financialpetition.org
Citizens For Financial Responsibility Our financial system and markets have become akin to a rigged casino. Wall Street has permeated all corners of Main Street, and unfortunately, the corruption has now affected even those - including likely you - who have no desire to be a part of it. Your home, unfortunately, became a part of the Wall Street casino. From 2003 to 2005, insane levels of price "appreciation" roiled the US housing market. Many - perhaps even you - cheered the "wealth" you saw created in what you originally thought was just a place to hang your hat and cook your breakfast. Some of you bought a second home, believing that this was not just a place to go on vacation, but a way to instant riches. A few went even further, and started "flipping" properties. It was created by Wall Street power brokers who took what was an old stodgy banking standard - the mortgage - and turned it into a means of playing casino games with you as the roulette ball. If you have a mortgage that allows "choice" in your payments (an "Option ARM" or "Option Fixed"), you have a 2/28 or 3/27 loan, or you didn't document both your income and assets, you were played for the benefit of those on Wall Street. The unfortunate reality of this casino game is that you can't create something from nothing. The "pumping" of house values to twice the level, on a national basis, of the maximum sustainable price, has put enormous stress on the American family. As prices rose these "fancy" mortgages became a necessity in order for people to buy homes. But these fancy mortgages are not really mortgages at all. That is, you're not really buying a house when you take one of these mortgages, because there is essentially no possible way for you to pay that mortgage off as originally scheduled and own your home free and clear. Instead, you're effectively "renting" your house from the bank and then rolling the dice in the Wall Street casino - that there will be a bigger sucker who would at least be willing to buy your house in a few years for more than you paid, so that its "value" rises at a rate faster than your loan balance grows. Each time you come back to refinance again, the bank "steals" some of your home's "appreciation" - it goes to the mortgage broker, banker, and Wall Street! The same thing happens when you "tap your home equity" to pay off your credit cards, buy a boat, or take a vacation. The intent of all that advertising of people "dancing" over some great home loan is not to help you buy a house - it is to strip some of your wealth - effectively, to steal it. The unfortunate reality is that this is a game you cannot win in the end. House prices cannot rise, over long periods of time and on average, at a rate which exceeds the rise in average incomes. That should be apparent to everyone, but it has become "lost in the noise."
The 3-4% that has already happened is shown in the little "hook" at the end of that graph - we have a long way down to go. Everyone would like to believe that this outcome can be avoided in some form or fashion. We can, however, compound the damage that this adjustment will cause to our economy by refusing to accept reality and refusing to reform the practices of the last seven years. After 9/11 Alan Greenspan inappropriately lowered interest rates, which helped feed the "speculative frenzy." The petition asks for higher - not lower - interest rates. This sounds counter-intuitive and even "un-American" - but it isn't. Democrats in Congress have repeatedly blamed "greedy oil companies" over the last several years for the increases in the price of energy. By encouraging the "Wall Street Casino" through inappropriately low interest rates commodity prices - that is, oil, wheat, soybeans, orange juice, milk and metals - have all shot up in price at an incredible pace. This is real inflation and it hits you right where you live - in your food and energy bills. Yes, your computer and blue jeans are cheaper to buy, because some sweatshop in China makes them for you - a peasant who is paid 20 cents/hour sews those jeans. But those low interest rates have destroyed the value of our dollar, and those commodities, while priced in dollars, are largely mined and produced in other nations. Gasoline didn't go from $1 to $3 because of greedy oil companies; it rose because you were lied to by your government and led to believe that a 1% interest rate was "good for our nation", when in fact it was only good for a few Wall Street fat cats, while your grocery bill has doubled in the last seven years. How much has milk gone up in price over the last six months? "Greedy oil companies" didn't cause Milk to go sky-high in price. Alan Greenspan, now Ben Bernanke, and The Fed did that through inappropriate monetary policy, which led to devaluation of our currency and a resulting rise in commodity prices when measured in dollars. The way to get commodity prices - and your grocery bill - under control is to defend the dollar - that is, improve its value relative to other currencies. This is done by raising interest rates, not lowering them. The lower The Fed sets the Fed Funds rate, the more the dollar will plunge and the higher inflation you will see in your food and energy bills. So while it seems "wrong", if you want to see your grocery bill come under control and real inflation abate, interest rates must rise, not fall. And while there some of you will say "but that will make my credit card payments go up", and this is true, you cannot outrun inflation through lower credit card payments. It steals your retirement income, your current income, and your children's future. What's worse, nearly all of the unsafe mortgages were packaged up, given "ratings" that were cooked based on knowingly-bad information and then sold off. The bank or mortgage lender who sold you your mortgage had no obligation under the law to act in your interest - they were nothing more than "mortgage salesmen", just like the corner used car dealer has every intention of selling you a car - for as much as he can get - not to "give you the best deal you can get." The "casino mentality" on Wall Street for mortgage finance meant that the guy who wrote your mortgage immediately sold it to someone else. He or she no longer held that risk - if they sold you a "bad loan" or even one they had every reason to believe you could not pay, the risk was passed on to someone else, giving them no incentive at all to insure you could afford the mortgage. These "exotic" instruments - CDOs, CDO-squareds, ABCP, all of the "Wall Street lingo" - are headed for trouble. The supposedly "excellent" credit sold to people has turned out to not be excellent at all, and huge losses - billions of dollars - are being taken. These "exotic" instruments were sold to everyone - from money market funds to insurance companies to pensions to foreign governments and banks. Your 401k, 403b and/or IRA are in some fashion "in" Wall Street. Whether you're in stocks, bonds, have a pension or even a Money Market fund, you're exposed to the chicanery. The petition on the following page is divided into six specific points. I understand that not everyone will fully understand or agree with every point on the following page. That's ok - the question to ask yourself is not whether every point fits exactly with what you think should happen - but whether, as a whole, you are tired of the Wall Street games and fraud, and want it to stop. There is a wealth of explanatory information on all of the points in the petition to be found at a link displayed just above the signature box. Clicking that will bring up a "PDF" copy that is formatted in a way that allows for "pretty" printing and study. It is important that we send a message to Congress and President Bush that we are tired of the fraud. Your email address and personal information will not be sold. I must ask for it because Congress needs to know that you're a real person, with a real address, and you are their constituent. As such that information HAS to be sent to them so they know you really are a voter in their district and your voice "counts" in their minds.
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