Financial Reform How Did We Get Here?

 

 

Written July 2010

   The agenda of those in control during the past administration and the present financial situation of this country was no mistake as the country will soon find out. With advanced knowledge of the approaching disasters many liberties were taken to solidify a permanent position of power, with what seem to be a humming economy and potential wealth while promoting patriotism towards a hated enemy. Promises were and still are being made that all those on board would have a place. All presently thinking the day of exposure will never come as the population or what few they assume are left shall only care about surviving another day. The situation has changed, lets fast forward from Jan. 20, 2001 to today, lets shed some insight to the American public whose tax dollars and more important, trust was misplaced.

   The plan was first to spur the economy through a coordinated effort of lenders, ratings firms, and major banks in support of the housing industry. Control of the oil fields by a designed war. Now almost all will say 911, but refuse to examine the money trail on the short side of the market that was placed days if not hours on the airlines and some banks in the World Trade, there was insight by some groups. No responsible intelligence person would broadcast a guilty party's name before capture. Now that is past history, not worth any focus as it will not change the past. What we need to focus on is the present financial situation of all how we got here. More important in order to correct this, there is the need for leaders to all be on the same page as opposed to current political stance. Now lets revel the intent of the plan set in place by the Bush Administration backed by some leaders in the Republican party today. How we got here and what are some the measures being taken to take back control of both houses and their hope another presidency for those who were so sure they would rule for life before the setbacks of a timeline of the pole shift.

   Thursday July 15, 2010 house minority leader John Boehner spoke of repeal of the financial reform bill, stating, why should the banking laws be changed for the actions of a few. With an assembly of business leaders gathered for the photo ops, a delay or repeal in the financial reform bill would allow small business owners breathing room for future growth. Boehner and his side kick Cantor, excuse me, I apologize, minority whip who backs this agenda are presenting a small sliver of the business sector to appeal to the self centered all about me grass roots movements.  The goal of financial reform, is to attempt to stop the abuse of the major banks caused, not by those who have taken an conservative percentage of banking profits as to not collapse the system, which is the agenda of those in charge of Federal Reserve. But, its the middle men, the corporate banking executives and CEO's looking for their slice of the profits that are out of control. With many players, agendas and moles diluting its effectiveness this is only a start to the bill, which you refuse to see.

   The American public experienced greatest transfer of wealth in the history of the United States from the middle and lower upper classes to selected individuals and corporations.  Are these people who loss almost half of their 401s and brokerage accounts not worthy of a plan that protects the investor, but promotes fair business practices? America was built on ingenuity, the ability to bring product that changes the world, yet now over 60 percent of our GDP growth is based on manipulation of money. You can only go to the well so many times before its dries up and you are looking at the beginning phases of this emerging trend. The financial markets create wealth for the few on the inside, while transactions and trades chip away at the overall total pool. On the lending side, the implementation of debt slavery for most, where the deficit and interest rates on personal finance is at a point that consumes almost all productivity to the continued enrichment of those who formulated and backed this plan. If the rates banks can borrow are record lows, how is it that credit card rates could rival loan shark rates varying between 16 and 31 percentage points? The spread is unfair for with good to great credit ratings.  So if you, Boehner state only a few were the cause, either you truly believe what you are told, or you are unaware of the facts being the leader of the house or worse you have chosen to look the other way. Which is it? So lets inform the American public what did happen and where the money went, if are so sure only a few were behind this.

   First, unspoken cooperation between regulators appointed by the Bush Administration and watched over by VP. Cheney, the mortgage companies, banking firms had to be established at the basic level of consumer housing loans. While many of the previous administration and the Republican party turned a blind eye, so did some of the Democrats who wanted to further their own personal agendas under the guise of helping the common man. At this level fraudulent loans for house flipping profits and bad commercial real estate projects, marginal standards of those who cannot afford, but given interest only loans only hoping to move to another home on profits from rising home prices. The years of profits were good for everyone at the top as all wanted a piece of the action. So Wall Street steps in, as capital from the banks dries up. They find a new source, CDO's. American investors are quick to follow a trend as long as an official source puts a stamp of approval and the media hypes it. Retirees seeking a safe investment became a new source of income as long as the doctored rating from the top firms gave them their seal of approval.

   Firms designed to find bad investments now are cooperating as the established bond rating firms must all be on the same page, collusion. The elite of the investment firms, ahead of the other banks and have deep connections overseas as they are admired. They packaged loans as AAA investments and sold them to investors, pension funds and  banks that are based overseas. With the bubble of unqualified investors drying up, the Bush administration forced defense contractors and other related corporations dependent upon the government revenue into a no sell mode, unless they could cross the sale as transparent. In place, the market was suppose to hold up until McCain was elected, but this did not happen, thank God. All in the financial industry was aware of the housing bubble, but it fueled the economy. As long as everyone held their positions all is well. But, the elite don't play by the rules, seeing a top coming firms like Goldman Sacs borrowed their own client owned house CDO's and sold them into a still up market overseas as a hedge, knowing their name had leverage. Yes they still paid the interest due on the CDO's to their clients as it is still on their books. With inside knowledge that the CDO's are going to go bad, sale of the assumed AAA and AA financial packages to overseas pension funds and banks guaranteed they will have to sell at a loss as they can not hold junk status debt obligations when they fail, what a plan.

   The well connected banks with established clients created a market for these debt instruments, that were bought on the word of past relationships at first. But, as research replaced innuendo as the basis for investment, the word of deception spread, only the biggest with deep resources were able to unload debt. Back in America, the media could no longer convince the public all was well, so as the base dried up, the Bush Administration applied extreme pressure to maintain the market until after the election. With no guarantees, the banks knowing as Bush was a lam duck, but even more important had little influence with those coming into power, no bank was willing to absorb a greater loss on an election that was not for sure, so the order was given, hedge there positions and everyone bailed,  the market collapsed. Most major banks knowing the hand writing on the wall are already prepared, pre-positioned  by heavily selling short into an up stock market for months and the public just keeps on buying what they think are bargains in the rising stock market. All purchases hidden behind walls of corporate proxy-corporations with goal of transfer of public wealth under the guise of a down market that was prepared for a top and then allowed a precipitous drop with the short position in place as all is normal. Was an alternate to this idea proposed by this same group to the public before, to separate them from their wealth in a more simplistic fashion? Yes, but it failed as social security was not allowed to be invested in the stock market.

  On the books, all banks seem saddled with bad debt and they are. So what seemed as an appeal for government bail out was a already set in place, by the Bush administration with TARP to buy up troubled assets. This was the back door agreement to keep all in line, but the banks ran the numbers. Would 350 billion would stem the tide of default for all, maybe a select few. Those who were late to the market that tried to transfer risk to the American public and Europe eventually would fail as some did. With the money provided, the banks holding short positions overseas with debt needed to  buy back the borrowed CDO's and close out their short positions, which was selling at pennies on the dollar and they returned the CDO's to their clients who were none the wiser. Since these were open positions, no need to report potential profits, government provided money well spent. For the Bush Administration a set of favors to be extracted later. For McCain, he loss everything despite the promise of a sure victory against what "he" considered a weak threat in his advance to power. The Republican party, with some of the American swayed by scripted movements of those who pull the strings of power in the shadows, just sit back and wait. The stance of no action, they assume will discredit the present administration as inept as little change has occurred to pull America out of its present situation.

   Little do they realize that life would have been even worse under McCain and Palin as their allegiance are aligned with the corporations. It is not that corporations should not be successful, they need to be as they are the foundation of this nation. But, to have a relationship with their workers that some of their hard work is rewarded and they feel that they are watching their business is the wise choice. If you continue to base your earnings reduction of labor costs, and keep marginal managers that built a name on mediocrity instead of improving the position of the company through bold innovation, there will be few in Americans left that can afford to buy your cheaply built products. While most of America is still affected by this depression, referred in the media as a recession, it still lingers.

   The banks, just months after being near what seem as insolvent, now have billions of dollars in profits appeared at the bottom line and bonuses for everyone. With the public in the dark and what seems to be projected with little understanding in Congress, hearings will be appoint a scapegoat as an isolated case, a few laws changed and everyone is happy. If no one rocks the boat this will all go away as the tea parties will want little government oversight, again what a plan.

   This was one the greatest threats to the National Security of the United States and those involved ruined the lives of millions, destroyed businesses increased the debt of every citizen. A plan calculated to create a bubble through collusion and greed, presented the financial instruments to the public as investment grade AA to AAA safe with the backing of major ratings firms, then resold the same borrowed client instruments and sell them short. As they fell in value, they used bail out money to buy them back and return ownership to their clients and no one knows the better. The best part everyone rides the stock market down on the short side and all the middle men in banking get super rich.

   Who suffered? The world, the American people as jobs, homes, retirement accounts, marriages and even lives lost to suicide. In a down stock, yes the price falls, but this is balanced by a transfer of funds from those who held their position to those that sold into the market on naked illegal short sales.

   Now Congress hands you a watered down bill, but it is a start and it is this that counts. Your trust allowed a group to take your wealth and through the establishment of tea parties they deflect the true blame on big government and like sheep you followed. Again it is a start, so ban short selling with borrowed public stock who have no interest in a down market. Close the gap of consumer interest rates above the prime for those with good to great credit. All you are so quick to go against welfare, but you allow the banks to raise your interests rate to cover those who default, when they lacked control on expanding credit limits for the risky. You lend it, you take the risk. If not, don't lend what you know may never return and then spread the risk of loss on good consumers. The rules for the derivatives markets based in the United States will be the same for all no matter the country of origin with margin rates based on volatility, updated real time. All trading halted in the event of a disaster and upon reopening all automated trades suspended to insure a fair market. There is a problem in America when over 60% of GDP is based on the banks, which manipulates a fixed ever shrinking pool money for a profit offering no real wealth, but a transfer of funds through trading and fees. This will collapse and life for the common man and will change forever.

   In November, you have a choice. It is not about Democrat, Independent or Republican, this is about who will do the best for America, where corporations and workers rise together, for this is what creates a strong America. Not the words of division coming from the mouths of the paid few, like Rush and Beck. They say the unemployed are lazy, lets not raise the deficit on checks for needy families. Haven't we heard the same lines before. If the middle class falters, America will hurt. There is collateral damage. What's sad is that their followers will never be seen as their peers for they are the middle class. If the groups were separated guess who would be the new underclass? Do you have a mirror?

   We have seen the blame placed on the underclass as they want the American Dream, with little resources, they are given a chance to fail as the deal makers enrich themselves on agreements they know few will complete and the best part, tax payers will absorb the burden. Rush and Beck present the problem as caused being by those who could not afford what they bought, irresponsibility, and this is true. Yet, few look at who approved the loans. Did they follow the standard regulations for loan approval, no. Would they have lent the money to the same people if it was their own?  No. In the end the pseudo spokesmen for the Republican party can take credit for promoting a movement against all who were financially weak, that were part of the sub prime mortgage debacle, thus fragmenting society. The counter strategy, the party behind them can claim deniability if it goes wrong.

   Now, are Rush and Beck presenting the new problem, the increased default rate in prime and jumbo mortgages among those who are credit worthy, no. They are considered savvy investors as they walk away from properties that have lost significant value. They can afford it, but by choice refuse to pay on a losing investment. Again a different set of rules for the well connected that the tax payers must absorb, the conservative way of life. Where those who were told they can afford the American dream tried to pay until all was lost, to those who can afford to pay the mortgage, but choose to walk away from a bad investment. Is this the America that we say that all are equal and have the same chance? The Republican Party and their expendable media outlets will tell you so, but it is time to look beyond the veil.

  As time progresses most of you will lose your belief in those that you thought could lead the country through conservative spending and ideas. It is their  goal to remain on top while you believe that you part of the movement. When really over time, they will see you as part of the problem as resources shrink. In an emergency are these the same people you want to be in charge as resources and food are conserved? Do you really think those who are selfish, I mean conservative will share with you, if is a choice between the long term survival of their groups or the short help your family may need? Judge by the promises as fear prevails and if a conservative government or official comes your aid or chooses to hide in the bunkers then emerging in safety barking orders. They know what's coming is fact, while for most it is crazy talk. The false alarms no how discipline those in power are, will expose all for who they are. Allowing you to see a past pattern of crimes emerge, when most thought those actions were right for the country during the past administration. Remember most are still in power in Washington as those who looked away, silently, agreed by a nod, orchestrated or just hoped to do enough to be included when safety was needed. When an emergency happens and the promises to families in the know will fall short as most are left when arranged transportation does not occur. The assigned workers will flee and only the truly important are moved, emerging after a false alarms an escalating number will be confronted by great anger and in fighting for those in the know that were left and alliances will break down and fragment. The wall of silence will fall with a great thunder as those who speak will feel they have nothing to lose, once experiencing abandonment.

All Rights Reserved: Copyright 2010

 

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