More and more, we discover our leaders--politicians, CEOs and some clergy--disappoint us. They disappoint us in the United States but also around the world.
Because of these people, our institutions--government, financial and religious institutions--insult decent, working (and non-working) people's sense of ethics and morality.
Who put these people in charge and why are they still there?
The guy in charge of "checking off" the Lesbian bondage fiasco for the Republican National Committee is still there and making money; Jaime Dimon is still CEO and still making millions; the Pope makes a horrible PR move, priests still have to remain celibate and a pedophile Cardinal runs free; Alan Greenspan still gets attention and people actually still care about his opinions. Why?
One of the few times I was on a panel several years ago during the "halcyon" days of housing, I said that whoever had the idea of making Fannie Mae and Freddie Mac public AND private institutions created an inherent conflict of interest, which just doesn't work. Daniel Mudd finally admitted to that the other day. If they only would have listened to me a few years ago.
When I asked Franklin Raines if Fannie Mae is doing anything to put financial literacy programs into secondary education, he said they were working on it. Sure. And, Angelo Mozilo, CEO of Countrywide, shrugged the idea off saying students "would probably cut class anyway."
But that's besides the point.
It's pretty obvious by now that Geithner-Bernanke-Summers will save the too-big-to-fail bank model if it means destroying the U.S. and any certainty-in-value there may be for currency, housing and commercial real estate. Right now, it looks like they'll succeed in their never-ending pursuit of a credit-driven, material wealth, Reaganomics society.
Regulatory reform will likely turn into 2000 pages of laws that TBTF bank lawyers can figure out ways to get around. Rather than bring back Glass-Steagall, we have to sit through months of stupid regulatory reform legislation, created by a paid-for Congressman, owned and/or rented by bank lobbyists. (That's Sen. Christopher Dodd, D-Conn. for those watching).
Speaking of conflict of interests, Greenspan said he does not want to see investors making dangerous bets with consumer deposits, but he doesn't see why we need to bring back Glass-Steagall. It's also amazing the "selective memory" that man has. Why was I and a million other people able to see that Interest Only mortgages and No Interest No Job or Asset loans would be a disaster for non-sophisticated homebuyers and destroy the mortgage market.
Greenspan said nobody could see it? Either we had a total imbecile at the Federal Reserve (and Andrea Mitchell married a total imbecile) or when times are good, nobody wants to stop the music.
Thinking of "when times are good, nobody wants to stop the music," I understand that the U.S. will be contributing $100 billion to a $500 billion International Monetary Fund that will, in turn, bail out Greece and other European countries (when they end up needing bailouts). It's just another $100 billion--a small fraction of the $3 trillion to $4 trillion in debt we've built up.
This is why I said the catastrophic economic collapse will happen in 12 to 18 months...it takes a long time to destroy the country if you use all the tools available to do it. Besides, it took three years after 1929 for the second collapse. And, please, quit this "Great Recession" stuff. It's the "Great Depression II" and history will certainly show that.
So, will there be any community or regional banks after all is said and done? Well, when the smoke clears, there will be the large too-big-to-fail banks, the very small community banks and a few credit unions added to the too-big-to-fail Navy Federal Credit Union.
Not sure about the FDIC and where they plan to get the money to close all these banks. What a joke. Meanwhile, we're more in debt than Greece will ever be and nobody will dare cut our ratings. Plus, Government Sachs will keep buying up bonds and feeding the stock market until it shorts everything, everywhere and all hell breaks loose.
And, it amazes me when I watch McNeill-Lehrer and these "experts" can't say why mortgage modification programs don't work. It's pretty simple--banks have to answer to residential mortgage-backed securities bondholders. Those are contracts that will cost those big banks lots of money if they break them because the lawsuits will flood in. They probably already have. If they break those contracts, then they won't be too big to fail. Their hands are tied.
I've said it before and I'll say it again. There needs to be "investor confidence" to bring liquidity back into the real estate market. Investor confidence comes from value certainty. Value certainty can only be attained through market corrections. Market corrections cannot happen while the U.S. Federal Government bails out homeowners who will not be able to pay off their mortgages and insolvent financial institutions.
The world will not have investor certainty if the U.S. Federal Government does the same thing with other countries either--like Greece. Because, if you haven't looked lately, the U.S. is Greece.
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