There are two bankers with opposing facts.
One banker, from Chicago, said that bailout money was going to banks that were in control of their assets, banks that made the right decisions that kept them stable enough to survive the current banking crisis, allowing them to take over management of banks that failed.
Another banker, from Springfield, who sits on the board of trustees at a local bank, said that bailout money was going to banks that were struggling so they could pull themselves out of the current crisis by shoring up their defaulted loans.
One of these opinions is correct. The truth is that Treasury Secretary Paulson gave money to some banks, and those banks in turn bought out some banks that were struggling, and also bought banks that were not struggling.
As the title of the program implies, the Tangible Asset Recovery Program (TARP)appeared on the surface to benefit home owners who were lured into sub-prime adjustable rate mortgages. They, and other defaulting borrowers have yet to receive a dime.
The first $350 billion was dolled out and the results were not as congress expected, so when it came time for Secretary Paulson to ask for more, congress thought they could open the books and question him about what was done with the first half of the money.
OOPS!
Showing posts with label mortgage. Show all posts
Showing posts with label mortgage. Show all posts
Friday, December 26, 2008
Saturday, February 09, 2008
DEBT EQUTY
The truth about the subprime mortgage industry
I’m sure you heard about being able to get loans with bad credit. It was all the rage after the Enron and Worldcom scandals. The banks and money lenders were getting paid anyway, if not by the people who borrowed the money, then by the tax payers.
Does anyone remember the Lincoln Savings and Loan Scandal? Remember Senator John McCain’s involvement in that? That little steaming nugget will be dredged up soon enough; it’s not the story right now.
Lending money to people who are known not to afford it has been reported in the news as a “disaster”, reported as a “mistake,” and journalists and pundits alike have been scratching their heads wondering why it was done. Why were all those poor people allowed to borrow money they couldn’t pay back? What were those bankers thinking? Were they stupid?
No. They knew exactly what they were doing. They were investing in living, breathing people who would be forced to sweat and toil to pay them back, plus interest of course, as long as they lived, and if they didn’t, it would be their children’s burden.
It’s like switching investments from stocks to bonds or gold during hard-times. You can switch your investments from manufactured commodities to entire living, breathing families to pay you back, because it’s the law.
Another word for it is indentured servitude. If you have a credit card, a mortgage, a car loan, or are mandated by your state to get car insurance, or you pay rent, you qualify as an indentured servant if your expenses exceed your savings.
Debt Equity is the possession of the living breathing entity (in this case, multiple generations of families) that pays the money, not the money itself.
Banks and other lenders can track you down anywhere in the country with the help of their police (you don’t have any police.) because you need money to try and emulate the so-called “American Dream” as taught in public schools. As comedian George Carlin said “It’s called the American Dream because you have to be asleep to believe it.”
This is the dirty little secret of the “free market economy” that republicans desire so much. They keep complaining that regulations are keeping down the power of the free market. Regulations are the products of lessons learned from deaths and disasters. Just pick up a book by John Steinbeck, Upton Sinclair, or Mark Twain and you can read about what it was like when the economy was really free.
I’m sure you heard about being able to get loans with bad credit. It was all the rage after the Enron and Worldcom scandals. The banks and money lenders were getting paid anyway, if not by the people who borrowed the money, then by the tax payers.
Does anyone remember the Lincoln Savings and Loan Scandal? Remember Senator John McCain’s involvement in that? That little steaming nugget will be dredged up soon enough; it’s not the story right now.
Lending money to people who are known not to afford it has been reported in the news as a “disaster”, reported as a “mistake,” and journalists and pundits alike have been scratching their heads wondering why it was done. Why were all those poor people allowed to borrow money they couldn’t pay back? What were those bankers thinking? Were they stupid?
No. They knew exactly what they were doing. They were investing in living, breathing people who would be forced to sweat and toil to pay them back, plus interest of course, as long as they lived, and if they didn’t, it would be their children’s burden.
It’s like switching investments from stocks to bonds or gold during hard-times. You can switch your investments from manufactured commodities to entire living, breathing families to pay you back, because it’s the law.
Another word for it is indentured servitude. If you have a credit card, a mortgage, a car loan, or are mandated by your state to get car insurance, or you pay rent, you qualify as an indentured servant if your expenses exceed your savings.
Debt Equity is the possession of the living breathing entity (in this case, multiple generations of families) that pays the money, not the money itself.
Banks and other lenders can track you down anywhere in the country with the help of their police (you don’t have any police.) because you need money to try and emulate the so-called “American Dream” as taught in public schools. As comedian George Carlin said “It’s called the American Dream because you have to be asleep to believe it.”
This is the dirty little secret of the “free market economy” that republicans desire so much. They keep complaining that regulations are keeping down the power of the free market. Regulations are the products of lessons learned from deaths and disasters. Just pick up a book by John Steinbeck, Upton Sinclair, or Mark Twain and you can read about what it was like when the economy was really free.
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