The Table Is Set For The Next Financial Crisis

Tyler Durden's picture

Submitted by Jim Quinn via The Burning Platform blog,

The housing market peaked in 2005 and proceeded to crash over the next five years, with existing home sales falling 50%, new home sales falling 75%, and national home prices falling 30%. A funny thing happened after the peak. Wall Street banks accelerated the issuance of subprime mortgages to hyper-speed. The executives of these banks knew housing had peaked, but insatiable greed consumed them as they purposely doled out billions in no-doc liar loans as a necessary ingredient in their CDOs of mass destruction.

The millions in upfront fees, along with their lack of conscience in bribing Moody’s and S&P to get AAA ratings on toxic waste, while selling the derivatives to clients and shorting them at the same time, in order to enrich executives with multi-million dollar compensation packages, overrode any thoughts of risk management, consequences, or  the impact on homeowners, investors, or taxpayers. The housing boom began as a natural reaction to the Federal Reserve suppressing interest rates to, at the time, ridiculously low levels from 2001 through 2004 (child’s play compared to the last six years).

 

Greenspan created the atmosphere for the greatest mal-investment in world history. As he raised rates from 2004 through 2006, the titans of finance on Wall Street should have scaled back their risk taking and prepared for the inevitable bursting of the bubble. Instead, they were blinded by unadulterated greed, as the legitimate home buyer pool dried up, and they purposely peddled “exotic” mortgages to dupes who weren’t capable of making the first payment. This is what happens at the end of Fed induced bubbles. Irrationality, insanity, recklessness, delusion, and willful disregard for reason, common sense, historical data and truth lead to tremendous pain, suffering, and financial losses.

Once the Wall Street machine runs out of people with the financial means to purchase a home or buy a new vehicle, they turn their sights on peddling their debt products to financially illiterate dupes. There is a good reason people with credit scores below 620 are classified as sub-prime. Scores this low result from missing multiple payments on credit cards and loans, having multiple collection items or judgments and potentially having a very recent bankruptcy or foreclosure. They have low paying jobs or no job at all. They do not have the financial means to repay a large loan. Giving them a loan to purchase a $250,000 home or a $30,000 automobile will not improve their lives. They are being set up for a fall by the crooked bankers making these loans. Heads they win, tails the dupe gets kicked out of  that nice house onto the street and has those nice wheels repossessed in the middle of the night.

The subprime debacle that blew up the world in 2008 was created by the Federal Reserve, working on behalf of their Wall Street owners. When interest rates are set by central planners well below levels which would be set by the free market, based on risk and return, it creates bubbles, mal-investment, and ultimately financial system disaster. Did the Fed, Wall Street, politicians, and people learn their lesson? No. Because we bailed them out with our tax dollars and have silently stood by while they have issued $10 trillion of additional debt to solve a debt problem. The deformation of our financial system accelerates by the day.

The $3.5 trillion of QE, six years of 0% interest rates for Wall Street (why are credit card interest rates still 13%?), and $8 trillion of deficit spending by the Federal government have provided the outward appearance of economic recovery, as the standard of living for most Americans has declined significantly. With real median household income still 6.5% BELOW 2007 levels, 7.3% BELOW 2000 levels, and about equal to 1989 levels, the only way the ruling class could manufacture a fake recovery is by ramping up the printing presses and reigniting a housing bubble and an auto bubble. They even threw in a student loan bubble for good measure.

The entire engineered “housing recovery” has had a suspicious smell to it all along. The true bottom occurred in 2009 with an annual rate of 4 million existing home sales. An artificial bottom of 3.5 million occurred in 2010 after the expiration of the Keynesian first time home buyer credit that lured more dupes into the market. The current rate of 5.31 million is at 2007 crash levels and on par with 2001 recession levels. With mortgage rates at record low levels for five years, this is all we got?

https://confoundedinterest.files.wordpress.com/2015/09/ehs092115.png

What really smells is the number of actual mortgage originations that have supposedly driven this 35% increase in existing home sales. If existing home sales are at 2007 levels, how could mortgage purchase applications be 55% below 2007 levels? If existing home sales are up 35% from the 2009/2010 lows, how could mortgage purchase applications be flat since 2010?

mbapnsa091615

New home sales are up 80% from the 2010 lows, but before you get as excited as a CNBC bimbo over the “surging” new home sales, understand that new home sales are still 60% BELOW the 2005 high and 25% below the 1990 through 2000 average. So, in total, there are 1.5 million more annual home sales today than at the bottom in 2010. But mortgage originations haven’t budged. That’s quite a conundrum.

As you can also see, the median price for a new home far exceeds the bubble highs of 2005. A critical thinking individual might wonder how new home sales could be down 60% from 2005, while home prices are 15% higher than they were in 2005. Don’t the laws of supply and demand work anymore? The identical trend can be seen in the existing homes sales market. The median price for existing home sales of $228,700 is an all-time high, exceeding the 2005 bubble levels. Again, sales are down 30% since 2005. I wonder who is responsible for this warped chain of events?

https://confoundedinterest.files.wordpress.com/2015/09/borathousingmkt.png

You guessed it – the Federal Reserve. There is no doubt these Wall Street captured academics with their models, theories, formulas, and Keynesian beliefs have created another immense bubble that endangers a global financial system already teetering on the brink of collapse due to central bank shenanigans by EU, Japanese, and Chinese central bankers. QE and ZIRP have encouraged rampant gambling by amoral greed driven financial institutions. John Hussman sums up the “solution” implemented by the serial bubble blowers at the Fed.

The main impact of suppressed interest rates is to encourage yield-seeking speculation, to give low quality creditors access to the capital markets, to misallocate scarce saving, to subsidize leveraged carry trades, to reduce the long-term accumulation of productive capital, and to foment serial bubbles and crashes.

The suppressed interest rates and Yellen Put have encouraged Wall Street hedge funds, banks, finance companies, and fly by night mortgage brokers to finance a buy and rent scheme, house flippers, and once again subprime borrowers. The withholding of foreclosures from the market and the hedge fund purchase of millions of homes drove home prices higher. The artificially low mortgage rates also allowed people to buy more house than they normally could buy, thereby driving home prices even higher. This market manipulation has now priced out all but the richest Americans from buying a home. As expected, the Wall Street machine has decided to try and steal home with two outs in the bottom of the ninth. They’ve decided loaning money to people who are incapable of repaying the loan will surely work this time.

Existing home sales fell in August by 4.8%, and the rate of increase has been decelerating over the last twelve months. Hedge funds stopped buying, first time buyers are few as they are saddled with student loan debt, and the middle class doesn’t have the financial wherewithal to trade up. The Wall Street debt machine is running out of financially able customers, so they’ve ramped up subprime lending at the worst possible time. While overall existing home sales were up 6.2% over last year, the number of subprime first mortgage originations was up 30.5%, subprime home equity loans was up 29.5%, and subprime home equity lines of credit rose 20.4%. The percentage of subprime mortgage loans is the highest since 2008. While prime lending declines, subprime lending accelerates. This will surely end well.

And this is being promoted by the government through the FHA. Subprime mortgages  are increasingly being underwritten by thinly capitalized non-banks and guaranteed by FHA. In 2012, when this data was first tracked, large banks represented 65.4% of FHA-backed loans. That number is now 29.6%. In their place, non-banks now represent 62.2% of the FHA lending. These fly by night outfits, who proliferated during the 2003 – 2008 subprime disaster, have little or no capital cushion and when these mortgages begin to default they will go bankrupt quickly, leaving the FHA (you the taxpayer) on the hook for the inevitable losses.

The FHA has been directed by their politician benefactors to pump up the housing market at any cost. You can get an FHA loan with a credit score as low as 500, so long as you have a 10% down payment. And once you hit a 580 credit score, you only need a 3.5% down payment. The FHA is exempt from the qualified mortgage requirement of a 43% debt-to-income ratio. Many loans have a debt-to-income above 55%. The FHA only looks at mortgage payments in their calculation. The FHA is willing to accept a gift or inheritance as a down payment. You could have no savings, a 500 FICO, a 50% debt-to-income and an inheritance and that would be sufficient to get you a loan.

These fly by night mortgage companies are created by slimy get rich quick hucksters who are willing to take huge risks, because there is a big difference between the risk that faces the company, and the risk that faces the owner.  He will take incredibly rich commissions on all loans he books. Wall Street is again packaging these subprime slime loans into high yielding mortgage backed securities and getting the rating agencies to stamp it with a AAA rating.

Foolish investors receiving a good yield and a guarantee from the US government, are as clueless as they were in 2008. The owner of the mortgage company doesn’t care about default risk, since some other sucker has assumed that risk. When the mortgage company goes bankrupt, the owner has no personal liability. When it all blows up again, an already bankrupt FHA will be on the hook, which really means the taxpayer will pay again. You are underwriting the new subprime crisis.

This exact same scenario is also playing out in the economically important auto market. It is clear the Fed, Treasury, Wall Street and the politicos in D.C. decided they needed to re-inflate the housing and auto bubbles to provide the appearance of economic recovery so they could resume their looting and pillaging of the national wealth. They have succeeded in ramping up auto sales from the 10.4 million annual rate in 2009 to 17.5 million in 2015, if you can call these sales. Short-term rentals is a better description. Auto leasing now accounts for 30% of “sales” (up from 22% in 2012), while subprime auto “sales” accounted for another 23.5%. The vast majority of the other sales are done with 7 year 0% financing. Does that sound like a sound business formula?

And now they’ve run out of dupes. The seasonally adjusted annual rate of sales for August 2015 was 17.2 million, flat with August 2014 and down from 17.5 million in July 2015. As the auto sales have gone flat and are poised to fall, the Wall Street finance machine has ramped up subprime lending from 18% of all loans in 2010 to 23.5% today. With overall sales flat with last year, subprime lending is up 9.6% in the last year. The pace of subprime auto loans has been more than double the pace of prime auto loans since 2010.

Over 10% of subprime auto loans are delinquent within the first twelve months. Subprime auto loan delinquency rates are soaring by 20% at Ally Financial. Santander is a Lehman Brothers in the making as their total delinquency rate approaches 20%. A critical thinking person might wonder why automaker profits are in decline, while GM and Ford stock prices are well below 2011 levels, if the auto market is booming.

The table is set for the next financial crisis. The apologists for the warped ideology that has resulted in $10 trillion of additional debt being layered on the original un-payable $52 trillion, argue subprime lending is lower than the 2008 peak, so all is well. They fail to realize the system is far more fragile and will collapse once the next Lehman moment arrives. The country is already in, or headed into recession. All economic indicators are flashing red. The stock market has fallen over 10% in the last month. Virtually every new car owner you see driving that fancy BMW, Lexus, or Volvo is underwater on their auto loan. Home price growth has stalled at record levels. Mortgage rates are poised to rise from record lows. We all know what happens next. Look out below.

Some people never learn. They follow the same path that destroyed their finances in the past. Wall Street is desperately packaging the increasing amounts of subprime slime in new derivatives of mass destruction and peddling them to clients, while shorting those same derivatives. It’s called the Goldman Sachs method. When home prices begin to tumble, these derivatives will self-destruct again. What is happening today is nothing more than rearranging the deck chairs on the Titanic. The iceberg has been struck, we’re taking on water, and this sucker is going to sink. Game Over.

“Part of the reason the Fed found it so difficult last week to justify a move away from zero interest rates is that the Fed seems incapable of recognizing, much less admitting, the speculative risks it has created. The strongest reason to normalize monetary policy was to reduce those risks, but the proper time to have done that was years ago. At this point, obscene equity valuations are already baked in the cake on valuation measures that are reliably correlated with actual subsequent stock market returns. At this point, hundreds of billions of dollars of low-grade covenant-lite debt have already been issued at risk premiums that are next to nothing. The bursting of this bubble is no longer avoidable. If history is any guide, policy makers will manage the resulting disruption by the seat of their pants, since they seem incapable of learning from history itself.” John Hussman

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ebworthen's picture

End the FED!  Hang the banksters and complicit politicians!

Death to the Kleptoligarchy and the money-changers!

Oldwood's picture

Too Late. Its only revenge.

AlaricBalth's picture

This FRED chart I have posted, which corresponds with the effective Fed Funds Rate chart in the article, will show exactly what a daunting problem the the US and the Federal Reserve is being forced to deal with. I have overlaid the Labor Force Participation Rate with M2 Velocity of Money, each beginning in 1960. M2 velocity refers to how fast money passes from one holder to the next. The labor force participation rate is a measure of the share of Americans at least 16 years old who are either employed or actively looking for work. If money demand is high, it could be a sign of a robust economy, with the usual corresponding inflationary pressure.

As you can see, each peaked around 1997-98 and have been in slow decline ever since. Unless the Fed has a plan to increase the LFPR, people are not going to be spending money they just do not have.

Demographically, this is not going to happen. Baby boomers will still be retiring at a rate of 10,000 per day and manufacturing is never coming back to the US until we are a third world country with a cheap labor force.
This is not an issue that can be fixed by political promises. So no matter which political party is in control, this will not be repaired with platitudes. This is a structural macro-economic phenomenon which is caused by demographics and poor long term fiscal planning.

https://research.stlouisfed.org/fred2/graph/fredgraph.png?g=1Vst

SafelyGraze's picture

reassuring thought of the day:

"Were a Fed chair to become incapacitated, the vice chair -- former Bank of Israel chief Stanley Fischer -- would take over the Board of Governors."

http://news.yahoo.com/feds-yellen-resumes-schedule-struggling-finish-spe...

 

Handful of Dust's picture

AB, solid analysis. It may also explain why gold has not risen again as yet since velocity is so low. However, if LFPR and velocity are so low, how can housing stay so high?

Took Red Pill's picture

"If existing home sales are up 35% from the 2009/2010 lows, how could mortgage purchase applications be flat since 2010?"

People paying cash for homes particularly foreign investors like the Chinese, although that money has been drying up.

greenskeeper carl's picture

blackrock becoming the biggest landlord in the country probably has something to do with that, too.

Hype Alert's picture

My brother had a major vendor's manager recently quit a very high paying regional position so he could help her manage her agency selling RE to Chinese.  Peaks and valleys.

Son of Captain Nemo's picture

On that note. Some more comforting news on continued "mass refugee migrations" complete with other Fukushima like events to distract us when the timing is deemed appropriate by our overlords!

Anybody know if this company has gone public yet?

macholatte's picture

 

Did Quinn finally post something worth reading?

 

 

 

 

 

SixIsNinE's picture

i dunno, where's David Pierre (sic) ?  gotta check in with him first 

Bendromeda Strain's picture

Someone invokes Candyman in the bathroom mirror and you show up? Stop spamming the important posts!

greenskeeper carl's picture

david pierre: 9/11 LITMUS TEST FUCK YOU JIM QUINN.

 

there, does that make you feel better?

RaceToTheBottom's picture

"A funny thing happened after the peak. Wall Street banks accelerated the issuance of subprime mortgages to hyper-speed."

The banksters did this on purpose not only to rid themselves of their bad loans but also to make the situation worse, so that the FED would have to save them and start the whole designation of TBTF.  

This was all planned by the banksters and they should pay for it, instead they get paid...

End the FED. They are the Bankster enabling arm with influence on the quazi government

Jack's Raging Bile Duct's picture

Third world status will not bring back manufacturing to the USA. Present third world countries with the manufacturing base only maintain their merchantilism because of the USA consumer, and to a slightly lesser degree, the European consumer. The labor participation rate declining is not necessarily a bad thing either. More goods with fewer working is one step closer to material utopia.

We already know the reasons why things are, and why they won't be solved. TPTB have destroyed money. Money is no longer an effective store of value, meaning that labor cannot effectively accumulate wealth. Commodities and capital goods required to make consumer goods nominal rise with inflation, while labor cannot. Biflation bitches. Fix money, or simply allow for competing currencies, and all of today's ills are cured. People will still be working less due to technological advances, but they won't be poorer for it.

End the FED.

TeethVillage88s's picture

Great Chart. I think the FED, TBTF Banks, and many corporations want low Money Velocity both to keep wages low and to keep the Middle Class Small.

There isn't much else it could be.

Sure I probably missed a couple of things, but it is obvious that US Congress does not represent the Middle Class, is enamored with Power and Money, and that they are the target of schemes to influence their positions.

In any case it is Laise Faire Economics and Status Quo for congress members. They don't represent the common man, nor do they care who they hurt with their Racketeering, Anti-Trust, and Treason.

- Too Bad we don't have Honest Brokers in DOJ, FBI, SEC, FINRA, FTC, GAO, CBO, FED, Treasury, OCC, FSOC, BCFP, CFTC, FDIC, FHFA, SIPC

38BWD22's picture

 

 

Oldwood

Quite right.  At this point it is really a look after ourselves period.  The system will reset, there is no way that it cannot.  By hyperinflation, by more borrowing, by default on debts or some combination of those.  We have passed the Event Horizon.

Our preparations should have strated years ago.

"The best time to plant a tree was 10 years ago.  The second best time is right now."

FreeShitter's picture

Most of us have seen this movie already so we are just waiting for the end credits.

LetThemEatRand's picture

If you wait until after the credits have rolled and everyone has left, there is a vampire squid on the screen wearing a duck outfit.

TeethVillage88s's picture

Anyone have this video?

Elizabeth Warren Video, Late Night with Steven Colbert, 23 Sept 2015.

Defends Dodd-Frank and gave stats to prove the value of CFPB formed, like 650,000 complaints handled, and many changes forced on corporations.

Edit: Looks like CBS didn't release the segment of Elizabeth Warren only, so you have to go through whole show or just the 2:00 minute segment that only shows her saying she is not running for President.

Shame on CBS, as usual.

http://www.cbs.com/shows/the-late-show-with-stephen-colbert/video/jUNG_y...

Apparently I don't have the computer configured to play it anyway.

38BWD22's picture

 

 

Elizabeth Warren is just another Democrat Socialist.  With the current Democrat Socialist in the White House, one would think that we have had more than enough of that.

TeethVillage88s's picture

Obama is a typical one party US Politician.

He is social engineering, so maybe that is a Democrat thing.

- Obama is a Right Wing, War Monger, Drone Killer, Killer List President, Civil Rights, Individual Rights, and Sovereign Rights Killer, ... but mostly he is a Big Government, Corporate-Shill, Fascist

If you didn't see all the Corporate Socialism, then you are probably a MIC Fascist

Let' me give you a clue. It started during Reagan and G.H.W. Bush hit it out of the park. I can't excuse the Fascist Bill Clinton that Deregulated Banks and caused the 2008 Global Financial Crisis and he facilitated the Wealth Extraction from the US Middle Class to the US/International Elites under various programs including Monopolies and Globalism.

$T Debt Added
J. Carter, ,$0.37 T (4 yrs)
R. Reagan, $1.69 T
G. H Bush, $1.4 T (4 yrs)
W. Clinton, $1.627 T
G. W. Bush, $4.357 T
B. Obama, $6.365 T (4 yrs)
B. Obama, $8 T (6 yrs est.)

Federal Budget 2014 = $3.5 Trillion (B. Obama)
Federal Budget 2012 = $3.54 Trillion (B. Obama)
Federal Budget 2010 = $3.45 Trillion (B. Obama)
Federal Budget 2008 = $2.98 Trillion (G.W. Bush)
Federal Budget 2006 = $2.65 Trillion (G.W. Bush)
Federal Budget 2004 = $2.29 Trillion (G.W. Bush)
Federal Budget 2002 = $2.01 Trillion (B. Clinton)
Federal Budget 2000 = $1.79 Trillion (B. Clinton)
Federal Budget 1998 = $1.65 Trillion (B. Clinton)
Federal Budget 1997 = $1.6 Trillion (B. Clinton)

- It is just one Party, Fascism.

Bilderberg Member's picture

Lets say hypothetically an "economic genuis" comes on the scene. His idea is to end the Fed and in fact introduce the 20 trillion dollar bill to eliminate our debt. But he also says with rampant bank hacking there is a need to introduce a credit chip that is implanted in your hand. This will store your credits to buy and sell all goods and will be the only accepted form of payment by law. Again, the Fed is gone and the national debt is gone. Please vote up if you take the chip, please vote down if you refuse the chip 

TeethVillage88s's picture

Suppose someone steals the $20 Trillion dollar bill or otherwise gets it through power or influence. Maybe a China Government or maybe a Warren Buffet.

The Rules are the Rules only till the guy in power changes them, so why would we not just take the debt held by public $13 Trillion and write it off as if it was depreciated over 20 years in Nov 2015.

- Edit: No that doesn't make sense either since $6 Trillion is held by Foreigners
- You would have to recall the Foreign Holdings of US Treasuries, pay for them first, then consolidate
- Probably you could eliminate the Treasuries held by federal government agencies also over a period of years, then consolidate

The Federal Govt operates with the remaining federal debt for multi-year programs, so it is not a good idea to write that portion off. The govt must use credit & debt to operate also at this point.

- This is a Hobsian Decision or illogical to accept a chip for two separate, intangible issues.

- Good Governance would never agree to one bad law in exchange for a separate issue, like asking us to accept Obama care with a dozen flaws to solve uncovered insurance for Americans

- US Congress no longer functions, this is teach Americans wrong-headed ideas

- But clearly neither the FED nor Congress give a damn about the Middle Class or the common man and his expenses, Clearly USA, UK, EU need an Advocate (Not a Lawyer, a Champion) to fight the TBTF Banks and other monopolies

skipjack's picture

Assess China about $3T for theft of intellectual property and poof, that foreign creditor is done.

 

Why not ? What are they going to do, send some nukes to pick up repayment ? Stop trading with their second largest account and put their economy so far underwater the current govt would be hanging from lampposts?

 

It's so easy my dog could figure this shit out.

83_vf_1100_c's picture

  But that would be unfair, sort of like bashing VW when GM killed people and got off very easy. It's an evil concept and I like it. We can keep kicking the can a while longer. No one is getting paid. All that debt is unpayable and will one day go poof. Then, no one will trust anyone and credit will be nil. Folks and 'gov may have to learn to live within their means.

thinkmoretalkless's picture

There would be a kill switch added to the chip

Bob's picture

If they zero out or close your account you are--unless you're a self-sufficient farmer and jack of all trades--dead for lack of money anyway. 

That should keep folks from being bad boys and girls.

Of course, all they have to do is eliminate cash (allow cards only) to exercise the exact same control without all the drama of "chipping" people. 

Fukushima Fricassee's picture
Fukushima Fricassee (not verified) 38BWD22 Sep 26, 2015 6:52 AM

Communist

q99x2's picture

Issue the arrest warrants. Without law there is no law and so on.

Yen Cross's picture

 I'm keeping my mouth shut, about the real issues. I'll list a few. Donald Trump, Real Estate magnate, is going to have to deal with higher borrowing costs. YES, his assets go into a "blind trust", but facts are facts.

 We have a bunch of retards running for office. They haven't the slightest clue regarding the "day to day" operations of the commerse of the United Banana Republic of Amerika.

  It's over-levered corporate real-estate.

 The requirements for developers to build are so easy, I could build a duck pond on Capital Hill.

 This is why BONER is resigning. He conflates freedom with stupidity and common sense.

 MBS, is the next chink in the chain---

 All those Corp. REIT trusts are going to fall like dominos.

OpTwoMistic's picture

"We have a bunch of retards running for office."

I agree, but look at what is in office now.  Carter looks like a genius.

Yen Cross's picture

 I agree.

 Carly "what ever her name is" Fiorina, is a leader?

 I love powerful women, and she need NOT apply.

  She was a failure at H/P and Lucent. Look at the earnings statements from the years she was in charge.

 I HAVE! Look at EPS? Look at cash on hand! Look at sector comparisons. Look at old credit ratings.

  Carly isn't a leader, she's a Human Resource board member.

Pickleton's picture

"she's a Human Resource board member."

 

Isn't that what all the retards in office in DC are?  They manage us, not the US.

greenskeeper carl's picture

I know, I laugh every time she mentions her "business acumen" or something like that. Its all the retards on fox news or the radio talk about, too. SHe lost half of her shareholder's value during her tenure there, AND like 30k people lost their jobs. thats called being a complete and total failure where i come from. I guess sean hannity et al are just really fucking stupid and don't know that, or they are all lying(and know most of their veiwers won't bother to do 2 minutes of research).

 

Although, as I have said before, since she is good at destroying properiety and jobs, she has that in common with all our presidents in recent history, so in a  fucked up kind of way, she is PERFECT

Tall Tom's picture

Jimmah Carter was an extremely successful President who was groomed for the office by David Rockefeller.

 

He loaded his Presidential Staff with Trilateral Commission members, many of whom still shape US Foreign and Domestic Policy through today.

 

Of course being successful at TREASON and SUBVERSION of United Stated SOVEREIGNITY is not something that I personally would be proud about, it is Carter's greatest achievement.

 

He was nefariously brilliant...an absolute EVIL GENIUS...while ACTING AS a BUFFOON so that the public would be easily DISTRACTED.

TeethVillage88s's picture

Yeah, it is perfectly legal to loot a publicly held corporation, then Leverage up to the Max, Pay Dividends to Insider Investors, complain about profitability, take government subsidies, lobby for tax loopholes & rebates, enjoy federal, state, county, city tax waivers... and then off shore jobs, and even declare bankruptcy in the end.

Sure, Vulture Capitalism.

But also having the Executives enjoy the newest buildings, fanciest offices, fleets of limos, company cars, fuel, travel funds for the best class of travel, best conference centers, company houses and apartments,... Unlimited costs for Overhead Admin Costs,... Top of the Line Compensation Packages.

Lose your job, not big deal, you had most of your expenses paid for anyway.

Identify the Problem:

Greed, Corruption, Cronyism (Networking included), Money in Politics & Government, Money in Elections, Money as Free Speech, War is a Racket, Foreign Policy is a Racket, Party Line of Democracy is a Racket, both political parties are One Political Party.

But Hatred, Prejudice, Racism, divides us and is not right.

They want to divide us by all the social issues, just as they want to give us Butter and Circuses, and play act in front of cameras to use military type propaganda against our own people.

Hatred of Jews is wrong.
Hatred of Whites is wrong.
Hatred of Police and MIC for people that want free speech, want to protest, want to exercise democratic rights... is Wrong.

What are their Goals?

Money, Power, Status, Control,... Globalism, suppression of Labor Force, Titles, Lands, Monopolies, Central Bank Monopolies, Loose Banking Rules, Bank Charters that allow them to create money at will in maximum quantities, they want growth which means to buy up and control more markets and companies and labor forces.

What other Goals do they have? War, MIC Spending, control of Global Resources, more interest and fees on energy, financial services, banking, government...

commishbob's picture

MBS is a huge issue.

But what I find amazing is what no one else seems to be talking about (save for Wolf Richter): CMBS.

Commercial properties are in as big, if not a bigger, bubble than residential properties. And we all know that small businesses are dying off by the thousands every yeear. Add to that the stratospheric prices for commerical real estate, and you've got one heck of a mess in that sector as well. 

buzzsaw99's picture

nirp can fix this /s

Yen Cross's picture

   So I'm paying 9-10% on my revolving credit. 15-30-50 basis points are meaningless, on my monthly statement.

 Sub zero rates are meant to hit medium sized businesses. How does APPL get affectted when they store 85% [almost 86] of their assets off-shore?]

 Some people argue lower corp tax rates will fix things. Personally... I think CEO's trust politicians about as far as the next check.

Whatta's picture

Janet had a nirp slip. Nah, it was the MN dude, Kotcherlawhatever.

Yen Cross's picture

 This Keynsenian clown

 He's not even a voting member next month. The January '16 meeting matters.

MrSteve's picture

a better fix is to tax robots like workers so Social Security will continue to be funded, ZH'ers love this kind of thought leadership!

lasvegaspersona's picture

or...rather than 'evil banksters'...

The banking system is/was dealing with a dying currency. It was after all, up there in years for a fiat currency. It needed to expand to survive, to deal with the currency expansion that fiat systems need to survive. The pressure is/was on every part of the system to keep growing. It is true these guys made money and that they did it with other peoples money but their actions are/were what you would expect from a banking system.

In the past the Fed could allow a minor correction, a small recession, a bit of clearing of dead wood. By 2008 however it is likley they felt they did not have that option. Greenspan felt he could not raise rates. He could not allow derivatives to be examined too closely. They had reached the terminal phase of the currency's life cycle. It had happened to all other currencies but this one was acting as the global reserve. When it died all the other currencies would go with it. They had to fight to the end and tolerate all kind of irregular activities.

Whether it is 'pure evil' or a valiant struggle to preserve the value of assets can be a matter of opinion. From a slight distance you can't really tell the difference. The end is coming either way.

When it is over we'll see. Will the bankers wind up owning 'all the assets' or will the majority of bankers fall prey to their own beliefs about the banking systems. If jamie Dimon winds up holding a billion dollars worth of worthless paper and no gold will you hate him as much then?

38BWD22's picture

 

 

lasvegaspersona wrote:

"If jamie Dimon winds up holding a billion dollars worth of worthless paper and no gold will you hate him as much then?"

Yeah, probably would still dislike him (a lot) because of his mutiple roles of getting us into this mess, even should he hold only paper gold, ha ha.

*   *   *

I agree that in the past "FED tweaking" was good enough.  But, times have changed, as has our financial system running on empty and the huge debts.

The end is nigh, you are completely right.  

Prepare.

RaceToTheBottom's picture

You do realize you are enabling the banksters by giving them a get out of jail card for free don't you?

It is obvious they are not the only ones, but why absolve them of error?  A debt based system is used by everyone that uses debt, but banksters are central to every debt based transaction, which is now every transaction.

"but their actions are/were what you would expect from a banking system."

If they started appearing at the base of their skyscrapers with push marks on their backs, at some point behavior changes would ensue among them.

 

WhackoWarner's picture

With all due respect, and I do agree. 

But as much as the FED and Squid and captured legislatures need to go SO do these secret FREE TRADE deals that are handing over the last of democratic will to multi-national corps.  This started with NAFTA and is steam rolling forward.

We (the lowly useless eaters)  are truly sunk if they pass. 

It is all so intertwined with premeditated greed and desire to own every productive asset on the planet.  Mining companies, copper, agri, all raw materials owned by the few.  Follow the money, always it leads back to a very few.

 

I refer everyone to this study done a few years back.  Available if you look.

 

The network of global corporate control

 

 

 

 

  Authored by............Stefania Vitali1, James B. Glattfelder1, and Stefano Battiston1?

 

It is so worth the read.

edit: to make title bold

WhackoWarner's picture

HERE IS THE LINK...  as Forbes titled it.."the 147 companies that control the world"..and if you follow the money the ownership gets narrower and narrower.

 

http://arxiv.org/pdf/1107.5728.pdf

Buster Cherry's picture

Okay, my fingernails were chewed to the quick and my knuckles were white in 2008.

After 7 fucking years of being on the brink,,,I'm a little worn out now....

I think I'll go home now....

 

http://www.wavsource.com/snds_2015-09-20_4380281261564803/movies/forrest...