Occupy Wall Street has it all wrong‏

A very interesting post from http://www.westernpac.org/ about Occupy Wall Street. This follows this post about the EPA's regulations against American industry. This follows this post about Gulf drilling by Cuba! This follows this post about the Keystone Oil Pipeline for oil sands from Canada. This follows this previous article about it to encourage American energy independence. This is a key issue to prevent money from going to hostile countries such as Iran  and Venezuela. For more that you can do to get involved click HERE and you can read a very interesting book  HERE!

You can also write your two Senators about Occupy Wall Street HERE!

Occupy Wall Street has it all wrong‏



Dear Patriot,






I largely sympathize with the anger displayed by the “Occupy Wall Street” protests. Most of the financial woes we face can be traced back to reckless gambling on Wall Street. I have spent years studying the causes of the banking meltdown and the complete lack of consequences for the criminals who caused the housing/credit markets to collapse. However, their anger is misdirected and should be focused on Wall Street’s manipulation of government at all levels to avoid the consequences of their gambling and greed addiction. After all my research here is the broad overview of how it all went down:



Wall Street created a series of financial “products” that were designed to broaden the risk associated with banking across the economy. These “products”(which don’t produce anything) soared in popularity because they seemed to mitigate risk and offer a high reward. The “products” were especially popular in the commodities and housing markets because they also offered multi-tiered opportunities for the banks to make commissions. When the Federal Reserve lowered interest rates to nearly 0, and then actually 0, it incentivized all of these financial institutions to take what is essentially free money and dump it into their magical no-risk, high-reward financial instruments. The problem is that these financial instruments were, and continue to be, deeply flawed.



Here is how these “products” work in the housing market: A person takes a loan out with a bank to buy a home, a mortgage. The bank knows that a certain percentage of people will default on those loans, so they package those loans together with other loans to create a sense of security. That bundle of loans (mortgage backed security) can now be traded, sold, insured, and bet on, and every time a transaction happens with that loan, somebody makes a commission. Those commissions and unmitigated greed, coupled with the idea that these securities had no risk and free money from the Fed, led the institutions on Wall Street to abandon all prudence. Banks started borrowing more money to continue the betting on these securities, over leveraging themselves at a rate of 40-1, 50-1 or in some cases 80-1, but even that didn’t satiate their greed. They made a legislative push in all 50 states to repeal “prudence” laws that prevented administrators of state retirement and pension plans from investing in anything but the safest investments. To fuel their irresponsible gambling, these bastards literally used their money and influence to gain access to the money that hardworking people had set aside for their retirements.



The problem with these securities is that they blur the actual value of the collateral (the mortgages) and therefore cannot receive a proper valuation. As they are re-bundled and sold, they continue to get farther away from that original loan, which is the only source of real value. Even at the source, the loans were overvalued because the government had begun demanding that proper underwriting be waived to ensure “fairness.” Basically, federal government idiots thought that not making a loan to somebody who couldn’t pay it back was unfair/racist/classist and therefore should be punished. To acquiesce, the banks developed a whole new set of “products” like Adjustable Rate Mortgages (ARMs) and interest-only loans that created a false sense of ability to pay back. So a mortgage that was overvalued to begin with was then securitized with other overvalued mortgages, so that it could become even more grossly overvalued. Then the quietly unstable security was borrowed against to the tune of 50-1 or even 100-1.



Eventually, Wall Street realized that they had bet everything they had, everything they could borrow, and everything they could steal (retirement, pensions) on the incredibly overestimated value of these products, but by then everyone had bought into the game and the giant bubble they had created collapsed.



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Sincerely,



Dustin Stockton

Co-Founder, Western Representation PAC