We now live in a nation where doctors destroy health, lawyers destroy justice, universities destroy knowledge, governments destroy freedom, the press destroys information, religion destroys morals, and our banks destroy the economy.Chris Hedges
A banker is a fellow who lends you his umbrella when the sun is shining and wants it back the minute it begins to rain.Mark Twain
If you really want a great example of what “freedom of choice” is consider this; how would you like to kill yourself? Maybe you want to hang yourself, or you could drink poison, or if you don’t mind making a big mess shedding your own blood, you could just cut open your veins. You may think that’s insane, but the economic debacle in the U.S. has claimed the lives of people like Carlene Balderrama, Deanna Donaca, Raymond Donaca, Judith Orlando, Wayne Anderson, Linda Clark, Gregory Bellows among MANY OTHERS. Those are just a few of many who took their own lives because they were not able to pay their mortgage. From 2008 until 2013, around 10M people across the country have been evicted from their homes [Democracy Now Aug 6-2013].
The housing market is just one component the global collapse created by deregulating banks in the U.S. The kind of markets open for speculation went so out of proportion that the Defense Advanced Research Projects Agency developed an investment market that would allow speculators to bet on the likelihood of events like suicide bombings or assassinations. The Pentagon decided to abandon that plan for the kind of scandal this could have generated [Democracy Now July 7-2003]. Let’s review some important aspects of this housing crisis. In 1999 the Glass Steagall Act was repealed with the Gramm Leach Bliley Act. This act opened the flood gates for the banks to pretty much use the people’s money like gambling chips. This time banks could sell mortgages to investors, so banks wouldn’t have to worry about collecting the loans – they rather charge a fee for collecting payments from the house owners. This gave incentive to banks to lend money to whoever who came across asking for money – this is what would be called predatory lending.
On top of that, the Commodity Futures Modernization Act was passed in 2000 to deregulate financial products such as over-the-counter derivatives or hedge funds. These financial instruments allowed banks to bet in many made-up markets. For example for general investments, banks used CDS’s (credit default swaps) and for the property market they created CDO’s (collateralized debt obligations). Then, these banksters kept selling mortgages they knew house owners wouldn’t be able to pay and betting on their failure. This vicious cycle kept spinning on itself since the banks used funds from the housing market as collateral for their bets. They just approved loans to anybody who can put a down-payment. Having the protection of derivatives, that function pretty much as an insurance, they didn’t care if borrowers had the capacity to pay the loan – this is what would be known as the ninja loans (no income, no job, no assets, no problem, you get the loan anyway) [Rolling Stone Nov 6-2014].
The banksters had two kinds of interests to charge to the home borrowers: prime and subprime. Prime loans were made available to those with a better financial situation and their interest was not so high, and subprime loans would be for the risky borrowers who would be charge a high interest. However, the massive gains obtained from the deregulated markets were no enough for the banksters so they charged subprime rate on borrowers who were entitled to prime mortgages. Eventually these irresponsible and criminal practices led to the sub-prime mortgage bubble crisis that started in 2007. Giving house loans to bowers in a shaky financial situation was already terrible, but on top of that banks charging high rates on good standing customers cause these customers to fail to pay their mortgages.
As we know, borrowers were not able to pay their mortgages and their homes went on foreclosure, but despite of that, speculators were able to capitalize massive gains. If you believe in magic, this could be the reason why. Massive amount of gains were coming in but there was not actual money, all of that was just numbers produced by Wall Street computers. As expected, this situation went out of hand and suddenly these organizations that got involved in this mad casino bonanza found themselves with massive gains, but the money had never existed in the first place – all of that was just a fantasy. Finally, Wall Street had gone too far into the magic of creating fictitious capital and some investors decided to cash their artificial gains and hell broke loose. If that was not bad enough, the banksters denied at all costs that they didn’t know their financial products were toxic, but the more we get into the communications within this banks, the more evident is that they were aware and actually were encouraging these criminal practices [New York Times Feb 7-2013 / Daily News Aug 1-2013]. On top of that, all of these reckless, and even criminal, practices eventually caused a global market wreckage. JP Morgan Chase itself piled up loses over $6B on derivative bets (London Whale case), always concealing the crises in order to mislead to public [Bloomberg Aug 15-2013]. Probably the worst aspect of this crisis is that everything was preventable if the government had the will to do the right thing regardless of the deregulation of the financial system. From 2000 to 2007, appraisal firms were warning Washington officials that lenders were extorting appraisers to over value property. A petition was signed totaling about 11,000 appraisers concerned about this widespread fraud [Huffington Post July 9th 2013].
We should know by now, the mega corporations own the democrats and the republicans that we vote for. In addition, our media is totally unwilling to denounce the crimes of Wall Street. So the banks did not have any major obstacle getting the government backing up those imaginary gains. On October 3, 2008, the U.S. government bestowed $700B in the TARP (Troubled Asset Relief Program) to the criminal financial institutions and the citizens were not even asked if we agreed with the bail out [Propublica Bailout List]. This bail out happened, again, with OUR MONEY, the very little money that was left for us, and again given away to the corporations. Well, it is not really just OUR MONEY. Indeed, here we are talking also about OUR CHILDREN’S MONEY that has been handed to these banksters because we are basically in debt. We don’t have the funds to cover that debt, therefore OUR CHILDREN will have to pay it for us. By the way, the government had to intervene those very corporations that are always begging with their arms wide open to the sky to keep the government out of their businesses. Consider this, AIG was given $184.6B for 90% of the company at the time when its market value was only $15B. Yet, former AIG head Hank Greenberg sued the government because according to him the U.S. government extorted AIG to accept less favorable conditions than banks such as Citigroup and Morgan Stanley did [Raw Story Oct 10-2014].
Just not to look bad helping only banks, the government came out with the Home Affordable Modification Program (HAMP), in the intend of helping eligible home owners with loan modifications. But, this program was put in control of the banks with no major reinforcement and not surprisingly, later on, it was found bank employees were encouraged to lie to push homeowners seeking loan modification into foreclosure. This in return would produce extra earnings for the bank since the government would cover these expenses through the HAMP program [The Huffington Post Jul 12-2013]. Also, the Dodd Frank Act was passed in 2010 but it was rather a cosmetic fix since for every regulation there were plenty of loop holes allowing banks to pretty much keep committing the same crimes. In fact, since the housing bubble exploded in 2007, investors no longer trust banks, but banks shrub their toxic products to the U.S. government through Fannie Mae and Freddie Mac – that among many other scams banks keep coming out with. Let’s remember that all of this started because these banks were “too big to fail” and after that, do you know what happened? Guess what! Many of them merged to each other. So forget about the “too big to fail” excuse, today we will be really lucky if they are just “too HUGE to fail” and no “TOO HUMONGOUS TO FAIL” [RT News May 14th 2012].
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Casino Economics: The Worst is to Come
If you really want a great example of what “freedom of choice” is consider this; how would you like to kill yourself? Maybe you want to hang yourself, or you could drink poison, or if you don’t mind making a big mess shedding your own blood, you could just cut open your veins. You may think that’s insane, but the economic debacle in the U.S. has claimed the lives of people like Carlene Balderrama, Deanna Donaca, Raymond Donaca, Judith Orlando, Wayne Anderson, Linda Clark, Gregory Bellows among MANY OTHERS. Those are just a few of many who took their own lives because they were not able to pay their mortgage. From 2008 until 2013, around 10M people across the country have been evicted from their homes [Democracy Now Aug 6-2013].
The housing market is just one component the global collapse created by deregulating banks in the U.S. The kind of markets open for speculation went so out of proportion that the Defense Advanced Research Projects Agency developed an investment market that would allow speculators to bet on the likelihood of events like suicide bombings or assassinations. The Pentagon decided to abandon that plan for the kind of scandal this could have generated [Democracy Now July 7-2003]. Let’s review some important aspects of this housing crisis. In 1999 the Glass Steagall Act was repealed with the Gramm Leach Bliley Act. This act opened the flood gates for the banks to pretty much use the people’s money like gambling chips. This time banks could sell mortgages to investors, so banks wouldn’t have to worry about collecting the loans – they rather charge a fee for collecting payments from the house owners. This gave incentive to banks to lend money to whoever who came across asking for money – this is what would be called predatory lending.
On top of that, the Commodity Futures Modernization Act was passed in 2000 to deregulate financial products such as over-the-counter derivatives or hedge funds. These financial instruments allowed banks to bet in many made-up markets. For example for general investments, banks used CDS’s (credit default swaps) and for the property market they created CDO’s (collateralized debt obligations). Then, these banksters kept selling mortgages they knew house owners wouldn’t be able to pay and betting on their failure. This vicious cycle kept spinning on itself since the banks used funds from the housing market as collateral for their bets. They just approved loans to anybody who can put a down-payment. Having the protection of derivatives, that function pretty much as an insurance, they didn’t care if borrowers had the capacity to pay the loan – this is what would be known as the ninja loans (no income, no job, no assets, no problem, you get the loan anyway) [Rolling Stone Nov 6-2014].
The banksters had two kinds of interests to charge to the home borrowers: prime and subprime. Prime loans were made available to those with a better financial situation and their interest was not so high, and subprime loans would be for the risky borrowers who would be charge a high interest. However, the massive gains obtained from the deregulated markets were no enough for the banksters so they charged subprime rate on borrowers who were entitled to prime mortgages. Eventually these irresponsible and criminal practices led to the sub-prime mortgage bubble crisis that started in 2007. Giving house loans to bowers in a shaky financial situation was already terrible, but on top of that banks charging high rates on good standing customers cause these customers to fail to pay their mortgages.
As we know, borrowers were not able to pay their mortgages and their homes went on foreclosure, but despite of that, speculators were able to capitalize massive gains. If you believe in magic, this could be the reason why. Massive amount of gains were coming in but there was not actual money, all of that was just numbers produced by Wall Street computers. As expected, this situation went out of hand and suddenly these organizations that got involved in this mad casino bonanza found themselves with massive gains, but the money had never existed in the first place – all of that was just a fantasy. Finally, Wall Street had gone too far into the magic of creating fictitious capital and some investors decided to cash their artificial gains and hell broke loose. If that was not bad enough, the banksters denied at all costs that they didn’t know their financial products were toxic, but the more we get into the communications within this banks, the more evident is that they were aware and actually were encouraging these criminal practices [New York Times Feb 7-2013 / Daily News Aug 1-2013]. On top of that, all of these reckless, and even criminal, practices eventually caused a global market wreckage. JP Morgan Chase itself piled up loses over $6B on derivative bets (London Whale case), always concealing the crises in order to mislead to public [Bloomberg Aug 15-2013]. Probably the worst aspect of this crisis is that everything was preventable if the government had the will to do the right thing regardless of the deregulation of the financial system. From 2000 to 2007, appraisal firms were warning Washington officials that lenders were extorting appraisers to over value property. A petition was signed totaling about 11,000 appraisers concerned about this widespread fraud [Huffington Post July 9th 2013].
We should know by now, the mega corporations own the democrats and the republicans that we vote for. In addition, our media is totally unwilling to denounce the crimes of Wall Street. So the banks did not have any major obstacle getting the government backing up those imaginary gains. On October 3, 2008, the U.S. government bestowed $700B in the TARP (Troubled Asset Relief Program) to the criminal financial institutions and the citizens were not even asked if we agreed with the bail out [Propublica Bailout List]. This bail out happened, again, with OUR MONEY, the very little money that was left for us, and again given away to the corporations. Well, it is not really just OUR MONEY. Indeed, here we are talking also about OUR CHILDREN’S MONEY that has been handed to these banksters because we are basically in debt. We don’t have the funds to cover that debt, therefore OUR CHILDREN will have to pay it for us. By the way, the government had to intervene those very corporations that are always begging with their arms wide open to the sky to keep the government out of their businesses. Consider this, AIG was given $184.6B for 90% of the company at the time when its market value was only $15B. Yet, former AIG head Hank Greenberg sued the government because according to him the U.S. government extorted AIG to accept less favorable conditions than banks such as Citigroup and Morgan Stanley did [Raw Story Oct 10-2014].
Just not to look bad helping only banks, the government came out with the Home Affordable Modification Program (HAMP), in the intend of helping eligible home owners with loan modifications. But, this program was put in control of the banks with no major reinforcement and not surprisingly, later on, it was found bank employees were encouraged to lie to push homeowners seeking loan modification into foreclosure. This in return would produce extra earnings for the bank since the government would cover these expenses through the HAMP program [The Huffington Post Jul 12-2013]. Also, the Dodd Frank Act was passed in 2010 but it was rather a cosmetic fix since for every regulation there were plenty of loop holes allowing banks to pretty much keep committing the same crimes. In fact, since the housing bubble exploded in 2007, investors no longer trust banks, but banks shrub their toxic products to the U.S. government through Fannie Mae and Freddie Mac – that among many other scams banks keep coming out with. Let’s remember that all of this started because these banks were “too big to fail” and after that, do you know what happened? Guess what! Many of them merged to each other. So forget about the “too big to fail” excuse, today we will be really lucky if they are just “too HUGE to fail” and no “TOO HUMONGOUS TO FAIL” [RT News May 14th 2012].