Forum Post: Don’t let them pull the wool over your eyes.
Posted 13 years ago on Oct. 18, 2011, 1:06 a.m. EST by KIRKESS
(10)
from Spokane, WA
This content is user submitted and not an official statement
An effective method to woo people over to your side is to use the same language as the “experts”.
Fannie and Freddie expanded their portfolio while committing accounting fraud. Trillions of dollars worth of mortgages were not properly analysis for their risk. Yes, I know interest rate were low however, revaluing risk in the secondary mortgage market would have increased the after tax interest rate. You got to remember this fraud was going since 1997(??) or at least 2001. G.W. Bush’s claim that debt does not matter because Regan proved it affects both the lender and borrower.
The over the counter mechanism have two components: Capital requirements of the parties and the value of the contracts. Holders of mortgages and mortgage related securities use them for their capital requirements. Since trillions of dollars of mortgages were not properly analysis for risk, this collateral is decreasing in value. This decrease in value is NOT a LIQUIDITY problem but, a SOLVENCY ISSUE. The price paid for insuring this debt is also wrong. It is not a mystery why the credit market freezes when there is trouble in governments.
http://www.federalreserve.gov/pubs/feds/2007/200740/200740pap.pdf Housing and the Monetary Transmission Mechanism
The User Cost of Capital can be consider as a generating function. Any financial business relating to housing can affect the user cost of capital. Examples: Mortgage Insurance used by financial companies to cover their losses can affect the interest rate. The value of a mortgage in the secondary housing market can affect the mortgage rate. The collusion between mortgage securities issuers and rating agencies.
It’s the total risk-based capital that gives me the chills. Total Risk-Based Capital: The sum of tier 1 plus tier 2 capital. Tier 1 capital consists of common shareholders’ equity, perpetual preferred shareholders’ equity with noncumulative dividends, retained earnings, and minority interests in the equity accounts of consolidated subsidiaries. Tier 2 capital consists of subordinated debt, intermediate-term preferred stock, cumulative and long-term preferred stock, and a portion of a bank’s allowance for loan and lease losses.
A good recap as follows: One of the reasons given loan originators was their expectation of housing price appreciation, not a decline. I believe this attitude was wide spread. In Fannie Mae’s 2004 10K PDF page 99. Assessing the sensitivity of the profitability of the single-family mortgage credit book of business to changes in composition and the economic environment sub-section, one will note that Fannie Mae never consider the possibility of a nation wide price decline. This assumption was removed in 2005. Fannie’s Mae 2006 10K PDF page 151 assumes a modest price decline. The housing bubble was based on fraud NOT on economic fundamentals. Reality dictates that “ALL Prices Should have Changed” when the US was shifting production off-shore (the Japanese Recession/Deflationary event).
The following cascade failure is in effect. Housing prices has decreased (the trigger). Bad loan portfolios have no bottom (drain of liquidity).
Reality check The Federal Reserve will never allow housing to become a fractional banking system. Vast majority of home owners do not have a home based business. The Equity -> Cash process, for the vast majority of home owners, is a lost. Local communities can fall into a poverty trap if none of cash was used to create new jobs.
I will look at the highlights of Future Cast’s (http://www.futurecasts.com/Depression_mythology-I.html) analysis of the Great Depression and point out the “morphism”: Germany was unable to pay off its war time debt.
Germany was printing money which triggered an inflationary environment.
Germany’s inflation was transmitted throughout the world via gold prices.
Germany was unable to capitalize internally due to Germany’s investor base’s not investing in their own country.
Foreign investors did not want to invest in Germany due to its inflation and debt. Global instability developed.
The automporphims: Households hold too much debt which they can not pay off.
FASB encourages financial companies not to renegotiate household debt. The Federal Bankruptcy laws have not been changed.
The Federal Reserve is printing money. The U$ dollar is the global reserve which now plays the role gold once held.
US of A investors are not recapitalizing this country. Their investor advisers tell them there is a greater return in other non-EU countries, such as China.
China is in violation of its WTO obligations and blocks foreign ownership of its companies.
India is a low wage country which subsidizes consumers’ commodities. Global stability is now threaten.
Foreign investors do not want to invest in the US of A due to our debt. China is bitching about the U$ Dollar and US Treasuries.
Viva La Revolucion!!!!
I'm not buying it. It's another one percent goon trying to divert our attention. The real truth is something more like this:
We have been mislead by Reagan, Bush Sr, Clinton, Bush Jr, Obama, and nearly every other public figure. Economic growth, job creation, and actual prosperity are not necessarily a package deal. In fact, the first two are horribly misunderstood. Economic growth/loss (GDP) is little more than a measure of wealth changing hands. A transfer of currency from one party to another. The rate at which it is traded. This was up until mid ’07′ however, has never been a measure of actual prosperity. Neither has job creation. The phrase itself has been thrown around so often, and in such a generic political manner, that it has come to mean nothing. Of course, we need to have certain things done for the benefit of society as a whole. We need farmers, builders, manufacturers, transporters, teachers, cops, firefighters, soldiers, mechanics, sanitation workers, doctors, managers, and visionaries. Their work is vital. I’ll even go out on a limb and say that we need politicians, attorneys, bankers, investors, and entertainers. In order to keep them productive, we must provide reasonable incentives. We need to compensate each by a fair measure for their actual contributions to society. We need to provide a reasonable scale of income opportunity for every independent adult, every provider, and share responsibility for those who have a legitimate need for aid. In order to achieve and sustain this, we must also address the cost of living and the distribution of wealth. Here, we have failed miserably. The majority have already lost their home equity, their financial security, and their relative buying power. The middle class have actually lost much of their ability to make ends meet, re-pay loans, pay taxes, and support their own economy. The lower class have gone nearly bankrupt. In all, its a multi-trillion dollar loss taken over about 30 years. Millions are under the impression that we need to create more jobs simply to provide more opportunity. as if that would solve the problem. It won’t. Not by a longshot. Jobs don’t necessarily create wealth. In fact, they almost never do. For the mostpart, they only transfer wealth from one party to another. A gain here. A loss there. Appreciation in one community. Depreciation in another. In order to create net wealth, you must harvest a new resource or make more efficient use of one. Either way you must have a reliable and ethical system in place to distribute that newly created wealth in order to benefit society as a whole and prevent a lagging downside. The ‘free market’ just doesn’t cut it. Its a farce. Many of the jobs created are nothing but filler. The promises empty. Sure, unemployment reached an all-time low under Bush. GDP reached an all-time high. But those are both shallow and misleading indicators. In order to gauge actual prosperity, you must consider the economy in human terms. As of ’08′ the average American was working more hours than the previous generation with far less equity to show for it. Consumer debt, forclosure, and bankruptcy were also at all-time highs. As of ’08′, every major American city was riddled with depressed communities, neglected neighborhoods, failing infrastructures, lost revenue, and gang activity. All of this has coincided with massive economic growth and job creation. Meanwhile, the rich have been getting richer and richer and richer even after taxes. Our nation’s wealth has been concentrated. Again, this represents a multi-trillion dollar loss taken by the majority. Its an absolute deal breaker. Bottom line: With or without economic growth or job creation, you must have a system in place to prevent too much wealth from being concentrated at the top. Unfortunately, we don’t. Our economy has become nothing but a giant game of Monopoly. The richest one percent already own nearly 1/2 of all United States wealth. More than double their share before Reagan took office. Still, they want more. They absolutely will not stop. Now, our society as a whole is in serious jeapordy. Greed kills.
The point I was trying to make was not to express an opinion but, to forward a working theory to accomplish a communication transfer. This transfer of information MUST BE STRUCTURED such that it has the ability to influence THE GOVERNMENT.
Some more information concerning Wages and Inflation: From Forget taxes, it’s wages that plague Americans at: http://blogs.reuters.com/david-cay-johnston/2011/08/06/forget-taxes-its-wages-that-plague-americans/ By David Cay Johnston All opinions expressed are his own. Here is how much economic progress America has made in the 21st Century: the average taxpayer’s 2009 income was at the same level as 1997. Average 2009 income was $54,283, just $18 more than in 1997 when you adjust for inflation, not that anyone would notice a difference of $1.50 a month in their pocket. And compared to 2007, the last peak year of the economy, average income fell a painful $8,588 or 13.7 percent in real terms. Having $716 less each month is something most people would notice.
These figures come from the newest tax return data issued by the Internal Revenue Service. You won’t find the numbers above at the IRS website, just raw numbers that I use to calculate changes in incomes, taxes paid and related information.
Recap: The back door to trillions of dollars worth of fraudulent mortgages was Fannie and Freddie. These fraudulent mortgages directly or indirectly affected other debt. These fraudulent mortgages can devastated whole neighborhoods and it blew through the over counter credit market like a “hot knife through butter”. Obama never fixed the national financial plumbing the national financial firms are still insolvent.
Let’s look at price controls like the one the Federal Reserve was doing, buying mortgage related securities. This policy was inflationary: The Federal Reserve coupled a decreasing commodity asset (mortgage related securities) to the value of the US Dollar. US Dollar’s value drops => Commodity price inflation.
Mechanism for Dollar Denominated Inflation: The US of A is globally integrated to the point in which China has become our factory floor and India has become our back office. This is latest I could find: U.S. Multinational Companies Operations in the United States and Abroad in 2008 By Kevin B. Barefoot and Raymond J. Mataloni Jr. http://www.bea.gov/scb/pdf/2010/08%20August/0810_mncs.pdf
The worldwide current-dollar value added of U.S. MNCs—the combined value added of U.S. parent companies and their majority-owned foreign affiliates (hereafter, “foreign affiliates”)—decreased 1.8 percent; value added of U.S. parents decreased 6.5 percent, and value added of their foreign affiliates increased 9.1 percent (table 1). The worldwide employment of U.S. MNCs decreased 0.5 percent; employment of U.S. parents decreased 1.5 percent, and employment of foreign affiliates increased 1.9 percent.
In real terms, decreases in the value added of U.S. MNCs appear to have been widespread by area and by industry. In the United States, the real value added of U.S. parents probably declined faster than the 6.5 percent decrease in current dollars because average U.S. prices continued to rise in 2008. Abroad, the real value added of foreign affiliates in manufacturing decreased 4.8 percent.
A previous study at: “Trade in Goods Within Multinational Companies: Survey-Based Data and Findings for the United States of America” (http://www.bea.gov/bea/papers/IFT_OECD_Zeile.pdf)
Start the war against Injustice by starting our own banks to double the income of the Bottom 90% of Workers, for many more people will come to your side when you are proactive (for “new” Business & Government solutions), instead of reactive (against “old” Business & Government solutions), which is why what we most immediately need is a comprehensive “new” strategy that implements all our various socioeconomic demands at the same time, regardless of party, and although I'm all in favor of taking down today's ineffective and inefficient Top 1% Management System of Business & Government, there's only one way to do it – by fighting bankers as bankers ourselves, and thus doubling our income from Bank Profits which are 40% of all Corporate Profits; that is, using a Focused Direct Democracy organized according to our current Occupations & Generations. Consequently, I have posted a 1-page Summary of the Strategically Weighted Policies, Organizational Operating Structures, and Tactical Investment Procedures necessary to do this at:
http://getsatisfaction.com/americanselect/topics/on_strategically_weighted_policies_organizational_operating_structures_tactical_investment_procedures
Join
http://finance.groups.yahoo.com/group/StrategicInternationalSystems/
because we need 100,000 “support clicks” at AmericansElect.org in support of the above bank-focused platform.
Most importantly, remember, as cited in the first link, that as Bank Owner-Voters in your 1 of 48 "new" Business Investment Groups (or "new" Congressional Committees) you become the "new" Congress, and related “new” Businesses, replacing the "old" Congress, and related “old” Businesses, according to your current Occupations & Generations, called a Focused Direct Democracy.
Therefore, any Candidate (or Leader) therein, regardless of party, is a straw man, a puppet, a political opportunist; what's important is the STRATEGY – the sequence of steps – that the people organize themselves under in Military Internet Formation of their Individual Purchasing Power & Group Investment Power. In this, sequence is key, and if the correct mathematical sequence is followed then it results in doubling the income of the Bottom 90% of Workers from today's Bank Profits, which are 40% of all Corporate Profits.
Why? Because there are Natural Social Laws – in mathematical sequence – that are just like Natural Physical Laws, such as the Law of Gravity. You must follow those Natural Social Laws or the result will be Injustice, War, etc.
The FIRST step in Natural Social Law is to CONTROL the Banks as Bank Owner-Voters. If you do not, you will inevitably be UNJUSTLY EXPLOITED by the Top 1% Management System of Business & Government who have a Legitimate Profit Motive, just like you, to do so.
Consequently, you have no choice but to become Candidates (or Leaders) yourselves as Bank Owner-Voters according to your current Occupations & Generations.
So please JOIN the 2nd link, and spread the word to as many as possible, so we can make 100,000 support clicks at AmericansElect.org when called for, at exactly the right time, by an e-mail from that group, in support of the above the bank-focused platform. If so, then you will see and feel how your goals can be accomplished within the above strategy as a “new” Candidate (or Leader) of your current Occupation & Generation.