Today the Labor Department released yet another round of jobless claims for this week, and, as usual, the mainstream media on both sides of the coin are going coo-coo for Cocoa Puffs because the number is a new low since the planned pandemonium. The United States has lost yet another 473,000 jobs. Additionally, last week’s new low of 498K has now been revised to 507,000; so, do not be surprised if this week’s number gets revised too.
But, as noted in the previous week’s jobless claims report, the media is just going bananas to convince the masses that America is seeing some sort of recovery. Without being a broken record, as explained in other reports, the economy is not even remotely close to a recovery. To again put things in perspective, this a little over 4 fully-packed University of Michigan football stadiums of 115,000.
Under ‘normal’ circumstances, the markets would be getting hammered. But, as explained again in other reports, the market, in this artificial environment, ascends higher on bad news. To briefly explain why, for those that do not know, the Federal Reserve has been juicing the markets. The markets know that the Feds will be pumping and printing money endlessly so it does not go nuclear. In other words, more bad news equals more bailouts and debt creation.
This is the underlying reason the housing market is on fire with no end in sight, coupled with extremely low interest rates, and stimulus and unemployment benefits. The media and financial “experts,” nor do the politicians, ever want to explain this. But more specifically than that, in this article, I will briefly explain one of the mechanisms as to why the markets are going insane.
As announced in March of 2020 when the markets were decimated, the Federal Reserve said that they would be buying unlimited mortgage-backed securities (MBS), bonds, and other debt, to keep the markets sustained.
According to Investopedia, here is what a MBS is:
A mortgage-backed security (MBS) is an investment similar to a bond that is made up of a bundle of home loans bought from the banks that issued them. Investors in MBS receive periodic payments similar to bond coupon payments.
Mortgage-backed security (MBS) is a variation of an asset-backed security but one that is formed by pooling together mortgages exclusively. The investor who buys a mortgage-backed security is essentially lending money to home buyers. An MBS can be bought and sold through a broker. The minimum investment varies between issuers.
As became glaringly obvious in the subprime mortgage meltdown of 2007-2008, a mortgage-backed security is only as sound as the mortgages that back it up. An MBS may also be called a mortgage-related security or a mortgage pass-through.
Essentially, the mortgage-backed security turns the bank into an intermediary between the homebuyer and the investment industry. A bank can grant mortgages to its customers and then sell them at a discount for inclusion in an MBS. The bank records the sale as a plus on its balance sheet and loses nothing if the homebuyer defaults sometime down the road.
This process works for all concerned as everyone does what they’re supposed to do. That is, the bank keeps to reasonable standards for granting mortgages; the homeowner keeps paying on time, and the credit rating agencies that review MBS perform due diligence.
They go onto to explain the role they played in the Great Recession.
Mortgage-backed securities played a central role in the financial crisis that began in 2007 and went on to wipe out trillions of dollars in wealth, bring down Lehman Brothers, and roil the world financial markets.
In retrospect, it seems inevitable that the rapid increase in home prices and the growing demand for MBS would encourage banks to lower their lending standards and drive consumers to jump into the market at any cost.
That was the beginning of the subprime MBS. With Freddie Mac and Fannie Mae aggressively supporting the mortgage market, the quality of all mortgage-backed securities declined and their ratings became meaningless. Then, in 2006, housing prices peaked.
Subprime borrowers started to default and the housing market began its long collapse. More people began walking away from their mortgages because their homes were worth less than their debts. Even the conventional mortgages underpinning the MBS market saw steep declines in value. The avalanche of non-payments meant that many MBSs and collateralized debt obligations (CDO) based off of pools of mortgages were vastly overvalued.
The losses piled up as institutional investors and banks tried and failed to unload bad MBS investments. Credit tightened, causing many banks and financial institutions to teeter on the brink of insolvency. Lending was disrupted to the point that the entire economy was at risk of collapse.
In the end, the U.S. Treasury stepped in with a $700 billion financial system bailout intended to ease the credit crunch. The Federal Reserve bought $4.5 trillion in MBS over a period of years while the Troubled Asset Relief Program (TARP) injected capital directly into banks.
The financial crisis eventually passed, but the total government commitment was much larger than the $700 billion figure often cited.
MBSs are still bought and sold today. There is a market for them again simply because people generally pay their mortgages if they can. The Fed still owns a huge chunk of the market for MBSs, but it is gradually selling off its holdings. Even CDOs have returned after falling out of favor for a few years post-crisis. The assumption is that Wall Street has learned its lesson and will question the value of MBSs rather than heedlessly buying them. Time will tell.
Well, it is very clear the masses and the traitors (not traders) have not learned the lesson. The WinePress has explained in other reports that we, America, is not only right back in the same situation as the prelude to the ’08 crash, but the current levels have only ascended much higher than that of 2008.
Evangelical Financial Advisor Dave Ramsey Says There Is No Market Bubble
History Repeating Itself: The Masses Did Not Learn From The Great Recession
The Looming Housing Market Implosion
The rich ruleth over the poor, and the borrower is servant to the lender.
Proverbs 22:7
The Federal Reserve is trying and easily succeeding in being both the borrower and the lender. As explained in another report we did, “The Quickest Way To Know The Economy Is Broken Beyond Repair,” we noted a report from Trends Journal writer Gregory Mannarino that explained that the FED is operating like a revolving door: they issue debt while buying it. And yet no one in the media or a single politician will dare to discuss this. Even Trump is quoted as saying the American dollar is “too strong,” so you can judge for yourself what side he stands on. But the point is, as explained with the MBS definition, you can now better understand where this artificial demand is coming from.
Then, as mentioned in our report about the exodus from the churches, citing a Gallup poll as to why church attendance has hit record lows, I explained what will occur subsequently occur in the near future:
When the lockdowns began last year, pretty much all the churches went livestream, if not already, and now have that as a permanent option that will continue to remain in place. Just as with commercial real estate and offices being in a massive depression, so too with the church buildings. Many businesses are not returning to their offices anymore because they have now converted their homes into adequate workspaces, so this saves money for the business to not pay rent and additional extremities, but leaves the landlords and the banks holding the bag.
Considering the economic data and news we have been reporting on, the inevitable atomic meltdown in the markets will cause the closure of thousands upon thousands of these buildings, including many of their private schools, as the owners will not be able to pay the rent and expensive fees as membership drops from the congregants going broke. Because of what “they” (the politicians, bankers, high-level religious authorities, big pharma, big ag, big tech, etc.) are doing with the shutdowns, it forced people to not congregate in businesses, public venues, and churches. This forced the masses in their homes while creating a mass exodus from the cities, one of these reasons for such high prices in the housing market and such high demand on building materials. Because of this, when the time is right, the housing market will crash when the rug is swiftly yanked out from under the feet of the masses – leading untold millions in unpayable debt and effectively rendered homeless, leading to the subsequent decline in church membership. Because of this, the Federal Reserve and other central banks will buy up all the debt as they have been doing (which we have noted various times), truly becoming the buyer and lender of last resort owning it all.
Knowing this, the manufactured plan is to then resell and loan people’s houses back to them. But as we have been reporting on, the wave of the future is the smart cities. Well, if the broke masses cannot afford their bills and pay their debts, the “caring” government will swoop in, and will force people back to these congregated settings that they regulate and control. Same with the church buildings. Predominantly, all that will be left are the “gigachurches,” Joel Osteen’s football stadium for example. I say this because a key component to the coming antichrist system of obedience and control is worship: he will demand worship of himself proclaiming he is God. But in order to mitigate and authorize such control you cannot have small networks of underground churches and millions of church buildings: the playing field will be leveled, and now the government through the IRS and other agencies can more properly subjugate the smaller ones effectively getting rid of them, or transforming them specifically to what the government wishes to regulate them as.
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So what is the solution for the average schmuck? Sell now before the crash and buy something cheap and (hopefully) off grid that can be paid in full?