I have issued a Financial Red Alert due to the mortgage crisis. I should add that this crisis could lead to a rebellion.
In Indiana a woman made her last mortgage payment 8 months ago and has not received a title despite repeated requests.
The banks have no clear titles to millions of homes. The reason for this is that it is illegal to make a loan that is far greater than the value of the property to someone who has insufficient funds to make the payments.
To get around the law the bankers decided to package mortgages into bonds for thousands of homes across state lines whose payments expired on the same date.
Of course it is also illegal to sell a worthless bond so they needed insurance. But insurance like fire or life requires the company set aside sufficient funds to cover the expected losses. And, since most of these borrowers were expected to fail, they did not qualify for real insurance.
Blythe Masters of Goldman Sachs invented the Credit Default Swap which insured the value of the bonds and allowed corrupt ratings agencies to give AAA status to worse than junk bonds.
Brooksley Born, the head of the CFTC in 1999, tried to regulate CDS but was thwarted by four Jewish men. Robert Rubin, Alan Greenspan, Larry Summers and Arthur Levitt.
One of Ms. Born’s objections was that the companies selling CDS had no money to pay when the mortgages defaulted. That is why the taxpayers had to bailout AIG. And that is why the Bailout has cost us 13 trillion dollars to date with another 14 trillion dollars to come. Actually the taxpayer has a potential of 600 trillion dollars in Bailouts because Reid, Pelosi, Boehner, McConnell and Obama have not yet banned CDS.
American state courts have ruled that if a bank does not hold title that it cannot foreclose. Once this becomes common knowledge people who owe more than their home is worth will stop making payments and live rent free with no fear of eviction.
Nobody will buy a house if they learn they cannot ever get title. And many who have been foreclosed will sue to regain title.
This will destroy what is left of the American economy and send the unemployment rate from the current 22.5% to 25%.
And it will anger the electorate at a time when their state and local governments go into bankruptcy. And also at a time when their dollars are losing purchasing power sending the price of food and gasoline out of reach of tens of millions.
Today’s videos are a two part discussion of the mortgage crisis. Max Keiser and Cynthia McKinney participated in this interview.