Submitted by Michael Krieger of Liberty Blitzkrieg.
With interest rates up sharply from the lows and Blackstone and other private equity firms holding billions of dollars with of properties with no one to sell to, the time is ripe for a little muppet fleecing. Leading the charge to find new tax-payer backed subprime loans to take some properties off the hands of Mr. Schwarzman is none other than Wells Fargo. I previously forecasted this in my piece: Stage Two of the Housing Bubble Begins: Blackstone to Lend to Others for “Buy to Rent.”
This Central Bankster game isn’t complicated. Provide access to cheap funds to financial cronies, pump the bubble, fleece the serfs. Rinse. Repeat.
Read the rest here.
The elimination of low-risk interest income in favor of risky speculative credit/asset bubbles has led to a monumental misallocation of capital and the institutionalization of perverse and highly corrosive incentives.
The stagnation afflicting advanced economies has several fundamental causes.
1. The dynamic between rising productivity, higher labor costs and technology replacing human labor has shifted decisively in favor of labor-saving technology: the low-risk, high-yield way to increase productivity and profitability is to replace high-cost human labor with software, automation and robots.
This is true whether the labor being replaced costs $10 a day or $100 a day: the machine can produce the output faster, better and cheaper.
This leads to a conclusion that undermines all existing capitalist/socialist models:wages are no longer a practical means of distributing the surplus generated by the economy.
In a telephone call on Friday between the US attorney general and the bank’s CEO, the two sides tentatively agreed to a $13 billion settlement for JPMorgan’s alleged sales of fraudulent mortgage-backed securities.
The tentative agreement concludes a civil investigation by the California attorney general over the bank’s sale of mortgage-backed securities (MBS) to Fannie Mae and Freddie Mac from 2005 to 2007, as well as the New York attorney general’s probe of Bear Stearns’ sale of MBSs to these two companies. JPMorgan, the largest US bank by assets, still faces a criminal investigation by the state of California.
Click here for more on the largest fraud settlement in history: