The Fed's Bail Out: Whose Money Is It?

[Joanne98]

On its own initiative the Federal Reserve has been making decisions to bail out the U.S. financial industry from exposure triggered by the collapse of the housing bubble. The bailouts, which are now extending beyond the traditional regulated banking system to investment banks such as Bear Stearns, involve hundreds of billions of dollars.

A bubble—indeed any type of risky borrowing—is a gamble or a bet. The housing bubble is proving to be probably the worst “bet” ever made by any nation in history. The bet was made by Federal Reserve Chairman Alan Greenspan in cahoots with the Bush administration, because the economy had run out of income derived from legitimate sources like jobs and manufacturing.

You see, the capitalists, who’ve also been borrowing from the banks, sent these jobs overseas aided by free trade agreements like NAFTA. Lacking income from employment, people then used the temporary proceeds of their mortgage and home equity loans as a source of cash (the proverbial family-home-as-ATM) in order to pay credit card debt or college expenses, buy cars, or defray medical expenses.

But the Fed’s current bailouts are not for the ordinary people who can no longer earn enough money to pay for the necessities of life. There are no bailouts—at least not yet—for homeowners facing foreclosure or bankruptcy. Moreover the housing crisis is triggering problems with overextended lending of other types, including leveraging of acquisitions by equity funds such as Carlyle Capital, which is about to be gobbled up by J.P. Morgan Chase.
http://www.globalresearch.ca/index.php?context=va&aid=8424

[Trajan]

1. Well said ....

I keep pounding on issues of worker earnings and compensation .... Which have slid deeply in the last 20 or so years ....

Without wage increases to buttress family incomes as years go by, and with costs continually and inexorably creeping upward; You finally reach a point of critical mass where families stop purchasing 'frivolities', unless they have access to easy credit, which extends their happy little party until the credit runs out ...

Without the REAL increases in income and a wage basis that escalates along with the cost of living; Workers CANNOT forever buy those things that bring jobs to citizens, AND profits to corporations ....

The RW economists have again shot the nation in the foot ....

Bring back UNIONS, and make some real headway .. again ....

[Joanne98]

2. Amen

[Earth Bound Misfit]

4. Great Post!

:thumbsup:

k & r :kick:

[veracity]

3. Who owns the fed? Do you know?

Must read: Dear Lou Dobbs, Who Owns the Federal Reserve?

http://tvnewslies.org/tvnl/index.php/editorial/jesse-richards-commentary/19-jesses-thoughts/665-dear-lou-dobbs-who-owns-the-federal-reserve

[flashl]

5. Bailing out when homeowners need help

Panel drops mortgage fraud cases

The Minnesota Financial Crimes Task Force has decided to stop taking mortgage fraud cases in a move that may or may not dent the state's efforts to combat a widespread problem, depending on whom you talk to.

Either way, the decision speaks to the tough time law enforcement is having tackling a new breed of financial crime, one that has played a significant role in the nation's foreclosure crisis and doesn't fit neatly into traditional police beats. In fact, the U.S. Attorney's office in Minneapolis is holding a special meeting today to discuss just how federal and state laws can be used together to better tackle mortgage fraud.

"If the task force can't do it, then we need to reinvigorate this other task force to start coordinating cases," said John McCullough, executive director of the Retailers Protection Association, which includes lenders. McCullough also is a member of the council that oversees the Minnesota Financial Crimes Task Force.

The "other task force" McCullough referred to is a group of federal investigators in the Twin Cities including the FBI that have been working on mortgage fraud with prosecutors in the U.S. Attorney's Office.

As for the Minnesota Financial Crimes Task Force, its 17-member oversight council in January instructed the group to shut the door on mortgage fraud, saying the cases were so time-consuming they threatened to overwhelm the group. Chris Omodt, a Hennepin County Sheriff's lieutenant who heads the task force, said he thinks crimes will go unchecked, but acknowledges it doesn't have the resources.

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Many homeowners still trapped in Ameriquest loans

Foreclosure possible even for those with fraudulent mortgage terms

In the fall of 2005, well before the mortgage meltdown hit, Roland Arnall was trying to become an ambassador.

President George W. Bush had nominated the founder of California-based Ameriquest Mortgage to head the U.S. Embassy in the Netherlands. But some in the U.S. Senate questioned whether Arnall was the right choice.

With the pressure on, Arnall's company agreed early in 2006 to a $325 million settlement with the states. Within a few weeks, the Senate blessed Arnall's nomination, clearing the way for the self-made billionaire to pack his bags for the Netherlands.

The settlement was hailed as a significant victory for consumers. But as it turns out, it did very little to ease the huge financial hit experienced by thousands of Americans still trapped in Ameriquest loans.

The settlement offered Ameriquest homeowners a token payment.

For homeowners stuck with fraudulent Ameriquest mortgages, the government's settlement offered no revision of the terms of the loans.

Consumer advocates say that Ameriquest customers at risk of foreclosure have great difficulty winning modifications to their mortgages now, even though the Bush administration has encouraged lenders to make reasonable changes to keep families in their homes.

Same scenario, different day. When the robbery taking place is sooooo big and soooo complicated, let's shut it down.

Yet, there are discussions, Congressional hearings, panels, and talk of creating new laws to save the system that robs and imprisons Americans, their children, and generations to come.

More than a year before acknowledging the current meltdown, economists were predicting that U.S. citizens will be paying the debt created for the next 75 years. Now that everyone is looking into an economical abyss, no one can predict an end.