FIND OUT THE BOLD TRUTH, NOW BEING TOLD BY JOHN A. SMALDONE
How did we get to where we are today? We got ourselves in this situation because of many years of making mistakes, lack of heeding the warning signs, corruption, complacency and greed on the part of our politicians and the American people themselves.
What about ignoring the guidelines people of our great nation are supposed to abide by, the "Constitution"! No, instead we seem to be abiding by laws only OUR legislators see fit to govern by. These laws being implemented by our legislators were and are, only to benefit them and their parties.
Our country and the American people have been paying the price and will continue to do so! We have NOT been told the real truth about the crash of 2008. Who is really to blame for all the foreclosures, the loan defaults and the economic crash of 2008?
Let me take you down a path I have actually walked. Not only walked but I presented to the financial communities in 2003 what I am about to tell you.
Here are some examples: you do not hear much about the “Gramm–Leach–Bliley Act” President Clinton signed in 1999. This was the act that overturned the “The Glass Steagall Act” and opened up the flood gates to out of control borrowing. This bill did away with most normal and prudent loan underwriting guidelines and common sense borrowing. We never hear the real truth about why back in 1999 our Federal Government was so eager to open up the flood gates to borrowing and allow loose credit underwriting standards and reckless borrowing, do we?
Think about it for a moment? The reason was to stimulate a false, long-term growth of our economy. This was done through the creation of the largest amount of debt in the hands of the American people in the history of our great nation!
Home loans, credit card debt and overall borrowing soared to record levels. The continuing accumulation of debt on the shoulders of the American people lasted for almost 9 years until an economical CRASH with the wrath of God came upon us in 2008!
The “Gramm-Leach-Bliley Act” signed by President Clinton was the fuel that started the fire! From 2008 to the present day, our national debt has soared to record levels and still growing.
The politicians and experts don’t mention all the wild loan programs that were created after the act was signed and introduced, such as “The No Income, No Asset Loans”, “Option ARM Loans”, “Negative Amortization Loans”, the “125% Loans with Stated Income Only” and sub-prime loans that anyone could obtain, bad credit or not! I could go on and on about the kind of loans that were created between 1999 and 2008. This hayride went on as I said for close to 9 years.
Loan originators and real-estate investors were making more money than ever and the sub-prime loan market was here to stay (every one thought). I could go way back in time to where it all really began but that story is for another day? The years from 1999 to present day are the years we need to focus on for now.
The entire lending industry was uncontrollable and borrowing was spiraling out of control. The competition was keen in the lending arena. In order to compete in the market place, lenders were forced to create new and wild lending programs that Wall Street, Fannie Mae and Freddie Mac all supported.
Through its “Negotiated Deals Desk,” Fannie Mae bought into many lender created programs, issued commitments on them and funded the loans.
Mortgage backed securities were being pooled together with mixed quality loan products; many of the securities were salt and peppered with toxic loans. These securities were known as "Collateral Debt Obligations" (CDO'S). Wall Street firms were working closely with and getting these securities insured by the likes of AIG, through what we called "Credit Default Swaps" (Swaps). They also worked hand and hand with the rating agencies.
In short, they were pitting AIG and the rating agencies together by creating securities that were triple-A rated and insured with the hedging instruments by AIG, "Swaps". Everyone dealing in the financial markets knew these securities would eventually be defaulted on!
Wall Street firms were getting these securities rated triple–A, which were yielding better than a normal triple–A rated security that contained 100% of quality loan product. The tainted securities were triple–A rated because of the insurance feature. Why do you think so much of the TARP funds and stimulus money went into AIG for bail out purposes and still is without your knowledge? There was NO choice but to prevent AIG from going under! If we did not bail them out, we would have had an Armageddon on our hands.
The mess the federal government has created has placed the major burden on we, the people. Claims against these securities started to sky rocket in later years when loans started to default. The wave of defaults and foreclosures have not even started to slow down and they will continue.
Let us not forget that China, Russia, Germany and other countries, were buying these securities very aggressively.
The yields and returns on these securities were very attractive. Attractive enough for these countries to hop on the bandwagon and buy, buy and buy. Fannie Mae and Freddie Mac were right in the thick of things. In fact, they were buying these securities as well from Wall Street for their own portfolio! This is a major reason these agencies are in the financial mess that they are in. You don’t hear much about that, do you? This just added another huge dimension to their already failed operations.
Let's face reality. What I have covered thus far is a major reason why our great nation and the American people are in the financial difficulty we are in today.
With borrowing spiraling out of control in this country, accumulated debt in the hands of the American people reaching record levels, a false economic growth, the inflated housing values going through the ceiling and tainted mortgage backed securities defaulting, only one thing could have occurred. What occurred were the most devastating housing and economic crash most of us have ever seen in our life time and the worse since the Great Depression.
The big question is what does the future hold for us now? It is up to us to regain control and hold on to our great nation’s values, if possible.
Change has to be made quickly. The time for playing political games is over. We are in an environment of a financial disaster along with the value of our currency becoming worthless. We as a free nation of people will not know how to cope with a collapse of the American way of life!!
Please, look seriously at the legislative issues in this petition, God and Country, get behind it and be part of this “Government Reform Proposal”. Partisan politics are at its highest level in the history of our great nation, nothing is being accomplished with the exception of the destruction of this great nation of ours!!!
Our federal government puts the blame on every other reason they can other than revealing the real truth about where the blame really belongs! Both the Democratic and Republican administrations could have stopped the freight train from hitting the wall but they did not!
Over the years and especially over the past four years, we have accumulated a national debt close to $16 Trillion dollars and growing daily. The American people have accumulated personal debt greater than any time in the history of our country. We are also seeing the disintegration of the greatest nation on earth. Once freedom is lost, it is lost forever, never to be regained again!
The
sad part of all this, is we, the people have allowed this to happen!
We
need to bring back the “Glass Steagall Act” or a major part of it!
Comments:
When the Glass
Steagall Act was repealed, banks were allowed to enter into other financial dealings
including credit default swaps allowing the hedge funds to come under the “too
big to fail” tent. As long as they could get AIG to insure their bets or buy
their bad securities, they were set to play the game. We need to remove taxpayer liability for bad
bets and let these firms fail. We must
change all laws and regulations that subject lenders to extortion. We must restore prudent lending practices and
repeal the Community Reinvestment Act and HUD discrimination rules. Restoring
Glass Steagall is a good start.
Norb Leahy,
Dunwoody GA Tea Party Leader
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