Mortgage Debt Fun!!

The Financial Times reports today that Citigroup, B of A
and JP Morgan are setting up a $75 billion dollar fund to
pick up those mortgage linked securities
in an attempt to ally fears of a downward price spiral in
balance sheets of big banks!

Now get a handle on this big boy concept: We are not even
talking about defunct sub-prime loans…we are talking about
the huge “free-fall” in equity pricing or
what the value of the goods are folks! The Big Banks have
had to put together a rush of cash to hold off a steady sell
off of properties at fire sale prices. The worst part of
this that many Banks have under reported the depth
of the losses….trying to fool people into thinking that
their Bank stocks, Mutual Funds, Insurance Funds and Pension
balances are safe. Not so…..if you consider that if the
size of these markets is between $3 and $20 Trillion dollars
worldwide…and if the deflation cycle we are in has dried up
every available “Credit Buck” for property. The fall could
be as large as $1.5 to $10 Trillion dollars in lost value!

This “Greenspan Bubble” has already shot its load….and now
we can all wait to see where the shotgun pellets land and at
what targets! This is a very big deal for the world economy.
When they tried to halt the process in England…there were
giant runs on the Banks. Pumping up “Stag-Flation Bucks”
can only sustain us so long. Finally, someone is going to
have to buy or sell property someplace. When they do; the
immense financial fall out…..will be deafening!

Some banks are taking their lumps and heading for the hills.
Many have simply dumped all their bad sub-prime based loans
at deep discount rates. Pennies on the dollar…as they say.
Will the economy jump back overnight to save these greedy
discount buyers? Maybe the ones that have relatives with
National or State Politicians! The Senate has already voted
$200 billion to bailout “certain qualifying loans”! Do not
be surprised to hear the thud of the ax falling soon! When
the Pension and Health Funds start to dry up….you will know
how badly, how greedy and stupid Greenspan was…dumping those
interest rates to nothing and then letting everyone including
the family dog into buying houses for no money down on those
lovely 80-20 Loan Programs! The good news is…that even if
Hillary gets elected; Greenspan won’t become the next IMF
or World Bank Chairman – if we are lucky.

In the meantime, we can all go buy Greenspan’s book,
laugh like heck and donate it to Move On dot org!

About Ron & Anna Winship

Independent News Producers/Writers and Directors for Parker-Longbow Productions. Independent Programming which includes a broad variety of Political, Entertainment and Professional Personalities. Cutting Edge - a talk the flagship of over 30 URL websites developed or under development. The Winships have been blogging for the Orange Juice since back when nickels had buffalos on them, and men wore onions attached to their belts, because it was the fashion back then.