The Bush Legacy - War and Recession
Hundreds of lending institutions have already gone bust (see below).
Now FDIC insured banks are starting to go bust as well. It is estimated that dozens of FDIC insured banking institutions (many of them major institutions) will implode over the next two years! Some estimates place the number of failing financial institutions at well over one hundred.
The remaining solvent FDIC member banks will be forced (FDIC rules) to finance the bail out, closure, or purchase of the less responsible insolvent members. To raise the hundred's of billions of dollars to save the U.S. banking industry interest rates charged by banks to their consumers must be increased, while interest awarded to account holders, and bond holders will decrease. There simply is no other way to raise the hundreds of billions of dollars it will take to save all of the failing banks.
U.S. consumers and investors should expect the cost of borrowing to increase.
This process has already begun, which is driving fears both in the stock markets, and the bond markets that the U.S. economy is plunging into a long lasting (years) recession.
The Federal Reserve will be unable to lower interest rates much lower than they already have, and thus using monetary policy to prevent or shorten the recession in unfortunately off the table.
The Fed's actions of decreasing interest rates to stave off the coming recession has resulted in a weak dollar which has driven the cost of oil and food up - actually driving the economy toward a recession.
Why has all of this come to pass?
The Bush Administration appointed "anti-regulators" to run the financial regulatory bodies which were charged with preventing this nightmare from happening.
The anti-regulators chose to do nothing even though they knew what was happening years ago.
Hundred's of Billions of dollars in foreign investment had kept the U.S. housing industry afloat based upon the assumption that no matter how poorly based mortgage lending became that U.S. real estate market would prevent the coming disaster of hundred's of thousands of home mortgage defaults and home foreclosures. The collapse has led to a historic collapse of lending institutions and soon - banks.
The pyramid scheme is falling apart - just as the U.S. Clown King Bush and his merry band of fools are leaving power - like rats deserting a sinking ship.
As all scam falls apart a major recession has been predicted by wide range of economist - and it could last as long as the next President's administration.
It appears that "priming the pump" (fiscal policy) won't stave off the recession any more than monetary policy, but it may shorten it somewhat.
Calls are being made that the next President, and Congress spend hundreds of billions of dollars in rebuilding the United State's crumbling infrastructure, and that this, at least, might keep millions of otherwise soon to be unemployed and idle housing construction workers off the dole.
Also, with six hundred billion dollars (and climbing) leaving the nation each year for foreign oil it has also been suggested that investing in alternative domestically produced energy supplies would help the country recover - however - this will have to wait until an administration not owned by the oil industry is able to break the stranglehold that big oil has on the U.S. government.
The U.S. should expect several rounds of major layoffs in a broad variety of sectors over the coming three years, with a short lived rebound and continued relapses into recession driven by ever increasing oil prices.
Here's a list of failed (non-FDIC) lending institutions (Since 2006)
266. Lehman Brothers SBF
265. IndyMac Bancorp
264. Mortgages Ltd.
263. Wilmington Finance - Wholesale
262. Accredited Home Lenders, Home Funds Direct
261. Assured Lending Corp. - Wholesale
260. Homewide Lending Corporation
259. Vanguard Mortgage & Title, Inc.
258. Chase Home Equity - Wholesale
257. Chase Subprime - Wholesale
256. Evergreen Investment & Carnation Banc
255. Casa Blanca Mortgage/Shearson - Wholesale
254. Guaranty Bank - Correspondent
253. Citi Residential Lending
252. Montgomery Mortgage Capital Company
251. E*Trade Wholesale Lending
250. Shearson Financial Network, Inc.
249. American Bank Mortgage Group - Wholesale
248. AmeriBanc Corp.
247. Washington Mutual - Wholesale
246. Century Bank, F.S.B. - Wholesale
245. Diversified Mortgage, Inc.
244. National Wholesale Funding
243. Centennial Mortgage and Funding, Inc./Award Mortgage
242. Fidelity Home Mortgage Corp. - Wholesale
241. LMI Funding, Inc.
240. Millennium Mortgage - Wholesale
239. Origen Financial, Inc. (Correspondent)
238. CitiMortgage - Home Equity Wholesale
237. Bear Stearns Residential Mortgage
236. East West Mortgage Co. of VA
235. New Vision Residential Lending
234. Washington Savings Bank, F.S.B. - Wholesale
233. Macquarie Mortgages USA Inc.
232. Global Mortgage, Inc.
231. Unique Mortgage Solutions (UMS, LLC)
230. First Franklin - Merrill Lynch
229. First National Mortgage Sources
228. Resource Mortgage (Wholesale)
227. KH Financial
226. Lydian Mortgage
225. OMG Wholesale Lending
224. Saxon Mortgage (Wholesale)
223. Beazer Mortgage Corp.
222. E-Loan (Wholesale)
221. Allpointe Mortgage (Broker Program)
220. Popular Warehouse Lending
219. Allied Lending Corp. (Wholesale)
218. BF Saul Wholesale Lending
217. Community Resource Mortgage
216. Lehman/Aurora Loan Services
215. Residential Mortgage Capital
214. Maverick Residential Mortgage
213. Countrywide Financial Corp.
212. First NLC Financial Services
211. First American Bank (Wholesale)
210. Soma Financial
209. National City Corp. (Wholesale)
208. Heartland Wholesale Funding
207. Homefront Mortgage Inc.
206. PNC Bank H.E.
205. Family First Mortgage Corp.
204. First Fidelity Financial
203. BSM Financial
202. 1st Choice Mortgage
201. Wescom Credit Union
200. Coast Financial Holdings/Coast Bank
199. WaMu (Subprime)
198. First Madison Mortgage
197. Southern Star Mortgage
196. TransLand Financial
195. Secured Bankers Mortgage Company (SBMC)
194. ComUnity Lending
193. Delta Financial Corp
192. BayRock Mortgage
191. Empire Bancorp
190. Option One - H&R Block
189. Citigroup - FCS Warehouse
188. Charter One (Wholesale)
187. Wells Fargo - Home Equity
186. Paul Financial, LLC
185. Webster Bank (Wholesale)
184. Fieldstone Mortgage Company
183. Tribeca Lending Corp. (Wholesale)
182. WAMU Comm. Correspondent
181. Marlin Mortgage Company
180. Countrywide Specialty Lending
179. UBS Home Finance
178. MortgageIT-DB (Retail)
177. Edgewater Lending Group
176. ResMAE Mortgage Corp.
175. Citimortgage Correspondent (2nds)
174. AMC Lending
173. Liberty American Mortgage
172. Exchange Financial (Wholesale)
171. FirstBank Mortgage
170. Bank of America (Wholesale)
169. Diablo Funding Group Inc.
168. Honor State Bank
167. Spectrum Financial Group
166. Priority Funding Mortgage Bankers
165. BrooksAmerica Mortgage Corp.
164. Valley Vista Mortgage
163. New State Mortgage Company
162. Summit Mortgage Company
161. WMC
160. Paragon Home Lending
159. First Mariner Wholesale
158. The Lending Connection
157. Foxtons, Inc.
156. SCME Mortage Bankers
155. Aapex Mortgage (Apex Financial Group)
154. Wells Fargo (various Correspondent and Non-prime divisions)
153. Nationstar Mortgage
152. Decision One (HSBC)
151. Impac Lending Group
150. Long Beach (WaMu Warehouse/Correspondent)
149. Expanded Mortgage Credit Wholesale
148. The Mortgage Store Financial
147. C & G Financial
146. CFIC Home Mortgage
145. All Fund Mortgage
144. LownHome Financial
143. Sea Breeze Financial Services
142. Castle Point Mortgage
141. Premium Funding Corp
140. Group One Lending
139. Allstate Home Loans / Allstate Funding
138. Home Loan Specialists (HLS)
137. Transnational Finance Wholesale
136. CIT Home Lending
135. Capital Six Funding
134. Mortgage Investors Group (MIG) - Wholesale
133. Amstar Mortgage Corp
132. Quality Home Loans
131. BNC Mortgage (Lehman)
130. First National Bank of Arizona
129. Chevy Chase Bank Correspondent
128. GreenPoint Mortgage - Capital One Wholesale
127. NovaStar, Homeview Lending
126. Quick Loan Funding
125. Calusa Investments
124. Mercantile Mortgage
123. First Magnus
122. First Indiana Wholesale
121. GEM Loans / Pacific American Mortgage (PAMCO)
120. Kirkwood Financial Corporation
119. Lexington Lending
118. Express Capital Lending
117. Deutsche Bank Correspondent Lending Group (CLG)
116. MLSG
115. Trump Mortgage
114. HomeBanc Mortgage Corporation
113. Mylor Financial
112. Aegis
111. Alternative Financing Corp (AFC) Wholesale
110. Winstar Mortgage
109. American Home Mortgage / American Brokers Conduit
108. Optima Funding
107. Equity Funding Group
106. Sunset Mortgage
105. Nations Home Lending
104. Entrust Mortgage
103. Alera Financial (Wholesale)
102. Flick Mortgage/Mortgage Simple
101. Dollar Mortgage Corporation
100. Alliance Bancorp
99. Choice Capital Funding
98. Premier Mortgage Funding
97. Stone Creek Funding
96. FlexPoint Funding (Wholesale & Retail)
95. Starpointe Mortgage
94. Unlimited Loan Resources (ULR)
93. Freestand Financial
92. Steward Financial
91. Bridge Capital Corporation
90. Altivus Financial
89. ACT Mortgage
88. Alliance Mortgage Banking Corp (AMBC)
87. Concord Mortgage Wholesale
86. Heartwell Mortgage
85. Oak Street Mortgage
84. The Mortgage Warehouse
83. First Street Financial
82. Right-Away Mortgage
81. Heritage Plaza Mortgage
80. Horizon Bank Wholesale Lending Group
79. Lancaster Mortgage Bank (LMB)
78. Bryco (Wholesale)
77. No Red Tape Mortgage
76. The Lending Group (TLG)
75. Pro 30 Funding
74. NetBank Funding, Market Street Mortgage
73. Columbia Home Loans, LLC
72. Mortgage Tree Lending
71. Homeland Capital Group
70. Nation One Mortgage
69. Dana Capital Group
68. Millenium Funding Group
67. MILA
66. Home Equity of America
65. Opteum (Wholesale, Conduit)
64. Innovative Mortgage Capital
63. Home Capital, Inc.
62. Home 123 Mortgage
61. Homefield Financial
60. First Horizon Subprime, Equity Lending
59. Platinum Capital Group (Wholesale)
58. First Source Funding Group (FSFG)
57. Alterna Mortgage
56. Solutions Funding
55. People's Mortgage
54. LowerMyPayment.com
53. Zone Funding
52. First Consolidated (Subprime Wholesale)
51. EquiFirst
50. SouthStar Funding
49. Warehouse USA
48. H&R Block Mortgage
47. Madison Equity Loans
46. HSBC Mortgage Services (correspondent div.)
45. Sunset Direct Lending
44. Kellner Mortgage Investments
43. LoanCity
42. CoreStar Financial Group
41. Ameriquest, ACC Wholesale
40. Investaid Corp.
39. People's Choice Financial Corp.
38. Master Financial
37. Maribella Mortgage
36. FMF Capital LLC
35. New Century Financial Corp.
34. Wachovia Mortgage (Correspondent div.)
33. Ameritrust Mortgage Company (Subprime Wholesale)
32. Trojan Lending (Wholesale)
31. Fremont General Corporation
30. DomesticBank (Wholesale Lending Division)
29. Ivanhoe Mortgage/Central Pacific Mortgage
28. Eagle First Mortgage
27. Coastal Capital
26. Silver State Mortgage
25. ECC Capital/Encore Credit
24. Lender's Direct Capital Corporation (wholesale division)
23. Concorde Acceptance
22. DeepGreen Financial
21. American Freedom Mortgage, Inc.
20. Millenium Bankshares (Mortgage Subsidiaries)
19. Summit Mortgage
18. Mandalay Mortgage
17. Rose Mortgage
16. EquiBanc
15. FundingAmerica
14. Popular Financial Holdings
13. Clear Choice Financial/Bay Capital
12. Origen Wholesale Lending
11. SecuredFunding
10. Preferred Advantage
9. MLN
8. Sovereign Bancorp (Wholesale Ops)
7. Harbourton Mortgage Investment Corporation
6. OwnIt Mortgage
5. Sebring Capital Partners
4. Axis Mortgage & Investments
3. Meritage Mortgage
2. Acoustic Home Loans
1. Merit Financial
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7 comments:
This is so scary to hear - not sure how and where the economy is headed towards. Recently there was a list of FDIC List of troubled banks
But JP, it's not Bush's fault; nor is it the fault of all the CEOs of those companies that went belly up. It is also not the fault of the brokers who saw big dollar signs every time they saw a gullible customer.
It is the fault of the consumer, and most importantly of all, the fault also lies at the feet of illegal immigrants...the new black.
Blogger JeromeProphet said...
Blogger JeromeProphet said...
Blevins you're cracking me up, which makes me feel guilty because this is such a serious topic. But thanks, because I needed that.
Mr. Ravidra: Watching the U.S. economy is like watching a train wreck in slow motion. You see it coming, but there's nothing you can do to stop it - and those who are conducting the trains are too busy getting drunk in the caboose to care.
Look, I am not giving Bush a pass on the economy. Despite a democratic Congress, Bush approved the out of control spending spree that the country went on.
But on the home mortgage crisis, I dont think it is his fault. Institutions were encouraged to provide loans to people who frankly could not afford under the threat of being labeled racists. Once they started doing this, it was just a matter of time before they started to default on their loans.
Here is one article I found on the subject
http://www.nypost.com/seven/02052008/postopinion/opedcolumnists/the_real_scandal_243911.htm?page=0
Read about the Community Reinvestment Act of 1995 here:
http://en.wikipedia.org/wiki/Community_Reinvestment_Act
this is the reason that we have the credit crisis today
Rick Monday:
Yes, it was just a bunch of well meaning billionaires and their K street connections working tirelessly to help the lowly black man.
You see the CEOs of all these financial institutions were working together to lift up the downtrodden.
And of course the Bush Admin. ever wanting to lift up the poorest in this nation was more than willing to help.
As I drive through Panther Creek a tear comes to my eye as I see all the little black children holding hands and playing hop scotch with their little white friends.
The day believe a single word spewed forth from one of Rupert Murdoch's toilets will be the day I ask for electroshock - and of course join the Republican Party.
JP,
I am not giving the CEOs of these companies a pass.
My point is that the CRA (community reinvestment act) started the ball rolling. Then when they saw the obscene profits coming it it snowballed from there.
And I dont know feel sorry for anyone who bought a bigger house then they could afford. My only compassion is for the guy who was making 20k year losing his house.
For the guy making 200k who bought a $2 million home, tough luck.
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