Did Bush cause 2008 the Financial Crisis?

[g5000]

and that was true genius; the derivitive market didnt collapse and cause the housing bubble to burst; house prices did. no; or very few; derivitives were called to be paid out


the problem was always the idea of giving trilion in taxpayer-backed mortgages to people that couldnt pay them. the derivitives sprung from bankers trying to MITIGATE THE RISK of that mostly liberal policiy

Derivatives were the central cause of the crash. Without derivatives, the crisis would have been several factors of ten less dire. So much so, there may not have even been a crash if they did not exist.

good. prove that

See Lehman Brothers. See AIG. See Bear Stearns. See RBC. See Northern Rock. See Bank of Ireland and Allied Irish Bank. See the entire nation of Iceland. See Spain.

 

[bedowin62]

Derivatives were the central cause of the crash. Without derivatives, the crisis would have been several factors of ten less dire. So much so, there may not have even been a crash if they did not exist.

good. prove that

See Lehman Brothers. See AIG. See Bear Stearns. See RBC. See Northern Rock. See Bank of Ireland. See the entire nation of Iceland. See Spain.

i said prove that; not make vagueries

what derivitives were "called"?

 

[g5000]

good. prove that

See Lehman Brothers. See AIG. See Bear Stearns. See RBC. See Northern Rock. See Bank of Ireland. See the entire nation of Iceland. See Spain.

i said prove that; not make vagueries

what derivitives were "called"?

Dude, I spent years proving this shit over and over and over to the ignorant. And there are mountains of books on the subject. I have neither the time nor the inclination to do it again.

Why do you think AIG failed? They failed because they had written credit default swaps against toxic CDOs, and they did not have any cash reserves set aside to cover those swaps because they believed the CDOs were rock solid. They thought they were getting free money from the swaps. They never believed there were ever going to have to pay out on a single one.

In the beginning of CDOs and swaps, that line of thinking was correct, but it became completely corrupted by greed.

Lehman Brothers acquired its own supply chain of mortgage brokers to feed their CDO manufacturing process. CDOs they were manufacturing to sell to investors in exchange for fees. If they couldn't make any more CDOs, they could not make any more fees, and so the supply chain had to start shoving more and more toxic loans into the pipeline to keep the game going after all the low risk borrowers were used up.

To offset the risks, they bought CDS from companies like AIG CP. AIG never did the due diligence on these CDOs until it was too late. AIG CP's boss was under the impression that no more than 10 percent of the loans in the CDOs being made were subprime, when in actuality it was approaching 90 percent.

Once AIG realized this, they notified Wall Street they were no longer going to sell swaps. This was in 2006. AIG believed it had gotten out of the game in time, but it hadn't.

When AIG got out of the swaps market, Wall Street, instead of stopping the music based on this information, started selling synthetic CDOs to their investors. These synthetic CDOs were mountains of toxic credit default swap policies which transferred all the risk of the CDOs onto the investors themselves. The investors never fully realized this. All they knew was that when they bought a tranche of a synthetic CDO, they began getting steady revenue streams. What they did not fully realize was that those revenue streams were, basically, insurance premium payments, which meant they were the insurers, which meant they were on the hook for any losses experienced by those swaps.

What derivatives were called, you ask? ALL OF THEM!

That's what imploded AIG and Lehman and all the others. As people's mortgages began resetting and they could not make their payments, the losses were felt in the CDOs, and this triggered calls on the credit default swaps written against them. And since they sellers of these swaps never kept any cash reserves to cover any losses, they collapsed. And as companies began collapsing, no one knew what other banks were zombies and which ones were not. And this froze everything. No bank wanted to lend to another bank.

This problem was magnified by the fact that not only were the holders of those CDOs allowed to buy CDS against them, ANYONE could buy CDS against them, and they did.

This is like me being able to buy a life insurance policy against your life, even though I don't stand to lose anything if you die.

If anyone could buy a life insurance policy against your life, and had nothing to lose and everything to gain by your death, how safe would you be?

Exactly.

And that is what happened with derivatives. There were some actors who realized they had everything to gain and nothing to lose by creating extremely toxic investment product which they could then bet against. This was just the extra spice in the whole picture.


Nevertheless, even honest actors were buying CDS against CDOs they did not have an insurable interest in.

If you had a $200,000 house, and ten people all had a fire insurance policy against it, and that house burned down, the result is that instead of the insurance company experiencing a $200,000 loss, they experience a $2 million loss. All thanks to derivatives.

That is what happened here and around the world.

 

[Claudette]

Pretty sure 2008 would have occurred with or without Bush.

Yup. The crisis was decades in the making and Bush just happened to be POTUS when it all finally collapsed. It would have happened no matter who was in the WH.

Not what I meant. Clearly I was unclear

Yes. I got it.

 

[healthmyths]

See Lehman Brothers. See AIG. See Bear Stearns. See RBC. See Northern Rock. See Bank of Ireland. See the entire nation of Iceland. See Spain.

i said prove that; not make vagueries

what derivitives were "called"?

Dude, I spent years proving this shit over and over and over to the ignorant. And there are mountains of books on the subject. I have neither the time nor the inclination to do it again.

Why do you think AIG failed? They failed because they had written credit default swaps against toxic CDOs, and they did not have any cash reserves set aside to cover those swaps because they believed the CDOs were rock solid. They thought they were getting free money from the swaps. They never believed there were ever going to have to pay out on a single one.

In the beginning of CDOs and swaps, that line of thinking was correct, but it became completely corrupted by greed.

Lehman Brothers acquired its own supply chain of mortgage brokers to feed their CDO manufacturing process. CDOs they were manufacturing to sell to investors in exchange for fees. If they couldn't make any more CDOs, they could not make any more fees, and so the supply chain had to start shoving more and more toxic loans into the pipeline to keep the game going after all the low risk borrowers were used up.

To offset the risks, they bought CDS from companies like AIG CP. AIG never did the due diligence on these CDOs until it was too late. AIG CP's boss was under the impression that no more than 10 percent of the loans in the CDOs being made were subprime, when in actuality it was approaching 90 percent.

Once AIG realized this, they notified Wall Street they were no longer going to sell swaps. This was in 2006. AIG believed it had gotten out of the game in time, but it hadn't.

When AIG got out of the swaps market, Wall Street, instead of stopping the music based on this information, started selling synthetic CDOs to their investors. These synthetic CDOs were mountains of toxic credit default swap policies which transferred all the risk of the CDOs onto the investors themselves. The investors never fully realized this. All they knew was that when they bought a tranche of a synthetic CDO, they began getting steady revenue streams. What they did not fully realize was that those revenue streams were, basically, insurance premium payments, which meant they were the insurers, which meant they were on the hook for any losses experienced by those swaps.

What derivatives were called, you ask? ALL OF THEM!

That's what imploded AIG and Lehman and all the others. As people's mortgages began resetting and they could not make their payments, the losses were felt in the CDOs, and this triggered calls on the credit default swaps written against them. And since they sellers of these swaps never kept any cash reserves to cover any losses, they collapsed. And as companies began collapsing, no one knew what other banks were zombies and which ones were not. And this froze everything. No bank wanted to lend to another bank.

This problem was magnified by the fact that not only were the holders of those CDOs allowed to buy CDS against them, ANYONE could buy CDS against them, and they did.

This is like me being able to buy a life insurance policy against your life, even though I don't stand to lose anything if you die.

If anyone could buy a life insurance policy against your life, and had nothing to lose and everything to gain by your death, how safe would you be?

Exactly.

And that is what happened with derivatives. There were some actors who realized they had everything to gain and nothing to lose by creating extremely toxic investment product which they could then bet against. This was just the extra spice in the whole picture.


Nevertheless, even honest actors were buying CDS against CDOs they did not have an insurable interest in.

If you had a $200,000 house, and ten people all had a fire insurance policy against it, and that house burned down, the result is that instead of the insurance company experiencing a $200,000 loss, they experience a $2 million loss. All thanks to derivatives.

That is what happened here and around the world.

FYI... How large is the derivatives market?
$1.2 quadrillion in notional value;
at least $12 trillion in cash at risk
The derivatives market could be over $1.2 quadrillion in value

 

[depotoo]

Over the past six years, the President and his Administration have not only warned of the systemic consequences of failure to reform GSEs but also put forward thoughtful plans to reduce the risk that either Fannie Mae or Freddie Mac would encounter such difficulties.* In fact, it was Congress that flatly rejected President Bush's call more than five years ago to reform the GSEs.* Over the years, the President's repeated attempts to reform the supervision of these entities were thwarted by the legislative maneuvering of those who emphatically denied there were problems with the GSEs.
2001
April:*
The Administration's*FY02 budget*declares that the size of Fannie Mae and Freddie Mac is "a potential problem," because "financial trouble of a large GSE could cause strong repercussions in financial markets, affecting Federally insured entities and economic activity."* (2002 Budget Analytic Perspectives, pg. 142)
2002
May:
The Office of Management and Budget (OMB)*calls for the disclosure and corporate governance principles contained in the President's 10-point plan for corporate responsibility to apply to Fannie Mae and Freddie Mac.* (OMB Prompt Letter to OFHEO, 5/29/02)
2003
February:
The Office of Federal Housing Enterprise Oversight (OFHEO)*releases a report explaining that unexpected problems at a GSE could immediately spread into financial sectors beyond the housing market.*September: Then-Treasury Secretary John Snow*testifies before the House Financial Services Committee to recommend that Congress enact "legislation to create a new Federal agency to regulate and supervise the financial activities of our housing-related government sponsored enterprises" and set prudent and appropriate minimum capital adequacy requirements.
September:
Then-House Financial Services Committee Ranking Member Barney Frank (D-MA)*strongly disagrees with the Administration's assessment, saying "these two entities – Fannie Mae and Freddie Mac – are not facing any kind of financial crisis … The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."* (Stephen Labaton, "New Agency Proposed To Oversee Freddie Mac And Fannie Mae,"*The New York Times, 9/11/03)*
*October:
Senator Thomas Carper (D-DE)*refuses to acknowledge any necessity for GSE reforms, saying "if it ain't broke, don't fix it." *(Sen. Carper, Hearing of Senate Committee on Banking, Housing, and Urban Affairs, 10/16/03)November: Then-Council of the
Economic Advisers (CEA) Chairman Greg Mankiwexplains that any "legislation to reform GSE regulation should empower the new regulator with sufficient strength and credibility to reduce systemic risk."* To reduce the potential for systemic instability, the regulator would have "broad authority to set both risk-based and minimum capital standards" and "receivership powers necessary to wind down the affairs of a troubled GSE."* (N. Gregory Mankiw, Remarks At The Conference Of State Bank Supervisors State Banking Summit And Leadership, 11/6/03)
2004
February:
The President's FY05 Budget*again highlights the risk posed by the explosive growth of the GSEs and their low levels of required capital and calls for creation of a new, world-class regulator:* "The Administration has determined that the safety and soundness regulators of the housing GSEs lack sufficient power and stature to meet their responsibilities, and therefore … should be replaced with a new strengthened regulator."* (2005 Budget Analytic Perspectives, pg. 83)
February:
Then-CEA Chairman Mankiw*cautions Congress to "not take [the financial market's] strength for granted."* Again, the call from the Administration was to reduce this risk by "ensuring that the housing GSEs are overseen by an effective regulator."* (N. Gregory Mankiw, Op-Ed, "Keeping Fannie And Freddie's House In Order,"*Financial Times, 2/24/04)
April:
Rep. Frank*ignores the warnings, accusing the Administration of creating an "artificial issue."* At a
speech to the Mortgage Bankers Association conference, Rep. Frank said "people tend to pay their mortgages. *I don't think we are in any remote danger here. *This focus on receivership, I think, is intended to create fears that aren't there."* ("Frank: GSE Failure A Phony Issue,"*American Banker, 4/21/04)
June:
Then-Treasury Deputy Secretary Samuel Bodman*spotlights the risk posed by the GSEs and calls for reform, saying "We do not have a world-class system of supervision of the housing government sponsored enterprises (GSEs), even though the importance of the housing financial system that the GSEs serve demands the best in supervision to ensure the long-term vitality of that system.* Therefore, the Administration has called for a new, first class, regulatory supervisor for the three housing GSEs:* Fannie Mae, Freddie Mac, and the Federal Home Loan Banking System."**(Samuel Bodman,*House Financial Services Subcommittee on Oversight and Investigations Testimony, 6/16/04)
2005
April:
Then-Secretary Snow*repeats his call for GSE reform, saying "Events that have transpired since I testified before this Committee in 2003 reinforce concerns over the systemic risks posed by the GSEs and further highlight the need for real GSE reform to ensure that our housing finance system remains a strong and vibrant source of funding for expanding homeownership opportunities in America … Half-measures will only exacerbate the risks to our financial system."* (Secretary John W. Snow, "Testimony Before The U.S. House Financial Services Committee," 4/13/05)
July:
Then-Minority Leader Harry Reid*rejects legislation reforming GSEs, "while I favor improving oversight by our federal housing regulators to ensure safety and
soundness, we cannot pass legislation that could limit Americans from owning homes and potentially harm our economy in the process." ("Dems Rip New Fannie Mae Regulatory Measure,"*United Press International, 7/28/05)
2007
August:
President Bush*emphatically calls on Congress to pass a reform package for Fannie Mae and Freddie Mac, saying "first things first when it comes to those two institutions. *Congress needs to get them reformed, get them streamlined, get them focused, and then I will consider other options."
*(President George W. Bush, Press Conference, the White House, 8/9/07)
August:
Senate Committee on Banking, Housing and Urban Affairs Chairman Christopher Dodd*ignores the President's warnings and calls on him to "immediately reconsider his ill-advised" position.* (Eric Dash, "Fannie Mae's Offer To Help Ease Credit Squeeze Is Rejected, As Critics Complain Of Opportunism,"*The New York Times, 8/11/07)
December:
President Bush*again warns Congress of the need to pass legislation reforming GSEs, saying "These institutions provide liquidity in the mortgage market that benefits millions of homeowners, and it is vital they operate safely and operate soundly. *So I've called on Congress to pass legislation that strengthens independent regulation of the GSEs – and ensures they focus on their important housing mission. *The GSE reform bill passed by the House earlier this year is a good start. *But the Senate has not acted. *And the United States Senate needs to pass this legislation soon." *(President George W. Bush, Discusses Housing, the White House, 12/6/07)
2008
February:
Assistant Treasury Secretary David Nason*reiterates the urgency of reforms, saying "A new regulatory structure for the housing GSEs is essential if these entities are to continue to perform their public mission successfully."* (David Nason, Testimony On Reforming GSE Regulation, Senate Committee On Banking,
Housing And Urban Affairs, 2/7/08)
March:
President Bush*calls on Congress to take action and "move forward with reforms on Fannie Mae and Freddie Mac. *They need to continue to modernize the FHA, as well as allow State housing agencies to issue tax-free bonds to homeowners to refinance their mortgages."* (President George W. Bush, Remarks To The Economic Club Of New York, New York, NY, 3/14/08)
April:
President Bush*urges Congress to pass the much needed legislation and "modernize Fannie Mae and Freddie Mac. *[There are] constructive things Congress can do that will encourage the housing market to correct quickly by … helping people stay in their homes."* (President George W. Bush, Meeting With
Cabinet, the White House, 4/14/08)
May:
President Bush*issues several pleas to Congress to pass legislation reforming Fannie Mae and Freddie Mac before the situation deteriorates further.*
"Americans are concerned about making their mortgage payments and keeping their homes. *Yet Congress has failed to pass legislation I have repeatedly requested to modernize the Federal Housing Administration that will help more families stay in their homes, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow state housing agencies to issue tax-free bonds to refinance sub-prime loans."* (President George W. Bush, Radio
Address, 5/3/08)"
[T]he government ought to be helping creditworthy people stay in their homes. *And one way we can do that – and Congress is making progress on this – is the reform of Fannie Mae and Freddie Mac. *That reform will come with a strong, independent regulator."* (President George W. Bush, Meeting With The Secretary Of The Treasury, the White House, 5/19/08)
"Congress needs to pass legislation to modernize the Federal Housing Administration, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow State housing agencies to issue tax-free bonds to refinance subprime loans."* (President George W. Bush, Radio Address, 5/31/08)
June:*
As foreclosure rates continued to rise in the first quarter,*the President*once again asks Congress to take the necessary measures to address this challenge, saying "we need to pass legislation to reform Fannie Mae and Freddie Mac."* (President George W. Bush, Remarks At Swearing In Ceremony For Secretary Of Housing And Urban Development, Washington, D.C., 6/6/08)
July:*
Congress heeds the President's call for action and passes reform legislation for Fannie Mae and Freddie Mac as it becomes clear that the institutions are failing.
September:*
Democrats in Congress forget their previous objections to GSE reforms, as*Senator Dodd*questions "why weren't we doing more, why did we wait almost a year before there were any significant steps taken to try to deal with this problem? … I have a lot of questions about where was the administration over the last eight years." *(Dawn Kopecki, "Fannie Mae, Freddie 'House Of Cards' Prompts Takeover,"Bloomberg, 9/9/08)

Not only did Bush not start it, he tried 17 different times to stop it.

Really? Would you like to at least give a partial list of these efforts? Can't? Didn't think so.

He didn't do a damn thing, honey. He just got up on the podium and said, "Wall Street got drunk". Wow, yeah. That really put a halt to the Banksters.

 

[Mac1958]

That is what happened here and around the world.

This was huge.

Now, what continues to stun me is that there were (apparently) no or few reserve requirements on AIG as they were writing these swaps. I'd think that would have slowed everything down pretty drastically, and I have to wonder how a financial instrument that had tentacles reaching throughout the system could have effectively gone unnoticed by the Feds.

I could write plenty of synthetic shit if I wanted to, but I swear I won't even click on those pages in my trading platform for fear of becoming radioactive or getting smallpox or herpes or something. Who knows what they look like? There are plenty of other options.

Where were the regulators during the years and years these things were being assembled and sold? I don't like derivatives and I'd love to see them largely eliminated, along about the time we repealed the repeal of Glass Steagall, tomorrow would be nice.

As desperate as the partisans are to blame the "other guy", it's just a teensy tiny bit more fucking complicated than partisan politics.

.

 

[depotoo]

There were many that were profiting off of it. Look into some names associated with AIG. Who had decent size stakes at the time. A start for you would be John Kerry.

That is what happened here and around the world.

This was huge.

Now, what continues to stun me is that there were (apparently) no or few reserve requirements on AIG as they were writing these swaps. I'd think that would have slowed everything down pretty drastically, and I have to wonder how a financial instrument that had tentacles reaching throughout the system could have effectively gone unnoticed by the Feds.

I could write plenty of synthetic shit if I wanted to, but I swear I won't even click on those pages in my trading platform for fear of becoming radioactive or getting smallpox or herpes or something. Who knows what they look like? There are plenty of other options.

Where were the regulators during the years and years these things were being assembled and sold? I don't like derivatives and I'd love to see them largely eliminated, along about the time we repealed the repeal of Glass Steagall, tomorrow would be nice.

As desperate as the partisans are to blame the "other guy", it's just a teensy tiny bit more fucking complicated than partisan politics.

.

 

[depotoo]

Dodd and Baucus as well.

 

[NoTeaPartyPleez]

They've spread the blame pretty thin here. It's like blaming the murderer, the murderer's parents, his teachers, the owner of the store where he bought his gun, the kid who was mean to him when he was three...

I would go a step further on W and say his role was actually pretty minimal. And I feel homebuyers can be taken off that list entirely. People weren't out seeking loans they couldn't afford, they were aggressively sold these loans. Even low-wage people were being sold on and signed up for these loans.

The homeowners were definitely a major part of the crisis. What they did was refinance their homes taking out the equity as property values rose and then blew the money. They helped relatives, went on vacations, bought mounds of stuff. It was free money.

Especially hard hit was the elderly with children and grandchildren talking them into taking out mortgages on paid for homes. That $250,000 cottage became a $750,000 mortgsge.

That was actually a small part of the problem, but the banks who gave these mortgages to them also promoted the stupid notion that their house was like an ATM and tried to GIVE people money over the top of the actual mortgage they needed. I know, Bank of A tried to do that with us in 2006.

For the rest of the story, Google NINJA loans. Period, the end. These trash mortgages were handed out like cheap candy because the banks were insuring themselves that the borrower would default, (CDOs) then they could collect a second time on the settlement through AIG. Remember them?

 

[NoTeaPartyPleez]

Derivatives were the central cause of the crash. Without derivatives, the crisis would have been several factors of ten less dire. So much so, there may not have even been a crash if they did not exist.

good. prove that

See Lehman Brothers. See AIG. See Bear Stearns. See RBC. See Northern Rock. See Bank of Ireland and Allied Irish Bank. See the entire nation of Iceland. See Spain.

And then read "Too Big to Fail" to see all of the above fit together to create the mess we're still in today.

 

[g5000]

good. prove that

See Lehman Brothers. See AIG. See Bear Stearns. See RBC. See Northern Rock. See Bank of Ireland and Allied Irish Bank. See the entire nation of Iceland. See Spain.

And then read "Too Big to Fail" to see all of the above fit together to create the mess we're still in today.

I've read quite a few books on the subject (including Sorkin's Too Big To Fail), and in my opinion the best book for the layman on the global derivatives crisis was written before the crash.

Traders, Guns & Money by Satyajit Das.

Most books on the crash deal with the aftermath and barely graze the causes.

 

[g5000]

That is what happened here and around the world.

This was huge.

Now, what continues to stun me is that there were (apparently) no or few reserve requirements on AIG as they were writing these swaps. I'd think that would have slowed everything down pretty drastically, and I have to wonder how a financial instrument that had tentacles reaching throughout the system could have effectively gone unnoticed by the Feds.

Not unnoticed. Unregulated. Deliberately so by the CFMA and FSMA.

 

[g5000]

Over the past six years, the President and his Administration have not only warned of the systemic consequences of failure to reform GSEs but also put forward thoughtful plans to reduce the risk that either Fannie Mae or Freddie Mac would encounter such difficulties.*

It is true the Bush Administration warned the GSEs were systemic risks. It is equally true that Barney Frank and Chris Dodd did everything they could to prevent the GSE portfolios from being reined in, and they succeeded.

However, there is good reason to believe the Bush Administration's motives were not pure.

Not only that, by 2006, the GSEs were less than 50 percent of the secondary market. This is an amazing thing in light of the fact they had previously made up 90 percent of the secondary market.

Wall Street was a much, much, much bigger factor in the crash than the GSEs.

Wall Street wanted to own the whole market, and if they could get the government to hogtie the GSEs, that would give them a bigger share. That may have been the motive behind the Bush Administration's attempts to shrink the GSE portfolios.

 

[zeke]

Bill Clinton is the reason the Repubs got their long awaited wet dream of passing Graham, Leach. Clinton failed to veto the legislation. It's on him. There was no mystery as to what greed and the opening of the mortgage markets to high risk lending practices and speculation would bring about.

But everybody was willing to believe the other guys story about how good the borrower was or how good the property, how good the portfolio was etc etc. and it was all because there was an amazing amount of money being made by a lot of people. An amazing amount of money. Enough to make people very greedy.

You know what they say about greed? It is a virtue. It makes the world go round. Though it used to be a sin.

 

[healthmyths]

They've spread the blame pretty thin here. It's like blaming the murderer, the murderer's parents, his teachers, the owner of the store where he bought his gun, the kid who was mean to him when he was three...

I would go a step further on W and say his role was actually pretty minimal. And I feel homebuyers can be taken off that list entirely. People weren't out seeking loans they couldn't afford, they were aggressively sold these loans. Even low-wage people were being sold on and signed up for these loans.

The homeowners were definitely a major part of the crisis. What they did was refinance their homes taking out the equity as property values rose and then blew the money. They helped relatives, went on vacations, bought mounds of stuff. It was free money.

Especially hard hit was the elderly with children and grandchildren talking them into taking out mortgages on paid for homes. That $250,000 cottage became a $750,000 mortgsge.

That was actually a small part of the problem, but the banks who gave these mortgages to them also promoted the stupid notion that their house was like an ATM and tried to GIVE people money over the top of the actual mortgage they needed. I know, Bank of A tried to do that with us in 2006.

For the rest of the story, Google NINJA loans. Period, the end. These trash mortgages were handed out like cheap candy because the banks were insuring themselves that the borrower would default, (CDOs) then they could collect a second time on the settlement through AIG. Remember them?

Why wouldn't they give you money with the "full faith and credit of FANNIE/FREDDIE??


Oct. 23,2008 (Bloomberg) -- Fannie Mae and Freddie Mac have an ``effective'' federal guarantee, not the "full faith and credit'' of the U.S. government, Federal Housing Finance Agency Director James Lockhart said after the hearing.
That does give them effectively a guarantee of the U.S. government.''
Lockhart's Fannie, Freddie Guarantee Remarks Stir Up Confusion - Bloomberg

 

[zeke]

Over the past six years, the President and his Administration have not only warned of the systemic consequences of failure to reform GSEs but also put forward thoughtful plans to reduce the risk that either Fannie Mae or Freddie Mac would encounter such difficulties.*

It is true the Bush Administration warned the GSEs were systemic risks. It is equally true that Barney Frank and Chris Dodd did everything they could to prevent the GSE portfolios from being reined in, and they succeeded.

However, there is good reason to believe the Bush Administration's motives were not pure.

Not only that, by 2006, the GSEs were less than 50 percent of the secondary market. This is an amazing thing in light of the fact they had previously made up 90 percent of the secondary market.

Wall Street was a much, much, much bigger factor in the crash than the GSEs.

Wall Street wanted to own the whole market, and if they could get the government to hogtie the GSEs, that would give them a bigger share. That may have been the motive behind the Bush Administration's attempts to shrink the GSE portfolios.

You have an excellent understanding of the workings of the markets AFTER the door was opened by Bill Clinton. But many of the practices you describe were illegal before Graham Leach was passed. There was a starting point to all the mortgage market activity and passing that legislation was the start.

Everything after that was to give cover for after the collapse. Blame shifting and CYA activities. Men and women who were experienced loan officers knew what the outcome would be for making the types of loans being offered.

Sometimes we would bet on how many months before a borrower defaulted.

And you have to remember that there were plenty of mid size bands that made lots of mortgage loans and never got in trouble at all. That was because they were/are run by real bankers who understand mortgage lending and not gamblers and speculators like were running the national banks, lenders and investment houses.

 

[TrainTime]

Clinton rammed NAFTA through Congress and into the WTO...that was the pistol shot that signaled the Fortune 500 to off-shore everything possible and close thousands of US factories. Clinton then left office with the dot.com bilking of the remaining US venture capital stolen in his rear view mirror. And al-Qaida planning another WTC attack. And Gorelick, Reno's monkey asst. AG, the kidnapper of the Gonzales boy who would be sent to Fidel. The Reno who ordered dozens of women and children burned to death at Mount Carmel. and the architect of the intel wall between the FBI and CIA that enabled 9/11, before sliding into Fanny Mae and filling her pockets with several million$. And let's never forget Willy Jeff allowing Loral to send the communist chinese our missile telemetry secrets for campaign funds. Has there has ever been a US president more worthy of being hanged on the South Lawn than Clinton? I think not.

 

[Sallow]

In one word?

Yes.

In three words?

Yes he did.

 

[The Rabbi]

In one word?

Yes.

In three words?

Yes he did.

One word? Moron
Three words? You're a moron.

Of course you worked on the floor of the NYSE. Mopping it.