Re-REITs

Dennis Kucinich (D-OH), who I usually regard as (to put it politely) “way out there”, has actually hit on something. The former youngest-ever mayor of a major U.S. city – Cleveland (who was almost impeached for his gross mismanagement of the city government) and former Presidential candidate, has found and made public a problem with the New York financial community’s more sophisticated rapists … again.


Apparently those New York boys (and girls) are at it once more. In order to maintain their obscene bonuses, they’ve invented yet another financial instrument which steps outside the bounds of common sense.

Welcome to the world of Re-REITs. A REIT is a Real Estate Investment Trust. An investment instrument that played a major role in the financial disaster we’ve seen over the last year. Few people actually understand the inner workings of a REIT, although many invested in them. A Re-REIT is something that is likely totally incomprehensible to us mortal humans.

Kucinich has pointed out these new instruments are filled with bad real estate loans (most likely mortgages … again) that have already had problems in collections. They are also designed to step outside of the regulations intended to stop such abuses and help maintain the Wall Street guy’s homes in the Hamptons.

What little I can find on the web seems to confirm these financial land mines exist and are being sold. Kucinich seems to be on target with this one.

The Ohio Congressman has asked the SEC to look into these questionable instruments. He has been told the SEC can’t do anything, since Re-REITs aren’t regulated. A Catch-22 if there ever was one.

The Bush administration sinned by unofficially confirming to Wall Street that they would ignore existing regulations in order to allow their buddies in the New York financial community to sell those complex and ultimately worthless financial instruments. This allowed them to become very, very rich, at the expense of the rest of us. The Obama administration, which to my knowledge is not maintaining the Bush Administration policy of coziness with the people who destroyed the value of our 401(k)s, is not acting on this problem and we may just have another round of financial disaster once again. This of course, will allow the wizards of Wall Street to become even richer, while more people lose their homes and the suicide rate climbs ever higher.

The current administration needs to put ankle bracelets on these guys and make sure they behave themselves. Apparently the financial rewards for the rape and murder of the average American’s dream of a comfortable retirement and a home of their own are just too great to ignore. Maybe the technology exists to have a chip implanted in these guy’s heads that will give them a conscience (Naw .. who am I kidding? They'd find a way to defeat such a thing if it existed.).

I know President Obama and his team have a lot on their plate … Health care, two wars, and lots of other things. However, this is really important guys. I suggest you look into this pronto before we all go down the tubes.

The Wall Street rapists are peddling a giant Ponzi scheme that will make Madoff look like a rank amateur and they are going to walk away scot free if something isn’t done. I urge the administration and Congress to act on this problem pronto. Defy the lobbyists and arm twisters and stand up for the people who elected you and even those who didn’t. You owe us that much.

We don't need Yogi Berra's "daja-vu all over again".

Martin