Saturday, November 27, 2010

Why low interest rates do not help the housing market and heavily benefit investment banks – 40 percent of Americans have mortgage rates higher than 6

Poverty is an anomaly to rich people: it is very difficult to make out why people who want dinner do not ring the bell. –Walter Bagehot Over the weekend it was leaked that US authorities were gearing up to bring insider trading charges against investment banks, consultants, and a wide net of Wall Street players. We’ve gone down this road a few times since the crisis started and many of the crony banking institutions merely settled out of court paying the government off with taxpayer money. It’ll be interesting to see that going on our fourth year of the crisis whether anyone will be charged criminally for what has become the biggest Ponzi apparatus known to humankind. Wall Street simply doesn’t understand how so many people can be angry about their record profits as they push people out of their homes through rocket dockets like those in Florida. If you are poor or middle class then not paying your bills is sufficient for you to be “thrown out on the street with prejudice” but for the big banking system it merely means more generous bailouts. And those being thrown out are also selected with bias; for example how is it that many non-payers in expensive California homes have more leeway to ignore paying their mortgage while a person in Florida with a $90,000 loan is ushered out in a McDonalds like court system? If you can rewind to 2007 when the proverbial debt hit the fan, most of the bailouts were pushed with the pretext of “saving” the housing market. If that was the mission, it has been an abject failure. (more)

No comments:

Post a Comment