Sunday, January 2, 2011

Rolling Stone: The Fraud at the Heart of the Mortgage Crisis

I read an article in Rolling Stone issue 1118, November 25, 2010. The Fraud at the Heart of the Mortgage Crisis. After reading it, I think I finally understand what happened to the economy, and why the banks are evil.

They lied about everything. They played games with our money, our mortgages. They turned mortgages into investments, like stocks, trading them for profit and betting on them. They signed people up for home loans who weren’t supposed to qualify just to make quota so they could bet more money on those loans. They inflated their value, inflated the value of the houses to make even more money off them.

Eventually, it caught up to them. Everything collapsed. A few who saw it coming got rich betting on the failure, at the expense of the whole company.

Then the banks had the gall to convince everyone the economy would collapse unless the government bailed them out. We believed them. We bailed them out of their mistake.

Now the banks are making US pay for THEIR mistake by holding us accountable for the bad loans THEY sold US!

"Well, the deadbeats should've paid their bills!" they say.

Well, who raised the interest rate and upped the payments beyond what anyone could manage? Who refuses to refinance anyone, as they promised when they sold people those variable loans? Who ended businesses' lines of credit, forcing companies out of business and millions out of work? It ain't the people who are to blame--they're willing to work! They want to work! They want to pay their bills! Ain't their fault there aren't enough jobs for everyone now.

Bush and Obama did what the government always does: side with the businesses. They bailed the corporations out, hoping the benefits would trickle down to the people. But it didn’t. We bailed out the banks, and we’re STILL jobless, homeless, and there’s no end in sight. So what good did it do?

The real evil is not the government having too much power. The government proved it’s sucking up to the real power. Giving the businesses what they want in the hopes that they’ll create more jobs, because really, that’s who has the power to create more jobs. That’s why the government didn’t bail out the homeowners who got stuck with bad loans and lost their jobs. Obama did the most logical thing: help the entities who can help the people. But instead of helping the people, it’s business as usual. Assholes.

Case in point: Chase Bank. In 2008 I signed up for free checking. It was free so long as I linked it to a recurring direct deposit. The other day I receive a letter stating that as of February, the checking account will carry a fee if that direct deposit doesn't total at least $500.

Doesn't sound too bad doesn't it? Then I read the fine print: "Two or more direct deposits that add up to $500 or more, but do not individually equal or exceed $500, do not quality."

Translation: If my two paychecks are only, say, $400 and $470, I'll still get charged a $6 fee that month because neither of those deposits was $500. Doesn't matter how many deposits go in; one has to be <= 500 to waive the fee. What bullshit!

This structure doesn't make sense! The average Joe working minimum wage is gonna be the one stuck with these fees, while the people who can actually afford to pay a fee like that will get the free checking. Guess the rich still win.

Obama passed all sorts of laws to curtail the banks' greed, but we knew they'd just find ways around it. They'd create new fees to stick us with, punishing us for their losses. Newton's third law, right?

What makes me even angrier is the banks already rake in the cash from credit card interest. On top of that, they charge the merchants interchange fees just to accept the cards! They're double-dipping, and they're creating new fees because they're losing money on free checking?! God forbid these companies should only turn 5 billion dollar a year profits instead of their usual 8 billion because they can't screw us with overdraft fees anymore.

Comes down to it, I'll just buy five packs of gum a month on debit. So far the banks haven't closed that loophole--making 5 debit purchases a month waives the fee, too. I'm sure the next rule change will be those purchases have to be over a certain dollar amount to qualify. is there no limit to corporate power? Guess it's true: whoever has the gold makes the rules, and we all agree the government does not have the gold.

No comments:

Post a Comment