From Elliot Wave:
Owning a home is proving to be a false dream for many who relied on false wealth to borrow one. Our collective journey from adventurous, carefree embrace of risk, to fearful, cautious regulation is following a classic, timeless pattern… one that has always arisen from within us.
Speculators are walking away, abandoning down payments on houses bought at the top of the market after weighing declining home prices against closing costs and the 6% commission to re-sell the property. Bubble-bursting headlines are on front pages across the country.
Home sales are down; home prices are down; construction starts are down, and now that the horse is out of the barn and the damage well underway, rules are coming down, from newly motivated government regulators.
And get this: these federal and state rules are “expected to be very controversial,” because they will require banks and the more than 90,000 mortgage companies to make a credible analysis of a borrower’s ability to repay a loan!
Foreclosure rates are rising, monthly payments are rising, and now that the party is over and everybody’s waking up in the wrecked living room, the long-stifled awareness of mortgage fraud is rising too.
An article in the Christian Science Monitor on Thursday (Dec. 14) tells stories of lenders who are tightening down and fessing up, “allowing prosecutors from Orange County, Calif., to DeKalb County, Ga., to expose hundreds of schemes that have wrecked individuals’ credit scores, dotted neighborhoods with foreclosures, and left banks – as well as taxpayers – holding the bag for hundreds of millions of lost dollars.”
The article describes widespread fraudulent schemes born in the free and easy credit environment. James Hughes, a policy analyst at Rutgers University said, “Boom periods provide very, very fertile territory for abuses and those abuses become very clear when the psychology of the market changes.”
Mr. Hughes description of boom and bust psychology could have been useful if heeded a few years ago.
Just note that EWI isn’t an unbiased news source.
jb
Published December 15, 2006 7:27 PM EST
*** BREAKING NEWS ***
CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
Tells visiting Bush administration officials they will not sit back and lose their shirts as U.S. Dollar collapses; they are getting out fast and large!!!!!!
BEIJING, CHINA — Sources with a U.S. Delegation in Beijing have told The Hal Turner Show the Chinese government has informed visiting Bush Administration officials they intend to dump One TRILLION U.S. Dollars from China’s Currency Reserves and convert those funds into Euros, gold and silver!
China was allegedly asked to withhold the announcement until Bullion Markets closed for the weekend to prevent an instant spike in gold and silver prices. This delay will give the world the weekend to consider appropriate actions rather than have a knee-jerk reaction which could see the U.S. Dollar totally collapse in value Monday.
According to this Senior source, China told the U.S. delegation they no longer have faith in U.S. Currency for several reasons:
1) The Federal Reserve Bank ceased publishing “M3” data in March, making it nearly impossible for anyone to know how much cash is being printed. China said this act made it impossible to tell how much a Dollar is worth.
2) The U.S. Dollar has lost upwards of thirty percent (30%) of its value against other foreign currencies in the recent past, meaning China has lost almost $300 Billion simply by holding U.S. Dollars in its reserves.
3) The U.S. has no plans whatsoever to reduce deficit spending or ability pay down any of its existing debt without printing money to pay it off.
For these reasons China has decided to implement an aggressive sell-off of U.S. Dollars before the rest of the world does so. China reportedly told the US delegation; “we are the largest holder of U.S. Currency and if the rest of the world unloads theirs before we unload ours, we will lose our shirts.”
Early this week, in an unusual move, the Bush administration sent virtually the entire economic “A-team” to visit China for a “strategic economic dialogue” in Beijing Dec. 14 and 15.
Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke lead the delegation, along with five other cabinet-level officials, including Secretary of Commerce Carlos Gutierrez. Also in the delegation is Labor Secretary Elaine Chao, Health and Human Services Secretary Mike Leavitt, Energy Secretary Sam Bodman, and U.S. Trade Representative Susan Schwab.
The Bush administration wanted to get China’s cooperation in preventing a dollar collapse. The Hal Turner Show has been told the effort failed.
According to the source, Fed Chairman Bernanke left the meeting “pale and in a cold sweat” as the implications of China’s decision seemed to sink in.
The implications are enormous: The U.S. Dollar is likely to collapse in value against all other major currencies as early as Monday, December 18.
This would cause a worldwide sell-off of dollars, create almost immediate “hyper-inflation” in the US and also impact world markets at a level “worse than the Great Depression of 1929.”
Arabs to the rescue?
In a strange twist of fate, Arabs and OPEC may come to the rescue of the U.S.!
Senior officials in OPEC made clear that they too would be severely harmed if the U.S. Dollar collapsed, and hinted they “would not be inclined to sell oil to any particular nation that intentionally caused such a collapse.”
This was a thinly veiled threat to China, which depends heavily on OPEC oil for its rapidly developing energy needs.
The OPEC officials even went so far as to say “Since China lacks the ability to project their military power, OPEC nations need not worry about any Chinese military response to an oil cut-off.”
Such brutally candid remarks will not sit well with China; and signal ominous things for the U.S. .
Arabs and OPEC will want something in return for saving the U.S. from economic collapse and it is already widely speculated what they want will be a complete change in U.S. backing of Israel in the Middle East.
If such demands are made by the oil-rich Arabs, the U.S. would be left with little choice but to virtually abandon the jewish state to preserve itself.
source: http://www.halturnershow.com/ChinaToDumpUSDollars.html
broadband this is an amazing story. i have not been able to find anybody else reporting it as of this morning.
Monday morning’s market should be very interesting.
sounds like a hoax…
Is anyone else as disturbed by this as I am ? GRIM?
If the Chinese attempted to unload their dollars at once, they would not only be taking a bath but the reduced buying power of the dollar would put millions of rootless laborers out of work. That would signal the end of the communist dictatorship as millions of poor and unemployed former farmers revolt.
I wonder if this is what Nixon had in mind?