The world is awash with money. I mean, never in history, ever. The worlds money is desperate to find a place to go. Further, there is so much( I know this is hard to fathom, but true never the less ) that the world was desperate to find places to spend checks that start at 10 billion.
The US was one of those places. The US Government was offering to tax 10 billion, 100 billion and give you 3 percent. Guaranteed.
Lots of people where happy, relived to do it.
Further, lots of people wanted to get higher returns, like 100 percent higher. This is were money just flooded into the mortgage market. Fannie Mae or not, it was coming.
And you know what? We all liked it.
So far, so good. We are still in (relatively) free market here (not really, but let's go on).
Now comes Fannie, Freddy and the Democrats.
The Democrats looked back at the disaster of Public Housing Projects and wanted to, as always, ‘do something’.
So the notion was that people that couldn't handle public housing, couldn't maintain it, and more or less were just warehoused would bloom into functional, daisy growing, lawn cutting home owners if they could sign up for 30 years of home payments. How people who by and large couldn't graduate from dreg high schools, hold a job, stay off crack or figure out who daddy was, were supposed to make 30 years of mortgage payments, taxes, upkeep, repairs, escapes me, but that's Democrats for you.
So the Democrats with RINO support do the Community Reinvestment Act. This commanded banks to loan to people that they would never loan to.
Now you would think outside of conviction and orders of a judge, no free person would have to obey orders. You are wrong. We don't live in that kind of country. You do as you are told, with out compensation. Period.
Anyways, the banks were told that Freddy/Fanie would back up the morgages. Also investors were told that Uncle Sam would back the morgages. Also Europe, the UK, China was told we would back the morgages.
Remember I told you the world was flooded with money and looking for places to put it?
Gasoline, match, air.
So now the biggest ‘pass the buck’ or in this case ‘pass the mortgage’ operation starts rolling. And it rolled from the slums of LA to Banks in Germany, China and all over the world.
And nothing moves in this world without everyone along the way getting something to make it worth their while to move it.
Everybody made, or ‘got’, money.
So we got to the point where a single welfare mom with five kids was getting $300,000 for a dump triple decker in Detroit that needed another $300,000 to rehab it.
She bails. Sob story in the paper, news at 11. You know the drill.
She bails, her neighbor bails, Joe six pack with the new pickup truck, the center console with the twin 200hp outboards and the vaction house bails and so forth.
Now all of sudden all those bankers, all over the world look at those papers in their desk and see that they are worthless. They know it and they don't want it and they can not find a sucker to take it. It is worth zero.
But, everyone remembers that 15 years earlier, that Chris Dodd, Barny Frank, President Bush, Congress said it was backed up by the Uncle Sam. You and me.
And that is why this bill went through.
And that is why if, and I believe it will, this blow up continues, Uncle Sam will have to do this again, and again.
........
The Dems are half right. The Repbus are half right. Together they are all wrong, but Hitler was wrong and the German people had to pay. Stalin was wrong and the eastern Europeans had to pay. Mao was wrong but the Chinese had to pay.
We are chained, tied, roped, glued to the government. And now we pay.
Rinse, lather, repeat.
Very nice. Thank you.