The giants are taking control of the home-mortgage market.
The mortgage crisis was deliberately created so that the giant banking houses could increase their control over the industry and could force many, if not most, of the smaller mortgage lenders out of the market.
Friday’s agreement for Bank of America Corp. to buy Countrywide Financial Corp. for $4 billion shows how size and financial solidity are trumping everything else in mortgage lending. With the heft to withstand rising defaults and falling home prices, these big companies are helping prevent a total shutdown of mortgage lending.
The only matter about which investors really care is that they not lose their money! In fact, the intervention of Bank of America is seen as a vote of confidence in the entire housing market!
Bank of America stepping in right now is a very good thing for the market because it signals confidence in an eventual revival of the housing and mortgage markets … the downside of this new development.
There is a price to pay: Their greater role means less competition and higher costs for consumers, at least in the short run.
Mark my word on this issue.
The end result is going to be a lot less competition in the home mortgage lending market, just as the Savings and Loan scandal of the 1990s resulted in a lot less credit unions independently owned and operated. Forcing out smaller lenders so that the giants could take over has been the agenda behind this crisis from the beginning.
You are also seeing only the beginning of huge money houses buying out troubled mortgage lenders.
But, there is still more to this crisis. American institutions are turning to foreign banks in a huge way in order to keep solvent. Globalization is also a bottom-line objective of this entire crisis.
Citigroup is putting the final touches to its second big capital-raising effort in as many months, seeking up to $14B from Chinese, Kuwaiti and public market investors. Under the proposal being discussed, the bulk of the money – roughly $9B – would be most likely to come from China … The Kuwait Investment Authority would contribute about $1B, while $2B to $4B would be raised through a public placement of shares.
The deal underscores the depth of the problems faced by banks that suffered heavy losses in the US subprime mortgage crisis. It would follow an injection of $7.5B into Citigroup by the Abu Dhabi Investment Authority in late November.
The entire world is rushing into a global economy, and this crisis is a major catalyst to achieve this global system.
Prophecy clearly states that the false prophet, acting on the behalf of the Antichrist (Revelation 13:11-18), will control the global financial market so that no one can either buy or sell unless he has the mark of the beast, probably an implantable computer chip, which shall control all facets of the new global financial community.
This mortgage lending crisis is greatly helping this effort to force every type of business into a truly global setting.
Joseph (Lebbie) Yates