Burning Down The House: What Caused Our Economic Crisis?

Discussion in 'Congress' started by Kat, Sep 26, 2008.

  1. Kat
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    Kat Diamond Member Gold Supporting Member Supporting Member

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    Burning Down The House: What Caused Our Economic Crisis?

    [youtube]H5tZc8oH--o[/youtube]



    A highly informative video that traced the cause of our current crisis that had its roots planted 12 years ago.
     
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  2. DiveCon
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    very interesting
    i wonder how many will just ignore this
     
  3. Kat
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    Kat Diamond Member Gold Supporting Member Supporting Member

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    I have a feeling a lot will..no guts to see the truth.
     
  4. Chris
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    Chris Gold Member

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    McCain's Economic Adviser is ex-Texas Sen. Phil Gramm. On Dec. 15, 2000, hours before Congress was to leave for Christmas recess, Gramm had a 262-page amendment slipped into the appropriations bill. It forbade federal agencies to regulate the financial derivatives that greased the skids for passing along risky mortgage-backed securities to investors. And that, my friends, is why everything's falling apart. That is why the taxpayers are now on the hook for the follies of Fannie Mae, Freddie Mac, Bear Stearns and now the insurance giant AIG to the tune of $700 billion.
     
  5. DiveCon
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    you are wrong again, as usual
     
  6. oreo
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    oreo Gold Member Supporting Member

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    Freddie & Fannie started during the Carter Administration. In an effort for lower income people to obtain home mortgages. It worked O.K. in the first years.

    Over the years deregulation set in, with sub-prime mortgages supported during the Clinton adminstration. Cash flowed in abundance to banking.

    What's facinating--there were many warnings, including from President Bush starting in 2001 regarding the size of these agencies. McCain warned again in 2005 & each & every time, democrats who were "worried" about not being able to supply money to people who could not afford to pay it back, BLOCKED EACH & EVERY EFFORT TO REIGN THESE AGENCIES IN.

    It is a fact, that democrat Barney Franks & democrat Criss Dodd--who is associated with Country Wide mortgage & are on video tape for saying years ago, that there was nothing wrong with Fannie & Freddie--Democrats on the hill didn't want to investigage or regulate Fannie Mae & Freddie Mac. Barack Obama is also the second largest donor receipiant of these two agencies.
     
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    Last edited: Sep 27, 2008
  7. Chris
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    Chris Gold Member

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    Warren Buffett, the billionaire investor and long-time chairman of Berkshire Hathaway Inc. (BRK.A), is a man who speaks his mind. I'm not sure whether he's always been that way, or whether it is his exceptional wealth or his age -- or both -- that emboldens him to cut through Wall Street B.S. like a hot knife and expose the bloody truth about the foibles of modern finance.

    Whatever the case, his comments on derivatives, in particular, have been always been especially enlightening -- and entertaining -- because they expose this supposed risk-sharing panacea for the house of cards it has become. In Derivatives Cause 'Mass Destruction', the Wall Street Journal reports on the 'Oracle of Omaha's' latest thoughts on the subject.

    Earlier Saturday, Mr. Buffet repeated his warning on the dangers of derivatives, saying that excessive borrowing by traders, investors and corporations will eventually lead to significant dislocation in the financial markets.

    In fielding a question about derivatives, which he once referred to as "financial weapons of mass destruction," Mr. Buffett told shareholders that he expects derivatives and borrowing, or leverage, would inevitably end in huge losses for many financial participants.

    "The introduction of derivatives has totally made any regulation of margin requirements a joke," said Mr. Buffett, referring to the U.S. government's rules limiting the amount of borrowed money an investor can apply to each trade. "I believe we may not know where exactly the danger begins and at what point it becomes a super danger. We don't know when it will end precisely, but...at some point some very unpleasant things will happen in markets."

    Buffett On Derivatives: 'A Fool's Game' - Seeking Alpha
     
  8. DiveCon
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    yeah, funny how he is making a killing on this disaster
    dont ya think?
     
  9. Chris
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    Chris Gold Member

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    The derivatives that McCain advisor Phil Gramm made legal are the reason for the collapse because they allow corporations to lend more money than they actually have. That's why Warren Buffet called them "financial weapons of mass destruction."
     
  10. DiveCon
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    wrong, it was the push to give loans to people with poor credit that caused this
    the government exerting pressure on the private sector
     

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