By John Galt
October 24, 2007
1 percent. One out of one hundred. Ten out of one thousand. A miserably low number which neither indicates sway or influence on our economy unless it’s the billionaires making acquisitions, or in this case, a nightmare that is being propagated on the public with stories of fictitious origin and wishful thinking. The general public has used their NEA endorsed education to be so dumbed down, so mentally incapacitated to think on their own that they believe the Dow Jones Industrial Average is the measure of the economy. However applying the statistical logic of baseball to finance is not only unwise, it’s the route of the greater fool theory which the banksters are bound and determined to keep the sheeple married to and the greatest wealth extraction in history well underway.
So why is 1% so bloody important you ask? That’s the exact number of Adjustable Rate Mortgages that have been refinanced into fixed rate mortgages since the Real Estate Implosion of ’07 began. The advertisements by the various shysters and those God awful DiTech ads which permeate the media like leeches which suck your blood in a tropical pond of water should have been your first clue it’s going to get worse. But the 1% who managed somehow to qualify only indicates that this problem is getting exponentially worse, not better. The banksters, as illustrated with the “let’s tell a little lie and see what happens” financial reporting method employed by Merrill Lynch today, are freaking out. There is not just a little panic in the back rooms and squash courts that would be easy to get rid of via layoffs and the Rent-A-Congresscritter program. This is the kind of historical panic which causes entire financial systems to collapse because the “full faith and credit” has become recognized as an atheistic faith with all the trappings of what happens when you try to marry your computer and it laughs at you when you try to have a serious religious discussion with it (that’s Baker Act time down here in Florida; break out the straight jackets).
With only one percent of these ARM’s being refinanced, you can see the disaster on the horizon. The banksters are trying desperately to postpone the day of reckoning because if they dumped all their bad news in one quarter at one time, the markets, not just the equity but all markets would crash resoundingly. Thus the lack of ability to re-qualify all of these people who took out such intelligent loans such as ARMS-Option which have resulted in negative amortization, stated income and my favorite, the no-docs with 2/28 or 3/27 teasers are just watching and doing what they do best: waiting for a government bailout. The banksters, terrified at becoming the largest landowners in history since British royalty in Medieval times, are also waiting for a government bailout. Sadly, I have some bad news for them; the U.S. government is waiting on a bailout also. If the Chinese Communists and OPEC elect not to bail our economy out, the implications are easy to figure out. At this time there is no indication that they are going to buy any more of our garbage paper from Wall Street, so the panic is only being bottled up and waiting to be uncorked on the first major investment bankster going into default. In the mean time, the average investor has nothing to worry about. Unless their pension fund, 401K, IRA, or other investments are structured to include the pain from the garbage paper. You see the banksters, besides being evil, are not stupid. They figured out that no matter the leverage, no matter the risk, if they spread it out to everyone be it a local government, a Mom and Pop local bank or your Mutual Fund the Federal Reserve would never let it all fail because it would wipe out our economy and the retirement of almost one hundred million suckers, er, investors.
Well, one percent suddenly becomes the most important number when put into those terms. And with our currency declining over 1% almost every few weeks, it won’t take long to find a safe, secure bottom which will stabilize our markets and give everyone a sigh of relief. So look forward to the good news several months or maybe a year plus from now. Ignore the phony government reports and statistics. Wink and nod when you hear about fraud on Wall Street or Main Street when it impacts your investments. Just remember, the sun will come up and the markets will finally stabilize.
Because everything is stable when it trades at “zero”.
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