Americans remain totally clueless about the extreme fragility of our financial system. They actually believe the Federal Reserve and the Federal Government have their interests at heart and will prevent bad things from happening to them.
The latest scam for preventing a mortgage meltdown is the so-called "freeze" on those "teaser" rates for a limited number of subprime adjustable rate loans. That this latest of "fixes" came about from a secret meeting where no jounalists were allowed to tread indicates to me that the real purpose of the get together had nothing to do with keeping families in their homes, but rather how to keep the owners of mortgage backed securities from suing U.S. banks and forcing them to buy back these worthless securities at face value. Can you say ten times their true market value?
Everywhere you look you find fraud and collusion. The originators of the loans, the appraisers, the rating agencies are all in it up to their eyeballs. Goldman Sachs and its CEO, Hank Paulson, now Secretary of the Treasury (through the magic of the "revolving door") knew about it. Goldman Sachs, it turns out, was going short these toxic waste products at the same time it was selling the stuff to foreign and domestic investors under the watchful eye of Mr. Paulson.
You can bet the shredding machines are working overtime at the banks and brokerage companies as New York Attorney General Andrew Cuomo zeros in on the fraud. What the average American citizen doesn't know is should the inevitable law suits force the banks to pay back the investors around the globe who were duped, the amount of money involved is many times the capital of all of our major banks combined. That can only mean one thing: all of our largest banks would fail, which would guarantee a giant bailout, the likes of which the world has never known, at taxpayers' expense.
But Americans aren't worried. After all, they are reassured daily by the government and their "cheerleaders," the financial press, that everything is just fine. While Goldilocks and the Tooth Fairy are dancing in the streets, the financial system is teetering on the brink, and a big bunch of "higher ups" are planning schemes and destroying records in a desperate attempt to stay out of prison.
12/23/2007
No comments:
Post a Comment