Criminal charges for Goldman Sachs?

(9 am. – promoted by ek hornbeck)

Not yet, but Dylan Ratigan’s righteous rant needs to be seen by every American, because he is throwing gas into the strike zone, while keeping it at a level any eight year old can understand.

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Gretchen Morgenson broke the story for the NYT last December (hat tip zerohedge.com).

Pensions were screwed, investors were screwed, taxpayers were screwed, and jobs were screwed.  Screwed, screwed, screwed, screwed.

Now, foreclosures are ripping through our economy like a wrecking ball.

But the respite is over. Two weeks ago, the Irvine Housing Blog stated in Bank of America to Increase Foreclosure Rate by 600% in 2010 that Bank of America’s OREO department said that the bank would increase its foreclosure activity from 7500 per month to 45,000 per month. That’s 540,000 annualized for just one bank (granted, the biggest one). If this is substantiated, one of two things is true: either 2010 foreclosures will go well over 1 million, or 2011 ones will go so far over it should scare us all breathless. Moreover, there’s a solid chance that numbers like these in 8 months time will have debilitating effects on the overall economy, even before New Year’s.

Not only are foreclosures, short sales and the like devastating for homeowners, they are a death knell for many banks. For the past three years, Washington’s policy has been to sweep anything toxic under the carpet. Well, we’ve run out of carpet. And pondering this unequaled mess, it shouldn’t surprise anyone that jobless claims come in far worse than projected. The very foundations are starting to shake. And it no longer matters what tricks come out of the Fed, the Treasury, Wall Street, the White House or Capitol Hill. There was always just one possible end to the housing crisis: plummeting prices. The glut of newly foreclosed properties added to a hugely oversaturated market will see to it that they do fall, and fast and furious at that.

This will have a cascading effect throughout the economy. Falling home prices will put huge additional numbers of owners underwater. Fannie Mae, Freddie Mac, the FHA, they will all grow beyond salvation, suffering losses (even with funny accounting) that will run in the hundreds of billions of dollars. Property taxes, for many places in America the only thing that stands between mere austerity and full-blown bankruptcy, will have to come down with the home values.

And most and worst of all, the banks which hold large portions of the loans, and which have already received untold trillions of dollars in hand-outs courtesy of the house, will need to come knocking for more, because the process of increasing foreclosures will function to draw toxic paper out of vaults all over the nation, and beyond. Yes, there is a fake recovery in banking, and yes, consumers are fooled enough to go out and buy some more stuff on their credit cards. But there are not nearly enough buyers for all those millions of homes that are now part of the inventory, be it the official or the real one.

 

Memory Lane Update: Max Keiser about one year ago on Goldman scum:

23 comments

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    • Edger on April 17, 2010 at 05:05

    Give the plebes a couple of days to cool down, and be brainwashed into “but they saved the economy!” by weekend tv?

  1. threat to our democracy and “freedom and liberty” is the financial oligarchy.  The cat is out the bag – who else was doing this – creating complex securities selling them only to bet against them.  And we were told to believe markets were efficient – ha!.

    • banger on April 17, 2010 at 16:56

    in this economy, in this political arena you will find what used to be called corruption but is now business as usual. Ratigan and the SEC notwithstanding little will change because there is no cohesive force acting against the oligarchy.

    The methods used to paper this over are old and reliable. You will get show trials–usually focused on one or two minor players who are assigned to take the hit. You will get huffing and puffing (if there’s enough pressure) from Congress and a big show and minor and booby-trapped legislation like HCR legislation that passed. Should things get out of hand and the public is truly inflamed you’ll get all the varying degrees of limited hang-out. Finally, if things get really bad you create a crisis or disaster and all bets are off as we worry about other things.

    Meanwhile the criminals have their loot to buy lawyers and prosecutors or buy prostitutes to entrap them and anything else including assassins and thugs to threaten prosecutors and politicians who don’t play ball.

    True reform is very tricky and has to be multi-layered and requires people like Ratigan to create a narrative space for people to recreate the mainstream narrative. But, it has to extend beyond Ratigan and even a few others. Ron Paul, here is a critical figure–can he rally those that like him to take a break from tribal hatreds and racism that has hijacked the Tea-Party movement?

    • dkmich on April 17, 2010 at 16:58

    to find the embed code for this video that would work and couldn’t.  I wanted to paste it into comments in my grandson’s blog.   After three botched attempts (no preview button), I ended up with a link that shows it when you float over it with the mouse.  You know.  Nobody likes a smart ass.  ðŸ™‚

    Ratigan does do a good job of explaining just how fraudulent the whole scheme was.  Goldman Sachs needs to be RICO’d, and their CEOs put into jail.  How much you want to bet that they get a slap on the hand, and the finance reform legislation will be as crappy as the health care reform legislation.    

    • icosa on April 17, 2010 at 19:35

    who let this cat out of the bag.  With this corrupt regime why was the SEC allowed to the unthinkable by the PTB. Methinks the bullies are warring with each other and they are putting on quite a show, but to go after the biggest player, something isn’t right here.  Someone bigger is going for the throat and it isn’t the SEC.  This will either be a total news blackout by Monday or the cards are all being played for those of us watching.  

    And then of course there is Iceland, another interesting side show, the people rebelled against the ‘free market’ and a month later..well….Mother Nature gets the final say.

    • dkmich on April 17, 2010 at 21:30

    Spitzer’s prostitutes and Clinton’s blow job were no-body’s business and most likely set-ups.  It didn’t keep Clinton out of the limelight, and I see no reason for it to keep Spitzer out.     The biggest problem this country has is its corruption.  All of the problems we are facing today are a direct result of this corruption.  We need a real reform candidate, which was what voters wanted when they voted for Hopey McChange.  I’d really like to see Eliot Spitzer primary Obama and run on the issue.  Summers, Geithner, and Bernanke would be a good start.  

  2. cunning they saved the U.S. by bagging one of the greatest threats to American finances, Martha Stewart, before she was able to hold any seances with Robert Vesco. What a job!

    • Xanthe on April 18, 2010 at 03:01

    also – sorry I missed this Max Keiser guy – wow!  I love the throwaway line from dylan when he covers the car with a piece of paper – “we’ll just cover it up here – some friendly government agencies….”

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