Was it George or the big banks

[Keukasmallies]

that caused the economic meltdown? For months we were told by our Dear Leader and his minions that the Bush Administration policies were the fount of all economic evil. Now, we're being told that the Wall-Street-mega-bank cabal is the true source of the problem, and that the precipitating event was institutional greed. The only thing we can be sure of, according to the 'mocrats, is that none of the fear of economic excess germinated from fear of a 'mocrat win in 2008, nor the spending practices that followed.

 

Could it be that the current administration is practicing situational honesty in an attempt to curry favor in November? Was George Bush the puppetmaster behind the economic evil empire, feigning the doofus persona while manipulating the world economy? Did Laura Bush's economic acumen corrupt the banking industry? Is Robert Gibbs a Tea Party plant? Is Rohm Emanuel ...Oh, never mind.

[Nanker]

From the penultimate bastion of the Vast Right Wing Conspiracy.

According to Federal Election Commission figures compiled by the Center for Responsive Politics, Goldman Sachs' political action committee and individual contributors who listed the company as their employer donated $994,795 during 2007 and 2008 to Obama's presidential campaign, the second-highest contribution from a company PAC and company employees.

Only the PAC and employees of the University of California, which donated more than $1.5 million, topped Goldman Sachs.

 

Of course he'll give the money back. But why does he need to be prodded into doing so?

[DC Tom]

that caused the economic meltdown? For months we were told by our Dear Leader and his minions that the Bush Administration policies were the fount of all economic evil. Now, we're being told that the Wall-Street-mega-bank cabal is the true source of the problem, and that the precipitating event was institutional greed. The only thing we can be sure of, according to the 'mocrats, is that none of the fear of economic excess germinated from fear of a 'mocrat win in 2008, nor the spending practices that followed.

 

Could it be that the current administration is practicing situational honesty in an attempt to curry favor in November? Was George Bush the puppetmaster behind the economic evil empire, feigning the doofus persona while manipulating the world economy? Did Laura Bush's economic acumen corrupt the banking industry? Is Robert Gibbs a Tea Party plant? Is Rohm Emanuel ...Oh, never mind.

 

It was people not paying their mortgages.

[Gene Frenkle]

It was an under-regulated housing market, no?

[Joe Miner]

It was an under-regulated housing market, no?

 

no

[IDBillzFan]

It was people not paying their mortgages.

I thought it was banks giving mortgages to people who couldn't afford their mortgages.

[Magox]

that caused the economic meltdown? For months we were told by our Dear Leader and his minions that the Bush Administration policies were the fount of all economic evil. Now, we're being told that the Wall-Street-mega-bank cabal is the true source of the problem, and that the precipitating event was institutional greed. The only thing we can be sure of, according to the 'mocrats, is that none of the fear of economic excess germinated from fear of a 'mocrat win in 2008, nor the spending practices that followed.

 

Could it be that the current administration is practicing situational honesty in an attempt to curry favor in November? Was George Bush the puppetmaster behind the economic evil empire, feigning the doofus persona while manipulating the world economy? Did Laura Bush's economic acumen corrupt the banking industry? Is Robert Gibbs a Tea Party plant? Is Rohm Emanuel ...Oh, never mind.

1) Started with the creation of Fannie and Freddie back in the 30's.

2) Creation of the CRA under Carter

3) Repeal of GS

4) Renewed push of CRA in 99

5) Wall Street reckless behavior with non regulated OTC subprime mortgage derivatives.

6) Which in turn led to an overbundance of supply of dollars for mortgages to people who shouldn't of been receiving loans in the first place.

7) Weak mortgage loan underwriting capital requirements

8) Ratings agencies did a god awful job of rating mortage bonds, giving AAA ratings on crap that should of been listed as Junk ratings, which led investors into believing that they were investing in top quality rated bonds, which of course led to an even higher infusion of capital for mortgage lending, that added more fuel to the housing bubble.

9) Unscrupulous behavior from the mortgage industry

10) Federal Reserve Dovish interest rate policies. "too low for too long" interest rates.

11) Speculators pushing up home prices

12) Treasury and Federal Reserves inability to be able to detect the severity of the bubble.

 

There's more but that's a start

[Gene Frenkle]

no

I thought that the banks gave mortgages to high-risk people who were unlikely to be able to handle the payments and that the foreclosure of their homes led to a decrease in the value of the housing market as a whole.

[Gene Frenkle]

1) Started with the creation of Fannie and Freddie back in the 30's.

2) Creation of the CRA under Carter

3) Repeal of GS

4) Renewed push of CRA in 99

5) Wall Street reckless behavior with non regulated OTC subprime mortgage derivatives.

6) Which in turn led to an overbundance of supply of dollars for mortgages to people who shouldn't of been receiving loans in the first place.

7) Weak mortgage loan underwriting capital requirements

8) Ratings agencies did a god awful job of rating mortage bonds, giving AAA ratings on crap that should of been listed as Junk ratings, which led investors into believing that they were investing in top quality rated bonds, which of course led to an even higher infusion of capital for mortgage lending, that added more fuel to the housing bubble.

9) Unscrupulous behavior from the mortgage industry

10) Federal Reserve Dovish interest rate policies. "too low for too long" interest rates.

11) Speculators pushing up home prices

12) Treasury and Federal Reserves inability to be able to detect the severity of the bubble.

 

There's more but that's a start

Or that...

[DC Tom]

I thought it was banks giving mortgages to people who couldn't afford their mortgages.

 

And spiraling health care costs causing people to not pay the unaffordable mortgages they were conned into buying.

 

And oil, don't forget oil...that's gotta be in there somehow.

[erynthered]

Its black peoples fault.

 

<WBF>

[GG]

1) Started with the creation of Fannie and Freddie back in the 30's.

2) Creation of the CRA under Carter

3) Repeal of GS

4) Renewed push of CRA in 99

5) Wall Street reckless behavior with non regulated OTC subprime mortgage derivatives.

6) Which in turn led to an overbundance of supply of dollars for mortgages to people who shouldn't of been receiving loans in the first place.

7) Weak mortgage loan underwriting capital requirements

8) Ratings agencies did a god awful job of rating mortage bonds, giving AAA ratings on crap that should of been listed as Junk ratings, which led investors into believing that they were investing in top quality rated bonds, which of course led to an even higher infusion of capital for mortgage lending, that added more fuel to the housing bubble.

9) Unscrupulous behavior from the mortgage industry

10) Federal Reserve Dovish interest rate policies. "too low for too long" interest rates.

11) Speculators pushing up home prices

12) Treasury and Federal Reserves inability to be able to detect the severity of the bubble.

 

There's more but that's a start

 

Actually, it was

 

1) Lou Ranieri creating the securitization market in '70s

2) Black & Scholes pricing model gaining wide acceptability in the market in the '80s

3) Bank of International Settlements moving to a uniform capital standard for all financial companies in the '80s

4) JP Morgan devising Value at Risk credit modeling in '80s/90s

5) Rise of syndicated loan market in '80s

6) Regulators allowing the use of credit ratings as a substitute for judging financials' credit risk and capital in early '90s

7) Invention of the credit default swap in the '90s

8) Ability of Wall Street firms to tap repo market for funding

9) Establishment of accounting rules that allowed firms to net their CDS exposure, without a forward look to the end of the swap chain

10) Regulators signing off on ratings, even though the risk and default profiles of asset classes were totally different

11) Creation of collateralized debt obligations

12) Everyone believing that CDOs carried the same risk profile as underlying mortgages

13) Bank of International Settlements and other regulators not separating credit risk from liquidity risk in establishing and regulating capital standards.

14) No one understanding the balance sheet mess, because the troubles were hidden in the netting arrangements.

 

Everything you list above is the popular theory that needs to find villains in the narrative.

[Magox]

Everything you list above is the popular theory that needs to find villains in the narrative.

Ya, OK

[IDBillzFan]

And spiraling health care costs causing people to not pay the unaffordable mortgages they were conned into buying.

 

And oil, don't forget oil...that's gotta be in there somehow.

I keep waiting for Alan Grayson to introduce the Icelandic Volcanic Ash Bill, designed to provide financial help for those who have been financially impacted by the ash, and to further punish and regulate any and all volcanic activity deemed too big to blow.

[DC Tom]

I keep waiting for Alan Grayson to introduce the Icelandic Volcanic Ash Bill, designed to provide financial help for those who have been financially impacted by the ash, and to further punish and regulate any and all volcanic activity deemed too big to blow.

 

I thought that was already introduced...?

[GG]

Ya, OK

 

To paraphrase today's WSJ editorial, if the culprits were the ones you identified, there would be an easier answer in how the GLOBAL financial system came undone by residential mortgage troubles in five US states. (Jenkins said "four" but it's actually five - AZ, CA, FL, MI, NV)

 

I should add another important factor - fraudulent reporting of mortgage quality by FanFred had a huge role in stoking the fire.

[IDBillzFan]

I thought that was already introduced...?

That wasn't as far reaching as The Alan Grayson Project.

 

I should add another important factor - fraudulent reporting of mortgage quality by FanFred had a huge role in stoking the fire.

Did I hear correctly that the bank reform bill does not include Fannie and Freddie?

[GG]

Did I hear correctly that the bank reform bill does not include Fannie and Freddie?

 

I think there's a provision along the lines of "Fannie Freddie, you're doing a heck of a job."

 

Look in Section 12561, Paragraph 2071456

[Magox]

To paraphrase today's WSJ editorial, if the culprits were the ones you identified, there would be an easier answer in how the GLOBAL financial system came undone by residential mortgage troubles in five US states. (Jenkins said "four" but it's actually five - AZ, CA, FL, MI, NV)

 

I should add another important factor - fraudulent reporting of mortgage quality by FanFred had a huge role in stoking the fire.

Weak bank underwriting practices coupled with government pressure unto the GSE's for lower income individuals is at the heart of the problem. There is no denying that, Period!

 

The securitization markets, the lack of regulation in certain sectors of it and the ratings agencies is another part of the puzzle.

 

Lack of regulation in the mortgage industry was another part of the problem.

 

Interest rate policies was another issue.

 

I don't see how any informed person can rationally argue these factors. You asked, how is it that "the GLOBAL financial system came undone by residential mortgage troubles in five US states"? Isn't it obvious?

 

Maybe because the top 25 banks in the US held over $180 TRILLION in Derivatives. Many of those in residential mortgages, some of the bonds were leveraged to over a 30/1 ratio. All it takes is a 10% decline in some of these assets to unhinge the entire global economy. Once you enter into this stage of the game, it's a matter of contagion and collateral damage.

[DC Tom]

Weak bank underwriting practices coupled with government pressure unto the GSE's for lower income individuals is at the heart of the problem. There is no denying that, Period!

 

The securitization markets, the lack of regulation in certain sectors of it and the ratings agencies is another part of the puzzle.

 

Lack of regulation in the mortgage industry was another part of the problem.

 

Interest rate policies was another issue.

 

I don't see how any informed person can rationally argue these factors. You asked, how is it that "the GLOBAL financial system came undone by residential mortgage troubles in five US states"? Isn't it obvious?

 

Maybe because the top 25 banks in the US held over $180 TRILLION in Derivatives. Many of those in residential mortgages, some of the bonds were leveraged to over a 30/1 ratio. All it takes is a 10% decline in some of these assets to unhinge the entire global economy. Once you enter into this stage of the game, it's a matter of contagion and collateral damage.

 

All your pseudo-scientific babble is nonsense; there's serious holes in scientific study of economics, and you can't prove any of it. It's time all you heretics abandon your nonsense theories and embraced the one true economic principle: intelligent finance. The Flying Spaghetti Monster caused the economic collapse, With His Noodly Appendage.