1sunfight’s Weblog

September 19, 2008

Ponzi Scheme

During the boom in the real estate market I was still in college and then a recent graduate from college. Once I finished college I graduated into the worst job market since the Great Depression, so it took me a long time to find a career. So there I was trapped in the halcyon days of a real estate boom and the drudge of a depressed job market. I kept asking myself how those two could exist on the same plane of reality. I never entered into the real estate market believing that it was not dealing with reality, that it was a façade that was covering up the reality that it was not halcyon, but one big lie.

I had friends trying their best to get me to buy a new house, or a condo, anything in real estate because it was a good investment and the loans were so much easier to get. In the back of my mind I kept thinking to myself the job market is not good, good jobs are hard to come by, and those that are available are not paying what they used to pay. Oh, and the loans, the easy money, the easy promises simply did not match everything else I was experiencing. The old adage of “if it is too good to be true, then it probably is” kept coming to mind. Peer and social pressure aside, I stepped back and decided to wait to see what would happen. I am more than grateful that I did.

The real estate market turned into one big Ponzi scheme, with many losing their houses. Too many, in my opinion, were granted loans when in another time they should have and would have been turned down. Too many have suffered because they were taken advantage of. I believe that many allowed themselves to listen to a siren song and did not listen to their inner red flags, or did not have enough sense to know that those with the money make the rules and can change the rules, which is what happened. As the rules changed in the Ponzi scheme, they got caught up and lost their homes.

As the deck of cards began to further collapse the Ponzi scheme began to reveal itself more with each passing day, the foreign financed housing mortgage began to create more casualties, the lenders themselves got caught up in the meltdown. Freddie Mae, Freddie Mac, Lehman Brothers, AIG, just to name a few went bankrupt, got a loan, or were taken over by the government that has culminated into a government bailout of the nation’s financial sector.

The biggest loser in the Ponzi scheme has been the American taxpayer and it makes me sick. The last seven and half years have been run by people who believe in no regulation, that the market will take of itself, the invisible hand will do its job. The last seven and half years has seen a government that has allowed this to happen. A president that paid no attention to it other than to say, “Gee, isn’t this spiffy, Americans are thriving.” But at what cost? Of those seven and a half years free markets also ran the halls of both Houses, believing the same thing. The balance of power did not shift enough in both houses in the last election to turn things around either. There were not enough votes to override vetoes, not enough to achieve anything substantive.

So here we are in an election year bailing out a Ponzi scheme with more foreign money, our backsides owed to more foreign countries, and the American taxpayer paying the bill. As an American taxpayer I want to know where our help is. We need help and a plan too as we shoulder even more debt, more foreign financed debt at a time when we can least afford it. We are not looking for a hand out, we are looking for a plan for main street America, because main street America are the ones who will be paying for the Ponzi scheme, the bad loans, the foreign debt, and we are the ones to lose. And the one thing this American does not want is to see us become a third world country who owes everyone and their brother. We will not have to wait for the next shoe to drop when it comes to terrorists, all we will need is the weight of this foreign financed debt and another bailout for something this American objected to in the first place.

Obama: “Help Main Street” as well as Wall St.

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2 Comments »

  1. the past presidents have a part to play in deregulation. Clinton put the final nail or the biggest nail in the coffin by repealing the Steagal Glass Act.
    McCain is the only person who is calling for accoutability and more auditing. Obama is not. Obama just panders to the public and Wall Street.
    In fact, he got special treatement from the mortgage industry.

    bama also got a $300,000 discount by Rezko who bought the lot next door to enable Obama to buy the

    house for $1.65 million dollar. Rezko can only gain access to the lot though Obama’s house and never

    develop the lot.

    Further Obama got special privileges: The freshman Democratic senator received a discount. He locked

    in an interest rate of 5.625 percent on the 30-year fixed-rate mortgage, below the average for such

    loans at the time in Chicago. The loan was unusually large, known in banker lingo as a “super super

    jumbo.” Obama paid no origination fee or discount points, as some consumers do to reduce their

    interest rates.

    http://campaignspot.nationalreview.com/post/?q=MzFkMjYzMmEwZjVkMGY4YjIyNDBhM2FiOTI4MzM1ZDc=

    Comment by Tim Pure — September 20, 2008 @ 4:14 pm

  2. There have been seven and half years to correct this, but it went ignored. That has been enough time to stop this freight train from happening. This isn’t something that came out of the blue. And I am sure if I dug around I could find other Senators, Congress people who received special treatment too. However, there are many who given outrageous loans during this period.

    Comment by Julie P — September 20, 2008 @ 4:22 pm


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