• Like a gambler in a casino hopelessly trying to recoup his immense losses by gambling more and more, ‘Paulson’ (proxy now for the US authorities who thought they would never be found out), is pouring more and more 'new' money into the system: and yet the defaults are exploding and will continue to go off like grenades for the foreseeable future, so that he can never hope to catch up.
Faced with this situation, the two nearly defeated but still typically arrogant US criminalist co-conspirators, Messrs ‘Paulson’ and Bernanke, appeared before Congress and tried to ‘bounce’ it into coughing up $700+ billion of emergency appropriations on demand, even threatening Martial Law if Congress demurred. When Congress naturally baulked at this arrogance, there followed the two weeks of theatrical activity parodied in our ‘sausages’ metaphor report.
The ‘new money’ was ‘needed’, in reality, to underpin the financing carousel that had suddenly stopped circulating; but in the meantime, since the carousel had stopped, the financial markets descended into chaos while the politicians and the representatives of the criminalist Executive squabbled over their sordid pork-barrel document which duly grew to well over 400 pages, a significant proportion of which have never been published. Final ‘agreement’ on the legislation satisfied the stock markets for a just couple of days, after which they reverted to chaos mode.
One likely reason for this is that that a hedge fund located in Grand Cayman linked to prominent figures may have received a proportion of the final pork-barrel $780 billion of US taxpayers’ money to provide the basis for a brand new 'funny money' financing platform, which has been 'Paulson’s' objective all along. These people are still fantasising that they can exit from Government with the finance that they ‘need’ to restart their own ‘refunding’ and trading carousel, after leaving office.
• This is a fantasy because most of these people face a bleak future that ‘they never anticipated’.
DUPLICITOUS BUT SUBDUED GREENSPAN BAMBOOZLES CONGRESS AGAIN
In his testimony before Congress on 23rd October, Dr Alan Greenspan, far more subdued than usual, and facing the continued prospect of arrest, nevertheless resorted to his familiar smooth verbiage to describe what has happened, which of course made no reference whatsoever to the fact that he is himself the architect and originator of the fraudulent finance that underlies the worst financial crisis in world history – a crisis that was predicted by this website.
• This smooth verbiage included the following:
‘This crisis has turned out to be much broader than anything I could have imagined’ (unspoken: I never imagined it because I thought the music would continue for ever, would never stop, and I could keep on stealing, stealing, stealing). ‘It has morphed from one gripped by liquidity restraints to one in which fears of insolvency are now paramount’.
‘The evidence strongly suggests that without the excess demand from securitizers, sub-prime mortgage originations (undeniably the original source of the crisis) would have been far smaller, and defaults accordingly far lower’.
As will be seen, all that Greenspan did here was to describe the situation in general terms, offering no solutions and deflecting attention from his own culpability while at the same time perpetuating the CIA ‘slide’ that the crisis stemmed originally from the ‘sub-prime mortgage meltdown’.
The only element of that last statement that is true concerns the fact that when the ‘taster’ low-interest period of certain mortgages ended, very large increases in monthly payments proved impossible for lower-income householders to finance. However the real financial scandal buried inside this ‘slide’ is that the mortgage bank prospectively gets paid FOUR TIMES per mortgage:
Payment #1:
Down payment and subsequent income stream from the householder granted the mortgage.
Payment #2:
A discounted payment from the ‘mortgage collectiviser’ (such as Lehman Brothers or Bear Stearns) which buys the mortgage at a discount from the mortgage bank and then sells it on to Fannie Mae or Freddie Mac, which then places the mortgage in a trust, which then creates Collateralised Debt Obligations (CDOs) after collectivisation with other mortgages (or even with dud paper), and then splits the CDOs into tranches, which are then multiplied creating a ‘basket’ of pools of tranches which are sold off to institutions, especially carousel participating institutions abroad which didn’t originally do their due diligence, with the resulting avalanche of completely worthless assets being propped up alone by the NAMES OF THE INSTITUTIONS marketing them.
Of course, from the earliest stage of this avalanche, the owners of the ‘assets’ beyond the original mortgage bank have sold them ‘without recourse’ to the holder of the original mortgage.
Therefore, if the mortgagee defaults, so that the ORIGINAL asset has become worthless, none of the parties ‘downstream’ is any the wiser. They just keep on marketing successive tranches of these fake ‘assets’ ON THE UNCHECKED ASSUMPTION that the original mortgage is still intact.
• For Greenspan, who was arrested in June 2007 and held under house arrest/in jail for three weeks to bring him to his senses, to tell Congress that he ‘couldn’t have imagined’ this being the case, is TYPICALLY SELF-SERVING and UTTERLY OUTRAGEOUS.
Payment #3:
Since the bank continues to hold the associated Universal Commercial Code 1 document that goes with the original mortgage and does not ‘travel’ with the subsequent hypothecations, the bank is in a position to sell the mortgage a second time, to a third party (which starts the replication process beyond the mortgage bank all over again).
Payment #4:
Finally, the bank of course continues to demand the repayments from the mortgagee. Should the mortgagee default, and foreclosure occurs, the bank hopes to be in a position to repossess the property, whereupon it becomes a realtor and proceeds to sell it or to provide a mortgage against it from scratch (which would open up a further three prospective payments for the mortgage bank in accordance with the above sequence).
In such cases, people facing repossession should, as we pointed out in our report dated 26th December 2007, demand that the TOP COPY of the mortgage document be presented to the Court.
Since the bank has sold the mortgage on, it may not be able to comply with this demand, in which case the repossession should be adjudged to be null and void. |
