Millions of American families have lost their homes to foreclosure over the past five years.
According to some reports, close to 9 million homes entered the foreclosure process between January 2007 and last month, out of which, 4.3 million properties ended up foreclosed-upon.
Activists are calling for a moratorium on foreclosure and proper action against the banks that they hold responsible for creating the crisis in the first place.
Press TV has conducted an interview with Joachim Martillo, a financial analyst in Boston, to further talk over the issue.
The video also offers the opinions of two additional guests: Tighe Barry with the CODEPINK movement and Caleb Maupin with the International Action Center (IAC).
What follows is an approximate transcript of the interview.
Mr. Martillo, will this wave of foreclosures, as was mentioned there, destabilize the housing market? That has been a major concern for a lot of economists and if so, what does it mean for average Americans?
Well, I think that the data on mortgage foreclosures is going to come out tomorrow and we will find out where it is headed but in fact, yes, everything is going to get worse as the European collapse continues and it sends the American economy, perhaps, back into recession, we are going to see more foreclosures as the economy worsens. There is little doubt about that.
A lot of banks have been saying that the foreclosure crisis did little harm because the borrowers, they say, were behind on their mortgages anyway and they should have been evicted.
At the other hand, investigators are saying that there are indeed; however; legitimate victims in the mortgage crisis because these homeowners are systematically being deprived of their legal safeguards and due process rights and that is an important question here; if there is this kind of victimization here, why, as Tighe Barry was saying, we are not seeing the process, rather, the legal process being applied for those who are regarded the criminals?
Well, certainly the bailout was handled incorrectly and part of it is because the mortgage crisis is much bigger than a mortgage crisis and it goes back to the 1970’s when the CMOs [Collateralized Mortgage Obligation] originated at Salomon Brothers and these mortgages were divided into different pieces, an equity piece and the interest piece and repackaged and resold as securities and what happened is then it was leveraged.
So the actual mortgage default piece is small but when you look at the securitization and then the insurance aspects, the assets, the credit default swaps and then the securitization of the credit default swaps into, I guess, it is abstract CDOs [Collateralized Debt Obligation], I have forgotten the term, Synthetic CDOs.
What we find is that there is, I think and no one truly knows, 120 trillion dollars that may vanish from the economic system within the next few years or so, and that is what will cause the disaster.
Now the problem is that when they bailed out the banks that had the bad mortgages, it did not really unwind anything.
What would have been better would have been to bailout the borrowers so that you would never have gotten into the point where the credit default swaps became active and then basically forced other financial institutions to cover for their defaults in a leveraged sort of way.
So this is a complete disaster and we have to understand why the bailouts were mishandled. There is a very interesting statistic which I read in a book by Linderman where he talks about the S&L [Savings and Loan] meltdown which happened during George H. W. Bush and it turns out that 90 percent of the people that were convicted of fraud with regard to the S&L meltdown were Jewish.
I have worked in Wall Street; I do consulting there; I am always asked whether I am Jewish so I can take part in the social networks on Wall Street and whether I can share insider info and help protect other people and basically exchange critical information that could be extremely valuable.
We have these vast, essentially, ethnic networks on Wall Street. They have been there for a long time. People have written articles about them but we are not allowed to talk about them.
Well, guess what? The people that Obama brought into his administration to deal with the crisis were people like Larry Summers and [Peter R.] Orszag and it goes on and on if you look at the names, people who belong to these social networks and they protected themselves because if anything, the percent, that should have gone to jail was higher than the 90 percent that we saw in the S&L meltdown, but these people were all shielding one another and therefore they will protect it and it is quite possible that they will get away with it totally.
So we have to start looking at the ethnic manipulation, the corruption and conspiracy in Wall Street in a serious way. And yes, the people who borrowed their homes and were essentially tricked into a terrible situation, they should be handled as well, but that is an extremely small part of the problem that we are seeing economically and with which the Obama administration is not dealing.
Mr. Martillo, an immediate moratorium on foreclosures, we want to see if that is possible, the root of today’s problems is the banks spending billions of dollars in the good times to build vast mortgage machines that made new loans and now those same banks ill-equipped to deal with the foreclosure process.
That is why basically people are saying these are the ones who created the problems and they should be the ones who are paying.
If they are responsible, how should they be held to account? Do you agree with our guest here, that the only way now is for public action to make something happen?
Well, public action is a good thing, but I have to point out that there is a deeper issue here. I mean if we really believe in Free Market Capitalism, as the US government apparently claims, why should the banks be in private hands; if their losses are going to be borne by the public but their profits go into the pockets of individual bankers, that makes no sense.
This is not real Capitalism, this is Crony Capitalism and we have to understand how this whole mortgage construction developed.
What was the big event of the 1970’s? That was the Arab oil embargo which sent up the prices of oil and basically gave the Arab oil countries a great deal more money to invest in the US.
These financial instruments for securitizing mortgages were used essentially as a way to bring Arab Oil money into the US as investments and essentially loot it for the private gain of essentially a rising class of Eastern European Jewish bankers.
They basically, essentially, supplanted the older German-American Jewish bankers on Wall Street. So there was sort of an inter conflict on Wall Street.
Once this took place, you saw Wall Street policy, if you can talk of that, being directed to the benefit of sort of an international Zionist Class and I know this all sounds like conspiracy theory; but why not? There have been conspiracies on Wall Street since the 19th century.
We used to talk about the Robber Barons. Yes, and can an ethic group take advantage of that? Yes, they can.
AIG should have gone bankrupt, unfortunately it would have brought down the whole financial system and it was bailed out but bailed out incorrectly.
Who created the situation that caused AIG to nearly fail? It was basically a construct of Martin Feldstein who is a Harvard professor. He created the form of the modern CDO and why was this created? This was to basically make it possible for Israel to fund housing for Russian immigrants when the Bush administration was considering holding up loan guarantees.
There is an intimate connection between the collapse of the financial system both in the United States and worldwide and US international policy and its manipulation by class of hyper wealthy Jewish Zionists.
And we have to start talking about this honestly or there will never be a solution. So the proper way to do this, if we go back to the original question, is a true Capitalism if the public bears the losses and the profits go into the hands of hyper wealthy rich banksters, who happen to belong to the Jewish social networks.
No, those banks should not remain in private hands. We should bring it into the governmental sector, which of course has its own problems, but the fact is most of what banks do is completely mechanical and cannot be handled basically through actuarial calculations in computers today. There is no reason for this middleman to be skimming off the profits.