Home the Buck

November 2, 2009

Home is not the castle so trumped years ago — now it’s nothing more than a file in the immoral portfolio of US banking’s financial system.
A system that’s so skewed you can’t tell the front door from the back.

McClatchy has another story on that ugly, nasty piece of shit called Goldman Sachs.

Goldman spent years buying hundreds of thousands of subprime mortgages, many of them from some of the more unsavory lenders in the business, and packaging them into high-yield bonds.
Now that the bottom has fallen out of that market, Goldman finds itself in a different role: as the big banker that takes homes away from folks such as the Beckers.
The couple alleges that Goldman declined for three years to confirm their suspicions that it had bought their mortgages from a subprime lender, even after they wrote to Goldman’s then-Chief Executive Henry Paulson — later U.S. Treasury secretary — in 2003.

Joining other Wall Street firms that bought millions of subprime mortgages, Goldman companies have gone to courts from California to Florida seeking approval to foreclose on the homes of middle-and lower-income Americans who couldn’t keep up with their loans’ soaring monthly payments.
Some borrowers were speculators or homebuyers who exaggerated their incomes on loan applications, thinking they’d always have an escape hatch because housing prices would keep rising.
Others, however, were victims of fast-talking mortgage brokers who didn’t explain that the loans’ interest rates could rise to as high as 15 percent.
Many borrowers who defaulted on their mortgages may never qualify for a home loan again.

And for in-depth background, read Matt Taibbi’s most-excellent comprehensive piece in Rolling Stone from last July about Goldman Sachs: The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.

Problem, though, is the very system itself.
On Bill Moyers’ Journal, James K. Galbraith, on why the financial future sucks:

The fact is, the economy — production is going to turn around, has started to recover.
But it will be six months in before a strong growth of production leads to new employment.
And the question is, will that growth of production continue, after six months?
The problem here is that we have a stimulus package, which is helping now, but it will be over with at the end of next year.
Will there be a basis for another strong, privately financed expansion at that point? I don’t see the evidence for that now.
And that seems to me to be something we should be worrying about.

“That’s the point about the crisis, is that it could have been prevented.
The people in authority two, three, five years ago, knew how to prevent it.
They chose not to act, because they were getting a political and an economic benefit out of the speculative explosion that was occurring.”

The overwhelming emphasis, in the administration’s program, I think, has been to return things to a condition of normalcy, to use a 1920s word, that prevailed five and ten years ago.
That is to say, we’re back to a world in which Wall Street and the major banks are leading and setting the path… Do you want to have a financial sector dominated by a small number of very large institutions, very difficult to manage, practically impossible to regulate and ruled by, essentially, the same people and the same culture that caused the crisis in the first place.

Of course, Galbraith is speaking of President Obama’s people like Tim Geithner, Larry Summers, and so forth.

Recommendation: Get a big mattress.

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