Watching this video reminded me of a book that I read some 5 years ago. Predatory Bender: A Story of Subprime Finance perfectly exposed the workings of the global financial system by focusing on one of it's ugliest, and most profitable, manifestations...
You will NEVER get me to defend the actions of banking institutions who stole billions of dollars from the US taxpayer through their unholy alliance with the federal government.
I see nothing wrong with the purchase and sale of debt among private entities, I DO have a problem with this debt being traded using funds given the banks by the US taxpayer, that were to be used for the purpose of lending, thus freeing up the credit markets.
I also would like the various governments, who sell this debt, to demand that the purchasers of the debt do not charge ridiculous fees, making it almost impossible for property owners to repay the back taxes.
This is another example of government that has forgotten just who its employer is.
Then again, I am uncomfortable with the whole property tax thing anyway. A man's home should not carry a permanent mortgage payment to a government.
Think about the implications here. A government can choose a tax rate, if it is too high, property owners will be more likely to be unable to pay. Then the government has the ability to sell that debt, often for full amount of the back-taxes, to a government funded Wall Street firm, who then gains the full value of the property if the original owner fails to pay the inflated tax bill and penalties.
Like I said, "an unholy alliance". All sides of the deal have the incentive to do everything possible to make damn sure the property owner defaults.
I was never in favor of bailouts. The punishment for poor management or a bad business model should be bankruptcy, whether you are the local dry-cleaner or Bank of America. Unfortunately the local dry-cleaner lacks the ability to have lunch with people who have prefixes such as President, Secretary, or Honorable before their names.
Wall Street is best described as a hungry animal, it will do as it must to show profit, and nobody should expect it to do otherwise. The problem is we have a government that has rubbed gravy all over us and tied us to the ground, then loudly says, “BAD DOG” while big banks join the feeding frenzy.
When the banks have finished devouring us, the government responds by giving the banks some doggy treats while putting in place new regulations that the big institutions ignore (they have the legal horsepower to do this) yet the small businesses who peovide some competition fail attempting to comply.
You will NEVER get me to defend the actions of banking institutions who stole billions of dollars from the US taxpayer through their unholy alliance with the federal government.
ReplyDeleteI see nothing wrong with the purchase and sale of debt among private entities, I DO have a problem with this debt being traded using funds given the banks by the US taxpayer, that were to be used for the purpose of lending, thus freeing up the credit markets.
I also would like the various governments, who sell this debt, to demand that the purchasers of the debt do not charge ridiculous fees, making it almost impossible for property owners to repay the back taxes.
This is another example of government that has forgotten just who its employer is.
Then again, I am uncomfortable with the whole property tax thing anyway. A man's home should not carry a permanent mortgage payment to a government.
Think about the implications here. A government can choose a tax rate, if it is too high, property owners will be more likely to be unable to pay. Then the government has the ability to sell that debt, often for full amount of the back-taxes, to a government funded Wall Street firm, who then gains the full value of the property if the original owner fails to pay the inflated tax bill and penalties.
Like I said, "an unholy alliance". All sides of the deal have the incentive to do everything possible to make damn sure the property owner defaults.
I was never in favor of bailouts. The punishment for poor management or a bad business model should be bankruptcy, whether you are the local dry-cleaner or Bank of America. Unfortunately the local dry-cleaner lacks the ability to have lunch with people who have prefixes such as President, Secretary, or Honorable before their names.
Wall Street is best described as a hungry animal, it will do as it must to show profit, and nobody should expect it to do otherwise. The problem is we have a government that has rubbed gravy all over us and tied us to the ground, then loudly says, “BAD DOG” while big banks join the feeding frenzy.
When the banks have finished devouring us, the government responds by giving the banks some doggy treats while putting in place new regulations that the big institutions ignore (they have the legal horsepower to do this) yet the small businesses who peovide some competition fail attempting to comply.