The Fed Did Indeed Cause the Housing Bubble »
Posted By berkeley 7 months, 3 weeks ago in Political NewsAlan Greenspan is a liar. The Federal Reserve and its long standing partner, the US Treasury, engineered the housing bubble, including the fraudulent inducement of America as part of a financial coup d’etat. Our bankruptcy was not an accident. It was engineered at the highest levels.
Your publication of Greenspan’s breezy and bogus history of the housing bubble insults your readership.
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berkeley
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hyperbola7 months, 3 weeks ago
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FTA:
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.... One of the dirty little secrets behind the housing bubble is the long standing partnership of narcotics trafficking and mortgage fraud and the use of the two in combination to target and destroy minority and poor communities with highly profitable economic warfare. This model is global. It is operating in counties throughout the world as well as in US communities.
Of all the actions that the Federal Reserve took to engineer this housing bubble, the one that I would note is Mr. Greenspan’s efforts to pacify Congresswoman Waters regarding allegations of government sponsored narcotics trafficking at a time when open Congressional hearings would have contributed to an important discussion of the operations engaging in mortgage fraud in minority communities. See, “Financial Coup d’Etat,” Chapter 16, Dillon Read & the Aristocracy of Stock Profits which was written in 2005 and published in April 2006, drawing from an article I first published in May 1999....
Catherine Austin Fitts
Assistant Secretary of Housing - Federal Housing Commissioner, Bush I -
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GWHayduke7 months, 3 weeks ago
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I made this comment a couple of days ago:
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The U.S. Federal Reserve’s “easy money” policies during the first part of this decade didn’t cause the housing bubble, former Chairman Alan Greenspan wrote in the Wall Street Journal.
A surge in growth in China and other emerging markets led to an excess of savings that pushed global long-term interest rates down between early 2000 and 2005, Greenspan wrote in an article. That caused mortgage rates and the benchmark Fed-funds rate to diverge after moving “in lockstep” from 1971 to 2002, he said.
The article is part of the former Fed chief’s defense against charges in books such as “Greenspan’s Bubbles” by William A. Fleckenstein that his policy of keeping rates too low for too long inflated the housing bubble. The collapse in the U.S. subprime-mortgage market led to about $1.2 trillion in writedowns and the bankruptcy of Lehman Brothers Holdings Inc.
“Given the decoupling of monetary policy from long-term mortgage rates, accelerating the path of monetary tightening that the Fed pursued in 2004-2005 could not have prevented the housing bubble,” Greenspan said
In essence, the bubble was carrying the economy. Greenspan, a Monetarist supported fake housing capital to keep the boat afloat
This article tends to support the assertion.-
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jimdoze7 months, 3 weeks ago
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Read it again, GW. The fed operates at the short end of the market. Mortgages are the long end of the credit markets. The economy rolled along with in inverted yield curve for a long time due to the liquidity Greenspan was talking about. The only way to bring down the housing bubble was with a crash... and that, eventually, is what we got.
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4thchance7 months, 3 weeks ago
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Here's a little question for you people to ponder over.
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I'd like to see ANYONE answer this question/s, with an intelligent answer that makes good clear sense.
WHY,
Why did most all the banks in the country hand out loans (Totaling hundreds of billions of dollars) to people that could not pay the loans back? Since when does anyone in banking do such a stupid, dumb thing. Even the $8.00 an hour employee at the drive through bank window knows not to loan money to someone who can't pay it back, so why did they do it? Some claim the banks were forced to relax their standards and loan gobs of money to just about anyone and everyone who asked for a loan, if that's true, then WHO FORCED THEM to do it and WHY?
I do know one thing for sure. The CEO's and such at these banks had to have known, if they loan money to people who can not pay the loans back, then that would be the end of their banks. So, why did every bank in the country do the exact thing that they knew would destroy their own business? It was INSANE for them to do this, and they knew it would be the end of them if they did do it, so WHY DID THEY DO IT?????
I'll be waiting for someone to try to answer this....good luck!-
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Leemck027 months, 3 weeks ago
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4thchance, this is a profound question. This is like asking why can't we see the forest for the trees? I feel a little stupid for not putting this obvious inconsistency at the top of questions to ask. Did we get dumbed down to this point not to comprehend the magnitude where the current crisis was not by chance? You messed me up, I have to go out and rethink everything on the issue. Thanks!
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all2funComment removed: Hard Banned
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wtagg7 months, 3 weeks ago
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The first fact that breaks your hypothesis is that all the banks did not fail equally. In fact, only a small portion of banks and financial institutions failed. Many large banks, like Key Corp, have done just fine. So, why did they all not fail? You are pushing toward CRA here and if all banks had to comply equally, then why did all banks not fail equally?
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Because CRA is not a major factor in the failures. Could CRA have some influence on an institution that was in huge trouble to begin with? Certainly. Is it the major factor in failings? Hardly.
Now, if you want to make a case that institutions, like CountryWide, were attempting to gain market share at any cost, then I think you might be onto something. They became the favorite of many who pursued non-traditional lending, like house-flippers. House-flippers would fit perfectly into your *can't afford* category, but there certainly was no government pressure to lend to such individuals. -
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spkguy7 months, 3 weeks ago
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"WHY,
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Why did most all the banks in the country hand out loans (Totaling hundreds of billions of dollars) to people that could not pay the loans back?
Because they could get insurance on that paper, from "Guess Who?"
"The contracts were flying out of AIG Financial Products. Hardly anyone outside Wall Street had ever heard of credit-default swaps, but by early 2005 investment banks were snapping them up to insure all kinds of deals in case of default, fueling one of the great financial booms in U.S. history.
During twice-monthly conference calls that originated from the company's headquarters in Wilton, Conn., President Joseph Cassano would listen as marketing executive Alan Frost listed the latest swap transactions in the firm's offices in London, Paris and Tokyo.
Once a small part of the firm's business, the increasingly popular contracts had helped boost the company's profit to record levels. But they also exposed Financial Products and its parent, American International Group, the global insurance titan, to billions of dollars in possible losses.
http://articles.latimes.com/2009/jan/02/business/f... -
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Ratskii7 months, 3 weeks ago
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This may be the wrong question, 4th.
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I would guess, though I don't have the figures at hand, that most people who received mortgages during the bubble period were able to make payments at the time they took out mortgages. A layoff here, a medical emergency there -- a lot of situations changed.
This was exacerbated by the banks and other financial institutions aggressively borrowing money to buy mortgage related securities (which looked like a good investment at the time). Unfortunately, given that these institutions were over extended, it didn't take much to make their mortgage related securities lose value.
Hence the bubble burst and created even more layoffs and individual hardships which made it impossible for even more people to pay their mortgages. Hence the cycle continued.
The question I would ask was why were the financial institutions so shortsighted as to overextend themselves. I saw the economic downturn coming back in 2004, and I'm no expert. -
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lfergie8127 months, 3 weeks ago
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4thchance
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Want to watch a little video of what happened?
http://www.vimeo.com/3261363?pg=embed&sec -
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reallypsst7 months, 3 weeks ago
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The government pushed those type of loans and they backed them through fannie and freddy mac,also the bankers kept selling the notes of homes over and over.Have you ever heard of a scam were multiple deposits were taken for the same home.
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cowboygrandpa7 months, 3 weeks ago
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“On December 18, 1997, the CIA Inspector General delivered Volume I of their report to the Senate Select Committee on Intelligence regarding charges that the CIA was complicit in narcotics trafficking in South Central Los Angeles. Washington, D.C. ’s response was compatible with attracting the continued flow of an estimated $500 billion–$1 trillion a year of money laundering into the U.S. financial system. Federal Reserve Chairman Alan Greenspan in January 1998 visited Los Angeles with Congresswoman Maxine Waters — who had been a vocal critic of the government’s involvement in narcotics trafficking — with news reports that he had pledged billions to come to her district. In February Al Gore announced that Water’s district in Los Angeles had been awarded Empowerment Zone status by HUD (under Secretary Cuomo’s leadership) and made eligible for $300 million in federal grants and tax benefits.”
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Alan Greenspan is a liar. The Federal Reserve and its long standing partner, the US Treasury, engineered the housing bubble, including the fraudulent inducement of America as part of a financial coup d’etat. Our bankruptcy was not an accident. It was engineered at the highest levels.
Your publication of Greenspan’s breezy and bogus history of the housing bubble insults your readership.
Best Regards,
Catherine Austin Fitts
Assistant Secretary of Housing - Federal Housing Commissioner, Bush I
Well I see some damage control being attempted here. Yeah It all happened on Clinton's watch. George Bush had nothing to do with it. Hahhahahahahahhahaha
One question who started the drug trafficking, if I remember correctly that was done under the Reagan administration, With Noriega and that bunch. To pay for the dirty little coups down in South America.
I mean yeah I'm not saying that Clinton wasn't involved in this crap. But lets get right down to it. I seem to recall Opium and Heroin being smuggled during the Nam war as well for the CIA to pay for its dirty little tricks.
The bottom line is both parties are screwing us and blaming the other party.-
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Leemck027 months, 3 weeks ago
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Cowboygranpa, I guess once a bad habit is learned, its hard to shake. I was privy to a conversation by a person who said he was involved with the Contra Guns for Drugs. He could have been lying but the story sounded credible. So yes, I believe this sort of thing goes on for real. Secondly, the media that never reported pass the obvious cover up where Ollie and Pondexter never went to jail, really, and Ollie even had a talk show. Talking about landing on your feet.
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Endoscopy7 months, 3 weeks ago
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WOW!!! Another great conspiracy theory. Ignoring the laws created and changed. Fannie and other CSE's were allowed to give Mortgaged backed securities out at the value of the sale price og the property. CRA created under Carter to help the poor blacks get into houses. Obama sued Citibank for ACORN to push them into giving those loans. Fannie and Freddy were not accepting loans under 10% down so they ended up lobbying for changes. 1992 the changes were created under Clinton. 0% down now allowed, low starting ARMs, no principle for some years, and no check of ability to pay for the poor. Democrat compassion in mortgages. HUD forced banks to give a per cent of their loans as CRA loans. These went into effect in 1995. Later under Clinton the laws were loosened up for banking by the Republicans. Up went the housing bubble starting in 1996. Problems were noted by Republicans in the 2003-6 years. While in power the Republicans allowed the Democrats to browbeat them into doing nothing. 2006 the bubble burst and down came housing and the finance market invested in those Mortgage backed securities.
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Both parties can truthfully point to each other but the Democrats have a major portion. Of course they will never admit it. Currently under Obama HUD has raised the CRA loan to 31% of the loans a bank should make. More enforced compassion in mortgages by the Democrats. Thus proving they do not care about the poor after their mortgage goes into foreclosure.-
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Will13137 months, 3 weeks ago
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there you are with the lie again...
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from the FEDERAL RESERVE.....
n conclusion, I believe the CRA is an important model for designing incentives that motivate private-sector involvement to help meet community needs. The CRA has, in fact, been helpful in alleviating the financial isolation of many areas of concentrated poverty, but as our report illustrates, there is much more that could be done in these communities. Contrary to the assertions of critics, the evidence does not support the view that the CRA contributed in any substantial way to the crisis in the subprime mortgage market. Today's discussion is an important first step in the process of identifying other initiatives and areas of cooperation between government and the private sector that will effectively address the continuing challenge of poverty in the United States.
POST A LINK THAT REFUTES THAT .. WHY DO YOU CONSTANTLY LIE AND BLAME POOR BLACK FOLK .. BECAUSE YOU'RE A BIGOT.....
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jimdoze7 months, 3 weeks ago
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In response to 4thChance...
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Warren Buffett 03/09/09 on CNBC:
BECKY: And still, this is the worst-case scenario from what you had imagined. What went wrong? Why did we wind up in that worst-case scenario?
BUFFETT: Well, we went wrong originally because we had a belief that--and everybody had the belief. I had it, the government had it, mortgage lenders had it, borrowers had it, media had it, everybody thought house prices could go nothing but up and--or at least they couldn't go down a lot. And once you had that belief--and it was nationwide--it didn't make any difference what you lent on the house because if the guy couldn't pay, you'd sell it at a profit anyway or you wouldn't lose much money. So you had 11 trillion of residential mortgage debt built on this theory that who was borrowing it, what their income was really wasn't that important because the house itself had to go up in price.
ALL MARKETS are an equilibrium of greed and fear. Increasing government intervention in the mortgage/real estate markets over the last half century reduced and eventually removed fear from that equation. Thus the meme, "Home prices always appreciate", became the totem to which every element of the market bowed... from individual home buyers to mortgage brokers to investment banks to commercial banks to rating agencies to risk modelers to professional investors and back to the individual investor. There is always greed in every market, but when fear is artificially reduced, greed overwhelms. Thus, bubbles are born. Eventually, every market will reassert an equilibrium, right over the top of the artificial suppression of fear.
Think about why GNMA, FNMA, FHLMC were created. Was it not to take away the fear of lending to vast sectors of mortgagees that would otherwise have not occurred? Over time that distorts the market. It cushions the corrections and enhances the upturns. Eventually, even the deepest part of the correction phase remains above the trend line of inflation and that of most other asset classes. The reinforced lesson, for everyone, is that real estate doesn't go down. It has upside with very little risk, just as Buffett said. Everyone believed it and acted accordingly.-
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4thchance7 months, 3 weeks ago
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In response to jimdoze,
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"Well, we went wrong originally because we had a belief that--and everybody had the belief. I had it, the government had it, mortgage lenders had it, borrowers had it, media had it, everybody thought house prices could go nothing but up and--or at least they couldn't go down a lot."
That all sounds like damage control, curve ball, cover up to me.
I'm sorry but I have a hard time believing ANYONE actually though that the housing prices would not go down...or not much. Even I, who knows very little about all this type of stuff, was wondering how the prices could go up and up so far and so fast. I wondered quite often if my house would actually hold the value that it had. I feared it would not, simply because it went up so far and so fast. It all seemed to me to be "TO GOOD TO BE TRUE!" You know what they say about things that are (to good to be true!?)
I was hoping my home would hold it's value, but I figured it would not. And I was right. So, me being mostly ignorant about these types things, am I the only one who figured the value wasn't going to hold. I really doubt I'm much alone on that one!
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jwinstonComment removed: Spammer
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Bucotch7 months, 3 weeks ago
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The Bilderberg Group planned the whole thing. Wall Street runs this country. The Republican and Democratic parties are the same as professional wrestling. They put on a show of beating each other up and at the end of the day, they all are in it for the same thing. This whole mess was meant to happen. The last real president we had was JFK and we know how they dealt with him, same as Lincoln.
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http://www.conspiracyarchive.com/Blog/?p=1947
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