Banks and mortgage brokers have been "sucking" people into ARM's (Adjustable Rate Mortgages)
Unaffordable rate resets on ARM's and declining home values lead to mortgage defaults.
Which lead to the erosion of collatoral values on mortgage-backed derivatives.
Which lead to asset devaluations.
Which lead to bank insolvencies.
Which lead to the tightening of credit and increased interest rates to remove and compensate for increased risk.
Which leads to a decrease in home demand because of fewer qualified buyers and higher loan costs.
Which leads to current homeowners who are now unable to trade-up.
Which leads to declines in new homebuilding.
Which leads to job loss in the building trades and businesses which supply homebuilders.
Which reduces wages.
Which reduces consumer demand.
Which fuels a recession.
Which causes the Fed to now lower interest rates.
Which causes the Fed to expand the money supply and credit availability to avoid a recession.
Which causes inflation as money supply expands.
Which causes an erosion of wages and buying power.
Which causes a further reduction in consumer demand and spending.
Which causes a further reduction of qualified home buyers.
Which causes a further reduction in the demand for housing.
Which causes a further erosion of real estate values.
Which causes a deeper recession.
Which causes the Fed to further expand the money supply.
Which causes the interest rate to be lowered even more.
Which causes even greater inflation.
Which causes the Fed to now raise interest rates to stop the economy from totally imploding.
Which causes the cost of business to drastically increase.
Which causes corporate profits to be drastically reduced.
Which causes the cost of home ownership to drastically increase.
Which causes further reductions of real estate values.
Which causes increased loan defaults.
Which causes the recession to deepen.
Which causes the stock markets to crash and burn.
In my opinion, the War on Financial Terror should be fought right now against the psycopaths on Wall Street, the dishonest brokers, bankers, credit rating agencies, the political eunuchs in Washington and against the SCAM known as the Federal Reserve.
For it has been through the nefarious actions of these people, that the U.S. and large parts of the world, will be propelled into the greatest economic depression that the world has ever seen.
Tuesday, April 01, 2008
Here's the Garden Path that the Financial Psycopaths on Wall Street have been Leading you Down!
Posted by Robert Otto at 12:24 p.m.
Labels: adjustable rate mortgage, arm, depression, inflation, recession, the fed, the federal reserve
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