1. The sub-prime market existed because semi-government agencies Fannie Mae and Freddie Mac started to purchase these sub-prime loans by face value! They were forced to do so due to a government initiative to make housing more “affordable” for low incoming individuals. This meant lenders can just give anyone a mortgage and then immediately cash out the loan by selling it to Fannie or Freddie, pocketing the profit immediately. There was no need for “qualifications” such as credit check and incoming verification, since there was virtually no risk to the lenders, why would they check for such things?
2. Of course risk does exist because the majority of sub-prime borrowers can’t possibly pay back the loan once housing market started to decline. When this happened, Fannie Mae and Freddie Mac immediately went to the edge of bankruptcy, now taken over by the federal government and required over 300 billion dollars to guarantee their sub-prime portfolio. Ultimately, it is the federal government who created this crisis and screwed numerous insurance companies and investment banks.
3. Why did the government do this? Consolidation of power! that’s why! All banks are not created equal. JP Morgan Chase, by far the biggest player on wallstreet, miraculously did zero sub-prime investment, are they that much better than everyone else or do they know the future? JP Morgan took over Bear Stearns right after the crisis unfolded. Bank of America, controlled by the Federal Reserve (largest shareholder), took over Merrill Lynch. We all know who control the Federal Reserve, right? powerful bankers like the Rothschild Family and the Rockefeller Family. This is just a case of big fish eating little fish, using the crisis as a smoke screen, they probably manufactured the crisis. Why buy Bear Stearns at $80 a share, when you can create a crisis and then buy Bear Stearns and others for $1 a share?
4. Stimulus package: guess who got most of the stimulus package? that’s right, the bankers. A whopping 70% of the two stimulus (Bush 700B + Obama 850B) went to the bankers. So they could continue to pay their top executive billions of dollars in bonus. Obama proposed a pay cap for companies receiving government aid, this was secretly taken out of the final bill. Did you think the slaves can put a limit on their master? I didn’t think so either.
