I’ve been called many things over my many years, a few good things, some not so good things, mostly average things, but never heartless. Still, I have to conclude that I am heartless. I’ve determined that I must be since I don’t feel sorry for subprime mortagees who may lose their homes or who may already have been dispossessed.

In my defense and to mitigate my heartlessness and insensitivity, I should add that I do sincerely and deeply empathize with the children of those people. Kids don’t understand such things as “foreclosures” and other multisyllabic words associated with the adult world. All they understand is that they are being uprooted from the place they’ve called home perhaps for their entire short lives and that they have to move to a different place, to different schools, to different neighborhoods where they will encounter strangers and be forced to make new friends and to acclimate to new environs.

All that is very difficult for youngsters and for those kids I have a great deal of sympathy because it’s all none of their doing or responsibility. For their parents, however, I have little empathy.

Before I am cast out from the society of human fellowship and tossed into the sewer of reprobate misanthropes, do hear me out.

This attack of heartlessness came on with a rush tonight as I watched on local news a horde of demonstrators armed with signs proudly declaring their status as subprime mortgage holders who were incensed. They were loudly picketing in front of homes of some CEO’s who were in some way associated with the effort to deny them the right to remain in their domiciles merely because they were unable to make their monthly payments to their mortgage holders.

I should add at this point that I have no sympathy with banks and mortgage companies, either. Many have operated immorally and unethically in granting home loans to individuals who they were fully aware could not afford them. Maybe they could pay the monthly nut during good times but when bad times struck they would be stuck. And bad times, as they inevitably do, have arrived with a vengeance.

Other institutions granted those loans under threats of being accused of discriminatory practices by the federal and local governments. Those, also, deserve condemnation for their corporate pusillanimity.

Some few resisted such governmental strong-arming, and those I would applaud, but they are relative rarities.

Which brings us to the question of precisely what “subprime mortages” and “subprime lending” actually mean. Terms of fairly recent vintage, USA Today defined the meaning: “Subprime lending — higher-interest loans to consumers with impaired or non-existent credit histories — has been the fastest-growing part of the mortgage industry.

Subprime mortgage activity grew an average 25% a year from 1994 to 2003, outpacing the rate of growth for prime mortgages.” http://www.usatoday.com/money/perfi/housing/2004-12-07-subprime-day-2-usat_x.htm

The operative words there are “higher interest” and “impaired or non-existent credit histories,” …

(Read the rest of this article at http://genelalor.com/.)

The Battle is between Government and the Federal Reserve system of Banking. The Government has no choice but to involve themselves and weed out International Bankers from interfering in the American Banking system.

Allowing Banks to operate without opening their books and identifying what is asset and what is worthless paper will just suck up whatever funds are sent. 350 BILLION has already been sent to Banks, where did it go..? There is another 350 BILLION on its way…and the same will occur, it is being used to offset Derivative losses, which are held in European banking systems.

Nationalize the Banks like Sweden did, get them back on their feet and reregulate markets and then set the banks free. Otherwise nothing will occur, we will just continue shifting taxpayer funds to a broken system. The system must be fixed first, The laws on the books at this time allow banks to do as they please, which caused the situation. If we do not correct the absense of regulation we accomplish nothing.

Congress alone is authorized to coin ( create) money, so why have we allowed a Foreign entity ( the Federal Reserve) to create money and charge the Government (the taxpayer) interest? and how can we allow this to continue..?

If it was such a good idea for the Government to take over AIG, then why the resistance to taking over the Banking system..? the solution for AIG is the same for the Banking system, take the institutions over and fix them. Otherwise we will continue spending trillions with nothing to show for it.

You also said that it’s borrowed money, it’s already out there. You are correct, to be sure. But, isn’t it borrowed money just going back to the banks as well?

I agree that a lot of people would hoard the cash though that would be a tremendous change from what has been the norm for the last couple of deacdes where everybody seemingly spent (and overspent)like mad.

Here’s my point, Marc: The money WOULD get spent or invested eventually. Maybe the gubment could put a time limit on how long it could remain unspent (I heard that proposed on Newshour with Jim Lehrer). That way everyone would surely spend it before it expired. How about that, sir?

ANYTHING is better than giving it to the banks!

Regards

In 1933 Congress passed the Glass Stegal Act, which prohibited Banks from leveraging financial instruments, purchasing security houses to sell financial products, or to expand and become so large,
” they could be allowed to fail”. This was in response to forces that created and amplified the Depression, the main culprit being the Federal Reserve system. The Nation was in the middle of the great depression and Congress passed legislation to prevent Federal Reserve and its member banks from damaging the Nation again.

In 1999 Congress and President Clinton Repealed the Glass Stegal act, which allowed banks to leverage themselves, create and market worthless derivatives, and become so large ” they cannot be allowed to fail”. The repeal of Glass Stegal in 1999 set the stage for what we are experiencing today.

Its simple, our legislators did not learn from History, or from their own legislative experiences. There is an estimated 550 TRILLION in worthless Derivatives currently being held by banks, and main reason money sent to banks will be swallowed up.

Several times in 2006-2008 the US treasury sent delegations to China to beg and plead with Chinese banks to involve themselves purchasing Derivatives from the WEB System (Western European Bank). The Chinese asked bankers to explain derivatives market, they could not explain what derivatives were, or how they were valued, so the Chinese said thanks but no thanks. If only our own leaders had used this example of common sense.

There is only one viable solution; Nationalize the Banking system and stablize it. The Federal Reserve is running wild, transferring trillions of dollars at will and without legislative oversight ( 2 Trillion we know about so far, there is probably far more we dont know about yet). These are cash transfers to destinations unknown and refusal by Federal Reserve to explain and justify, It is theft plain and simple.
The President must force banks to open their books and inspect exactly what is asset and what is worthless paper, which will not happen until the Govt takes over the bank and can view ledgers themselves.

The raw truth is we are witnessing an Economic war between entities that print money ( the Federal reserve and its member Banks) and entities that value money ( the Government and the Taxpayer / citizens). The Federal Reserve is not part of the Government but a Private entity. It will come to a tipping point when the taxpayer revolts and demands accountability from its Government and REAL oversight of the Nations Banking system.

Furthermore, it doesn’t really add to the cash in the system. It’s borrowed money. It’s already out there. It’s a matter of whither the money gets allocated. Sure, it’s Chinese money or whatever, but it can be put to other uses. If businesses ask for it, they can get it, because no other country is likely to stand a better chance of making it pay.

The problem isn’t the lack of capital. The problem is that everyone is in a defensive crouch. Everyone is waiting to see what the government is going to do first. Until then, you can’t make a proper risk/reward assessment. If the gummint said, we are going to do nothing for two years, except remove a couple really bad laws, let the market sort itself out, then reassess then, then the country would sort itself out in fairly short order. The problem is the danged gummint.

Can one of our financial gurus please explain to me why it’s better to give these banks this money than it is to give it to the citizens? It just seems like that if the gov’t is gonna spend 1.5 trillion dollars to bail us out, it should go to us-not to the people who got us all into this mess!

Correct me if I’m wrong, but isn’t 1.5 trillion divided by 300 million (estimated population) equal to $5,000?

So if the gov’t gave all citizens (who actually ARE LEGAL citizens) of legal age (18 or above) this money, wouldn’t this spur the economy better? That might equal $7,500 or even be close to $10,000 each (according to demographics).

I don’t know about you, but if the gov’t gives me $10,000, it’s going straight to the bank! Liquidity problem solved! Also, it will be spent over time or invested-economic crisis solved!

I should have been an economist!

Feel free to correct me if I’m wrong!

HonestJon

At what point does the world dump dollars? We keep acting like Argentina, when is the world going to treat us like Argentinia?