The banking system is inherently flawed and it is part of the larger system of government and Wall Street Corruption. The recession/depression has revealed the truth that our system of capitalism that was meant to be fair for everyone is long gone. This recent redistribution of wealth from middle class to the wealthy was the biggest push yet for the oligarchs to usurp all the freedom and earning power from the middle class. The powers that be pushed hard to brain wash everyone that the system was fair and the pie was growing for everyone. The reality was that they were angling for the take over as they overloaded the system with RMBS that could never be resolved or extracted from a security if there was a default. They had no interest in what happened after they took their huge fees, sold insurance on policies they knew they could never pay out if the system melted down. They had complete confidence in the government to bail them out. They also had complete confidence in the gullibility of Americans to believe their BS that the world would end if any of the banks were allowed to fail.
The truth was that it wasn't the world that would crumble when a few banks fell, it was that Wall Street and the major players in the CDO markets would vaporize over night. Wall Street is the king of leverage and always has been while they fain to hedge their risk only to reveal that they had not hedged much of anything once the system collapsed. Their only hedge is the federal government bailout.
AIG is perfect example of a company selling Credit Default Swaps that it knew they could never pay if the system came under minor stress. In the end the federal government came to the rescue. No one was held accountable or responsible for the trillions of dollars needed for the bailout which in hindsight was a round about bailout of the "gold standard of companies" Goldman Sachs.
Unless something is done to hold the parties accountable, we will have learned no lessons from the complete decimation of the golden goose of the American economy, the housing market.
The last hope lies with the AG of the individual states. The Nevada AG Cortez Masto is showing the courage to press for accountability by filing suit against B of A for making a mockery of a previous settlement that was reached in NV in 2008. The banks new what was coming if this crisis was strung out too long so they quickly agreed to a settlement that they had no intention of honoring.
They bought another 3 to 4 years of freedom from criminal activity and the ability to continue to use fraudulent documents and repossess homes when they had no legal authority to do so. The used this settlement in 2008 as cover to continue criminal activity that become so egregious that over 265000 complaints were made in Nevada alone regarding the banks failure to live up to the terms of the settlement. It was as if the banks thought if they could cause a large enough mess for long enough time that the government again would be forced to allow them to skirt the rule of law and chain of title precedent.
They may have done just that by capturing property through the foreclosure process and then selling it to a new owner when the bank never had the right to repossess the property in the first place. What is amazing is that more people throughout the country are not outraged at the turn of events because it put everyone's right of ownership in question. It doesn't matter if your mortgage is paid off or not, the banks have taken liberty to fraudulently claim ownership with the blessing of the court. The implications are astounding because it means the foundation of America, the right to own property free from worry of seizure has been trampled.
The trampling has taken place on a foundation of fraudulent activity. The case of Bank of America and Country Wide gives a perfect example. There are court documents of statements made by Country Wide employees saying they never transferred original documents to the proper securitization trust in order to meet the PSA guidelines. The Pooling Service Agreements have very strict regulations as to when the note and mortgage documents must be delivered and if they deadlines are not met, there is no remedy other than falsifying documents or back dating important papers. Since these mortgages were to be securitized and sold on Wall Street they also are under the laws of the SEC and every year the trust have to put forth documents stating that all the I' s are dotted and T 's are crossed and if they falsify these reports it is considered securities fraud, something that until now, the SEC did not take kindly to regardless of the reason.
The potential for the rule of law to be ignored as the crisis become more and more convoluted is very high. The parties involved seem to know the longer they can kick the can down the road, the more difficult it will be to hold anyone accountable so they are in no hurry to resolve the issues. Of course the politicians are in no hurry either because they are bought and paid for by the major banks and other Wall Street money. With the next election always looming over the horizon politicians in Washington never have the fortitude to step up to the major players and risk losing their meal ticket.
The system has turned into a giant money laundering machine that is endorsed by the government and the current administration. The fact that Washington government is on board makes it even more difficult for those with the mind to hold someone accountable for the criminal activity. (Nevada AG and NY AG are the only ones so far to really step up to the plate and speak the truth, as the administration pushes for a "let the banks skate" settlement that screws just about everyone except the banks themselves. )
The stimulus is for the benefit of the financial institutions only. It does nothing to help the economy or the American people. The continued 0 interest rate policy does nothing except let the banks make risk free money by shuffling funds between the bank and treasuries. They are charging over close to 5 % loans that could easily be 3 or 4 % since the banks are getting virtually free money. I think the economy could do very well if small business or average citizens could get free money also. Imagine the stimulus boost that would occur if business owners could get 0 % loans or if homeowners could get 0 or 1 to 2 % improvement loans. It might not be huge due to the high job insecurity but it would do a lot more than what has occurred so far by just handing unlimited funds over to the banks.
Today the Fed has put forth operation twist that will give more easy money to the banks and to little to help the economy. It would be nice after 4 years of floating money to the TBTF banks and other Wall Street companies and getting zero results that they would not keep trying the same thing. However, the influence of the lobbyists and those appointed to the inner circle of the White House are pushing the buttons in Washington and it doesn't look like it will change anytime soon. It likely will not matter which part is in power or who is the President. We have seen the result of the new blood from the tea party movement and the influx of independents and republicans to congress. The result was just more of the same as they all take part in the game that pays themselves first and the people last if ever.
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