SubPrime Mortgage Burst

The housing market plunged deeper into despair last month, with sales of new homes plummeting to their lowest level in more than 12 years.

The slump worsened even more than most analysts expected, heightening fears that the country might be thrust into a recession.

New-home sales tumbled 9 percent in November from October to a seasonally adjusted annual sales pace of 647,000, the Commerce Department reported Friday. That was the worst sales pace since April 1995.

The housing picture turned out to be more grim than most anticipated. Many economists were predicting sales to decline by 1.8 percent to a pace of 715,000.

By region, sales fell in all parts of the country, except for the West.

In the Midwest, new-home sales plunged 27.6 percent in November from October. Sales dropped 19.3 percent in the Northeast and fell 6.4 percent in the South. In the West, however, sales rose 4 percent.

Over the last 12 months, new-home sales nationwide have tumbled by 34.4 percent, the biggest annual slide since early 1991, and stark evidence of the painful collapse in the once high-flying housing market.

"I think you can classify what we are seeing in the housing market as a crash," said Mark Zandi, chief economist at Moody's Economy.com. "Sales and home prices are in a free fall. The downturn is intensifying."

The median sales price of a new home dipped to $239,100 in November. That is 0.4 percent lower than a year ago. The median price is where half sell for more and half for less.

On Wall Street, the Dow Jones industrials, after an erratic session, managed to squeeze out a small gain even as the grim home sales report added to some investors' angst. The Dow closed up 6.26 points at 13,365.87.

Would-be home buyers have found it more difficult to secure financing, especially for "jumbo" mortgages - those exceeding $417,000. The tighter credit situation is deepening the housing slump. Unsold homes have piled up, which will force builders to cut back even more on construction and look for ways to sweeten the pot to lure prospective buyers.

"A lot of borrowers are being disqualified for loans. If you can't qualify for a mortgage the game is over. For those who do qualify, it takes longer to get loans," said Brian Bethune, economist at Global Insight.

Ultimately the foreclosures will set the new home prices, which will be substantially lower than the current market value; consequently the overly inflated homes will bottom down and people will be able to qualify and afford the homes. The other alternative, the scary alternative is: Just like the terrorist used our planes to hit us on 9/11, the Chinese are using our free markets and corporate greed in a hostile takeover of our economy. If the golden rule applies, he who has the gold makes the rules, within the next decade; China will own a substantial chunk of the US. The repercussions can only mean war. Once our leaders wake up to these back door acts of war, they will retaliate.


The Arabs have followed suite and are investing heavily in our crippled economy, infusing tremendous sums of money in our fraudulent and fledgling banks for a share of the pie. The Arabians have a superior hand in all this because they have direct control over the price of oil, adjusting it at will to suit their objectives.



These foreigners are pseudo-government conglomerates masquerading as holding companies with the sole purpose of toppling our nation in a hostile takeover of our economy. We might as well kiss Israel goodbye!

The Whistler

Now that the Fed has launched investigations on Wamu, one has to hope that they can expend to the rest of the industry. The banks are criminals and should be addressed as such. If the administration is bend on doing something about these criminals and possibly rescuing the country from the major recession it's heading to, then it needs to completely overhaul the entire banking system.



The banks that were involved in the fraudulent and predatory lending scams should be investigated, and prosecuted. Their assets should be frozen by the Government and used to correct the system. Since when did a bum from the street, a bum without a job or the prospects of getting one, a bum that has not filed income tax for 15 years, qualify to buy a $1/2 million home? The stated income scam should be investigated because it led to inflation in home values and subsequently major defaults, and foreclosures. The single biggest scam in History, right under the watch of the administration.

So rather than negotiate with the one that is bleeding you to death, the Govt. should cut ties immediately and pursue an aggressive and real solution to this mess. If this was to happen, it would not only exonerate the administration for all its shortcomings and absurdities, but it would propel this administration into the history books as the administration that saved America from the first aggressive attack and possible colonization since independence.

The bad credit the Americans have accrued due to defaults, coupled with loss of employment through outsourcing have effectively set the foundation for a hostile takeover of our beloved country by foreigners who not only have virgin credit, but in most cases bring cash to the table. These foreign investors are gobbling our distressed banks, the same scandalous banks that initiated this whole mess, and now own the defaulted mortgages and the foreclosed homes. Look at Citi And Meryl. These foreign investors are buying up stock in these banks and once they take full control, they will not only own and control our economy, they will become our new landlords. Just take a look and see what they have done with our oil dollars, transformed their desolate desert into an oasis of envy!!

Watch out America!! The Arabs are coming.

According to Greenspan

Very few in the world of economics can challenge the genius of Alan Greenspan. This 81 year old financial genius was at the helm of the strongest economy in the world, the Chairman of the Federal Reserve, for 2 decades. He led The Fed through 4 presidencies, until last year when he voluntarily stepped down and was succeed by Ben Bernanke.

While his last years were mired by criticism for his handling the economy and keeping the interest rates too low which some critics blame for the housing bubble, he is also credited with saving the economy from disastrous recessions; notably 1997 and more recently following the 911 attacks in 2001.

I will not delve into Greenspan's biography nevertheless I will mention that he is learned and has previously served in several seniority positions. A well traveled man, Greenspan wined and dined with the wealthiest in the world and as such had numerous connections and ideas of how and where the market was heading.

While one might argue that some senility associated with old age had started to erode his brilliant mind, it's his global connections that dictated the direction of the markets.

This brings me to today's observation: Greenspan single-handedly facilitated the collapse of the US economy not only by cutting and maintaining key low interest rates, but also by encouraging banks to aggressively promote alternative lending products, specifically, subprime loans. While this was his idea of revamping the economy, he has as of 2005 admitted that he had no idea that it would get out of hand, nevertheless, he did predict that the housing bubble that he had created would burst in a relatively short period of time. Perhaps this might have played a role in his untimely resignation from his coveted chairmanship.

If he helped to create this problem, then perhaps he should know how to resolve it. When he suggested financial aid to the home owners, perhaps it's because he understood that most had bit more than they could chew and in the interest of the overall economy, it would be best to give the home owners some money to pump back in to the economy. Consumer spending has tremendously fallen in the wake of high mortgages and market uncertainties.

After conferring with several of my friends, all of whom have been or know someone whose home has been foreclosed on, the consensus was that the Government should take a more aggressive approach into this quagmire in the interest of saving the economy and the nation at large. They all concur that the home values were inflated and if the Govt. would reappraise them and rewrite new loans then perhaps they would be tempted to keep them otherwise they would just walk out of the loans. They figured that it was easier to rebuild their credit than to pay off their non-recourse interest only mortgages that would reset every 6 months. Very easy decision given the fact that most of them were paying an average of 4k-9k/ month. Big loans.

It seemed like a good idea to investigate all the banks involved with the mortgage fraud that became evident as more owners defaulted on loans that should have never been written in the first place based on their inability to honor their obligations. That it was in the interest of the economy and nation at large to prosecute these banks and brokers rather than bail them out in the guise of bailing out the home owners (victims).

While Greenspan would probably fall in this category for facilitating the whole fiasco under his watch, the best solution forwarded was to dissolve the Fed and replace it with a Govt. owned and operated central bank. The discussion also pointed out that several members of both houses of Congress were very hesitant in "grabbing this bull by the horns" because they too were guilty of not activating or heeding to the recession and inflation prevention mechanisms in place, but that they profited from the said scam by turning into overnight investors and using their influence to score big deals. They exploited the bubble by delving head first into the real estate business and when they could have stymied the bleeding earlier, held back until they unloaded their investments.

One should not look for a meaningful reaction from Congress regarding the investigation and prosecution of the fraudulent banks or the immediate decommissioning of the Fed. At least not from the current do nothing bunch.

So where does this leave us? In a nut shell, this leaves us between a rock and a very hard place. We are now ripe for a hostile take over from foreign investors such as the Chinese and the Arabians. While the Chinese are guilty of swiping away our manufacturing jobs, (the second major reason for our recession), the Arabs are systematically and increasingly buying controlling interests in our fledgling banks and corporations, the most recent being Citi.

If history holds true, then the golden rule will prevail; those who have the gold make the rules!! The Arabs give us oil, but do we know what they do with our dollars? Are they using our dollars and our capitalistic system against us? Why do they have Govt. sponsored holding companies buying everything they can get their oily hands on? And to think that they have transformed their desolate desert into an oasis of envy at our expense is not only Inferiororating but criminal.

Perhaps the next adminsistration will usher a new dawn of economic policies; perhaps they will continue business as usual. Perhaps they will heed to Greenspan's suggestions to arm the consumers with financial aid. Whatever their game plan is, they will inherit a country waist deep in the greatest depression in history.

ATTACK ON THE NEW FRONT: OUR ECONOMY

Neither candidate from either side has a serious economic or foreign policy agenda that addresses the impoverished nations especially those in Africa and South America.

The two continents combined boast 65-70% of the world’s natural resources, from minerals, to manpower. Left unaddressed, other emerging powers such as China and the Arabians will tap into those resources to our demise.

We are living in a different era, where corporate warfare has replaced field combat and artillery shells. Not to undermine the sacrifice our young men and women in uniform give everyday in the grinding wars around the globe in our continuing effort to combat global terrorism, we need to understand that there are other nations that have waged a different kind of war on us. An economic war. Just like the masterminds of 911 used our planes against us, these warring nations are using our identity, Capitalism, against us.

That the candidates are steering away from this vital economic issue is not a coincidence. Those who were in Congress joined the administration in taking credit for the booming economy, rather than activating the mechanisms in place to prevent the mortgage fraud that is now crippling the nation.

Foreign Government sponsored corporations have emerged with the sole purpose of investing in our crippled economy, effectively becoming our new masters. The constant bickering and infighting amongst our leaders and candidates has diverted the nation from the prime focus of maintaining its grip as the leader of the free world. Eventually when all is said and done, and the dust has settled, the fighting candidates will rally behind the victor, the one they have been bombarding with flimsy accusations all along the campaign, to undermine the nominee from the other party. However, after the general elections, and the new President is chosen, the politicians will switch gears and do what they do best, start preparing for the next election, with new attacks on the leadership. Others will embark on returning favors for the endorsements while all along ignoring the task at hand.

It's in the interest of the west, especially America to ensure that Africa gets preferential trading deals and grants, without strings attached. While this does not call for the re-colonization of Africa and South America, it mandates aggressive protection of their resources from nations that will not only exploit those resources to boost their own economies, but will abuse them to deteriorate our economy and National Security. Preventative measures have to be implemented to prevent such nations from undermining the effort by circumventing the assumed policies. China is currently exploring setting up an auto assembly plant in Mexico, a country that has preferential trade agreements with the US. This not only defeats the purpose of the implementing policies to promote and safeguard the developing nations resources, but is a direct threat to the US auto industry.

One needs to travel outside America to see the rate at which the Chinese and Arabians are infiltrating the impoverished and in most cases corrupt African and South American countries. They lure them with infrastructure, and money; however, the roads lead to the abundant natural resources which are easily and cheaply converted to finished products that flood our stores.

With a lock on these natural resources, the Chinese and Arabians are gradually and systematically destroying our economy and national security. We, the American consumers are giving up an opportunity not only to help these poor nations, but are embarking on a self destructive mode.

The Arabians armed with the knowledge that their oil reserves are swiftly diminishing have embarked on an aggressive approach to diversify their petroleum $$ by investing in renewable and sustainable economies.

These high powered Govt. backed foreign investors are after our blood. Like a predator in the wild targets the limping prey, they have sensed a limp in our stride and are converging on our economy's jugular with the help of the greedy and fraudulent banks that should be investigated and prosecuted for fraud and predatory lending practices.

The -ve credit the Americans have amassed from defaults, coupled with massive unemployment resulting from outsourcing have laid the foundation for a hostile takeover of our beloved country by foreigners who bring virgin credit and cash to the table.

These foreign investors are gobbling our distressed banks, Oil dollars at work!! the same scandalous banks that initiated this whole mess, and now own the defaulted mortgages and the foreclosures. Once they take full control, these foreign investors will not only own and control our economy, they will become our new landlords.

Just take a look and see what they have done with our oil dollars, transforming their desolate desert into an oasis of envy!!


Watch out America!! The Arabs are coming!!!