January 19, 2009 1:46 PM

Peter Garvin pens poem on mortgage crisis

THE ECONOMY, POLITICIANS AND A RETURN TO GREATNESS

The US economy experienced a record ten year run
Real Estate Brokers, Lenders and Investment Bankers had their fun
Comprised of enormous salaries, bonuses and cash
At ridiculous levels that could not last.

In the middle of 2006 it began to change
Real estate property values became rearranged
By reversing the trend of incredible appreciation
Slower sales, declining vales and then depreciation.

And the sub-prime market began its demise
While bankers, investors and politicians were so surprised
At the overall numbers of late payments and default
Which had been rapidly growing after years of assault,

On the mortgage and banking system due to loans that would never be repaid
Underwriting guidelines, investor requirements and mortgages that would ultimately fade
And revert to products that actually analyzed the ability and willingness to pay
Back to the more traditional methods to analyze risk and many would say,

That politicians, lenders, investment bankers, REALTORS and borrowers together
Had formed the perfect storm that would cause stormy weather
For years to come, a national debt load which would be difficult to carry
That the Washington bureaucrats just could not ignore or bury,

The Wall Street guru's had repackaged and sold
These loans to foreign investors seeking real estate gold
In America's market, always a safe haven to invest
China, Japan and Great Britain found the USA the best,

To continually purchase securities backed by mortgage loans
Year after year the volume piled up and the more they owned
Both subprime and prime loans were part of their investment desire
To get the yields, security and liquidity that they would require.

But then the repayment on these loans became unclear
Fannie and Freddie financial issues created more fear
Our foreign investors began to demand,
That Washington address the problems at hand.

Political involvement had gone back many years
To Carter, Clinton and the Fannie and Freddie fears
Where disastrous lending policies had been born
Then add participation of a group called ACORN.

Loans had been securitized and delivered into pools
And then packaged and sold to investors who drooled
From Europe and Asia they continually invested
None of the investments were ever contested.

As values declined and foreclosures mounted
The failure of Lenders were just being counted
Century United, Countrywide and American Home were the first to fail
Indy Mac, Wamu and Wachovia were the next to bail.

But all of a sudden a timely miracle appeared
More cash at the problem, seven hundred billion I hear
Would solve the dilemma at least for now
Pelosi, Dodd and Frank would tell us how,

The US government could reduce our mounting financial woes
And how this infusion would fix our negative cash flow
Barrack agreed that this needed to be done
And in very short time he would be the one,

To set the pathway for our country to recover
New ways in our economy that he would uncover
To once again prosper and create enjoyment
To add new jobs and reduce unemployment.

But was this really the way to salvation
More government spending...what a revelation
Hadn't all this been tried in the past?
As a solution, a failure and it really couldn't last.

And what about Pelosi, Dodd and Mr. Frank
Weren't they the PROBLEM with many of the banks?
That were forced to make their questionable loans
Through Fannie and Freddie on subprime buyer's homes?

And now we see the same names in the mainstream press
Slapping themselves on the back and being so impressed
With their political prowess in making the economy look so dire
That immediate steps had to be taken and that would require,

Some seven hundred billion forced to the financial system and banks
Before the whole country would be in despair and in the tank
But then AIG, The Investment Bankers and the Big 3 Auto Makers
Also needed help and for new cash investment...they were surely takers.

But now what has happened to the seven hundred billion and why no solutions
With all of the political maneuvering and huge cash infusions
To steer our country back on path
Pelosi, Dodd and Frank are quite the laugh.

The Institutions have taken the cash and used it for other needs
Not to fix the problem but to acquire new banks and develop leads
For new areas of profit and a chance to earn
Revenue to offset their losses and their slow cash burn.

So what has happened to our country, economy and ability to pay?
Our liabilities of trillions of dollars which mount every day
To levels that will ultimately become so burdensome and heavy
That generations to come will be saddled with this levy.

The answer is grim and the solution is worse
In 2009 the bubble will probably burst
At some point we will not be able to repay
Our debts to the foreign nations and they will say,

The USA is no longer the place to invest
Our foreign partners will quickly suggest
And require their cash be immediately paid back
But the USA will have lost its knack,

To cover these investments and pay back the loans
To our debtor nations who invested in homes
Truly new territory for our country to feel,
The inability to repay...a situation quite real.

But the USA cannot die and retire
Our people are strong and have the desire
To continually produce, prosper and excel
We will surely survive and ultimately propel,

Our economy to get back on track
Because as Americans we will never lack
The desire to improve our national condition
And send this recession into remission.

This will only prove once again
To all of us that this has been
A debacle seeded in politicians and DC
The solution, the private sector as we all will see.

The economy will prosper once again
Cycles are exactly that and our business can
Produce and grow this nation's GDP,
Just a little bit longer...you will see.

So have no fear
We soon will hear
The sounds of business getting cranked
America will return, yes even the banks.

Our nation and people will always prevail
And the foreign investors will quickly hale
The return of the USA to be the dominant force
The world's safe haven, we knew this of course

Peter Garvin is president of Garvin Enterprises. He can be reached at pggarvin@msn.com

Posted by John Rebchook at 1:46 PM | Comments (5)