hvactec
VIP Member
The more American homeowners lose, the greater some bankers profit. Logic dictates that banks would want to mitigate their losses and resolve troubled loans with borrowers. But the reverse is true for those bankers who bet against the bonds backed by American families' homes and who make even more as the bond values plummet. Unwittingly, millions of American families became racehorses on the subprime racetrack. By saddling the horses with as much debt as possible on terms that made the load increasingly overwhelming to burden, there was little chance of anyone crossing the finish line. Even so, bankers gussied up the horses and took wagers from unwitting MBS investors such as pension funds and smaller banks all under the noble pretense of providing homeownership opportunities for all. And in the backroom, Goldman Sachs, Deutsche Bank and Paulson & Co. were betting billions that homeowners and MBS investors would fail spectacularly.
Now millions of families are falling apart under the burden of failing in a game they could never have won. Admirably but foolishly, some of the families borrowed from friends and family, took on second and even third jobs, and ran themselves to exhaustion trying to find a stride to the finish line. But the incline on the track increased with each interest rate adjustment, and the track at points became as steep as that of a mountain pass in the Rockies. At this point, government officials feigned assistance by designing a program in which they promised to level off the track by temporarily reducing interest rates, but only if the nearly-exhausted families could prove their worthiness through a three month trial".
However, when the incline remained intense even after the first three months, they were cheered on. Just make it a few more months and then you will reach the Promised Land. That was the message, yet the Promised Land remained an illusion for 9 out of 10. The survivors did not fare much better. They were only allowed to continue the impossible journey if they were saddled with even more debt and forced to remain in the race an additional ten years. Ultimately, there will be few if any survivors. Instead, the wreckage is immense, with families crushed, divorced, homeless, and/or staying in the basements and garages of friends and family. They are drained physically, mentally and financially.
Equally bamboozled, the pension funds and smaller banks lost billions on their bets. Much like a nerd who thought he was making friends with the football team, M&T Bank ponied up $82 million to Deutsche Bank in February 2007 to invest in Gemstone VII, a bond issue backed by subprime loans. Internal emails from Deutsche traders at the time referred to subprime loans as the plague and stated these bonds are going much, much lower. Still, they pretended to befriend M&T, took their money and betrayed them. Ten months later M&T had lost 98% of their investment, whose value had dropped to just $1.9 million.
Read more Bankers Bet On Failure of US Homeowners - Jorge - ShametheBanks.org
Now millions of families are falling apart under the burden of failing in a game they could never have won. Admirably but foolishly, some of the families borrowed from friends and family, took on second and even third jobs, and ran themselves to exhaustion trying to find a stride to the finish line. But the incline on the track increased with each interest rate adjustment, and the track at points became as steep as that of a mountain pass in the Rockies. At this point, government officials feigned assistance by designing a program in which they promised to level off the track by temporarily reducing interest rates, but only if the nearly-exhausted families could prove their worthiness through a three month trial".
However, when the incline remained intense even after the first three months, they were cheered on. Just make it a few more months and then you will reach the Promised Land. That was the message, yet the Promised Land remained an illusion for 9 out of 10. The survivors did not fare much better. They were only allowed to continue the impossible journey if they were saddled with even more debt and forced to remain in the race an additional ten years. Ultimately, there will be few if any survivors. Instead, the wreckage is immense, with families crushed, divorced, homeless, and/or staying in the basements and garages of friends and family. They are drained physically, mentally and financially.
Equally bamboozled, the pension funds and smaller banks lost billions on their bets. Much like a nerd who thought he was making friends with the football team, M&T Bank ponied up $82 million to Deutsche Bank in February 2007 to invest in Gemstone VII, a bond issue backed by subprime loans. Internal emails from Deutsche traders at the time referred to subprime loans as the plague and stated these bonds are going much, much lower. Still, they pretended to befriend M&T, took their money and betrayed them. Ten months later M&T had lost 98% of their investment, whose value had dropped to just $1.9 million.
Read more Bankers Bet On Failure of US Homeowners - Jorge - ShametheBanks.org
