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Wallstreet and the banks and investment firms already knew that people were going to foreclose and default on their mortgages. I didn't know too much about it, but a recent Fortune article highlighted Credit Default Swaps... and the 55 Trillion problem.
Basically, the wallstreet firms, and likewise anyone else involved with the CDS market used CDSs to "insure" against defaults. Because of this, selling crap loans to unworthy buyers actually pays off. If someone defaults, or if the CDOs, MBSs, etc. default... the "insurance" would pay off.
The wallstreet firms and banks are pretty much criminals. My wife told me about an incident of some women buying insurance for homeless people, and then killing them off to collect the insurance payout. Essentially wallstreet and the banks did the same thing. They sold loose mortgages to unworthy people betting that they would eventually default by insuring the debt with CDSs.
Of course, now we are seeing that their "scheme" is falling apart. The insurers of the CDSs aren't able to fund the payouts... and the system is collapsing on itself.
The CEOs and bankers need to go to Jail. They basically committed insurance fraud. Instead, they're getting bailed out.
I'm definitely not happy about all of this Am I analyzing this wrong?
Wallstreet and the banks and investment firms already knew that people were going to foreclose and default on their mortgages. I didn't know too much about it, but a recent Fortune article highlighted Credit Default Swaps... and the 55 Trillion problem.
Basically, the wallstreet firms, and likewise anyone else involved with the CDS market used CDSs to "insure" against defaults. Because of this, selling crap loans to unworthy buyers actually pays off. If someone defaults, or if the CDOs, MBSs, etc. default... the "insurance" would pay off.
Notice how nice the CDSs parallel with the reset schedule?
The wallstreet firms and banks are pretty much criminals. My wife told me about an incident of some women buying insurance for homeless people, and then killing them off to collect the insurance payout. Essentially wallstreet and the banks did the same thing. They sold loose mortgages to unworthy people betting that they would eventually default by insuring the debt with CDSs.
Of course, now we are seeing that their "scheme" is falling apart. The insurers of the CDSs aren't able to fund the payouts... and the system is collapsing on itself.
The CEOs and bankers need to go to Jail. They basically committed insurance fraud. Instead, they're getting bailed out.
I'm definitely not happy about all of this Am I analyzing this wrong?
-chuck22b
Bingo !! You got it exactly right. And they were warned since 2003.
Why would the banks want to anger us? Aren't WE putting money into their pockets?!!
I would never anger or abuse my customers, but I did recently, you know why? I can make MORE without them being there. Whats a loss of a couple thousand pounds when I'm faced with an intake of up to £500,000? I'm not overly greedy. When they couldn't get their product from me, they threatened to go to the next guy, I said, "Go to him, see if I care". The look on their faces were priceless. "Theres the door, now **** off"!!!!
As these people are the real constituencies of the Republican Party (and corrupted Democrats in Name Only like Bill Clinton). Why is anyone surprised by the events of the last 30 years? The massive transfer of wealth from working people and small business to the money manipulators and hyper wealthy has never be more obvious or successful. The system is falling apart because we lesser folks no longer have any available wealth and the manipulators started stealing from each other to keep the scam going. The trillions these folk are claiming they will loose during this crisis will not really be lost because the wealth never really existed. All these things like REIT, CDO, and the rest of the alphabet soup are only promises to pay with nothing to back them up. The money won’t be lost, because, as in the margin call driven collapse in 1928, it was never there.
I suggest never trusting any Republican politician ever again and be very careful about the Democrats. I am fairly certain I can trust Obama to do his best for us less wealthy folks.
As these people are the real constituencies of the Republican Party (and corrupted Democrats in Name Only like Bill Clinton). Why is anyone surprised by the events of the last 30 years? The massive transfer of wealth from working people and small business to the money manipulators and hyper wealthy has never be more obvious or successful. The system is falling apart because we lesser folks no longer have any available wealth and the manipulators started stealing from each other to keep the scam going. The trillions these folk are claiming they will loose during this crisis will not really be lost because the wealth never really existed. All these things like REIT, CDO, and the rest of the alphabet soup are only promises to pay with nothing to back them up. The money won’t be lost, because, as in the margin call driven collapse in 1928, it was never there.
I suggest never trusting any Republican politician ever again and be very careful about the Democrats. I am fairly certain I can trust Obama to do his best for us less wealthy folks.
Yeah sure, just like his buddy Rezko did right? Yeah he'll do real good for the "less wealthy folks" by taking money from people that he considers "rich" (that bar is lowering all the time btw) and giving it to you maybe?
All he's doing is starting and hyping a class war from what I can see...
They all knew- from Greenspan to Bernanke to Paulsen. But they all said the problem was 'contained' the economy was strong-blah blah blah.....
Read some of the Blogs from 2 years ago or more- they told the truth about everything- and most predicted this massive catastrophe. I used to read posts from some saying- I am enjoying this all- the time will come when I can sit in an easy chair eat popcorn and watch the biggest leveraging in American history take place-guess what? That time has come- and its even worse then many predicted
Due to putback provisions, Wall Street is stuck with many of these loans and CDOs from 2006-2007 because of heavy early payment default rates (EPDs) and first payment default (FPD) rates. A lot of mortgage fraud occurred where people were getting money at closing and had no intent to pay the mortgage or live in the home.
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Am I analyzing this wrong?
