WHAT IN THE HELL IS A SUB PRIME
if you asked this when you first heard about these little beauties, you weren't alone.
LAST YEAR THOUSANDS, MAYBE MILLIONS, WERE SUCKERED INTO BUYING AND SELLING SUB-PRIME MORTGAGES. Talk shows are filled with hours of the bankers mewing mea culpa and trying to explain why Jorge lost his house and the banks their shirts, its all bull my friends... The answer as to why is simply stupidity and greed- a bad mix..............
WANTA BUY A “SUB-PRIME” CAR?
“Pisssst, hey buddy, I have a little jewel , a cream puff, owned by a little old lady only driven 2 months a year?” OK, of course, you’d pass on this. Only an inexperienced idiot would fall for such a scam line. So, this being true, how in the hell did so many supposedly astute experienced financial money managers fall for buying “sub-prime” debt?
The key word here is “sub-prime” This means, in case you didn’t know, less than prime, meaning “craploa…” likely worthless and definitely not something anyone with a grain of sense would touch with a ten foot pole- especially guys investing OPM ( other people’s money.)
So, what is a “sub-prime loan?” Well, what is a sub-prime anything? It means less than good- below par. In the mortgage business this is a debt that was incurred by a individual who has what one could call at best, “bruised” credit – in other words, a person who couldn’t qualify for a loan under normal circumstances.
Often these borrowers had no regular income, no down payment, bad credit, 10 kids and a 20 year old pick-me-up. So, the happy, greedy mortgage broker said “OK, no worries mate, we have just a thing for you- a non-qualifying, nothing down, 100% ARM with no payments for 6 months.
Thousands of mortgage brokers packaged up hundreds of thousands of these DOA mortgages and palmed them off in huge portfolios into the secondary money markets. Fanny May, played a critical part in all this promising to buy all the crooked loans the originators, banks and mortgage companies could serve up.
Can you believe it? The idiots running theses huge, super sophisticated money machines went for the Sub-primes like a bunch of starving hogs at feeding time. They had an inexhaustible appetite for this worthless paper. They squandered billions of their trusting depositors and investors hard earned cash on what any semi- sane, reasonable person would never have touched.
Now, the chickens have come home to roost ! Of course, what else, no surprise- 95% of the impoverished indigents and their squalling broods squatting in these millions of 100% financed homes stopped paying if indeed they ever even made the first payment. Most of them had no jobs when they moved in and most still don’t. Few, if any, had any intention or capability of making payments once the ARM kicked in and raised the payments anywhere over what these guys had been paying for rent in the public housing projects they moved out of.
Meanwhile, the happy brokers were driving their new 911’s to their new beach homes- chortling all the way.
So, now what do we have? Billions, no one knows how much, likely hundreds of billions of dollars have been looted and, after the foreclosures, all the idiots have to show for it are thousands of empty, trashed cheap lower class homes in crappy neighborhoods that no one who could really carry a mortgage would ever consider as a place to live.
For decades, city managers and zoning commissioners all over the country have pressured builders and developers to include “affordable housing” in all their land planning. Homes for “working people” they called them. So, what did they get- red lined areas all across the country in every city and burg. The grass turns quickly into high weeds and the blowing dirt mixes with trash and papers looking like a herd of starving goats passed by. Doors and windows are broken open, the yards collect broken bottles and trash- and entire neighborhoods are in permanent decline.
The residents are almost 100% Latino or black- gangs rule just like in the urban projects. The street lamps, if there are any, are broken and hundreds of kids and toddlers in dirty diapers sitting with their overweight lumpy moms are waiting for good ole Dad who stopped by the local bar for a friendly six pack before heading home to his castle.
The mortgage payments just jumped on his “starter home” from the friendly gimmick rate of $599.00 to $1600.00 but he doesn’t care- he never opened the increasingly shrill demand letters from whoever is servicing the debt and likely he can’t really read English anyway. He has no intention or capability of paying and possibly has never made even the first payment. His wife works as a school crossing guard and he hangs in a Spanish work pool waiting for a job. If the “broker’ who signed him up didn’t speak Spanish, he never would have bought the dump in the first place.
So, what is the choice- what do we do now- throw the bum out? It costs money to foreclose a loan and once you do, what have you got- a cheap empty property that no one wants that is declining in value and an uncollectible, uncontested default judgment against some snook that’s likely 100% above the value of the place even in the best of times? That’s what you’ve got! ZIP! Now you have to try to take care of the place and the hundreds of others you, as the idiot who finally wound up the loser in the musical chairs, wound up with.
The “mortgage broker” is safely out of it- he got his commission off the top and doesn’t care. The bank servicing the bad debt doesn’t care. Only the fool holding the bag cares and he’s really hurting. Problem is, that fool is us, the American tax payer.
When the smoke clears on this one there will be hell to pay. All of the money managers who had their sticky little lily white hands on these stupid decisions will be looking for work in other fields. No one without a 20 %cash down payment will ever be able to buy a house again- which, to be correct, is as it should be.
Debt is a scared thing in our economy- Borrowers are honor bound to repay what they borrow. For many years those millions of middle class Americans who bought homes did exactly that. They live within their means, pay their car loans, credit card debt and service their home loans. These people make up the real strength and backbone of the American economy. Their parents fought in WWII and their grandparents in WWI. They are reasonably well educated and believe deeply in American values. They love their country and are genuine stand -up folks. None of them, not one, are included in the mass of dead beats who make up the “sub-prime” debacle.
Who to blame for this mess? Well, we can start with the fools who pressure society with the silly politically correct concept that says banks aren’t allowed to “red-line” no pay- no account neighborhoods and have to, by law, grant loans to borrowers they know very well will likely default. Let’s start the blame game there with the bleeding liberals and the pandering pols who will always trade 'your' money for “their” vote.
Then- we can move on to where the whole thing really started- the men controlling the secondary money markets. The guys, like Franklin Raines at Fanny May, who said, “OK, bring it on, we’ll buy all the ragged- ass worthless paper you all can shovel to us.” Had it not been for these SOB's not one “broker” could have or would have bothered to fill out a single application. The buck started with the bloody libs in congress and ends where it started, except the pandering pols just passed the debt to us.
What on earth were they thinking? Their fathers would never, ever made such stupid decisions- loaning other peoples money to someone who you know is going to default should be a crime. And, it is a fact, an absolutely incontrovertible fact- that these guys in congress knew, they all knew, from the broker to the silly-ass who wound up holding the bag, that the vast majority of the borrowers in the “sub-prime” mortgage market were going to default !
Put any one of them on a stand being sued by the thousands of sad sacks who trusted them with their money and ask them this. “Mr. Frank, or Mr Raines, here’s the situation. The borrower on this particular non-qualifying loan had 10 kids and no job, he was on welfare and didn’t speak English- in fact, he was an illegal alien but we never asked him that because it’s not legal to discriminate. He put nothing down and moved into a $200,000 home with a 12 month ARM and no payments for the first 6 months. The payment was going to jump from $500 a month to $1600 in month 13. The question to you is- under this scenario, would you, as a prudent responsible man, extended this guy a loan and let him move in?
What do you think the guy is going to say? Of course he would deny the loan. So now, why did he and his fellow money managers say yes, not once, but millions of times, to millions of borrowers who closely fit the above profile? The why is the question !
Another question is what are we going to do about it? Do we want the taxpayers to bail out the guys who got stuck with this monumental non-performing debt? Is that fair? Here’s what I think. Pin the tail on the jackass who deserves it. What these politicians did was criminal and all of them should be prosecuted, including the companies and banks who knowingly participated. They all should have known better than to loan deadbeats this kind of money. There is no excuse- none ! They broke every rule of sound business practices and violated the trust of their investors and stockholders. They should be sued in civil court for every cent they have and then face criminal charges. If a law can’t be found under which to charge them then maybe we’ll invent one- how about 10 years in the slammer for being an idiot?
Boca Raton Fl.
I’m Nancy Pelosi and I don’t give a damm what the American people want!
Unbelievably, the dems in congress walked out for a five week vacation without permitting an up or down vote on the floor to pass a comprehensive energy bill. The American people have been contacting their congressional representatives in unprecedented numbers over the past several months for the express purpose of persuading them to open our vast domestic energy resources. Nancy Pelosi and Harry Reid, along with their liberal followers, have turned a very arrogant and very deaf ear to the voice of the people.
For years, the libs in Congress have refused to allow the American people to drill their own oil. This is incomprehensible and stupid! We need to lift the restrictions on off- shore drilling, open the shale fields and build nuclear power stations and we need to do this now! We need to develop clean coal and fuel from coal. Fuel prices will most certainly rise and over time perhaps even higher than $147/ bl.
America is on the brink of economic collapse due to liberal policies ( see "Who Screwed You") and now the dems are playing partisan politics while Rome burns! The elected representatives of the American people can see the economic situation is spinning out of control due to staggering and under obama rapidly increasing debt. Energy prices will rise again . Then feds may stick a .50per gal tax on gas and when the dollar devalues, this, in addition to increasing demand could easily push fuel even higher than $4.50 per gal. How many more airlines do you want to see go out of business, how many truckers will park their rigs, how many will have to choose between food or fuel………
America will need oil for at least the next 25 years- there is today no rational or reasonable substitute. With the petroleum we have we can be completely independent of the bloody arabs and the idiot chavez in 3 to 7 years. Global warming, per se, is a myth, Gore an ass– climate change is a phenomena over which man has little or no influence. Any prescient individual can understand this by studying the available data. Do you want to see the chinks driving hummers while we ride around on bicycles? Do you want to see America reduced to a third world country? (maybe you do)
The law of unintended consequences have shown that using food products to make ethanol was and is a stupid idea. Now we have grain shortages and spiraling food costs worldwide that have hurt the poorest the most. The lease money and the percentage of profits that the oil companies will pay the Fed and the states can be used for developing forms of alternative energy. No one can argue that cleaner and renewable energy is a good idea but its not here yet and won’t be for many more years. We need oil now! Jet and heavy truck engines don’t run on solar power!
Parroting the liberal party line by saying that the oil companies can drill on already leased land is deceptive and erroneous. The truth is that the oil companies have submitted, as of today, over 700 pending permits on this leased land while various states and the Federal agencies drag their feet on approvals. You know this.
The dems cannot put themselves and their personal opinions above the express will of the people. To do so is the epitome of arrogance. Unless the dems want their legacy to be one of standing against the welfare of the people they will call a “special session ( the first in 60 years) and return to Washington to do the peoples business. They will not leave the American people to suffer with these ungodly and unnecessary fuel prices for the next five long hot weeks. If they don’t do what’s right they will surely and most deservedly be turned out of office.
THE STINKING LIBS PLAN TO DESTROY THE MIDDLE CLASS
Liberal politicians have survived and prospered because they have been able to build their power base among the less well off groups. They have done this by promising, and in many cases transferring vast sums from the middle and upper classes into the pockets of the great un-washed. They have successfully divided us as a people. They have deliberately promoted class envy and encouraged the idiotic concept of "diversity" creating a broken immigration system encouraging and allowing in millions of poor uneducated Latinos, Indians and others from third world countries, including many who most definitely intend to do us great harm.. The Stinking Libs invented the words "entitlements, motor voter, welfare, the great Society, The War on Poverty," etc. They foisted a dependence on government largess and are trying to create a socialist state in America.
For many years the liberal political movement, which includes secular progressives, atheists, environmental groups, the homosexual community, most blacks, the members of move-on, the Soros bunch and activist professors from universities like Columbia and Harvard’s Noam Chompsky and their ilk, has joined in a loose confederation to legislate the passage of horrific and confiscatory taxes, absurd laws and regulations prohibiting us from pursuing a rational energy policy.
The stinking libs are excited, they smell blood. They are close to realizing their dream- that of breaking the great American middle class. This has always been their principal goal because the largest group in America who have thus far kept them from total power has been the Middle Class. Now with their new black messiah, obama, they feel that the time is right!
The Middle Class can be defined as being the majority of the “normal” working taxpayers in America and includes all who oppose the libs. This group includes the enterprising self-employed, most of the wealthy, many professionals, the majority of the military and all of what is called the “silent majority.” These groups make up the solid republican, independent and libertarian block that has been mainly responsible for thwarting the lib’s plan for building their socialist utopia and protecting the rights of the normal American citizens who provide 100% of the incredible wealth that has made America the most powerful economic power-house in the history of the world.
America has huge natural resources locked up on Government lands and under our coastlines by the filthy liberals who persist in forcing us to purchase petroleum from OPEC at ever increasing prices. For years we have not been able to build refineries or coal and nuclear power plants.
Today, the price of gasoline and diesel has reached the breaking point. I define this point as being that price wherein our economy begins to self destruct. At over $4.00 a gallon and increasing- we are there. Commercial Trucks are being re-possessed and sold off to China and Russia, a married couple, both commuting to work, are spending over $400 a month on gas and God knows what to heat their homes.
Today the libs in congress and government are blocking every attempt by the Republicans to pass laws permitting us to open our lands for new energy projects. They brag about their plans to force us from the use of fossil fuels by allowing the price to continue to climb. In another year (or less) oil may well be at $200.00 a barrel and gas over $10.00 a gallon, Before that, the American economy will have tanked and been forced into severe recession.
People won’t be able to drive to work, millions will have lost their jobs, many industries will have shut down and electric power plants will have increased costs to homes and businesses beyond that which many can pay. Next winter, the cost of heating oil and gas may force many to abandon their homes and migrate to a warmer climate almost as refugees. As all this happens the filthy libs will be chortling, smiling and smelling final victory. The greens and other wacko environmental groups will be crowing as we park our cars, buy bicycles and burn our furniture.
If we let the libs succeed the great American Middle Class will have finally been destroyed- striped of their jobs and pride- destitute and forced to rely on the “government” for handouts. You can be certain that the Dems will have the National Guard on every street handing out great blocks of Velveeta, stale bread and beans.
We have defined and identified the enemy and laid out what they want and why - what can we do? The American people rose up and shut the libs and their fellow travelers down when they tried to pass an amnesty bill on immigration. At that time they got the message loud and clear- let’s do it again- while we can !
Let’s let the stinking libs know now that they will open the locked federal lands and do it immediately. Under that kind of pressure, the only kind they understand, they will pass a comprehensive rational energy bill that will free us forever from foreign oil and they will do it now !
Once the restrictions have been lifted the price of oil will immediately drop precipitously as the markets cope with the potential of vast new supplies and the fact that America will soon stop buying any OPEC oil. Of course, China and India might well pick up the slack but that will have no impact on our economy. If America can become completely energy independent we can save our economy and will have the time to produce alternative power. Billions of dollars in lease payments for the federal lands will immediately flow to Government coffers from the energy companies and all the money we have been sending to the ragheads will now stay at home providing thousands with good paying jobs.
I wouldn’t argue that we should not pursue alternative forms of energy. As an airline pilot I find it amusing and more than a little silly that we are building these remarkable and highly advanced aircraft and then powering them with the residue of dead dinosaurs. The problem is in the short term. 99.9% of our vehicles run on oil, 100% of our commercial and private aircraft run on oil, 100% of our trucks and diesel trains run on oil. Our entire economy runs on oil. There is no way in hell that we can move away from oil over the next 25 years period! America needs oil and we need it now! We have it- lots of it- let’s get it and let’s do that now! We have to rise up and put a stop to the filthy libs and their pals plan to destroy us – it’s up to us. We do it or we perish !