Mr. Shaman
Senior Member
- May 4, 2010
- 23,892
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I used to say Obama caused the economic collapse simply because he was the nominee
You're not the only "conservative" who committed that fuck-up.
"While the subprime bubble was still growing, Countrywide could easily sell low-quality loans into the voracious private market for bonds backed by mortgages. Once that market went away, Countrywide created the Hustle to ramp up its origination of prime loans that could be sold to Fannie Mae and Freddie Mac. The suit charges that Bank of America kept the Hustle going through 2009.
The beginning of the housing bust saw other questionable activity. In 2007, Wall Street banks let Magnetar and John Paulson stuff crummy loans into collateralized debt obligations (CDOs) so the hedge funds could later sell them short. And banks started selling dubious debt to each other to keep sales rolling.
Several of those 2007 deals have already cost Wall Street banks dearly, including a $285 million settlement by Citigroup, a $153.6 million settlement by JPMorgan Chase, and a $550 million settlement by Goldman Sachs. (The banks neither admitted nor denied wrongdoing.) Depending on where this new $1 billion suit goes, the Hustle may be one more example that some of the most costly actions came during the twilight of the boom, when desperation kicked in."