The Bermuda Triangle Of Uncertainty: 

1.  Governments “Working Group on Financial Markets” attempt to measure increased pleasure in order to moderate prices, by reducing them for the increased satisfaction, a consumer derives from some improvement.  Example, the upgrade from a 43 inch TV to a 50 Inch TV has economic value.  What the heck does that have to do with anything with the economics of our country?

2.  Our over-indulged credit cards have been maxed out along with the displaced concepts of the new world wealth machine’s theme; “Paper Entrepreneurialism:” That wealth could be increased without creating or manufacturing anything.  Creation of the “Shadow Banking System”!  Derivatives where asset and mortgage backed securities where mortgage loans are “stripped of risk” and the money received is used for another loan and then another loan, again, and again, and again.  Lending “limitations” became “non-limitations” and as volume swelled enticements to sign up marginal borrowers through exotic forms of mortgage contracts. 

3.  Believing that economic hopes were imitating religious conviction, the Christianity religions, Evangelical, Fundamentalists, Pentecostal and Church of the Latter Day Saints (Mormons) took over the political process and introduced the “Success-Ethic Beliefs” and started preaching the “Prosperity Gospel” of “Name it and Claim it” concept that “God wants you to be rich theology”.

We need new leadership and my hopes are the Obama may have done that except he is bringing in all of Clintons old cronies, the very ones who started this mess. 

A nation that has never been invaded, their political and economic arteries get so clogged with special interest groups that life giving circulation of ideas an elites is impaired.  They run out of creativity. Countries that have been beaten in war receive a new lease in life because the old interest group structures are uprooted and they are able to start anew. 

Our country’s dollar used to be tied to the “Gold Standard” today it is tied to the “Oil Standard”! 

Our country (USA) is a “Home-is-Your-Castle-Nation” where 70% of people in the US own homes.

Housing is centered on mortgage finance businesses, construction businesses, home furnishing and furniture businesses, lumber businesses and together they make up 25% of the US economy. 

The trouble first came from the mortgage finance companies in that they the took advantage of the “Crack Cocaine” of our generation which is “Debt” and they developed products called Ninja Loans, meaning NO, INCOME, JOB, or ASSETS” for the general public.  The names of the mortgages went by many different names, “Interest Only; Payment-Option Adjustable Rate Agreements; Piggy-Back Loans; Negative Ammonization mortgages;

The underwriting criteria was: They all assumed that there would never be a missed payment, the value of home would always continue to increase in value, and no one would ever lose their job. No matter what you call them they are nothing more than “Implode-O-Meter” products.

These mortgage companies packaged all the debt they could and sold them to Wall Street, who in turn resold them as Derivatives.  Warren Buffet said in 2002 that Derivatives are the “Weapons of Mass Destruction” and he was right.

To make matters worse the American homeowner turned their homes in ATM’s.  They turned huge chunks of equity into borrowed, but spendable cash.  This kept financially stressed customers consuming products that they did not need or really could not afford. 

Then the “Reset” or replacement of the “Teaser Rate” implementing the  revision of the low initial interest rate on the “ARM” Adjustable Rate Mortgage to the higher rates that in some cases nearly doubled a homeowners mortgage payment, we started to see home foreclosures as these homeowners could not afford the new payment.  

With a lot of homes being foreclose, we started to see the values of home start to decrease, and persons who used their homes as an ATM, were quickly caught with homes that were worth less than what they owed, again they stopped making payments and we had more foreclosures.  L

There is a saying; “The greater the power, the greater the abuse and corruption!”  Everyone has to share the blame for this mess, including the American Home Owner.