Anybody feel sorry for the poor investment bankers out there? They certainly have been up against it lately. Fearing for their jobs they still refuse to come clean as to how much sub-prime bonds they’re holding on their books.
They were almost giddy with the boatloads of money and bonuses they had racked up over the past 5 years. After all, coming up with the idea of packaging these nasty little investment vehicles which they sold to unsuspecting Wall Street Investors and Pension Funds was a stroke of genius.
For those who don’t know what’s behind the sub-prime and housing disaster, here’s a quick rundown. The top two consist of SIV’s (Structured Investment Vehicles) and CDO’s (Collateralized Debt Obligations). In essence what they did was to buy up all the bad credit, No Documentation, Adjustable Rate, Interest Only mortgages that were being created (sold) to unsuspecting borrowers and simply package them up with a few decent “A” Credit loans and sold them to investors as “Asset Backed Mortgage Investments.”
The credit rating companies like Moody’s and Fitch, they all went along for the ride.
This insidious “Ponzi Scheme” was kept afloat by the fact that property values would continually rise allowing the borrowers to either refinance out before the rates reset or sell their property and payoff their mortgage. Once property values stopped rising this house of cards came crashing down around them.
Angelo Mazillo, owner of Countrywide Mortgage (the nation’s largest mortgage lender) went on CNBC crying like a little girl that he had no idea how this could have happened. Oh really??!! CitiCorp announces that it doesn’t know the true extent of it’s exposure to these Toxic Bonds. In truth, there is no real way to accurately value these defaulting mortgages. My guess is its pennies on the dollar.
In walks the Federal Reserve to the rescue. Like the Lone Freakin’ Ranger, Big Ben Bernanke prints off a quick $80 Billion Dollar loan to CitiCorp and another $8 Billion for Countrywide. The fact that the funny money he randomly prints to bail out these greedy bastards asses has to be repaid by all of us, the American Taxpayer.
“Let the Dollar be Damned,” I can hear the words dripping from his lips. He got a degree in what? From Where? We are all going to foot the bill for his carelessness in the form of much higher interest rates and a lower standard of living for us and for future generations to come.
The mortgage companies and investment bankers may have been greedy and stupid but that doesn’t mean they deserve a bail out of epic proportions. Greedy and stupid I can live with, but the “Fed’s” (Bernanke’s) cavalier attitude about how he spends my money is nothing short of criminal.
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“This insidious “Ponzi Scheme” was kept afloat by the fact that property values would continually rise allowing the borrowers to either refinance out before the rates reset or sell their property and payoff their mortgage. Once property values stopped rising this house of cards came crashing down around them.”
Folks with such potentially lethal mortgages should look into the advantages of home equity acceleration:
More and more folks are using a Home Equity Line of Credit (HELOC) or a business-line-of-credit (BLOC) or personal-line-of-credit (PLOC) as an interest cancellation account to accelerate their home equity and payoff their home *years* sooner than listed on their mortgage amortization schedule.
Unfortunately, today’s Real Estate market means that folks can no longer count on appreciation to build home equity. Those who realize that they need to pay down their current mortgage debt are looking for alternate ways to aggressively (yet safely) build equity.
And they’ve discovered a perfect online system to do that; they can focus on their wealth accumulation goals while accelerating their equity simply by using a Home Equity Line of Credit to ‘power’ the Money Merge Account™ financial solutions program.
A typical 30 year loan (of whatever type) can be paid down in 1/3 to 1/2 the time — it’s a great way to save *huge* amounts of income by eliminating a mortgage amortization front-end interest load. (On a million-plus dollar home, I’ve personally seen where the Money Merge Account™ program will save the homeowner $750,000 in interest charges!)
And the best thing – homeowners don’t have to refinance their existing mortgage or, in most cases, make any adjustments to their lifestyle.
It is unfortunate that most of us were never taught to follow three essential principles: (1) Avoid paying interest, whenever possible, (2) Use other people’s money, whenever possible and (3) Find and use a financial system that will guide you, especially if you have the tendency to go off-track. The Money Merge Account™ software and the program’s counselors use these principles to keep each homeowner focused on their wealth accumulation goals.
I’d be happy to provide further details…
Posted on February 9th, 2008 at 9:55 pm
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