UNITED STATES SECURITIES AND EXCHANGE COMMISSION BEING CHARGED WITH NEGLIGENCE IN MORTGAGE INDUSTRY

To some investors who bought New Century Financial Corp stock, it sounded good on the surface. They were attempting to loan money to a market that was neglected by the bigger boys – but then Wall Street stepped in and seized the entire sub prime market in less than two years.

That was the final pump that blew up the bubble. They couldn’t pump it any higher and home values, particularly in California became exorbitant, far more so than the irrational exuberance which preceded the rocked stock market in 2000.

Those two million people with bad credit who will lose their homes this year thought they had reached the American dream which in reality is the American delusion.

The mainstream media, the Feds, and the lackeys who support this insane financial system are using their public relations engines to try to boost confidence and slick over the truth – what real estate depression?

There is no depression in the real estate industry”, they say! Of course their paychecks and survival depend on there not being a depression and covering up the balloon they created out of thin air!

More than ten million Americans were rooked into taking out phony mortgages based on phony stated incomes which would have eliminated them from getting a loan if the truth had been revealed to the underwriters. That includes tens of millions of owner and non owner occupied home debtors with excellent credit and credit scores above 780 that borrowed about $5 trillion over the past five years.

It has been that money circulating through the economy over the past few years that has kept the entire Bush administration looking good for the public on the economic policy front, but that is about to change.

The Bush administration my go down as the worst economic policy making presidency in the history of the United States. If not for the housing bubble, this war economy would have been a total disaster – it still is a disaster in the making – only the inevitable has been postponed.

What is really interesting however is the SEC’s negligence in the entire sub-prime market bubble, which had it acted more than five years ago when stated income loans became more and ever more popular not so much amongst borrowers, but by the 57,000 mortgage brokers who acted as agents of destruction for the American housing industry.

Their negligence has perpetuated the largest Ponzi scheme ever invented by man. It is run by Fannie and Freddie while Washington Mutual, Countrywide and the ten largest banks in the world are all bit players next to the Wall Street underwriters who float bonds backed by fishy mortgage deals originated by even sketchier mortgage brokers.

Those ten million families who finally got that home loan through the sub prime market makers on Wall Street who hawk junk bonds just as quickly as they can hawk junk mortgages, a product which has already developed into a multi-trillion dollar a year trading market, are all having a difficult time sleeping at night.

While the debacle continues to unfold, millions of homeowners may never again obtain credit in this country, impacting the economy for a long time to come…perhaps as long as a decade.

Those damaged borrowers are thoroughly fed up and sick and tired of the government, the banking system, and the crooks on Wall Street who keep sucking the lifeblood out of America’s economy. They want nothing more to do with debt, bankers, Wall Street or even the American government. They simply drop out and go into the underground economy. And the powers that be can do nothing about it.

When you have more than 10 million people with bad credit defaulting on loans over a two year period you have some serious problems on the horizon for the global economy.

Many “professional” economists are simply poo pooing the entire mess stating that the worst will soon be over – but those thousands of economists are not only morons, they are idiot mouth pieces for Wall Street and get paid millions for lying! They speak only out of their own vested interests, not the overall general public well being.

Never will the real estate agents and their bankers have another opportunity to inflate the market as much as they did during the past five years before the bubble burst in 2006.

They will also never have another opportunity to defraud again as new laws are being drafted to slam the lid shut on mortgage fraud in this country by Congress and industry watchdogs. The need for an honest mortgage banking industry has never been stronger. Very few mortgage bankers will be as honest as it takes to clean up this mess.

These institutions have done so much more damage to the overall credit quality of home debtors by loaning money to poor credit risks that a majority of them will always have something that will need to cleared up before ever being considered for a home loan again. This and their establishing good credit will take many more years to accomplish.

You might think it was the borrower’s faults for applying for phony loans instead of working hard and meeting credit needs through earnings. But it was the mortgage brokers who went about lying to induce them into taking out a home loan they could ill afford and then putting those lies in the loan application, telling the borrowers they need to “show” so much income to get the loan.

This activity borders on coercion and ultimately, using the artifice of fraud to obtain money and then making a living off those who do not understand what they are getting themselves into, is tantamount to embezzlement.

The lenders and the borrowers all got caught up in the monopoly game called “The American Dream” and are now paying big time for it. There is no escape mostly because market forces are so powerful, not even the government can stem the bloodletting going on now in home equity values which continue to plummet all over the nation.

The reason Washington Mutual, Fannie and Freddie are jumping into the “bailout the bad borrower’s bandwagon” game is, if they don’t, the government will be forced to do so from public pressure.

The ripple effect on the global economy is going to be enormous when the bad money they lent to the bad borrowers on top of the money they lent them in the first place also winds up in default. It is much like the sovereign debt defaults of the late 80’s only magnified a million fold. They just kept loaning the defaulted countries more money just to pay the interest. The phony interest made the banks balance sheets look good to their investors – but ultimately many of the loans never got repaid and they had to be forgiven.

All it can do is postpone the inevitable which always happens in any ponzi scheme which the mortgage industry has become – plain as day to any honest regulator or law enforcement official.

The SEC should have been on top of this long before it hit the news and the IRS is going to have a field day collecting billions of taxes on those ten million people who wind up having to short sell their properties.

When a taxpayer gets debt relief from a mortgage loan they must pay capital gains on the difference between what they owed and what they sold for during a short sale. It is doubtful that even the IRS will be able to collect all that tax created out of fraudulent loans granted to borrowers who knew they didn’t qualify but didn’t want to turn down hundreds of thousands in free money.

Already there are hundreds of class action lawsuits flying about the national court system over this debacle but the biggest lawsuit is yet to come. There are rumors that a $5 trillion dollar lawsuit is being prepared as a class action against the SEC for its negligence in the mortgage industry debacle. Regardless of the outcome, it still means the U.S. government and the tax payers will eventually wind up paying off all that bad debt, or never paying it at all by defaulting.

The SEC doesn't have the staff or manpower to deal with the financial implosion.

They have around 3,000 legal staff that covers over 100,000 publicly traded companies in the US, Canada and overseas. They are already overwhelmed.

Despite the thousands of SEC rules and regulations you cannot regulate people into being ethical...it is a personal choice. You can force them to be moral and do the right things with laws and so forth, but in the end the final decision to be ethical rests with the individual and 99% of all bankers, brokers and realtors are not honest.

They may think they are honest, but when a system as corrupt as the mortgage industry becomes so entrenched you have to tow the party line when it comes to “professional practices” such as overages (a shortened term for "over charge”) and “rebates” (another term in the industry for “kickbacks to brokers by lenders”) just to stay in business, one has to wonder how many days are left before this industry dies off and is replaced by something far more beneficial and equitable for society as a whole.

If they were truly honest they would see the damage they cause to other humans with their acts of "lending" (which is another word for greed) and quit the business. Flipping burgers or pumping gas is a more honest profession than car salesman or mortgage executive these days.

It is true that the market has outgrown the SEC in such a way that it makes them an obsolete entity and this is the problem. The problem that the international capital markets are faced with is a government operating with fiat money which is ineffective in dealing with massive fraud in its own financial markets.

What is needed is an entity to supersede the current financial regulatory infrastructure. You have state regulators, bank regulators, and currency regulators, all these different agencies that do not coordinate and communicate well enough to function properly to maintain honest standards in an industry that has in fact become the largest Ponzi scheme in history.

Something in the system is cracking at the seams and the dam is about to burst and when it does they will have another 911 type financial disaster on their hands where the market corrects by more than 20% in a very short period of successive days and creates a global ripple effect across the planet.

There needs to be created an overhauled administration of the current financial system, much like the one created by Homeland Security when intelligence failures created the recommendation to appoint a single Director of all Intelligence to oversee 17 other diverse and far flung intelligence operations.

The entire financial and mortgage industry, which seems to have some sort of special exemption from securities regulations when it comes to treasury bills, bonds and securities. You have to ask yourself, what idiotic central bank would buy securities from a bankrupt nation and why? Therein lies the essence of the fraud.

The newly created global regulatory entity needs to be disconnected from any political ties, like the current SEC Chairman Cox who pays lip service to big business and Wall Street and looks the other way when it comes to the real problems in this industry.

Goldman Sachs, JP Morgan, and all the Power Brokers have more power than the Depository Trust Corporation and the SEC combined, unfortunately they cannot wield a sword strong enough to cut out the fraud that has permeated the mortgage industry. What has occurred defies the imagination.

57,000 mortgage brokers packaged up $3 trillion worth of fraudulent loans and sold them off to the Chinese, the Arabs, the British, even the South Americans and the African central banks bought into the Ponzi scheme. Why do you think the dollar is worth less than 2 British pounds now? The dollar has been falling steadily against the pound since the debacle surfaced.

The Brits know what is coming and they are taking steps to shore up their own financial systems by allowing Barclays to Acquire ABN in what is now hailed as the “largest merger ever in global financial industry."

The 90 plus billion takeover of ABN Amro Bank by Barclays announced today is Britain’s latest effort to get some of their assets out of the United States before the final plug is pulled and the market does its 20% correction, wiping $5 trillion off the books to fix the $5 trillion created out of thin air over the past five years.

Barclay plans on selling all of ABN Amro’s U.S. based assets including their own and come back into the market after the dust settles. Many other international banks, including the Japanese will soon follow their lead. They will create their own buying opportunity by pulling out before anyone else has any clue of what is really going on. It’s all part of their business strategy. Buy Low, Sell High, and if that doesn’t work, cause lower prices, and then buy when it bottoms, and resell when it all get’s reinflated.

This is corruption in the highest of places and we see the end result. Builders going bankrupt, borrowers being bailed out with Band-Aid money under the belief that bad money following bad money will somehow turn into good money.

If this corruption weren't the case, 15% wouldn't have control of 85% of all the wealth in the whole world. Where the big money is, so also are the decisions made that run the markets. It breeds corruption and it extends from NYC to DC to Hong Kong.

The current financial system has bred and continues to create a sewer full of corrupted politicians, lobbyists and Washington bureaucrats, republican and democrats alike, who have no clue about the impact that fraud is having on the value of the United States dollar, its’ securities, and the entire housing market in general.

It has been there since the 20's and is with us today. We see the effects of it in everyday life. Today it’s all about money people fighting over the scraps or the other 15%, more than anything else. The American people and its government are on a collision course that will have long lasting effects when the party is over.

Who will be there then to pick up the pieces? When the musical mortgages stop flowing, who will be standing on the street without a house to sit in?

Will it be the ten million people who bought into mortgage fraud or will it be the regulators, the bankers, the lawyers, and all the corrupt politicians (99% of which are also lawyers) who created this mess in the first place?

America has so many problems on so many levels and nobody is really able enough to apply themselves to fixing them. It is like a cancer that has been mis-diagnosed and surfaces only when it is far too late. The patient is already dead on arrival. It’s that late folks!

Money won't help even the richest when this floodgate of bloodletting opens. Turn on the TV and CNN daily and it’s like a warning signal telling us the seriousness of this play, this artificial monopoly game, and the prop men keep following the director’s orders till the final curtain comes down.

We can see what happens when the money and power struggles that have been going on for years in DC lead to mass murders and Narco death squads.

We get caught with our pants down when the likes of Bin Laden are given the football. Not Saddam, he was nothing more than a fall guy. The billionaire bad boy Bin Laden family remains at large and was whisked out of the country immediately after 911. But the mass media still pumps that party line – 911 was a terrorist attack on America by Iraq? Nothing could have been further from the truth.

What we don't have are the really brilliant people who possess good common sense to run this country. The ones who could break this chain and get this nation moving in the direction to regain what will be lost forever. American integrity and ingenuity. That may soon change as the 2008 elections come closer and closer.

The people are out there who are ready to take action. When we listen to some, people like Lou Dobbs, who some believe could be a good President who serves four years and we would want to give him another four.

There are groups out there who are so fed up with it all they are ready to shut down the country in a general strike that will block every major freeway entrance and exit out of every major city in America for weeks on end just to end the war and get the message across that the people of America are in charge and responsible for what happens to them. Now that is a very powerful message!

If we had 600 new people in Congress who care and love this nation and what it should really represent it would get this nation moving on the right path following the beacon light of right. But that requires a non violent revolution. A miracle of history in the making…perhaps!

There are literally thousands of groups ready to pull the trigger – they just haven’t found the magic bullet and the trigger man who will lead the next revolution to higher evolution for the world’s financial and business systems.

There are plenty people who are every bit as brilliant and 100% American who care deeply about our nation, but the problem is they aren't stepping up to the plate. All they do is sit around, watch television pablum and complain, criticize and condemn.

They have lost the will to take big risks and stir up strong honest economic change. Even George Soros, the famous billionaire who was so intent on fighting the Bush “terrorist Nazi death squad war machine” in the 2004 national elections with his millions in donations to such groups as Move On has now invested tens of millions in Halliburton stock. Perhaps he has just “moved on.”

It takes people who can take a position, who are willing to pursue this, and willing to give it their best, and sacrifice themselves for the good of this nation. Many are afraid it’s not going to happen, and we will continue down the beaten path we have been on for the last 150 years. More gradual inflation till the water in the boiling pot cooks the struggling frogs that we all are.

The SEC was set up to solve the problems which were created during the wild and wooly free wheeling days of 1920’s stock market manipulation. There was lots of corruption then and there has been a thousand fold increase in it since then.

Honest people have lost their rights and rights have been replaced with money. Those with money have lots of rights and the ability to hire armies of lawyers to defend their rights. Unfortunately those rights do not include destroying the financial health and wealth of an entire planet with fraud.

Can we remember or learn from what the people in the 20's were doing before the walls caved in on everyone? Will history repeat itself? How will we get out of it this time around?

Does anyone see another New Deal President on the Horizon? One that will revamp the securities markets and whips its’ ass for being so shady. Can anyone really see over that wall in New York City?

Where was the SEC when you and thy neighbor were getting fleeced by the 57,000 mortgage brokerage firms who originated $3 trillion worth of fraudulent stated income loans?

If I told you I made a hundred thousand a month would you believe me and could I then get a loan for ten million dollars on a house I put nothing down on?

You bet! But I wouldn’t, like maybe ten million of you readers would or did! You all made your own beds, now lie in them conducting your business as usual!