The Bank Factor

I feel compelled to make everyone aware of an amazing article in the current issue of Rolling Stone by the brilliant writer Matt Taibbi. To view this article, check out the following link...it is totally worth the read:

http://www.rollingstone.com/politics/story/32255149/wall_streets_bailout_hustle

Much of what Matt talks about in this article pertains to the greater systemic issues within the banking system and the Federal policy and he brilliantly draws analogies to common scams or "grifts" that have been used historically by criminals. While this article provides an amazing insight into the financial system, the bailout, and how the banks have been able to post huge profits even in these hard financial times; it is also provides the fundamentals as to why the housing situation is where it is and really calls into questions the practices and motives of the banks.

The article speaks briefly of bank deregulation that occurred in 1999 and the repealing of depression era safeguards that allowed the banks to get into other businesses like insurance. This brings up an interesting point and possibility. The banks have been, for many years, trying to get into the business of real estate. This has been one of the last holdouts and what has really kept the banks at bay is the strength of the National Association of Realtors and their lobby in Washington. Realtors have, fiercely and successfully railed against the banks, who already have many of their tentacles in most real estate transactions, to prevent them from becoming direct parties to real estate transactions as sellers of property.

Call it conspiracy theorist/tin foil hat if you will, but the facts laid out within Matt Taibbi's Rolling Stone article suggest that, if there's profit to be made, there is no low these banks aren't willing to sink to. Currently, they are reinflating the same bubble that burst and caused the whole market to collapse in the first place and they seem to be doing it with the Fed's blessing, the government's assistance, and on the backs of the American people. The run up in the stock market has been puzzling for many people because the jobs have not been returning and, in fact, there seems to be more job losses, more foreclosures, and tighter lending restrictions on home loans. The estimates are that 40 percent fewer home loans will be written than in prior years and that there will be 3 million or more foreclosure filings this year. So how in the world, with all of these factors, is the stock market being bouyed, up over the 10,000 marke, and posting near daily modest gains. Again, it is all about manipulation and the fact that the same crap that brought down the house of cards is being repackaged and fed to us once again. This time, it is on our dime and yet the American public doesn't seem motivated to do anything about it.

It really is time for us to call our elected officials, the current economic system, and the people who have unduly influenced this situation into question and, if appropriate, have them brought up on charges and incarcerated. They are no different or better than the Bernie Madoffs of the world except the Ponzi scheme is bigger and, whether we want to believe it or not, the probability of our own elected officials being in on the action is likely.

The banks sold the Fed the idea of becomming commercial banks, almost overnight, so why not the idea that they should be in the business of selling real estate? That will be their next move when things continue to spiral out of control. Their justification? That they now OWN so many of the physical real estate assets out there that there is no choice but for the government to allow the banks to engage in the business of real estate. And, once again, it will be a happy windfall for them and an additional revenue stream. And when they have accumulated a significant market share of physical property, once they've strip mined their other schemes, they will use real estate as a new one.

For example: Currently, there are conservative estimates that there is a large "ghost inventory" of 1 million or more homes that aren't on the market. If you ask any Realtor out there, they've seen these homes. They have been in neighborhoods where they pass a home that is clearly vacant, has clearly had it's lock drilled out and shows signs that it has been taken by the bank, but when the agent looks for the listing it is nowhere to be found. These homes are sitting there, unlisted, but the question is...why?

Well, many people simply think there isn't enough manpower for the banks to get all these homes listed. Some think that the holdback is, in part, intentional so that the markets aren't further deflated by an over abundance of homes on the market. It is probably a combination of the two, but as the banks look at the number of homes that are in some state of default currently; and that would include the 2.8 million homes that received foreclosure notices last year, the 3 million that will receive them this year, and the undetermined millions where the homeowner is technically in default but the bank isn't taking action...it is clear that the banks have an enormous opportunity to manipulate the real estate market in the coming years.

Much in the way siteholders predetermine the number of precious stones that will be released into the market in a given year, thus colluding to create an artificial market based on manipulated supply, if the banks have enough property in their possession, they will be able to effectively manipulate inventory as well and thus fully control the market's pricing and its relative stability.

So, theorhetically, when they actually have possession of all these homes, a couple of things are conceivable. First and foremost they will lobby for and, in all likelihood, be given the green light, to get into the business of selling real estate directly. In this way they will be able to manipulate many aspects of the market including pricing as well as mortgages. They'll make prospective buyers feel like it is "convenient" because going to their local bank branch will be like a one stop shop for their physical residence, the loan to buy it, the insurance for it, and just about every way that a bank could squeeze as many dollars out of that person's paycheck every month. In fact, many of us may have noticed that banks like JP Morgan Chase have actually been increasing their neighborhood presence despite the economic downturn. Clearly, this strategy is not without its roots. There are movements around the country, because of the points brought up in Mr. Taibbi's article, where people are pulling their money out of the big banks in protest and are, instead, turning to their local banks and credit unions. So, perhaps, the increased local presence is a strategy to disuade people from doing this, maintain and build local PR and, in fact, prepare for their entry into a wider consumer market. All this is and all this does is continue to fill the pockets of the criminals who have orchestrated the economic downfall.

And it isn't just going to be local people in communities helping out...oh now, the banks will double dip on the government as well. When the banks, in fact, become the largest residential landholders in the country, they will turn to the government for help. Instead of private investors putting money into blighted communities and taking advantage of Section 8 programs, the large lending institutions will be in a position to have homes, condos, and apartment buildings across the country that are filled with tenants that the government is subsidizing. And since, by the time this happens, any defaults will have been written down and/or the government will have paid out on any FHA/Fannie Mae/Freddie Mac backed loans to the tune of 70% of the judgment value...the banks will be able to effectively double dip with the government and produce a tremendous income stream that will allow them to house people on government subsidies, until a point where the areas regain their value and then can be sold at a tremendous profit.

If this happens, the banks will fully be in control of our country and will have an even heavier hand in all policy.

If you are losing your home, have a story to tell, or have something to say, please make your voices heard.

We need to make sure that the word is spread and that this criminal behavior is ended or it will be the end of America.