The Great American Ponzi Scheme or Is It Economic Treason or Terrorism? Maybe It's All Three?

Real Estate Agent with Keller Williams Realty 0590712

Since 2008 tens of millions of people have lost their jobs, savings and homes.  The finger can be pointed to one person who put the nail in America's financial coffin.  The following is just small history lesson:

After listening to the horrific terrorist murders in Norway of innocent people. I thought about what happened to our own country. I know the housing market lost over $10 trillion in equity, millions are out of work and the National Debt is over $14 trillion. Bernie Madoff earned a life sentence in jail for a $65 billion Ponzi Scheme and Scott Rothstein, who I know, and I always thought a nice guy, earned a 50 year sentence. Their crimes are paled by Banksters and those in the legislature and top officials in our government, but are continued to be rewarded for their Ponzi Schemes.

If we had to point the finger to the one person who is responsible, I doubt if you will guess and the answer can be found in the last paragraph of this paper. Don't look yet.

Banksters and Wall Street caused the Great Depression. In response to irresponsible and criminal banking practices leading to the Great Depression the Glass-Steagall Act was enacted in 1933 to keep banks in check by imposing heavy regulations and restricting them from gambling with depositor money. Everything went fairly well until 1999 when the regulations imposed by Glass-Steagall were repealed by  the Gramm-Leach-Bliley Act. This act removed the banking regulations put in place in 1933 because we didn't learn from history. In essence it gave Wall Street and the banks use of depositor money to gamble with and in essence created nothing short of a gigantic Ponzi Scheme.

The banks and Wall Street unregulated took depositor and investor money and made the most unbelievable mortgage loans imaginable. The term for these mortgages, heard at a recent short sale conference is NINJA loans (no income, no job, no assets). I was awed by the buyers I was witnessing buying my listings. No income verification, fraudulent appraisals, fraudulent loan applications, and more. The Ponzi Scheme was so outrageous a landscape company with one lawn mower, edger and clippers had a first and second mortgage of over $432,000! Do you want to guess what happened to the property when the bubble burst? It was one of the first to be foreclosed. Just like any Ponzi Scheme the Banksters and Wall Street took there money knowing there would not be any way these home owners would be able to pay their loans in the future.

Here is how it all worked. The bank and mortgage bankers would make the mortgage loan and sell them at discounted prices to investors which included Freddie Mac, Fannie Mae and 500 investment institutions. In turn, they would take the new money and make more fraudulent loans. Over and over this scenario was repeated. Now that everyone could buy and also had a right to own a home whether they could afford it or not quickly diminished the inventory. With low supply and high demand appreciation increased exponentially prices doubling and tripling in just a few years. Professional and amateur investors got in the act buying and flipping; raking in thousands, tens of thousands to hundred of thousand dollar profits on a single home without seeing the home or even taking title. We had a feeding frenzy of catastrophic proportions. In the heyday, Wall Street and the Bankster were making millions in salaries and bonuses.   Richard Fuld, CEO Lehman Brothers, took home $485,000,000 in salary on bonuses in 2006 - 2007 and Joseph Cassano, CEO of the failed AIG, took home $315,000,000 in 2007.  There were many more Banksters on Wall Street, but these two were the biggest and most blatant in essence thumbing their noses at every single American except their fellow Banksters who were thumbing their noses too.

After all was said and done this gigantic Ponzi Scheme turned into Economics Treason or Terrorism (pick your term). Since this President signed the Gramm-Leach-Bliley Act and unleashed the banks and Wall Street the National Debt has grown from $6 B to $10 B. The one person who put the final nail in the coffin that should be held solely responsible and gave the Banksters and Wall Street the licenses to steal is...Bill Clinton.  To him, we owe all our thanks for repealing Glass-Steagall.


Comments (7)

David Shamansky
US Mortgages - David Shamansky - Highlands Ranch, CO
Creative, Aggressive & 560 FICO - OK, Colorado Mtg

It is sad and no doubt the real players involved are all connected. Madoff was a pawn, no doubt a criminal and what he did was not right but he was the gift horse those who committed the worst of crimes got delivered on a silver platter as the focus got turned from them and poof vanished not to be heard about or brought up again. Do you think it coincidence that Paulson made billions betting against the housing industry he made millions off of when building it before collapse? Dont think so. Goldman Sachs to Head of Treasury. Ever wonder how Goldmans main players all seem to end up on Capital Hill?

The whole things is appalling and I am afraid it may not be over. 

Jul 25, 2011 05:31 PM
Catherine Ulrey
Keller Williams Capital City - Salem, OR
Equestrian and Acreage Property Specialist

At what point did we, the American public lose our country?  We truly have no say anymore.  I am honestly suprised there has not been a revolt yet.

Jul 25, 2011 05:35 PM
Vickie Nagy
Coldwell Banker Residential Real Estate - Palm Springs, CA
Vickie Jean the Palm Springs Condo Queen

Edward, it's sad to say that your post actually makes some sense! Unfortunately as tax payers we're left holding the bag!

Jul 25, 2011 05:40 PM
Karen Anne Stone
New Home Hunters of Fort Worth and Tarrant County - Fort Worth, TX
Fort Worth Real Estate

A big part of the mortgage mess occurred whtn Dick Cheney insisted on deregulation the mortgage loan industry.  No more overseeing what they were doing.  The that free rein... or should I say "free reign"... they could get away with so many things they previously could not.

Jul 25, 2011 05:42 PM
Karen Anne Stone
New Home Hunters of Fort Worth and Tarrant County - Fort Worth, TX
Fort Worth Real Estate

Ah yes... and, as you said in your post... good ol' boy Phill Gramm... another shyster in favor of de-regulation.  These Texans.  When they mess something up... they do a fabulous job of it.

Jul 25, 2011 05:44 PM
Edward Goldfarb 450 Short Sale Approvals - 1750 Sales
Keller Williams Realty - Fort Lauderdale, FL

Thank you all for your positive comments and support to my post.  I will not give up our Country so easily.  Mark Twain said, "everyone talks about the weather, but no on can do anything about it".  I say that's a defeatist attitude.  A few people in the mid 1700's had a tougher road to hoe than we do, and they create the most wonderful Nation ever.  We have so much available to fight with.  We too need a revolution, but not with guns, muskets and cannons, but a much more powerful weapon.  Our vote.  We have many supporter, but they are focused on the wrong issues, at least, for now.  And a few issues should be put on the back burner while we make our economy strong.  Only then can we make America whole.  The old business adage holds true in America,  "80% of the solution will be solved by eliminating 20% of our problems".  An irresponsible, crooked government desensitized to the people and are dedicated to their self serving interest.  I've only started.  Next blog will be my, "Foreclosure Wars White Paper".

Jul 25, 2011 06:04 PM
Karen Anne Stone
New Home Hunters of Fort Worth and Tarrant County - Fort Worth, TX
Fort Worth Real Estate

Edward... I fully agree with you.  That is why I was so glad that we finally got rid of that irresponsible crooked government in 2008... and elected the present one which is much more "in tune" with the needs of the people... the 80% of the electorate that make this country great. 

Jul 26, 2011 04:16 AM