By Catherine Austin Fitts
The American people are so smart. I am laughing my head off reading today’s WSJ. The “Letters to the Editor” are filled with letters from readers outraged by Timothy Geithner’s latest round of self-affirming yah-yah. One is from Tom Newman of Scottsdale, Arizona who writes “Mr. Geithner conveniently fails to address the profoundly flawed federal housing policies that allowed the massive amounts of bad mortgage debt that precipitated the financial crisis.”
No kidding. Indeed, this is a sensitive topic these days. All the people who engineered the housing bubble during the 1990’s are running for election, enjoying the rich capital and profits that it provided and busy affirming their legacy.
Let me give you an example.
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Paul Krugman wrote an article the other day assigning the chronological start of the latest housing bubble during the George W. Bush Administration. A smart professor at an East Coast university published a post on his blog pointing to the initial policies engineered by HUD with respect to Freddie and Fannie during the Clinton Administration. I posted a comment saying that the professor was indeed correct, and adding a link to my story from 1995 that is an interesting tidbit in support of the facts:
From Subprime Mortgage Woes are No Accident
In 1995, a senior Clinton Administration official shared with me the Administration’s targets for Fannie Mae and Freddie Mac mortgage volumes in low- and moderate-income communities. We had recently reviewed the Administration’s plans to increase government mortgage guarantees — most of these mortgages would also be pooled and sold as securities to investors. Even in 1995, I could see that these plans would create unserviceable debt loads in communities struggling with the falling incomes expected from globalization. Homeowners would default on mortgages while losses on mortgage-backed securities would drain retirement savings from 401(k)s and pension plans. Taxpayers would ultimately be hit with a large bill . . . but insiders would make a bundle.
I looked at the official and said that the Administration was planning on issuing more mortgages than there were houses or residents. “Shut up, this is none of your business,” the official snapped back.
The post was market “for moderation.” I went back later to see if the author had made a comment. The whole blog was down! I checked back the next day. The blog was back up by the post criticizing Krugman was gone. I have not mentioned the blog proprietor’s name as I have spent years dealing with tens of thousands of dollars of systems expenses arising from hacks. So I do not want to embarrass anyone for wanting to avoid the problem.
Big money and their hacking teams appear to be watching this issue careful. The degree of hacking and other Internet censorship speaks to the sensitivity. The slow burn squeeze on the American people is growing vicious – Obamacare, then a harsh winter, 1st quarter economic contraction and now a softening housing market with food prices inflating at double digit rates. We are coming into mid-term elections.
Somebody’s got some “ ‘spalinin” to do.
Related Reading:
Dillon, Read & Co. Inc. And The Aristocracy of Stock Profits
