ICH, pulls this giant housing fiasco all together in his excellent must read short essay entitled Sub-Primal Scream ~ which explains how Asset securitization is the monster created by the financial community that touches the whole housing market and could well bring down that house of cards ~ that was built on the quicksand of Greed.
Asset Securitization is a structured process whereby interests in loans and other receivables are packaged, underwritten, and sold in the form of "asset-backed" securities to other financial institutions or hedge funds.
Here's a mindboggling example of what is happening regarding these traded mortgage packages ~
Excerpt: The Alt-A class of loan is intermediate, a marginal problem for many people. And a prime loan is issued to, usually, someone with an excellent credit rating. The problem with the latter is that all is well, until the borrower loses a job. The usual quick fix is to try to refinance, why not, with excellent credit rating to that point, shouldn't be a problem? Wrong! For example, woman buys a house in 1998, up to date on mortgage payments, maybe even ahead. Job gone. Innocently, she goes to bank to discuss the problem. Nothing to do with them. They've sold that mortgage on. And many others ..
Allen L Roland
Sub-primal Scream
by Joseph L. Elkhorne
http://www.informationclearinghouse.info/article18191.htm
08/15/07 "ICH" -- - -About last October I started taking note of suspicious clues surrounding the American housing bubble. None of these that I saw were in the mainstream media. Rather, it was like working a jigsaw puzzle: looking at miscellaneous comments in alternative sources, finding "this piece with goes with that", and so on. Now, after reading countless hundreds of articles on the housing bubble, and comparing it to the leadup to the Great Depression, which my parents and I lived through, I still find the MSM lacking.
Here's why:
The mainstream media went along for some time with a "What, me worry?" attitude. And even when Henry Paulson said on July 21 that "we were about at the bottom of the housing slope" MSM parroted that 'wisdom'. Whistling in a graveyard, more like. Since the shakiness of the market, however, there are any number of commentaries about problems. Many of them are still in the recent past: it's about the sub-prime sector. Ha!
In point of fact, the bubble is well past that point. The rot has spread to Alt-A loans, and now a significant percentage of prime loans, and even jumbos. Now, the seeds of this potential disaster were planted in 1970 by the Department of Housing and Urban Development.
Asset Securitization is the name of the game.
From the Comptroller of the Currency Administrator of National Banks, 1997, "Asset Securitization Controller's Handbook":
"Asset securitization is the structured process whereby interests in loans and other receivables are packaged, underwritten, and sold in the form of "asset-backed" securities."
'In the day', when someone bought a house, a bank usually supplied the loan and held the mortgage. After World War Two, demand outpaced supply and investment banking hit on the plan of developing mortgage pools. This was a way to spread risk over a range of securities and seemed like a good idea at the time.
HUD's Government National Mortgage Association (GNMA or Ginnie Mae) issued securities collateralized by a portfolio of mortgage loans.
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Allen L Roland is a practicing psychotherapist, author and lecturer who also shares a daily political and social commentary on his
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