HowardReal Estate, to Takeovers to Dollar Angst
November 21st 2006 02:46
Fedexing to the Global Economy, NYC
The crash of the housing bubble has become a fact of life. But, what does it really mean? It is something that was created by the Federal Reserve by pumping low cost (low interest rate) money into the mortgage market, Fannie Mae, Freddie Mac, etc. This was done in the wake of the collapsing IT bubble, also known as the Y2K bubble, and the dot-com-went-bomb. You know, the NASDAQ collapsed from over 5,000 to close to 1,000, and little things like that. It's not exactly sexy, in fact it was a kick in the balls, and would have lead to a big financial collapse.
So, instead new home mortgage originations went from in year 2000, about $1.45 trillion, to $3.95 trilllion by 2003. It continued at $3 trillion or so for 2004 and year 2005. This in turn created the great cash-out machine, where homeowners could easily refinance their homes and create oceans of cash for their immediate use. This is how homes all over New York City, Loudon and Fairfax Co. Virginia (near Wash DC), San Francisco, Calif., etc. suddenly reached market values of between $350,000 to $5 million or so. This is how the so-called wealth of American households went from $47 trillion to $62 trillion, in about 5 years. This process occurred as the productive capacity of the U.S. was being shut down. Remember what happened to the auto sector?
The auto sector was bought off, and sold for scrap by the likes of WR Ross, Felix Rohatyn Inc, Lehman Bros, Rothschild Inc., to name a few inside job guys, in the destruction of Detroit. Also, there is another story of why Elliot Spitzer knocked out, legally, Hank Greenberg, and benefitted Lehman Bros, Felix Rohatyn, etc, but that is later... Ofcourse, who really doesn't care if the dollar crashes...
It did not simply occur because Toyota and Honda were making better cars and more money. The auto sector could be reconverted to alot of things, like it used to get reconverted when it went idle in producing cars. Hey, the Saturn V rocket had various pieces made in former auto plants. That was of course 40-years ago.
The other giant bubble now being put up is the leveraged takeovers, buyouts and so on. This is now hitting $563 billion for the year 2006, which is not even over. So, people, are you getting tired of being recycled dog doody for a bunch of quick buck artists. This is ridiculous.
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