Obama Inc. Unveils Brilliant Plan to Cause Second Economic Crisis with Bad Loans

Since we’re on an imaginary recovery from a real recession, it’s time to upgrade that recession to a real depression for twice the recovery.

This speech was made in Vegas, because when you want to trash the economy with a politically correct gamble, the place to roll the loaded dice is in Sin City.

The Washington Post reports that the administration is pushing a plan designed to encourage banks to lend money to riskier borrowers, in order to boost the housing market. The plan is designed to help young people (who have little to no credit history) and folks whose credit may have been damaged by the great recession.

Raise your hand if you see the flaw. The reason some of those people got ruined by the recession is because they were given loans they probably shouldn’t have been given. A surge in shaky home loans over the last 10 years is often the first thing people think of when they think about the collapse of the economy in 2008.

Yes, but surely that can’t happen a second time. I mean what are the odds that the government will pressure banks to make bad loans and that liberal billionaires will monetize those bad loans a second time to fund the election campaign of Hillary Clinton, whose husband set up this whole mess?

But at this point, the government essentially is the mortgage market; the overwhelming majority of loans now go through an entity controlled by the US government.  So the government is going to set the underwriting standards.  The question is, will they set them too high or too low?

Obama Inc. is playing with someone else’s money and it needs to get some action going to claim a recovery, even if it has to go on faking it.

So it will set the standards to too low. What does it have to lose?

And it’s all the more egregious because it repeats so many of the mistakes we’ve been lamenting — and paying for — the past five or six years. Not to mention that existing FHA-backed loans are already believed to be under-capitalized and run the risk of a taxpayer bailout that could rival those of GM and Chrysler.

Taxpayers have lots and lots of money? Right?

And who could possibly have an interest in all this?

Wells Fargo has become the dominant U.S. mortgage lender, grabbing an unprecedented 28.8% share of all home loans issued nationwide last year, up from 11.2% in 2007, the year before it bought Wachovia. Its home-loan production hit $524 billion last year, the largest annual total ever for one lender and greater than the output of the next five largest lenders combined, according to the publication Inside Mortgage Finance…

The big question now looming for Wells and other mortgage lenders is what will happen when the refinancing boom wanes. Loans to purchase homes accounted for only about 25% of the mortgage industry’s production last year. Mortgage refinancing accounted for 75%—business that is likely to decline precipitously when interest rates start rising again. Timothy Sloan, Wells’s chief financial officer, told investors last month that he expected mortgage revenues to decline in the first quarter—a sign that a refinancing slowdown may have begun.

Wells Fargo. Sounds familiar. Who is cashing in on that?

Warren Buffett’s voracious appetite for shares of Wells Fargo in recent years has made the San Francisco bank his biggest investment in a public company.

Wells pushed aside long-standing top holding Coca-Cola, a stake Buffett purchased from late 1987 to 1995 as he decided the value of the company’s powerful global brand wasn’t reflected in its share price. The fact that the beverage giant remained Berkshire’s top holding for years shows how well it has performed for Buffett.

Crony capitalism rides again.

  • Mary Sue

    No no no no no no no NO NO! This is the same kinda garbage that got the banks bailed out and the mass defaults! Obama really should stop taking economic advice from no-nothing know-it-alls like Chris Dodd and Barney Frank.

    It's like seriously, do those two representatives' constituents even KNOW or CARE that their particular representatives are largely responsible for the economic mess you all are in right now?!

  • cheryl

    Isn't obama's idea the same thing that caused the housing bubble? Maybe he figures a repeat will finally send this country over edge. I'm finally convinced his main purpose is destroy America

  • truebearing

    How blatant does Obama have to get before the majority of Americans figure out what he's doing? If he ordered the Department of Education to teach The Communist Manifesto, would people finally figure out that he is a communist? Would they then understand our nation's peril? Don't count on it, but when the government starts taking their property, and they will, and when it's too late to change course without a bloody civil war, the freedom loving American people will suddenly wake up.

    How ironically sick is it that Obama is using poor, illiterate African Americans, Hispanics, etc to create an economic black hole for the specific purpose of liquidating America's wealth until the country fails? He is using his people as a reliable way to cause economic failure. What does that say about his attitude toward the very ethnic groups he champions? Cynical doesn't begin to describe Obama's evil and rapacity for power.

    • kasandra

      Frankly, if he ordered the Department of Education to teach The Communist Manifesto, that small percentage of our people who actually heard of it thru our wonderful media would probably first ask "What's a Manifesto" and then ask "What's a Communist?" I think they conclusively proved this just last November

  • timmysfriend

    This only makes me more terrified that I can't afford a gun right now.

  • Elizabeth

    And when it blows up again they'll be blaming republicans again.

  • JacksonPearson

    "Obama Inc. is playing with someone else’s money and it needs to get some action going to claim a recovery, even if it has to go on faking it."

    Dang, he hasn't learned a damn thing from the last "Community Reinvestment Act" failure.

  • C.R.

    Its not a recession–its a depression–DUH!

  • sd42jnq

    We are in a Depression now.

    consider that, with the newest Bureau of Labor numbers two weeks ago, the number of unemployed is now more than 89 million people.

    Compare that with 22 million in the Great Depression.

    This polyannish dishonesty of claiming we have had "recovery" when it's been a spiral into the ashcan since 2009 has got to stop.

    It's like the idea of claiming 11 million illegals when there are 13 million in California alone. Six million mexican nationals went over the border each year for more than a decade. At present, roughly a third of the total mexican population (110 in Mexico, 60 million here) is in the United States.

    The lies must stop.

  • http://homemortgagesaz.com/ home mortgages

    Pretty good discussion about economical crisis of America! Actually i don't know what is going on into the political party but the true thing is that president Obama is trying to recover the economical recession as per as possible and i hope that the success will come as early as possible. Thanks
    home mortgages