Wall Street Propaganda
22 Feb 2009, 05:47 PM Filed in:
Current Events
This animation of the economic
collapse just came out:
http://vimeo.com/3261363
This is a well produced and slick piece. Also, all they say is true and can't be contested.
However, the piece is propaganda that misrepresents the situation.
How can this be if all they say is true?
Because they carefully selected what not to say.
Not pointed out in the video:
The failed subprime loans are a minute fraction of the bailout and of the loss of investments. The reason is that the mortgage assets were leveraged outrageously and used to invest in nonsensical investment instruments that were based on nothing. There is a quadrillion in loss right now, which is more than the value of all the assets of everything in the entire world. There are $200 billion in subprime defaults, and these represent actual property value of about $100 billion, so it's really only a $100 billion actual loss. None of the bailout has gone to this, but if it had, it could all be paid for with $100-$200 billion and the houses given away for free. It's the fraudulent pyramid scheme wall street had going that collapsed, the mortgage defaults aren't a big deal in the overall scheme of things.
In addition, they do not cover the reason for the defaults. Brokers passed investments on to funds and did not care that the mortgages would go bad. So they got dishonest appraisers and set up a system where you have average home values of $750,000 in a working class neighborhood with average salaries of $35,000. There were lots of adjustable rate mortgages where the first year is $1000 monthly payments on a million dollar shack, then the rate resets, and payments go to $4000. Obviously a family with $35,000 yearly pretax income can not make these payments and will default, that is a foregone conclusion that was known decisively by the mortgage broker. Why give the loan then? Because the brokers are not loaning their own money. The brokers knew for a fact that the people couldn't pay that and the mortgages were intentionally structured to make them fail because they WANTED them to fail, thinking they would then make even more money when they got to resell it in a year and wake a new commission. They also knew that the system can been set up to tweak all these investments that were guaranteed to fail to seem like AAA investments, so they could sell them to investment funds owned by school districts, small towns, and pension funds with no problem.
None of this is covered, instead the slick and expensively produced animation makes Wall Street out to be the victims and the mortgage holders to be the bad guys.
I find that to be pretty interesting in itself.
http://vimeo.com/3261363
This is a well produced and slick piece. Also, all they say is true and can't be contested.
However, the piece is propaganda that misrepresents the situation.
How can this be if all they say is true?
Because they carefully selected what not to say.
Not pointed out in the video:
The failed subprime loans are a minute fraction of the bailout and of the loss of investments. The reason is that the mortgage assets were leveraged outrageously and used to invest in nonsensical investment instruments that were based on nothing. There is a quadrillion in loss right now, which is more than the value of all the assets of everything in the entire world. There are $200 billion in subprime defaults, and these represent actual property value of about $100 billion, so it's really only a $100 billion actual loss. None of the bailout has gone to this, but if it had, it could all be paid for with $100-$200 billion and the houses given away for free. It's the fraudulent pyramid scheme wall street had going that collapsed, the mortgage defaults aren't a big deal in the overall scheme of things.
In addition, they do not cover the reason for the defaults. Brokers passed investments on to funds and did not care that the mortgages would go bad. So they got dishonest appraisers and set up a system where you have average home values of $750,000 in a working class neighborhood with average salaries of $35,000. There were lots of adjustable rate mortgages where the first year is $1000 monthly payments on a million dollar shack, then the rate resets, and payments go to $4000. Obviously a family with $35,000 yearly pretax income can not make these payments and will default, that is a foregone conclusion that was known decisively by the mortgage broker. Why give the loan then? Because the brokers are not loaning their own money. The brokers knew for a fact that the people couldn't pay that and the mortgages were intentionally structured to make them fail because they WANTED them to fail, thinking they would then make even more money when they got to resell it in a year and wake a new commission. They also knew that the system can been set up to tweak all these investments that were guaranteed to fail to seem like AAA investments, so they could sell them to investment funds owned by school districts, small towns, and pension funds with no problem.
None of this is covered, instead the slick and expensively produced animation makes Wall Street out to be the victims and the mortgage holders to be the bad guys.
I find that to be pretty interesting in itself.