“Long Beach Financial was moving money out the door as fast as it could, few questions asked, in loans built to self-destruct. It specialized in asking homeowners with bad credit and no proof of income to put money down and defer interests payments as long as possible. In Bakersfield, California, a Mexican strawberry picker with an income of $14,000 and no English was lent every penny he needed to buy a house for $720,000.
Michael Lewis: “I’d never taken an accounting course, never run a business, never even had savings of my own to manage. I stumbled into a job at Salomon Brothers in 1985 and stumbled out much richer three years later.”
Lewis wrote a book, “Liar’s Poker,” about his experience on Wall Street in the 1980s, after having secured a job there. He verifies that greed is the only driving force in unrestricted capitalism. Which means for the average investor, the market is high risk gambling. It’s like visiting a casino but at the casino, there are rules that are followed. In an out of control, unfettered capitalist environment, there are no rules.
In this Dec. 2008 article, “The End of the Wall Street Boom,” he revisits Wall Street, writing about the cast of characters who play reckless with other people’s money, some without a clue and others who know exactly what they’re doing. Since there was no controlling legal authority, the current disaster could have been predicted.
And it was. I knew this would happen in 2005. No, I don’t even have a basic working knowledge of the financial sector. I simply listened to those experts who predicted the collapse and the reasons why. I got out before the housing bubble burst. But this current crisis may be the threshhold to a new world that promises a very unpleasant journey for everyone.
Writer James Howard Kunstler predicted on Sept. 8, 2005:
“If fewer suburban houses are sold because of higher energy prices, the creation of false liquidity in the form of mortgages spun out of thin air will cease. If this stream of false liquidity ceases, the government-sponsored entities who bundle all this debt into tradable instruments will find themselves in trouble. If they go off the rails, the American finance sector will follow like a choo-choo train.”
Lewis talks about Steve Eisman, a financial analyst, whose household help took part in the subprime loan program:
“Lenders were making loans to people who, based on their credit ratings, were less credit worthy than 71 percent of the population.” The baby nurse that Eisman “hired back in 1997 to take care of his newborn twin daughters phoned him.”
Eisman: “She was this lovely woman from Jamaica…One day she calls me and says she and her sister own five townhouses in Queens…How did that happen?”
Lewis: “It happened because after they bought the first one and its value rose, the lenders came and suggested they refinance and take out $250,000, which they used to buy another one. Then the price of that one rose too, and they repeated the experiment.”
Eisman: “By the time they were done,…they owned five of them, the market was falling, and they couldn’t make any of the payments.”
(2006): “Eisman knew subprime lenders could be scumbags. What he underestimated was the total unabashed complicity of the upper class of American Capitalism. He knew that the big Wall Street investment banks took huge piles of loans that in and of themselves might be rated BBB, threw them into a trust, carved the trusts into tranches, and wound up with 60 percent of the new total being rated AAA.”
Eisman wondered how “the rating agencies justified turning BBB loans into AAA-rated bonds.” The answer was they couldn’t. They just did it.
After the collapse of the market in 2008, he said, “That Wall Street has gone down because of this is justice…They f….d people. They built a castle to rip people off. Not once in all these years have I come across a person inside a Wall Street firm who was having a crisis of conscience.”
Lewis met with John Gutfreund, former CEO of Salomon Brothers, to discuss the events that took place.
Lewis: Gutfreund “agreed that the main effect of turning a partnership into a corporation (Salomon Brothers) was to transfer the financial risk to the shareholders…and to the U.S. government.”
Gutfreund: “When things go wrong, it’s their (taxpayers and government) problem. It’s laissez faire until you get in deep shit.”
Read the complete article and discover how these criminals shorted companies and made up bonds without a mortgage, knowing that the whole thing would come crashing down. They made their money, they’re not in prison and we are being forced to bail them out.
And don’t forget the three automakers. They also want a bailout after their failures. These are the CEOs who sent their factories overseas for cheap labor. Their factories in Mexico produce American vehicles that are then shipped to the United States. The top pay for an autoworker in Mexico is $3.50 per hour.
Their goal is to destroy the unions and establish an economic trading region, a North American Community where citizens of the continent can “live and work” anywhere within North America. It won’t be practical, however, “until the wage differentials between Mexico and its two North American neighbors have diminished considerably.” American wages and benefits for workers in the developed countries must be reduced to a much lower level so that these corporations can be “competitive” in a global environment. (Pages 27, 28, see next paragraph)
The plans for the merger of North America can be found on a U.S. Department of State article (a reprint) which praises the Council on Foreign Relations plan for building this North American Community, a roadmap to the Security and Prosperity Partnership of North America. Click State Department link above, read the article, click on link at bottom, then on English Version, 295K PDF, pp. 27,28.
See thesigintreport, archives, May 12, 2008, “Bush: CEOs use Global Workforce to replace American Workers, lower wages”
General Motors is one of the corporate members of the North American Competitiveness Council, which was made a permanent institution in 2006 at the U.S. Department of Commerce. The ten members of the NACC, American branch (Canada and Mexico have ten each), were appointed by the U.S. Chamber of Commerce.
These corporate leaders helped develop the CFR plan for building a North American Community, which includes a free flow of labor across North American borders. Corporate CEOs also support an amnesty immigration bill for up to 20 million illegal aliens, not counting all of those who will cross the border after the bill is passed next year. Yes, that means more jobs will be lost to the third world and wages will continue down.
The bottom line is that the news is not good for America and its citizens. Those who really rule our nation will “stay the course” as a corporate state emerges. They can’t help themselves. Greed is in their DNA.
Also see thesigintreport, December 1, 2008, new blog, “The New Global Order and the end of Democracy.” The dots are connected and documented.