American Economics Thread
- Thread starter Bernard
- Start date
State capitalism with American characteristic.
So it looks like I finally might have some useful insight for once.
The 'Pandemic Mortgages' phase, if you will for lack of a better term, was heavily heavily fueled by refinances, and not just that but refinances that were possible only because of that idiotic PPP loan (fraud and theft) thing.
I know because I was part of the mortgage industry at the time. I even assisted underwriters in some basic underwriting and loan processing tasks. Elementary stuff, but it certainly gave insight into just how bad the fraud was. Both openly illegal fraud and fraud that is not technically illegal by Muricunt legal standards (it's the same as how Muricunts pretend like their country isn't the most corrupt country in the world because instead of outlawing corruption they simply legalized it and called it "p0LitiCAL lobbyiNG" instead) but for all intents and purposes it might as well be fraud because it's the same Wallstreet Financial sleight-of-hand tricks that cause money to be siphoned away from where it needs to be towards secret bank vaults and tax havens in like the Bahamas or wherever.
Anyways, the basic jist of it was that PPP 'loans' were being handed out like candy on Halloween with no oversight at all almost. Everybody and their brother who had an LLC, LLP, S-Corp, etc. applied for and likely got one. Upon getting one many if not most of these guys would refinance an existing property they already had. Why? Well you gotta remember that in the land of FreeDumbAssness if you are a business owner of any kind (small, big, whatever) you almost certainly are wealthy enough to have multiple properties (at leastt a vacation one) but typically these guys also have rental properties. Basically, these guys are the classic "multiple streams of income" high-earners. Which makes sense. If you are rich then you are smart enough to know that you need to diversify your assets and also have more than one source of income so that you can hedge against a bad economy or some personal tragedy that takes you out of work for some time.
Moving on, so all these rich folks/landlords/business owners/property gurus/whatever you want to call them all get their PPP freedumb money. They use part or even all of that as a down payment to refinance existing mortgages on their rental properties so that way their rates go down from sayyyyy 4.5% to like 0.5%!! No seriously, during earlier parts of 2020 the rates were literally less than 1% for many lenders. That's even for non-owner occupied properties or even DSCR loans (a loan meant for landlords who literally use the PROJECTED estimated rental income as justification for the mortgage). Obviously, the mortgage industry being the greedy and downright scumbags they were were more than happy to accommodate all sorts of obviously bullshit loan applications using PPP payment as down payment.
So what was the result of all of this? Basically, tons and tons of landlords got the mortgages on their rental properties to be even less than it was before. Then they promptly turn around and scream "ZOMG INFLATIONNNNNNN!!!!" and now increase rent on their tenants, and they did all of this by essentially stealing money from the working class whom didn't see a single penny for all their efforts. PPP was funded by the taxpayers after all.
But here's where it even gets more interesting.
What do you think the bank (or the lender is the more correct term) does with the mortgages after it's all said and done? Do you think he simply sits there and collects the mortgage payments the same way a landlord collects rental income? Like he just passively does nothing and waits for the checks? Soundsssssss like a good idea right?
Wrong!
There are much MUCH better ways of earning money if you are a mortgage lender.
Let me introduce you to the secondary market!
Have you ever heard of the term "Mortgage-Backed Securities"? Well that's where they are. The secondary market.
It's kind of complicated to explain, and this is where my knowledge begins to falter because neither me nor my employer was involved with the secondary market or securitization (the technical term for turning a bunch of mortgages into a mortgage-backed security). In fact, most mortgage lenders, regardless of background, actually don't even hold onto the mortgages they sell you, the house buyer. They give you the mortgage and then as soon as it's done they sell it off ("Ship" is the correct term) to one of the gigantic mortgage banks like Verus. Verus is who then securitizes those mortgages (usually you shouldn't do any sort of securitization until you get at least 400 mortgages together) and trades them on the secondary market.
At this point, if you've seen The Big Short then you'll begin to have an idea of how devastating this kind of carelessness and money tricks can eventually have on an economy once the Wizard of Oz is revealed and all the illusions are dispelled. Well I'm here to tell you that, for starters, it's not quite as blatant or as utterly fake as it was before 2008. Believe it or not even Murikkka actually learned a thing or two from 2008...barely.
But the movie (and the book) doesn't begin to describe how utter bullshit the secondary market still is to this day.
OK so I've done my job and so have all my bosses and co-workers. We've shipped off a bunch of loans to Verus who now are going to package them all together and trade them on the secondary market. Sounds good right?
Until you realize that trading on the secondary market is just like douchebag finance bros trading any sort of financial instruments at all. It's just a bunch of douchebags upselling something to be worth more than it really is, and this cycle of upselling, trading, upselling, trading, upselling, etc. goes on for an extreme number of repetitions until it gets to an absurd number. This whole process is also very opaque, untransparent, and filled with dishonesty. So even if you could get some kind of 'final number' you actually can't because the final number/figure does not include all the hidden crap smeared unto the underside of each deal to make it look like each trade was benefitting one or both sides.
*** I wrote too much in my last reply so I had to split it up but here's the conclusion ***
Also, this is where I get to go back to my lane and say that I can promise you that the majority of the loans I looked at. In other words more loans than not had at least several major red flags/lies. I'm talking about loans where the borrower, a landlord, had a multi-unit apartment complex and he refused to show pictures of one of the apartments but he tried to cleverly attach pictures of another unit and use that as proof that the unit in question was all fine and dandy. This landlord did so because during 2020-2022 mortgages were so easy to come by that everybody just did appraisal waivers. that's right! There literally wasn't even an appraiser or an inspector to come and make sure the property wasn't a total piece of junk!
How do you get this waiver?
Well obviously you just sort of have to trust this totally honest and morally upstanding landlord to be telling the truth, the whole truth, and nothing but the truth...by letting him submit pictures of the property instead of an actual inspection/appraisal.
Oh and the guy that was using pictures of a different unit when he got caught...his excuse was that since his property was composed of 6 units that were identical that we didn't need to see pictures of all the units. Just one.
Doesn't take a genius to figure out that he was hiding something bad in that one unit, but well...Verus didn't really care that we were submitting downright fraudulent loans like this because Verus (like the other major players on the secondary market) can make astronomical sums of money with securitization to the point that a $1.89 million loan doesn't matter since they can easily make $1.89 BILLION in the same package that this loan was in.
And I haven't even mentioned the other loans where the landlord used bank statements as income qualification (this is actually one of teh most popular and common methods of income verification) instead of actually proving that there was a responsible tenant paying on time. Oh and of course you guys are smart enough to know that there were numerous problems with bank statement borrowers who tried all sorts of tricks like moving money into and out of different bank accounts that they owned through different trusts, LLCs, subsidiaries, etc. so that it LOOKED like they were getting regular income when the truth is that they weren't.
Look I could go on and on about how many borrowers were lying about one thing or another, but I think you guys get the point now. That a metric fuck ton of borrowers during the pandemic totally lied about needing a PPP loan, used that loan to refinance or even buy a rental property, lied a bunch on the application for that loan anyways, and now there's a bunch of landlords and tenants living and profitting off of one helluva of a house of cards just waiting to collapse.
What do these idiots think is going to happen once unemployment goes up and up and up? Apparently, the answer is nothing at all along the lines of "shit now I'm bankrupt and in debt forever because my tenants can't pay since they don't have a job and I lied to the bank about what this trashy place was actually like".
What do the geniuses at Verus and those huge players think is going to happen also? Well apparently it doesn't matter because those guys are raking in huge amounts of profit just like they did before 2008 (although not as much as before then) and when it all comes crashing down the same thing will happen. Not a single ounce of consequences. Completely spared the rod.
So there!
This is how 400 pathetic mortgages (the average QM mortgage has a limit of about $550k except for HCOL areas whom get like $770k) can artificially make Murikkkunts say "L0OK aT DA MURICANNNNNNN econOMY it's G0T yUgE GeEDeEPeE" when the reality is that it's 400 buildings that may or may not even be structurally sound being paid for by a couple of mcdonald's workers, retail store supervisors, and basic white girl HR chicks) whom are all living paycheck-to-paycheck and their is a meteroid of unemployment about to explode the whole thing very soon.
Also, this is where I get to go back to my lane and say that I can promise you that the majority of the loans I looked at. In other words more loans than not had at least several major red flags/lies. I'm talking about loans where the borrower, a landlord, had a multi-unit apartment complex and he refused to show pictures of one of the apartments but he tried to cleverly attach pictures of another unit and use that as proof that the unit in question was all fine and dandy. This landlord did so because during 2020-2022 mortgages were so easy to come by that everybody just did appraisal waivers. that's right! There literally wasn't even an appraiser or an inspector to come and make sure the property wasn't a total piece of junk!
How do you get this waiver?
Well obviously you just sort of have to trust this totally honest and morally upstanding landlord to be telling the truth, the whole truth, and nothing but the truth...by letting him submit pictures of the property instead of an actual inspection/appraisal.
Oh and the guy that was using pictures of a different unit when he got caught...his excuse was that since his property was composed of 6 units that were identical that we didn't need to see pictures of all the units. Just one.
Doesn't take a genius to figure out that he was hiding something bad in that one unit, but well...Verus didn't really care that we were submitting downright fraudulent loans like this because Verus (like the other major players on the secondary market) can make astronomical sums of money with securitization to the point that a $1.89 million loan doesn't matter since they can easily make $1.89 BILLION in the same package that this loan was in.
And I haven't even mentioned the other loans where the landlord used bank statements as income qualification (this is actually one of teh most popular and common methods of income verification) instead of actually proving that there was a responsible tenant paying on time. Oh and of course you guys are smart enough to know that there were numerous problems with bank statement borrowers who tried all sorts of tricks like moving money into and out of different bank accounts that they owned through different trusts, LLCs, subsidiaries, etc. so that it LOOKED like they were getting regular income when the truth is that they weren't.
Look I could go on and on about how many borrowers were lying about one thing or another, but I think you guys get the point now. That a metric fuck ton of borrowers during the pandemic totally lied about needing a PPP loan, used that loan to refinance or even buy a rental property, lied a bunch on the application for that loan anyways, and now there's a bunch of landlords and tenants living and profitting off of one helluva of a house of cards just waiting to collapse.
What do these idiots think is going to happen once unemployment goes up and up and up? Apparently, the answer is nothing at all along the lines of "shit now I'm bankrupt and in debt forever because my tenants can't pay since they don't have a job and I lied to the bank about what this trashy place was actually like".
What do the geniuses at Verus and those huge players think is going to happen also? Well apparently it doesn't matter because those guys are raking in huge amounts of profit just like they did before 2008 (although not as much as before then) and when it all comes crashing down the same thing will happen. Not a single ounce of consequences. Completely spared the rod.
So there!
This is how 400 pathetic mortgages (the average QM mortgage has a limit of about $550k except for HCOL areas whom get like $770k) can artificially make Murikkkunts say "L0OK aT DA MURICANNNNNNN econOMY it's G0T yUgE GeEDeEPeE" when the reality is that it's 400 buildings that may or may not even be structurally sound being paid for by a couple of mcdonald's workers, retail store supervisors, and basic white girl HR chicks) whom are all living paycheck-to-paycheck and their is a meteroid of unemployment about to explode the whole thing very soon.
Kinda scimmed through, but I do think I get your central gist, and am also agreeing.
In fact, lately, I've been watching videos from this (), and I would say he's very great (need to understand chinese or have some good translator program).
But some basic gist, we're currently actually heading to something like a 2008 crash in the US, this year or first half of next, and it might very well end up even worse than 2008 as well.
And there's lots, and lots of sign of that being the case as well lol.
I'm on mobile right now because I feel like enjoying some fresh air before the winter comes here so I'll try to be as clear as possible. But I would say that if nothing else the key takeaway here for anyone back in the home country is basically:
American GDP is almost completely fictional and made up of thin air via financial speculation and magic tricks.
I'll just use the example from before. The 400 mortgages.
Ok so you have 400 mortgages. On average they are each $500k (a realistic figure actually for an American home honestly). Ok so that means you have $200 million at the end of the day.
Now you take those 400 mortgages worth $200 million, and you 'put them together' (it's easiest to just keep it simple now). You call this "Great American Mortgage Pack" or GAMP for short.
You take GAMP and you say to this other guy "hey this is actually worth $500 million because mortgages generate income from interest. So once these mortgages are all paid off you will have $500 million. That's why I'm selling it to you for $300 million!"
The other guy accepts.
At this point the muricunt government steps in and says "oh sweet guys we just added a whole bunch of money to our economy. This is why we are so cool and awesome and so rich. Look at how rich we are! We have $200 million from just those houses + $200 million from GAMP + $100 million from when GAMP sold and made it a profit +$300 million from the final sale price of GAMP + $500 million because the new owner of GAMP says that's how much it's worth! So together we have $1.3 BILLION now added to the economy for 2020! We are so cool and awesome and rich you guys!"
You see how fake and fictious those numbers are now?
Now imagine that, suddenly, yet another black swan event happens to MURIkkka...like all the job losses, layoffs, companies downsizing, banks going out of business, etc. Happens. And suddenly half those guys in the original GAMP foreclose on their homes. Now you have 200 out 400 homes being empty, mortgages defaulted, and suddenly something that was TOTALLY worth $1.3 billion is worth way less. Maybe not even $100 million. A greater than 90% loss in perceived value!!!
Now you see how utterly meaningless muricunt brag's about how strong their economy and how big their GDP is. Those numbers are made up!
The rest of this is just me trying to do some mental exercise now but here's where the truth gets even more ridiculous.
In my example, my GAMP only sold for $500 million, but in reality it would sell for many more times that figure and go through many more times. Why?
Because the first buyer would turn around to second newer buyer and say "Hey since murican property values infinitely increase because we live in the land of capitalism and in capitalism there's a such thing as infinite growth then it means that my GAMP here is worth $1 billion because these houses and properties will go up in value. So let me sell it to you for $700 million."
Second buyer agrees and now the government adds another $700 million and $1 billion to the GDP.
Of course second buyer then turns around to a third buyer and says "hey this GAMP here is actually worth $3 billion because these mortgages are for houses in an up and coming city like Austin, Texas in the 90s or Boise, Idaho right now. So I'll sell you this GAMP for $2 billion." Buyer agrees.
Now the US government adds yet ANOTHER $2 and $3 billion respectively.
I'm a little busy enjoying some random person's dog hanging out with me now to do the math but ya look at what happened. Originally $200 million worth of houses became like $7 billion, and just from trading, a.k.a. former college frat bros from rich white suburban families lying and upselling to other former white college frat bros.
Meanwhile, dumbass muricunts on Reddit, TikTok, and fucking Facebook will talk about how their country's economy and GDP when combined with NATO dwarfs China's GDP and that's why they'll outspend us to victory in a shooting war.
Ya no shit your numbers are bigger! They should be! They better be actually!! After all that bullshitting if they couldn't be higher than a country who measures only what's materially real then that would actually make me afraid that you guys were hiding something actually deadly to us.
Ok enjoy Friday night. Hope this isn't too much.
broadsword
Brigadier
Google or ChatGPT is your Ameridoc.
Man, these fine folks love to nickel and dime their regular God fearing Americans for all the money they got until they're left with nothing. All in the name of the almighty GDP.