Sub-Prime Collapse Doesn’t Add Up

Tap ,

Regards the financial crisis – I was led to believe by the media that it was just subprime mortgages which went bad – i.e. bad lending to Ninjas who defaulted – but I was always suspicious about this .

Even when a house is repossessed it still has a value – obviously things may be different in the US – because I don’t believe the same thing has happened in the UK . From my own local perspective , I know that an average property retains 60-70% of its value regardless – even after repossession . Subprime mortgages can only ever be a small percentage of the total mortgage money lent – and of course their failure rates are higher – but that is already factored in with higher interest rates charged from the start . We never get to see the details on the problems – just the glib excuses – which seem to make sense – but since we don’t see the details – they are impossible to verify .

That said – it just doesn’t make sense to me that the financial collapse would happen because a minority of loans ( subprime ) had to be repossessed – given that there remains a residual value in the property . Sure – it could make the system take a tumble – but not a collapse .

Working it through – if we assume that subprime accounts for 20% of the mortgages – even if half of them go bad – we just lost 10% off the total amount of money mortgaged – but given that those properties will still sell ( be mortgaged ) for 60% of their original mortgage value , we only really lost 4% of the total value. Given that an amount is already factored in for losses – I can’t see that this type of value would cause instability. I appreciate that due to Fractional reserve lending – losses are multiplied in the same way as gains are leveraged – but still I’m suspicious that losses of that size would cripple the system . Of course I just made up those numbers – who knows the real values ?

The media story is that the problems occurred because the various mortgages were packaged together and sold as ‘ debt bundles ‘ to investors – but still I don’t see how this could cause a collapse.

I read a new account of what went on from ‘ what really happened .com ‘ – He says that the real route of the problem is simple fraud – the mortgage resellers sold the same debts over and over as parts of different bundles – leading to the situation where one mortgage debt would have multiple owners . He compares the situation to Fractional Reserve banking – which seems to work fine as long as every depositor doesn’t come in for their cash at the same time . Now if that has happened – I readily accept that the whole system would nose dive into collapse . IE , only one owner can re-coup the 60% value left in the repossessed house – the other 10 owners are left with 100% ++ losses ( including costs ) .

What’s your understanding here – Are you aware of this alleged fraud ? If the media did cover this – I missed it .

Sean

GREECE TO DEFAULT ON THURSDAY 15MARCH2012.

Yep! this ties in nicely with Moody’s Down Grading of Greece to category ‘C’

tap link:-

I was talking to a Greek Guy the other day, what he didn’t have to say about The Banksters’ wasn’t worth hearing, he said he had lost a couple of relatives in the Rioting.
Greece Telling them to get stuffed could signal further round ups of The Banksters’.

It is no accident that 1,700 Bank jobs have been cut.

Link;-

We can but hope the Parasites at the Top on their Illegal Bonuses
will shortly follow.

REGARDS ……… WASP

The Tap Blog is a collective of like-minded researchers and writers who’ve joined forces to distribute information and voice opinions avoided by the world’s media.
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15 Responses to “Sub-Prime Collapse Doesn’t Add Up”

  1. cave cave dues videt says:

    “Are you aware of this alleged fraud?”

    Er…yes. The whole thing’s a total fraud from top to bottom.

    The whole global financial system operates as a fraud – based around the global central banking cabal, at the BiS (Bank for International Settlements) in Basal.

    Don’t think it’s just limited to the recent crash, all the economic crashes are planned, right back to the Great Depression, probably further (South Sea Bubble?).

    Oh yes – all revolutions are planned as well, most notably French and Russian – read chapter two of Eustace Mullins The World Order, available as free PDF download.

    Read some of the posts on this website about money and how it’s created.

    Read through some of the books listed further down on the right hand side.

    Everything is a con. Everything we are told is a lie. Welcome on board.

  2. malcolmd says:

    Could point you to many pages online that will tie your brain in knots trying to get at the truth. For a start suggest you watch the feature film ‘MARGIN CALL’ at:
    http://www.movie2k.to/Margin-Call-watch-movie-1023670.html
    Much better than the WALL STREET films for getting at the basic fact of leveraging. That’s the word to remember LEVERAGING

  3. Helen Highwater says:

    Leverage = banks creating money from nothing and leading it as interest.

    I mean literally, from nothing.

    They input an figure into a computer and the money is created and then lent to the public.

  4. Helen Highwater says:

    correction –

    LENDING it AT interest, of course…

  5. Faye Dinaway says:

    Since the crash of 2008, the amount of money in the world has been reduced by 40%

    http://www.knowthelies.com/documentaries/the-money-masters

  6. Anonymous says:

    Guys , I appreciate the general theme that the whole system is a fraud – but we should strive to understand a bit more of the detail .

    Interesting to hear that the money supply has dropped 40% – Where do reliably find a stat like that ?

  7. Scotty says:

    Which details did you have in mind?

    The original post seems to be fairly accurate, as I had understood it – although I’m not at all a financial expert.

    http://the-tap.blogspot.com/2012/03/money-cause-of-all-wars.html

    Re the 40% figure – I’ll admit, I can’t remember where I read / heard it. Think it was on a documentary…

    If you take the time to investigate some of the BIG picture details (why), the small details (how they did it) will begin to seem fairly insignificant. Just one stage of the game, the plan.

    We know how the sub-prime scam was perpetrated, it’s not secret is it?

    Look at the booms and crashes of recent decades. There was a crash in ’74, a bigger one under Thatcher in late ’80’s and another in 2007, following Lehman’s end. They inflate the money supply, then reduce it and go around buying everything up for pennies.

    Re 2007/8, the sensible option would have been for the government to ‘bail out’ individual, private savers, like you and me and companies, up to a certain size and let the corporate banks die. So, why didn’t that happen? The banks would have re-opened for business within a week anyway, maybe under different names.

    “Under capitalism, the banks would have died”

    Q: So why didn’t they? Don’t say too big to fail – what does that mean, re above solution?

    The crash and the current situation we find ourselves in has all been planned out. I believe that it’s supposed to be like this. Nothing to do with incompetence and silliness. Representatives of the banking world now run Italy and Greece.

    They create a PROBLEM and then step in to save us with a pre-planned SOLUTION. This is how society is moved along, from one stage to the next, all part of a plan. Wars serve a similar purpose.

    Also, certain banks in the US have just been found guilty of forging documents to repossess properties.

    They create a HUGE problem, gambling with money they have created, from nothing – and we are all now indebted for generations; they own everything, we are increasingly impoverished.

    Do you smell a rat?

  8. Anonymous says:

    Scotty , of course I agree with the general theme – but that is not enough to present a sufficient argument if we want to discuss this seriously. ( and actually get somewhere )

    When you say they buy everything up for pennies – Can you tell me what you are referring to ? Do you mean that they used the collapse in the FTSE as a buying opportunity then sold once it quickly recovered ?

    Details are important – I know you say that everyone knows how the sub prime scam was perpetrated – but were you aware of the assertion that it was the mortgage repackagers who sold the same debts to multiple investors ?

    If we start to understand the details , we can begin to anticipate better what will come next , and be better prepared.

  9. Road_Hog says:

    “Even when a house is repossessed it still has a value”

    Not in the States it doesn’t.

    In America, there is so much land, that land doesn’t have a value (with planning permission) like it does in the UK.

    You only have to look at Detroit, where they don’t even bother to knock down abandoned houses, they just find another plot.

    Secondly, American houses are made out of wood, to last 100 years max. Not like British houses that are made to last centuries.

    So, cheap land and shit house builds, mean that they are worth nothing. In the UK, even if your house fell down, the fact that you could build another house on the land would make it worth something.

  10. Anonymous says:

    I am glad I am woken up to what is going on. Thanks to this blog and the guy from http://www.forecastfortomorrow.com you need to listen to him.

    I listen to the guy that called the market crash, and he is very accurate, he called the financial crisis about 12 months before it happens. Now he is saying some spooky stuff. Seeing he is so accurate, I am getting worried for my husband and kids.

    I hat the fact that we have been brainwashed to think this financial crisis was an accident. It has all been designed. Time to wake up was yesterday people.!

  11. Anonymous says:

    Forecast for tomorrow – not another subscription website ?

    Sean

  12. malcolmd says:

    GREECE TO DEFAULT ON THURSDAY 15MARCH2012

    Michael Hudsonl gives the lowdown at:
    http://michael-hudson.com/wp-content/uploads/2012/Renegade%20Economists%20radio%2007.03.2012.mp3

  13. wasp says:

    GREECE TO DEFAULT ON THURSDAY 15MARCH2012.

    Yep! this ties in nicely with Moody’s Down Grading of Greece to category ‘C’
    tap link:-
    http://the-tap.blogspot.com/2012/03/greece-defaults-dozens-more-senior.html

    I was talking to a Greek Guy the other day, what he didn’t have to say about The Banksters’ wasn’t worth hearing, he said he had lost a couple of relatives in the Rioting.
    Greece Telling them to get stuffed could signal further round ups of The Banksters’.

    It is no accident that 1,700 Bank jobs have been cut.
    Link;-
    http://menmedia.co.uk/manchestereveningnews/news/business/s/1488155_lloyds-and-rbs-to-cut-1700-jobs

    We can but hope the Parasites at the Top on their Illegal Bonuses
    will shortly follow.

    REGARDS ……… WASP

  14. wasp says:

    Argentine advice for Greece: ‘Default Now!’ Link:-
    http://rt.com/news/argentina-advice-greece-default-033/

    ‘You’re not the boss of me!’
    Better to sort out your mess on your own, than to have parasitic banker vultures carving out their pound of flesh from your nation’s decaying social and economic body.

    What did Argentina’s government do wrong? In the months leading to collapse it bowed to all the bankers and IMF-mandated measures and “recipes”, which were actually the very cause of collapse: Argentina was loaned far more than it could pay back…. And the banker knew it! This was described in our December 19, 2011 article, Argentina: Tango Lessons.

    Successive governments since then have continued to be functional to banker interests by rolling over debt 30 to 40 years, aggregating huge interest and in 2006 paying the full debt to the IMF – almost US$10 billion in full, cash and in US dollars (sole entity given most-favoured creditor status).

    Same vultures circling Greece
    Today, Greece is confronted with a similarly tough decision. Either it keeps its sovereignty, or it capitulates to the “Vulture Troika” – the European Central Bank, European Commission and International Monetary Fund – who work for the Bankers, not the People.

    Not surprisingly, today we find that Greece too has a Trilateral Commission Rockefeller/Rothschild man at the helm: Lucas Papademos who is doing the same things Argentina did in 2001/2. ………

    REGARDS …… WASP

  15. chitown 2020 says:

    Max Keiser and other financial experts have stated that only 20% of the loans were risky. Not nearly enough risk to collapse the global economy. Other experts have stated that its another Hitler Plan and that all roads lead to Rome.

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