FINANCIAL HOUSING DISASTERS

FACT CHECK

On Financial and Housing Great Depression # II

FINANCIAL-In 1920’s Conservative Coolidge let Wall Street Gamblers run wild.
In first decade of 2001, The Neo Con Conservatives in Total Control Of Government.
Let Wall Street Gamblers run wild-again. Investment Bankers were betting $2000-$4000 with only $100 in the pocket. When dice hit snake eyes they could not pay off so House (government) came to rescue.

HOUSING—Fed set stage for Greed by cutting interest Fed Rate for Banks from 6.5% to 1%. All Banks rushed to borrow the Max. Housing Developers were given low interest rates and commenced to build homes too large—too expensive-- for middle class incomes. No problem. Bundle mortgages sell to Wall Street Gamblers who sell as
Investment securities without knowing or telling buyers the assets backing the investment. $700,000 Mortgage backed by $14,000 annual income is disaster ahead.

BACKGROUND—1999 change in law to allow local Banks to trade with Wall Street Gamblers. Same as 1981 Law change to allow ONE Wall Street Gambler to own local S&L and use assets for hostile corporate takeovers, build resorts, etc. instead of local affordable housing.

Fannie Mae and Freddie Mac were formed to back funding for “Affordable” Low Income Housing and Businesses. Non-Profit.
Changed to Private Corporate to make a profit.
They got hooked into Derivatives and lost .

Twenty Three Percent of Foreclosures have been on Speculative Purchase of homes.

Homes were sold without proper income to support the payments. It was known but did not matter as long as mortgage could be sold to Wall Street Gamblers who could sell to unsuspecting investors.

The problems were known long before 2007 Crash but were ignored by whistle blowers.

False Premise was:

Housing always appreciates in value. Always. Ho Hum.

Price of average size home increased in cost by 70% from 2000 to 2007.
Labor and Materials had no such increase. Profit=Greed.
Regulators were SEC—Federal Reserve-Treasury
All under control of Republican Free Market Conservative Neo-Con let good times roll minds. Market is always best. Do not interfere.

Major Culprits—
HOUSING:Phil Gramn/ Republican Promoted 1999 Law change signed by Clinton
Allowing local banks to trade with Wall Street Gamblers in Rich Man’s Casino.

FINANCIALS: Lack of Supervision on Gambling.
Absolute Faith in a Free Market
Allow $4,000 bets with $100 in pocket
Allow bets on any up/down change in many new markets.
Allow Bernie Madoff and many other Ponzis.
Burlington Bull Sperm Ponzi just a few years ago. Wow!
A sucker is born every minute.
cswinney2@triad.rr.com

the bank has your condo.