US FED CHAIRMAN BERNANKE FOUND DRUNK!
March 4, 2008
Introduction: By Doug Krieger
The
unthinkable has occurred in American financing scams: Banks/Mortgage
Companies to Lower the Principal on home loans at the recommendation
of the FED! This is perhaps the most desperate and absurd notion ever
extended by America’s Central Bank: The Federal Reserve. It’s
precisely like me asking someone to whom I owe $100.00 to lower my
amount to $80.00 because I simply don’t have enough money to pay the
guy. Talk about nuts – this has got to be the most absurd economic
news ever perpetrated upon the American public. Nothing is sacred.
Everything is up for grabs. Anything goes! Fiat currency has reached
its deepest depths. Not only are we going to print more money—we are
going to play like your home mortgage doesn’t exist. Whoever came up
with this idea –
Bernanke
– is either loosing his mind or is so consumed with America’s consumer
economy he’ll do anything to keep the world’s largest
Ponzi Scheme
alive. We’re talking serious 12-step here!
Who would have thunk it? Not only has the dollar descended to its lowest depths – now we speak of loans which have no value in the first place! Man, I’ve got to get off this train – it’s heading for a complete crash and all the passengers enjoying the ride of their lives are all the more oblivious to the pending carnage. No wonder the Scriptures depict Babylon the Great as INTOXICATION OVERLOAD!
“With whom the kings of the earth committed fornication, and the inhabitants of the earth were made DRUNK with the wine of her fornication . . . for ALL THE NATIONS have DRUNK OF THE WINE OF THE WRATH OF HER FORNICFATION, the kings of the earth have committed fornication with her, and the merchants of he earth have become rich through the abundance of her luxury” (Revelation 17:2; 18:3).
This pathetic drunkard has become so inebriated, so intoxicated with her wine, that he has thrown caution to the wind and decided to abandon all standards of financial decency to avoid a total financial collapse of the world’s most monstrous Ponzi Scheme ever perpetrated upon history’s general populous! So, what do all those gazillionairs and miscellaneous little people from afar (a.k.a. foreigners) think of our absurdity? – Forbid that they stop buying America because it’s WORTH NOTHING? And, how about Bill and Sally Frump who thought they could retire by selling property to XYZ but now find that their property isn’t worth the paper it’s written on? The idiot who came up with this idea should be fired! Might as well claim a full-blown Socialist takeover and declare all property as part of the State! Who said Communism isn’t alive and well?
Ladies and gentlemen – GREED comes in sordid packages which don’t even sound reasonable – but somehow you should do your patriotic duty – especially you greedy bankers and mortgage loan sharks who got us into this mess in the first place – but CONSUMPTION is America’s destiny – just as Asia is America’s financier and manufacturer, even so, let them be appeased that the I.O.U.’s they hold are worthless in any event.
This “plain-speak” doesn’t impress anyone – why? Because I’m speaking to a bunch of drunks!
Fed Chairman Urges Lenders To Forgive Some Loan Principal
BY SCOTT STODDARD
INVESTOR'S BUSINESS DAILY
Posted 3/4/2008
Federal Reserve Chairman Ben Bernanke on Tuesday called on lenders to lower mortgage principal for homeowners facing foreclosure, as part of efforts to stave off a deepening housing crisis.
His controversial comments didn't excite analysts, while investors dumped financials.
Bernanke warned that delinquencies and foreclosures were set to rise further, putting additional downward pressure on home prices and leaving a growing number of Americans owing more than their homes are worth.
Cram-Downs Favored
"This situation calls for a vigorous response," Bernanke told a banking group in Orlando, Fla. "Principal reductions that restore some equity for the homeowner may be a relatively more effective means of avoiding delinquency and foreclosure."
Stocks sold off initially on Bernanke's comments, which fueled fears that banks would have to take bigger mortgage losses. But they rebounded on positive news from Cisco, Amazon and Ambac.
The Nasdaq, down 1.6% intraday, closed up 0.1%. The S&P 500 fell 0.3% and the Dow 0.4%.
Citigroup fell 4% to a nine-year low of 22.10 after bearish forecasts from Merrill Lynch and Goldman Sachs analysts.
Sameer al-Ansari, head of state-owned Dubai International Capital, said the largest U.S. bank may need "a lot more money" from outside investors.
Bernanke had previously asked lenders to help troubled homeowners, but he noted that those efforts typically involved lowering interest rates and not reduction of the principal loan balance.
Analysts Unconvinced
Analysts were skeptical that reducing principal would work.
"I don't know how it can be done. Most mortgages are not housed on the balance sheets of banks," said Christopher Mutascio, an analyst at Stifel Nicolaus.
Lenders typically packaged home loans into securities and sold them to investors for cash to write more loans. As a result, the investors would also have to agree to any principal reduction, or the lenders could have faced lawsuits.
"I don't know what would behoove them (lenders) to write off principal unless the government exempts servicers from lawsuits from bondholders," Mutascio said.
Furthermore, forcing investors to rewrite contracts and accept losses could do long-term damage to the securitization market, cutting off funds for potential homebuyers and deepening the housing crisis.
"What we could end up with is a further liquidity crisis, and that's going to compound the problem," said Kris Niswander, associate director of financial institutions at SNL Financial.
Others were even more critical.
"(Bernanke) clearly indicated to the banking industry that he wants the loans to be written down substantially," said Richard Bove, an analyst at Punk Ziegel. He added: "The outcome of the comments today will be the Bernanke recession. He is demanding a reduction in bank lending in the U.S."
Bernanke acknowledged that the plan would likely face opposition from the banks.
"Lenders tell us that they are reluctant to write down principal," he said. "They say that if they were to write down the principal and house prices were to fall further, they could feel pressured to write down principal again."
If some homeowners get a mortgage haircut, many others will demand the same, even if they can afford the payments, analysts said.
But Bernanke said rising foreclosures could deepen the housing crisis and derail the economy, which many say is already in recession or teetering on the edge.
Delinquencies and foreclosures will likely continue to rise for "a while longer" and a glut of unsold homes means that "further declines in house prices are likely," he said.
People with homes worth less than their mortgages are far more likely to stop making payments or simply walk away, he said.
Lenders were on track to initiate about 1.5 million home foreclosure proceedings last year, up from an average of fewer than 1 million in each of the prior two years, Bernanke said.
This year, about 1.5 million adjustable-rate loans are scheduled to reset higher, boosting payments significantly, he said.
"Measures to reduce preventable foreclosures could help not only stressed borrowers but also their communities and, indeed, the broader economy," he said.
He said banks may stand to earn more in the long run if they reduce loan amounts, since doing so may reduce defaults or foreclosures.
After costly foreclosure proceedings, banks are recovering less than 50% of loan values, he noted.
He also urged investors who bought mortgage-backed bonds to accept "short payoffs" of loans by letting borrowers refinance at a lower principal.
He added that investors may be able to share in future home price increases under a proposal by the Office of Thrift Supervision, which would let borrowers refinance at current home values while giving the lender a "negative equity" certificate that could be redeemed if the house is sold.
OTS has not formally released its plan, but gave an overview of the work in progress last month.
Some said Bernanke's speech was an attempt to head off a deepening crisis that may only be resolved through government intervention. That might include establishing a body similar to the Resolution Trust Corp., which used taxpayer funds to buy bad loans held by savings and loans in the early 1990s.
"He's admitting that what has been done to date is wholly inadequate," Mutascio said. "The longer this lasts, the chances of a government bailout increase."
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