Who Should Take The Blame For The Mortgage Crisis
The only time mortgage confusion was higher that it is right now is back when sub-prime mortgages were not known to be the cesspool that we now know them to be. The world economy has collapsed. Much of the world lays the blame for the collapse at the feet of greedy Americans. While this is patently unfair (who’s not happy to sell us crap?), it is true that three American parties do share the blame. The first two are those who bought homes they couldn’t afford and those who gave them mortgages. Of these, the most dangerous and most responsible party, the Federal Reserve Bank, is also the malefactor fingered the least. Snel geld lenen is written in Dutch but you can use google translation service to understand it.
It was the Federal Reserve Bank, and only the Federal Reserve, that was responsible for increasing the ratio between how much money a bank had on deposit and how much it could lend to 30-1. When Jon Stewart repeatedly asked Jim Cramer, “Who thought a 30-1 leverage was a good idea?” he was referring to the Federal Reserve upping the deposit-to-loan ratio to 30-1 for American banks. The answer to who did it, Jon, is: The Federal Reserve Bank. President Barack Obama’s failure to replace Ben Bernake at Treasury and the failure of Congress to set about replacing the Federal Reserve Banking System are unconscionable.
Mortgage brokers concocted obtuse mortgage contracts and then began shilling subprime loans to unqualified buyers. With interest rates at historic lows (until now, and God help us), mortgages were made to people that mortgage brokers knew could not afford the payments if interest rates were to return to their historic averages.
These shaky mortgages were then bundled and sold to financial firms as ‘asset backed paper,’ the now infamous ‘toxic assets’ we, the taxpayer, are buying from the banks. Toxic assets don’t exist in the real world. In the real world they have a different name: liabilities. Your tax money is being used to the American government.
Finally, the people who sit and tell CNN cameras that they didn’t know that they had an adjustable rate mortgage are simply too stupid to own a home. I know that’s harsh, but it is the truth. Does that sound pessimistic? Good, because if you are not pessimistic now, you are a fool.
