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As I try to organize my thoughts on who might be the subject of this missive, I am debating whether to call this Part 1 for unfortunately obvious reasons. I make up titles and then try to create appropriate text.

Is the CIA and the Bush Administration appropriate for this title? Yes, if Ron Suskind is accurate in his new book The Way of the World, which accuses the

White House of ordering the CIA to forge a letter to tie together Saddam Hussein and the attacks of September 11th, 2001. Fire them, impeach them, jail them, do anything possible to them short of torture…..Enough on that for now, this writer hopes for more information to come to light quickly to snuff these charges out or confirm them, in which case it will be brought front and center to not only US but to world politics.

Could I be talking about Freddie Mac CEO Richard F. Syron who ignored clear and accurate warnings in 2004 that Freddie Mac was buying loans that would not only harm Freddie Mac, but would also “harm the country”?

Yes and decision makers and risk managers at Fannie Mae, most Wall Street firms, most large Banks, rating agencies like Moody’s and Standard and Poor, and insurers like MBIA and AMBAC and especially Alan Greenspan of the Federal Reserve, someone I have historically admired. I must also mention that some, not all, individual loan salesmen, most often grouped into the mortgage broker category, who indeed were guilty of too many individual cases of inappropriate lending that harmed individuals. What must be understood is that mortgage brokers are actually the smallest part of this homeland security risk but get the most negative press.

They are an easier target for the MSM which likes to film individual victims of predatory and inappropriate lending but do not seem to understand or be able to explain the complexities of our important housing finance system requiring the services and judgment and capital of the firms I named above. In partial defense of the MSM, most of us know what a mortgage broker does but have no clue what part of the complex delivery system those other firms play.

So my point is, there are real culprits who have harmed national security because they are higher up in the chain of shame and whose combined actions effectively conspired to truly harm the economic security of the United States. Economic security is a necessary precursor to military and energy security.

This calamity began when our internationally admired housing industry lost it’s previous boring, sometimes overly cautious rules based rationality and resorted to an uncontrolled more computer and finance driven growth strategy that had it’s origins with Countrywide Mortgage in the early 1990s. By then the US started to leave behind its history of narrow market interest ranges and had endured about a dozen years of interest rate roller coasters rides with short term rates as high as 21% and mortgage rates as high as 18% and everywhere in between. During these boom and bust mortgage refinancing cycles in the industry, computers and clever finance strategies were created while legitimate housing demand fueled home price increases in many parts of the country.

During the late 1990s and into 2002 or so interest rates had been low for so long, and most homeowners had refinanced their mortgage, some many times, and rates remained historically low, and the industry was once again massively overstaffed. That is when the “advances,” begun in the last decade, kicked in to keep this beast fed, by in essence creating buyers/borrowers out of those who would have been better off remaining renters, and by allowing owners to buy and finance a bigger house than they could afford, and encouraging owners to take cash out of their artificially increased equity, due directly to the overbuying caused directly by the fog a mirror loan underwriting Freddie Mac, Fannie Mae and most Wall Street firms and most large Banks facilitated and others facilitated. That game is more than over.

This today from the e-Daily Shirmeyer Rate Market Report, an interest rate strategy service for mortgage originators:

“The pendulum has swung 180 degrees on risk in the past year. For five years the greed of investors and Wall Street took risk and flushed it down the drain, and totally ruined the mortgage business. Now, in the massive reaction the pendulum has moved way too far to the right (pun intended), and investors and the agencies are trying to remove all risk with fee charges and credit scoring that is too tight. I still have a difficult time with what The Street foisted on the public and investors—but investors deserved what they got being too greedy and buying sub primes, Alt A’s, 80/20’s, etc, without having much of a clue as to what they were getting. Rating agencies also had no clue. Under it all there was the universal assumption that home values would continue to increase 15% to 20% a year ad infinitum. How dumb is that?”