Wednesday, April 2, 2008

The Mortgage Money Pipeline into Wall Street is Down, Permanently

For the past 20 years or so, a 48 inch "pipeline" of money in the form of fees for underwrting and trading mortgages has been coming into the New York City economy, via Wall Street, at the expense of the rest of the world. That "pipeline" has been permanently shut down. The ill effects of the "pipelines" implosion will begin to be felt about now by the local economy, and will get much worse over the next couple of years. For New York's better looking but slightly trampier step daughter, South Florida Real Estate, this could hardly be worse. To borrow a phrase from an unknown the "FIRE" (Finance, Insurance, and Real Estate) economy that is South Florida will be feel like a bucket of water was thrown on its last smolduring flame.

New York has a whopper of a Financial Services economy, and all financial roads really do lead either to London, New York, Singapore or Hong Kong. These cities receive their patronage from the hinterlands of the empire and have for decades. Maybe the decline in interest rates will be enough that the banks, brokerages, and hedge funds come up with a new set of products to take the place of the cash that once poured out of the mortgage "pipeline" - but I would not bet my hard earned money on it.

The funny thing is that now we have a moron, socialist Congressman from Connecticut, whose economy entirely depends on New York City and Wall Street proposing that the solution to higher energy prices is to remove speculative investors from the energy futures markets.

"I am from the Government and I am here to help you." - LOL!!!

Yours for a better world,

Mentatt (at) yahoo (d0t) com

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