By Staff, Glenn Beck
September 1, 2022
A new Bank of America policy designed to help certain Americans own homes hints that U.S. financial leaders have learned NOTHING from the 2008 crash. Carol Roth, ‘recovering investment banker’ and author of ‘The War On Small Business,’ joins Glenn to detail how policies like this one not only put our economy at risk of another financial crash but could wipe out the middle class as well. Plus, Roth and Glenn discuss signs that China — thanks to its bursting property bubble — is heading towards financial DEPRESSION…
TranscriptBelow is a rush transcript that may contain errors
We have Carol Roth joining us now, the author of the war on small business. Former — as she likes to say, recovering investment banker. And I want to get her on today, and ask her, what this means. This is according to the Wall Street Journal. The real estate giant in China has said, China’s property market has slid into severe depression.
Hi, Carol, that sounds scary.
KENNEDY: Hi, Glenn. Happy September. What a great way to kick off the last four months of the year, with a big tee pregnancy in China.
GLENN: Right. Right. (?) what does it mean?
KENNEDY: So China is basically a giant mess. Obviously, outside of their demographic issues. Outside of the fact that they’re not really an emerging market. And that’s putting pressure on their manufacturing. They have sort of the confluence of things going on. The covid disruptions. They have heat and water power issues, that are basically rationing energy. They have youth unemployment, at 20 percent. And then they have this property bubble that has bursted. So basically China did something similar to what we did. It was a communist version of what we did here leading up to the great recession, financial crisis, where they just plowed a bunch of cheap money into creating lots of and lots of real estate.
GLENN: Like ghost cities. Not lots of real estate. Whole cities that had no one in them.
KENNEDY: Yeah. That literally in the middle of nowhere, that no one wanted to live in. And then the prices just started to get out of control. One of the things that are a little bit different — well, there are a lot of things different about China. One of those things is that housing is about 70 percent of household wealth. People that have money, that the middle class, they don’t trust the stock market. Which they should not. And over 90 percent of households in China actually own their residence. So that compares to about 65 percent of the United States. So a huge, huge alternate of the wealth of the middle class is tied up. Within real estate. And the property has gotten crazy. Like in the major cities, it’s about 50 times the average income, in a — in a crazy place in New York, it’s about ten times the average income. So you can see that that has really gotten completely out of control. And we all knew that it was unsustainable. It was just sort of a question of when. Chinese policy and then all these other events kind of came together at the same time, and now like we suffered through 20 years ago, they are going to have to endure the same thing, but, you know, with a different tenure because it’s a communist country. China owns the bank, they have — the whole middle class is sort of involved, and their wealth is tied up in this. So this is a major issue for the Chinese economy.
GLENN: I will tell you, that this should strike everyone as more than a little odd. You know, it’s not odd for us to see protests in front of banks.
KENNEDY: Yeah.
GLENN: In China, that is akin to protesting the Communist Party. They’ve rolled in with tanks and soldiers. And people are still protesting. That shows how unhappy people are, with what is going on.
Because in China, as I understand it, please correct me if I’m wrong. Here, we go out, find a house, then we go to a bank. In China, you go to a bank, you get a loan, you start paying on that loan. And then you go to a builder, and it might take five years. But you’re paying on that. And what happened is, these builders (?) paying on this loan, and they, had a? Lose their money.
KENNEDY: Yeah. There’s actually reports of people living in unfinished homes, so as you mentioned the middle class in China, they’ve started to band together, and they’re basically saying, we’re not paying our mortgages anymore. And you have to remember, that China has implemented their social credit system. And one of the dings for social credits is not paying your debts. Which your mortgage would obviously fall into. So the fact that they’re willing to stand up against the Communist Party. Against the social credit pushback, just goes to show, as you said, just what a complete disaster this is for the Chinese people. And the governments.
GLENN: So President Xi, he is elected one more time. I think it’s in November, isn’t it?
KENNEDY: Mid-October. October 16th.
GLENN: So he’s running for reelection, and he did change the Constitution that he could be dictator for life, but only after this election. When Pelosi went out, the word is from people that I know in China, that are high up in — in the banking world, that do business in banking over there, that they’ve been watching their press very closely. Because there’s a — there’s half of China, and the leadership. They don’t want Xi.
And so some of the reports, that came out, when he — when — when Pelosi was going over, where they said, he’s going to shoot that plane out of the sky. They made all of these — you know, of these demands or expectations of Xi, knowing he couldn’t do it, because humiliation is one of the worst things — weakness is horrible in China. So they set him up to be weak. How does this play in his election?
KENNEDY: Well, you know, we would assume, that there would be fair elections. Obviously, that’s in question, even in the United States. It certainly is not the case in communist China. And so I think that, you know, being entrenched in the party, even though there is pushback. I think it would be a giant surprise, if he wasn’t elected again. And I do think that censorship has played a big issue, in this. You know, part of the reason, I’ve been told that they had these covid lockdowns, is because they’re trying to control information — not let people talk to each other. Not let people in the country, to let the real tenure of what is going on out into the broader population. So there are a lot of people in China, who even though they may be upset about this one particular thing, don’t really have a scope on the real story, and who knows what they’re being told.
GLENN: That’s unbelievable. This story leads me to something. Bank of America has just started a policy that sounds very familiar, except race is involved now. Zero down payment, for mortgages for first time buyers. And I believe this is minorities. To help minorities — black and Hispanics grow ownership of homes.
Zero down payment. Zero closing costs. So just come on in. It’s like renting a house. Isn’t this what caused 2008?
KENNEDY: You know, I know that history always repeats itself. And human beings have a hard time learning from the past. But really, this wasn’t that long ago. You would think there would be some grace period. Where we would go, okay. This probably isn’t a good thing to do.
And it’s really frustrating. Because it’s one of those things that sounds very nice on the surface. Oh, we’ll help these underserved communities build wealth. That’s a good thing. We want everybody in this country, to participate in wealth creation opportunities. The last way that you do that, is at a point where we’re having a top in the housing market. The bed is raising rates. We’re heading into a recession. Prices will come down. And then you take somebody, who can’t afford a down payment. And you get them paying on a house, that you know they won’t be able to afford over the long-term. That’s basically stealing equity from them in the long-term, making them very afraid to continue to do that, in the future.
GLENN: This is — this is what they called predatory lending.
And it’s being pushed, I’m sure, by the government. It’s being pushed by these big banks. They’re all in collusion with the great reset. It’s going to impoverish people, even more.
KENNEDY: Yeah. If you want to tie this to the ESG, right? This is part of the — the social initiative, we have to make housing more affordable. But that doesn’t do that. I mean, this creates more fees for banks, at a time when they may be losing fees in origination. Because the fed is raising interest rates. And that’s flowing through the market. You know, it’s not like they’re creating a fund, and saying, we’re going to buy up properties. And we’re going to allow to you rent to loan. There are ways you can do this for underserved communities, that will be fantastic. But zero down mortgage — and, by the way, it’s not like a veteran zero down mortgage, where there’s a strict underwriting process. This is a non-underwritten process. (?) we’ve seen how this has gone awry in college lending. Now they’re bringing it back to the mortgage industry. Once again, because there wasn’t enough damage the first time around.
GLENN: O they want to make sure that there’s nothing (?) left for people to learn.
KENNEDY: Or. Or maybe they want the correspond to be able to have this, at the expense of the (?) middle class. And they’ll just forgive those loans. Like, you know, they’re on the kick of forgiving every other loan. There’s a buffet of possible, fantastic —
GLENN: And none of them are good. None of them are honest. None of them are free market-based. None of them are ethical. None of them.
KENNEDY: No. It’s picking winners and losers. It’s letting the government and these big entities play venture capitalists in a way that she shouldn’t.
And it’s not teaching sort of the discipline, so that we allow for these broad creation opportunities. Which is the future of prosperity. Because we know at the end of the day, big business. Big government. Big special interest, doesn’t want that. They want to gut the middle and working class. They want to consolidate power. So every one of these (?) ultimately ties back to that in some way.
GLENN: Energy prices. Goldman Sachs is now saying, just the energy prices will push the UK inflation to 22 percent.
That is a near post-war record of 22 percent inflation.
That’s — I mean, we — let me get another story here. Because I read here, cost of living. Shoppers despair, at cost of staple foods, soar up to 20 percent in a year.
That’s remarkable! I mean, we’re all going to see this.
And it’s — a lot of this is coming from this craziness of ESG with the energy.
KENNEDY: Absolutely. This is entirely self-inflicted. That’s the most frustrating part of this. It could have been avoided. But it was the liberty by policy. And who is going to pair the brunt of it. It is the small businesses. It is the million dollars and working class. It is the core to people, who really can’t have this happen. I’ve seen this all over Twitter. I’ve been sharing all the stories coming out of Europe and the UK in particular. With small businesses who are getting their energy bills. And something like 10,000 euros, or, you know, like multiple tens of thousands of euros. And it’s just completely non-sustainable. I mean, obviously nobody is going to be able to operate under those types of conditions. It’s going to be a really ugly winter.
And as we’re talking about, not learning. This should be a giant neon sign to say, okay. They made a mistake. Let’s (?) they just passed the biggest climates bill. And are telling about what a great deal it is. As if there’s not more pain and suffering on the other side.
GLENN: I know. I will tell you, Marx said for a Communist Revolution to happen, you need to have the working class rise up, and then they could close it down.
And that — if you can’t get them naturally, you have to create the conditions for that. And everything, including the IRS, all of these things are designed to abrupt the middle and lower class. (?) to wipe them out entirely. And when that happens, you will have revolution on the street. It is — yeah. Go ahead.
KENNEDY: You will own nothing. And you will not be happy. Because as we’ve seen throughout history, those who do not own anything, are not the ones who are happy.
GLENN: Yes. Thank you very much, Carol. Appreciate it.
KENNEDY: Another uplifting segment, Glenn.
GLENN: One of these days it will turn around. One of these days. Yeah. Thank you so much. I appreciate it.
This story originally appeared in Glenn Beck
iHeart
Live Radio
Podcasts
Artist Radio
Genres
News
Features
Events
Contests
Photos
About
Advertise
Blog
Brand Guidelines
Contest Guidelines
Subscription Offers
Jobs
Automotive
Home
Mobile
Wearables
© 2022 iHeartMedia, Inc.
About Author
