Were Mortgage Backed Security Derivatives A Giant Multi-Trillion Dollar Ponzi Scheme?

From The Huffington Post

Janet Tavakoli, President Tavakoli Structured Finance

If a high-on-crack driver crashed his speeding rental car into your house and killed your spouse, you would be outraged if law enforcers took bribes and gave the driver a pass on a blood test. If the judge then merely fined the killer and ordered you to pay it, you would appeal, wondering what happened to justice. If the government then handed the crack-driver keys to a bigger rental car and presented you with the rental bill, you would certainly protest.

How is it, then, that you have remained largely silent in the face of the same sort of behavior by Wall Street and Washington? Bonus-seeking bankers careened off the right path and ran Ponzi schemes that nearly ruined our economy. Bureaucrats and elected officials bailed them out without demanding consequences. Bankers are revving their engines again.

Bankers Get Bonuses, the USA Gets the Great Recession

Taxpayers are asked to believe that over-borrowing by U.S. consumers created a global financial crisis. This myth aids and abets Wall Street. The economy was nearly destroyed because banks borrowed massively, and they borrowed many multiples more than they could afford. Wall Street pumped the Fed’s cheap money through financial meth labs, and deceptive financial vehicles ran over securities laws at top speed.

More than 20% of mortgage loans–including originally sound loans–are underwater, meaning the borrower owes more than the home is worth. Official unemployment numbers hover at around 10%. If you include underemployment, it is around 18%. In depressed areas where the nation’s poorest–chiefly minorities–have been hurt the most, unemployment has soared past 30%. For this destitute group, unemployment combined with underemployment exceeds 50%.

As U.S. soldiers fought wars in Iraq and Afghanistan, Wall Street flattened Main Street. Our foreign wars drag on, while the U.S. battles a crippling recession at home.

Read more here:  http://www.huffingtonpost.com/janet-tavakoli/wall-street-and-washingto_b_462205.html

NY Times Refutes Government’s Unemployment Figures

The New York Times now lists the “broader” rate of unemployment as being 17.5 percent. This contrasts sharply with the official government figure of 10.2 percent. The Times accounts for the disparity by factoring in the officially unemployed, the discouraged, and the underemployed — people who are working part time.

Of course, the Times refers to current economic conditions as the Great Recession. Let’s not mince words. It’s a depression. We’ve also heard TV news commentators say this is the “worst recession since the Great Depression.” Hold it. Back up for just one minute. The Great Depression wasn’t a recession. It’s not okay to rewrite history.

Read the rest of the unemployment article from The New York Times…

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Americans Becoming Day Laborers

Americans are becoming day laborers? You can’t be serious? The Las Vegas Sun says it’s true. The publication recently discovered that American citizens are joining illegal immigrants on street corners in Nevada, hoping to earn a day’s pay. This new phenomenon is a disturbing commentary on the state of the labor market. It clearly foreshadows what financial analyst Jim Willie refers to as America’s thrust into third-world status. Read more about American day laborers…

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$13 an Hour? 500 Sign Up, 1 Wins a Job

As soon as the job opening was posted on the afternoon of Friday, July 10, the deluge began.

C.R. England, a nationwide trucking company, needed an administrative assistant for its bustling driver training school here. Responsibilities included data entry, assembling paperwork and making copies.

It was a bona-fide opening at a decent wage, making it the rarest of commodities here in northwest Indiana, where steel industry layoffs have helped drive unemployment to about 10 percent.

When Stacey Ross, C. R. England’s head of corporate recruiting, arrived at her desk at the company’s Salt Lake City headquarters the next Monday, she found about 300 applications in the company’s e-mail inbox. Read more about scarce jobs…

The incredibly high rate of unemployment makes it all the more difficult to prevent foreclosures. Clearly, the banks shouldn’t have been bailed out. Consumers should have received the cash infusion. They’re the engine the powers the American economy.

One incredibly effective solution to the high rate of unemployment would be to require American companies to manufacture their products in the United States. They could be given tax cuts as an incentive.

The President should remember one thing: There will be no economic recovery without jobs.

Do you own a law firm? Would you like to utilize our mortgage auditing services for foreclosure defense cases? Contact MFI-Miami now!