Introduction
Your host for this seminar is Catherine Austin Fitts, president of Solari, Inc. and successful Wall Street and Washington DC investment banker. For an overview see the Seminar Description and course Outline below. For a quick rundown on how our audio seminars are conducted, see How Solari Audio Seminars Work. You are encouraged to do the Recommended Reading before or after listening to this audio seminar, and, as time allows, to enhance your understanding even further via the Additional Links listed below. To listen to the seminar, click on the Download Audio Recording link. Most seminars close with a brief invocation.

This audio seminar was recorded live on March 10 and 17, 2005.

"We have turned our homes into ATM machines."
—Ed Steer

When I was assistant secretary of HUD during Bush I and the lead financial advisor to the Federal Housing Administration under President Clinton, I watched from the position of an insider as the senior leadership of the U.S. financial system began to engineer today’s spectacular housing bubble – in much the same way that they manufactured the stock market bubble of the late 1990s. The result was twofold:

1. When the dot.com and telecom bubbles burst and Enron hit the skids, people all over the world lost their jobs and life savings.
   
2. Still, the economy stayed "afloat" as the housing bubble continued to finance a “first-world” lifestyle far beyond our means, based on debt.

So what’s up ahead for housing? Each of us urgently needs to develop a working model of what has happened and why. We especially need to understand where the housing market stands today in the larger context of Tapeworm Economics. In this seminar, I assist you in identifying the risks and the opportunities that result from this unprecedented situation.

"As long as I can get government subsidies, what do I care if people have education or jobs?"
—Dick Ravitch
Chairman, AFL-CIO Housing Trust
Developer of HUD and Mitchell Lama Housing in NYC

1. Brief Introduction
2. My Home
3. Part I vs Part II of This Seminar
   • History vs Future
   • Macro vs Micro
   • Risks vs Opportunities
4. U.S. Housing and Mortgage Credit – Time and Storylines
   1913–1949
   1950–60
   1980s
   1990s
   2000s
5. Who's Who in Housing Bubble Power Politics?
   Alan Greenspan
   Bob Rubin
   Larry Summers
   Franklin Raines
   Andrew Cuomo
   Nicolas Retsinas
   Stanley Sporkin
   Jerry Hawke
   Pug Winokur
   Charles Rossotti
   Kit Bond
   Mel Martinez
   Nicholas Brady
6. Unanswered Questions and Wild Cards
   • Scenarios: Slow Burn vs Armageddon
   • Missing Money Reinvestment
   • The Case for Fraudulent Inducement
   • The Debt, Drugs, Draft, and Taxes Spiral
   • Who Is In Control Tomorrow?
   • The UnSuppression of Technology
   • Solari
7. Coming Up: Part II Highlights
8. Question & Answer Period
9. Closing or Invocation
   

Outline - Part II

1. Three Scenarios on the Political/Economic Horizon
2. Housing in the Context of the Middle Class Squeeze
   1. Revenues
   2. Taxes
   3. Expenses
   4. Critical Issues
3. Successful Strategies
4. Successful Financial Strategies
5. Tapeworm Traps
6. Bottom Line
7. Opportunities
8. Question & Answer Period
9. Closing or Invocation

Be sure you have heard Part I of this audio seminar before tuning in to Part II. In Part II, I refer to the financial fact sheets on Bill & Alice and Frank & Angie below during the case examples. I hope you also will take a moment to read "Where is the Collateral?" and "So, Where is the Collateral?" by Chris Sanders before tuning in. These articles connect the dots between the trillions of dollars missing from the U.S. Treasury, questionable HUD deals, the "Where is the Money?" litigation (ref.), and the story of how the honest folks were moved out so the mortgage bubble could happen.

General Background

• Navigate the Falling Dollar – a CD/DVD lecture presentation by Catherine Austin Fitts in December 2004
  
  
• The Real Economic Hit Men and Getting Started with Coming Clean – The first two introductory audio seminars in this series provide a useful backdrop for understanding the housing bubble and strategies for navigating it.

History of the Mortgage Bubble

• "The Negative Return on Investment Economy: A Discourse on Americas's Black Budget" by Chris Sanders & Catherine Austin Fitts for the World Affairs Journal, June 2004

Overview

1. "America's Black Budget and Manipulation of Markets"
   Jim Puplava interviews Catherine Austin Fitts, 18 May 2004
   On Financial Sense Radio - Transcript / Real Audio / MP3
   
   
2. "Tapeworm Economics Home Ownership" – Radio Talk Show
   Host Alan Conrad interviews Catherine Austin Fitts
   On radioActive Radio, February 2005
   

Wrassling with The Tapeworm

1. "Where Is the Collateral?" and "So, Where Is the Collateral?" by Chris Sanders, October 2003 and July 2004 respectively -- these articles connect the dots between the missing money, questionable HUD deals, the "Where is the Money?" litigation (ref.), and the story of how the honest folks were moved out so the mortgage bubble could happen.
   
   
2. Fitts Fights Back, Michael Ruppert, From the Wilderness, November 6, 2003 – reports that the Where is the Money? Litigation(ref.) "may uncover massive criminality in the US gov't and in the financial markets."
   

The Internet Hotseat - Holding Tapeworm Leaders Responsible

1. Mel Martinez Hotseat
   
2. Stanley Sporkin Hotseat
   
3. Pug Winokur Hotseat
   
4. Letter to Jerry Hawke
   

How Do You Pump & Dump a Neighborhood?
Or, What Does the Leveraged Buyout of a Neighborhood Look Like?

Narco Dollars for Beginners – audio seminar by Catherine Austin Fitts, October 2001 "Watching Too Much Television" – Tony Soprano HUD Fraud (Video/HBO) The Sopranos Episode 46 4th Season Disc 2 #7 - Brian lays out a way to use bogus real estate deals to con money out of the Federal Department of Housing and Urban Development (HUD) . . . reality or fiction? Map of South Central LA HUD Defaults & Tony Soprano HUD Fraud Photo Each Map is a one-page visual created by Edgewood Technology Services using place-based software. See also: •Map of New Orleans HUD Defaults •Map of Washington DC HUD Defaults

South Central Los Angeles Narco-HUD connection? (click for larger image & narration)

"This Is the Fight of Our Lives" by Bill Moyers – keynote speech for the Inequality Matters Forum New York University, June 3, 2004 "U.S. Households Run Record $342 Billion Deficits Annually" by The Northern Trust Company, Economic Research Dept, October 2004 "Road to Ruin" by Eric Sprott, Sprott Asset Management, January 2005 Regarding the $11 Trillion Deficit in the U.S. government in FY 2004 "The Three Faces of Inflation" by James Puplava, Feb 15, 2005 "The Real Deal about Enron" An Interview with Catherine Austin Fitts by Daniel Armstrong, Feb 2003 (read Part I Only) "My Personal Experience with FHA-HUD" by Catherine Austin Fitts, June 2003 "The Myth of the Rule of Law: The Destruction of Hamilton Securities" by Catherine Austin Fitts, November 2001

Dumping the Mortgage Bubble by Sending the Jobs Abroad

1. The Story of Edgewood Technology Services – or How I Lost $100 Million Discovering Who Makes Money Making Sure the Solari (Popsicle) Index Does Not Go Up
   by Catherine Austin Fitts, July 2002 (Parts I–III)
   
   
2. "Piracy on the Delaware"
   by Catherine Austin Fitts, 20 May 2004
   Introducing Paul Atkinson's Story of How the Bush Boys, Sun Oil, the U.S. Navy, and the Philadelphia Upper Crust Profitably Destroyed a Great Shipbuilding Business and Its Hometown of Chester, PA
   1. Excerpt: "The greatest economic engine of a community is knowledge. What do we know how to build, to grow, to make that is useful? Great business enterprises organize people and tools in a learning environment that creates wealth – the employees, for the investors and for the surrounding community. When you destroy such an enterprise, you also destroy an ecosystem and the rich intellectual capital that gives it vitality and creates wealth and purpose. Destroy such an enterprise and you destroy the primary source of learning and relevancy in the community. Destroy such an enterprise and you destroy a powerful constituency for transparency and accountability in government. Without businesses like Sun Shipbuilding, we will not have communities."
      
      
3. Letter to the Editor of the New York Times regarding prisons
   by Catherine Austin Fitts, March 1999
   

The Missing Money at HUD – Do You Really Own Your Home?

1. "HUD's Financial Woes Continue"
   by Kelly O'Meara, April 18, 2003
   
   
2. Testimony of the HUD Inspector General
   U.S. House of Representatives Government Reform, May 2000
   
   
3. "Treasury Checks and Unbalances"
   by Kelly O'Meara, Insight magazine, April 14, 2004
   The 2003 financial statements mark the seventh year in a row
   that the federal government could not audit, let alone balance,
   its books . . .
   
   
4. 'High Risk' Finance at the Federal Level
   by Kelly O'Meara, Insight magazine, August 21, 2003
   The US Government reports that its financial management systems
   are seriously unreliable...
   
   
5. "Why Is $59 Billion Missing from HUD?"
   by Kelly O'Meara, Insight magazine, November 2000
   
   
6. "Cuomo Leaves HUD in Shambles"
   by Kelly O'Meara, Insight magazine, March 2001
   
   
7. "Inside HUD's Financial Fiasco"
   by Kelly O'Meara, Insight magazine, June 2001
   
   
8. "Wasted Riches"
   by Kelly O'Meara, Insight magazine, October 2001
   

Who Has Access to Your Mortgage Data?

• "Software That Steals: Mortgage Market Unanswered Questions" – Hitting On HUD
  by Catherine Austin Fitts, August 2002
  

Dealing with Fraudulent Inducement

• "The Solari Solution: A Responsible Way to Fund America's State and Local Government Deficits"
  by Catherine Austin Fitts, Scoop Media, May 2003
  

Positive Solutions

1. Coming Clean! – 21 opportunities for building a beautiful world
2. Getting Started with Coming Clean – a Solari Audio Seminar
3. Understanding the Popsicle Index – a brief description and links
4. An Introduction to Solari Investor Circles – a brief description and links
5. Solari: Playing to Win – a slide presentation introducing Solari Investor Circles
6. Shifting from Tapeworm to Solari Economics – (also available in pdf without the animation) a chart mapping opportunities to shift the Cost of Capital to benefit healthy economics while shrinking the Tapeworm
7. Solari Venture Fund and Data Bank – a brief description and links re: local investment advisor and mapping local money flows
   

Web sites and Catalogs Offering Useful Ideas

1. Hado Institute – messages from water, water crystal research
2. Real Goods and Solar Living Institute – for ecologically sustainable homes and workplaces
3. Lehmans.com – catalog for sustainable home and family farm living
4. Home Power Magazine – home-scale renewable energy and sustainable living solutions
5. Simple Living – tools, examples, and contacts for conscious, simple, healthy, and restorative living
6. Co-Housing – international resource web site for co-housing
7. Ecovillage Network of the Americas (English & Spanish) – towards an ecologically, economically, and culturally sustainable future.

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