First several “eye popping” background articles:

April 24 (Bloomberg)

Bond investors who financed the U.S. housing boom are starting to pay the price for slumping home values and record delinquencies in subprime loans… They will lose as much as $75 billion on securities made up of millions of mortgages to people with poor credit, says Pacific Investment Management Co., manager of the world’s biggest bond fund. Some of the $450 billion in subprime mortgage-backed debt sold last year has lost 37 percent, according to Merrill Lynch & Co…

April 23/07/The News-press

Home value reform urged. Real-estate schemes often start with inflated appraisals… Deliberately inflated appraisals are the key component in residential real estate schemes in Southwest Florida and across the country… “In the end the public ends up picking up the tab,” said Woody Hanson of Fort Myers-based Hanson Real Estate Advisors, which specializes in resolving high-stakes disputes over appraised values — often in court cases… How can the problem be solved? Hanson suggests stricter enforcement of federal legislation passed in 1979 requiring careful scrutiny of appraisals by lenders. “Let’s demand the federal legislation be enforced,” he said…

April 21, 2007 (Bloomberg)

KPMG claims fraud at Fannie Mae… for “fraudulent deception” that prevented KPMG from uncovering $6.3 billion in overstated earnings. Fannie Mae from 1998 until 2004 withheld and distorted its accounting, engaging in “breach of contract, fraudulent misrepresentation, fraudulent inducement” and other wrongdoing, New York-based KPMG said in an April 16 filing with the US District Court in Washington. A Fannie Mae spokesman declined to comment…

And now, the cherry on the cake so to speak:

Fannie and Freddy, still a significant concern (read: threats to the economy), a government report say last April 23, 2007.

While we invite you to draw you own conclusion, here is a hint… what does the SEC have been doing during all this time, we (at ”In Debt We Trust”) ask?

Those two million people with bad credit who will lose their homes this year thought they had reached the American dream which in reality is the American delusion. The mainstream media, the Feds, and the lackeys who support this insane financial system are using their public relations engines to try to boost confidence and slick over the truth – what real estate depression?  “There is no depression in the real estate industry”, they say! Of course their paychecks and survival depend on there not being a depression and covering up the balloon they created out of thin air! More than ten million Americans were rooked into taking out phony mortgages based on phony stated incomes which would have eliminated them from getting a loan if the truth had been revealed to the underwriters. That includes tens of millions of owner and non owner occupied home debtors with excellent credit and credit scores above 780 that borrowed about $5 trillion over the past five years. It has been that money circulating through the economy over the past few years that has kept the entire Bush administration looking good for the public on the economic policy front, but that is about to change…  

What is really interesting however is the SEC’s negligence in the entire sub-prime market bubble, which had it acted more than five years ago when stated income loans became more and ever more popular not so much amongst borrowers, but by the 57,000 mortgage brokers who acted as agents of destruction for the American housing industry. Their negligence has perpetuated the largest Ponzi scheme ever invented by man. It is run by Fannie and Freddie while Washington Mutual, Countrywide and the ten largest banks in the world are all bit players next to the Wall Street underwriters who float bonds backed by fishy mortgage deals originated by even sketchier mortgage brokers… americanchronicle.com: April 23, 2007

Now to be fair, we do not entirely agree with the author of this last article, and which portrays the Bush Administration as the main culprit. President Clinton is also to blame. The very root of this insane credit addiction started under his watch and has been escalating since then. Just like Danny Schechter has pointed out in his documentary, this a non-partisan issue.

Let’s expose the problems and their ramifications, History will be the judge.