Bring Transparency To Our Financial System
The Housing Bubble was created by intentional mispricing of risk allowing investment banks and others on Wall Street to siphon off hundreds of billions of dollars for their own enrichment, while ensuring that millions of Americans are turned into debt zombies.
Now we have Ben Bernanke “cutting interest rates” into bad information due to “rogue traders” and “bailout proposals” involving unsafe and foolish changes to Freddie and Fannie mortgage caps, which are explicitly opposed by these firms’ regulator (OFHEO.)
The Bond Market reacted violently to these actions today (1/24), spiking up the rate on the ten year bond by more than six percent, effectively revoking all of The Fed’s “rate action” in less than 24 hours. Mortgage costs are going to RISE, not fall!
As if that is not enough, Egan Jones, who has the same status as Moody’s, Fitch and S&P, today said that the “bond insurers”, known as “monolines”, need not $15 billion – but two hundred billion dollars to remain afloat!
WE THE UNDERSIGNED DEMAND THAT THE GAMES STOP!
Specifically, we demand that you, as our elected representatives, do all of the following:
We are at risk of a full-on deflationary credit collapse in this country similar to what happened in the 1930s. If it occurs it will not be due to the expected and just contraction of the credit bubble which you allowed to be inflated by Wall Street, but rather due to your intentional actions which are and will continue to make the situation worse!
Housing prices must and will contract until a “median house” sells for approximately three times a “median income”, as has been the case for the last two hundred years. This not only cannot be stopped but any attempt to do so will only cause those with money who fund both commercial and government debt to demand ever-more-onerous terms for the use of their money.
The market served its warning to you and The Federal Reserve today. Our vote depends on you listening to both the market and our voices.
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