Friday, December 05, 2008

Angry Sam Owen Gripes About Fractional Lending And The American Dream 

Homeownership, the American Dream?
Financial slavery is more like it!

When did we sink so low? How is a pile of sticks on a postage stamp with a 30 year payment a "dream"? (its a helluva dream for high financiers - easy money from suckers) ...And what happens at the end of 30 years, when even at 6% interest you've already paid for the house nearly three times over? The Roof is shot, the paint is peeling, termites have infested the place, the carpets are worn out and the kitchen is so outdated that it makes powdered wigs look like a new idea.

So, what next, now that the pile of crap is officialy paid for?
Well Bob...It's a brand new mortgage!

So after 30 years of showing up for a shitty job you couldn't stand and finally paying off that nice little house in that quaint little suburb. It' s time to heap on some fresh debt just to make the place livable.
Fortunately for you, your local bank is thrilled at the prospect of providing a little fractional lending to help you out inyour time of need.

See, even though you were prudent and made your payments by the sweat of your brow, fractional lending has been off on a tear. It seems that the whole world was clamoring for debt backed assets and banks could easily sell their loans to Wall Street, generate more reserves AND LOAN MORE MONEY! Just lend it right into existence. If a bank holds $200,000 in deposits the FED says they can loan 80% more than that. Thats right 200k turned into a cool million with naught but a signature and a few key strokes.
Meanwhile, back in the financial jungle, That brand new debt was being sold to eager investors. Your new loan was packaged, bundled and processed with a heap of other trash into mortgage backed securities and secured by credit default swaps then leveraged to the hilt.

That little local bank of yours through the sale of debt, just doubled its reserves and can now loan out twice as much money with fresh new "assets" ready for sale on the world market. Just keep the warm bodies coming and the money grows exponentially. Lets see, you pick lettuce for $6 dollars an hour and want to buy a $750,000 house? Well, lets just add a tiny zero here and change your job description slightly and suddenly, You Qualify! Why not, any "agricultural consultant"making "$60" an hour deserves nothing less.

A lifelong commitment for a shabby place to live was never the "American Dream".
A system of finance that keeps us in perpetual servitude was never the "American Dream".
A leviathan of government kleptocracy was never the "American Dream".

The dream of America was Freedom from tyranny with liberty and opportunity for all men.

- Angry Sam

His usual charming self!