Now. the Financial Mess

Friday, February 26, 2010
Now, the Financial Mess
Between 1998 and 2000, the laws regulating banks and bank investments wtitten afetr the Great Depression were stripped of all their regulatory power. From that monet on, Credit Default Swap bonds became the whole in the fabric of our economic life.

To understand them best, go to Time Magaxine for March 2008 in an article by Janet Mirrissey. You can also get CDSB defintion from the net, but the explanation is difficult to understand.

To undwestand thm best, look at y0ur newspaper for today. Take a look at the foreclosure listings. Call the banks involved and find out the net left on the mortgages. Take that number and mukltipkly by 30 or 40, and y0u will get th money that will be paid out to a CDSW holder. All the "bonuses" mentioned in the press are CDSB payments--not bonuses. In his first Press Conference, President Obabma mentioned in an answer to a wuestion from MSNBC's political reproter--"..You know that the boinds that pay 30 to one caused this pronbekms." That may not ne exact, but thepoint he made was that CDSB took trillions of dollars out of 0ur economy. Morrissey, in her Time article suggests the amount might be over 45 Trillion dollars--Now, experts are predicting that the amount will be closer to 75 Trllion. The bond holders and hedge fundas who now own that amount of money have more money than any group of any indivicuals aand organizations in theistory of the world.

Also, a retired lawyer who spent his whole career bewteen New York and Europe designing tax loop holes for officers, board, and the corporation itself for a major internationl American bank. He confirmned this theory. As he put it, "we got away with murder!" Clinton needed mortages for the poor--no one told him that it would cost our economy over 50 trillion dollars! Senator Gramm and his ilk got to increase these mortages by 50%, creating the largest mortgage failure in our history.

"Yield Spread Premiums"(Check on Google) were paid to loan origanorts of betaween $2,000 and $15,000 based on the fact that a $ 100,000 mortages written in 2002, would produce $ 3,000,00 if the CDSB was 30 to one, or $ 4,000,000. Think about it? YSPs made mini fortunes for everyone involved.

If we want to stop this crisis, the federal governemtn must Claw Back these YSPs and ALL CDSB payments. Then, over 50 Trillion dollars would be retuerned to the people of the United States.
Posted by Lionspen at 10:54 AM