The New York Times posted a Paul Krugman article “Sanders Over the Edge” criticizing Bernie Sanders that is obviously politically (and Wall Street) driven propaganda. What Krugman and the majority of politicians fail to realize is that the Wall Street banks created a new “non-traditional’ mortgage “securitization” that has directly affected over 180 MILLION Americans and indirectly affected 180 million more folks across the United States of America.
With that said the biggest failure that Krugman and his pals overlook is that American homeowners are wising up and researching exactly what has happened to their properties and precisely who was behind the scheme.
Let’s first clarify the fact that as Judge Peck of the bankruptcy court in the Southern District of New York observed, mortgage-backed securities are “unique creatures of Wall Street . . . and it is the rare ordinary human being who understands them.”
Krugman, like most politicians, is not among the “rare ordinary human(s)” that have researched, investigated, pulled court records and depositions and read USPTO patents and trademarks enough to recognize how far and in what directions the corruption stems.
The new securitization scheme began with deregulation back in the 1980s (thanks to President Reagan) and escalated in the 1990s with more deregulation and repeal of Glass-Steagall (thanks to President Bill Clinton) in order to accomplish the mission of the procurement of collateral for the purpose of securitization. It is doubtful that Presidents Reagan or Clinton were among the “rare ordinary humans” either.
Most homeowners know that they were scammed and that the current administration helped the banks by “foaming the runway” with a half-assed HAMP program. Million of Americans lost their homes, lost their entire savings and retirement pensions and lost loved ones from stress and fear.
Mr. Krugman states, as he berates Bernie Sanders:
“The easy slogan here is “Break up the big banks.” It’s obvious why this slogan is appealing from a political point of view: Wall Street supplies an excellent cast of villains. But were big banks really at the heart of the financial crisis, and would breaking them up protect us from future crises?
Many analysts concluded years ago that the answers to both questions were no. Predatory lending was largely carried out by smaller, non-Wall Street institutions like Countrywide Financial; the crisis itself was centered not on big banks but on “shadow banks” like Lehman Brothers that weren’t necessarily that big. And the financial reform that President Obama signed in 2010 made a real effort to address these problems. It could and should be made stronger, but pounding the table about big banks misses the point.”
Mr. Krugman, you obviously have no clue who the players are at the top of the monkey bars. The investment banks, as well as Fannie and Freddie, have been hall of framers in the design and computer software programs that run the securitization scam. The smaller pretender lenders used software platforms that had to incorporate and license the big bank patents in their own proprietary software programs. For many years, until about 2008, pretender lenders would issue their proprietary software programs to brokers and loan officers who would upload directly to the pretender lenders which ultimately uploaded to the investment banks.
The investment banks had designed software to detect fraud, yet failed to utilize that portion of the program. It may have made the software patent-able but it appears it was never intended to be used in order that the bulk of homeowners could be captured in the new scheme. And Mr. Krugman, just who do you think created these egregious ARM financial products that were sold to American homeowners with refinancing promises that were never intended to be honored??
Trillions of dollars were sucked out of state, federal and union pension funds, corporate 401ks and other retirement accounts that filled the investment banks’ coffers. If Krugman had read The Big Short or BAILOUT and researched the software patents he’d probably better understand the corruption and the scheme… and certainly the intention.
The smaller pretender lenders reported to the investment banks. Their credit lines were provided by Wall Street banks and funded even before the borrower signed. New Century Mortgage (now bankrupt), for example, had pre-existing agreements with Lehman Brothers, as well as Sutton Funding LLC – a U.S. shell corporation for Barclays Bank (among a host of other big banks) to procure homeowner collateral for the purpose of securitization. There was no disclosure to homeowners who unwittingly entered into off-handed securities transaction.
Mr. Krugman’s brown-nosing take on the current administration’s effort, when he states: “And the financial reform that President Obama signed in 2010 made a real effort to address these problems” is truly propaganda. Read BAILOUT and BULL BY THE HORNS from real people who worked under this Obama administration and it is obvious that the only effort that exerted was protectionism for the TBTF big banks.
Dear Mr. Krugman – Big Banks have annihilated this country. They have used homeowner collateral as their new gold standard. Look at the rehypothecation of assets and the OVER $700 TRILLION of derivative debt these scumbags have accumulated.
Lehman Brothers was just the tip of the iceberg. What makes you even remotely think that anything has ever changed?! The patented software programs are still rolling along as investment banks (aka “Big Banks”) pay a pittance in fines and settlements for their wrong doing. They have not changed their ways and won’t without some protection in place like reinstating Glass-Steagall – and your pet politician, Hillary Clinton (Ms. Goldman Sachs), is not about to push for that reform because her husband and his pals were the ones sent in to open the flood gates.
The bottom-line is that Homeowners that have been fighting back are more aware of the scheme and corruption that neither Krugman or any of his political compadres want to recognize. The American people pack the stadiums for Bernie Sanders and Donald Trump because they want a revolution to eliminate the corrupt status quo “fat cat” political regimes.
It all over one way or another. The TBTF big banks will either get reorganized, nationalized or bankrupted in order to correct the corruption – and yes, its going to hurt America for a while. But we can’t go on starting wars and killing leaders because they lost their investments on Wall Street and want to behead Lloyd Blankfein and his minions due to a corrupt unregulated industry or because the elite wants to profit from destruction.
Bernie Sanders is talking about the problems – addressing them loud and clear. Donald Trump is pointing fingers and taking names and one thing for sure Trump is going to flat out tell it like it is and just who is buying Congress so that nothing worthwhile gets done.
So, when you see Paul Krugman on the street – just tell him “I know”. Maybe if he hears that enough times he’ll realize Americans are not as naive as he’d like to believe.