Rshermr
VIP Member
MBS's did not exist in large volume until they were bundled, which ocurred after the end of Glass Steagell. What did happen, and what you do not seem to want to admit (for obvious reasons) was that when commercial banks were given the ability to sell securities, and investment banks were able to sell mortgages, the banksters began were able to gamble - sell high risk products, which were made up of mortgages. And they were able to sell insurance products, derivatives, which were totally unregulated and generally with no actual value behind them.Yes, they could. And did, in some cases. But they did not make and sell mortgage backed securities, they did not manufacture and sell derivatives. They could not count on these instruments to keep them going if a bunch of mortgages failed.Banks could write bad mortgages under Glass-Steagall.
So, again, they did not have a major bank failure when Glass Steagall was in place. They did, when they were allowed to gamble with their customers equity.
But they did not make and sell mortgage backed securities
MBS existed for decades under Glass Steagall.
So, again, they did not have a major bank failure when Glass Steagall was in place.
You sure about that?
They did, when they were allowed to gamble with their customers equity.
Banks didn't fail because of derivatives, they failed because of mortgages.
You may know all this. But you want to push the con dogma, which is do not regulate the banksters, they will do great without regulation. But, history is not on your side. There is too much opportunity to make big bucks on securities, as compared to lower yields on mortgages.