News: Big Banks Were Enablers of Subprime Crisis

Discussion in 'Current Events' started by Indiana Oracle, May 6, 2009.

  1. Indiana Oracle
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    Indiana Oracle The Truth is Hard to Find

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    A newly released study revealed that 21 of the 25 largest subprime lenders were owned or financially supported by Citigroup (C), Wells Fargo (WFC) and other lenders that received U.S. aid. The watchdog group that released the report said it showed "mega-banks that funded the subprime industry were not victims of an unforeseen financial collapse, as they have sometimes portrayed themselves. These banks were deliberate enablers that bankrolled the type of lending that’s now threatening the financial system."

    Wall Street Breakfast: Must-Know News -- Seeking Alpha
    Citigroup, Wells Fargo Gained From Subprime Lenders, Group Says - Bloomberg.com
     
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  2. RodISHI
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    RodISHI Gold Member

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    It was at the very least a double ding on the taxpayer for the risk they knew they were incurring. First they sold suprime mortgages via any means possible to the unsuspecting and they were using federal guarantees to mitigate the losses that they new would be there. They had already collected the servicing fees and push these bad loans off into the system that is fully backed by taxpayers. They have done the same thing with student loans, emergency loans and SBA loans. That double dipping does not include the erroneous 1099's they use to buffer against their profits when it comes time to pay their fair share to the IRS.
     
    Last edited: May 6, 2009
  3. editec
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    editec Mr. Forgot-it-All

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    Well duh!

    Many of us have been screaming this "news" for the last six months.
     
  4. tigerbob
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    tigerbob Increasingly jaded.

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    Why does this not surprise me?
     
  5. editec
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    editec Mr. Forgot-it-All

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    Why oh why do some of us NOT understand that it took the private banks coupled with the FED (which they run) using the power of the government AND the gullibility of the investment class to make this fiscal crises happen?

    Here's why...

    Because if they acknowledge that well established fact, then they cannot simply blame the OTHER TEAM for this meltdown.

    Partisans are the enablers of their own enslavement.

    Now that wouldn't so bad, if we weren't chained up right along with them.
     
  6. RodISHI
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    RodISHI Gold Member

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    Sucks when someone else sells themselves for nothing even when you have not. I fully understand.
     
  7. Sinatra
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    Sinatra Senior Member

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    It was the federally backed paper that was the foundation for this crisis. Greed took it from there - but w/o Fannie and Freddie to back up a considerable portion of that paper, the situation would not have escalated to the levels it did.

    And the very legislators who oversaw the Fannie and Freddie fiasco are now the same ones charged with fixing the same mess their incompetence willfully created.

    Welcome to Washington DC...
     
  8. Toro
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    Toro Diamond Member

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    Something like 10% of all subprime loans were backed by the GSEs. Most CDOs backed by subprime paper had no guarantee, there was no implicit guarantee, and the investors knew exactly what they were getting into.
     
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  9. Indiana Oracle
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    Indiana Oracle The Truth is Hard to Find

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    I have been saying it too. Bloomberg, as far as I can tell, has not been open about it until now. I also doubt the general public has had this expressed to them in this way. What I am hoping is that this information will become much more mainstream.
     
  10. sealybobo
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    sealybobo Diamond Member

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    Editec. I am a partisan, but I COMPLETELY agree with you. And I don't know if you are going to find many liberals/progressives that would argue with you. We know there is class warfare going on between us and them. We know the bankers are in bed with the politicians. We know that $700 billion was nothing but a bank robbery.

    I think most liberals don't know/understand. They aren't into politics as much as we are to have thought that much about it.

    Hell, even Republicans admit it was a scam, but only because they got the Dems to be the ones who gave Bush the money. But by not signing the bailout bill, they admit that they know the bankers are crooks. And Kramer admitted it on the Daily Show. The Bankers/Wallstreet CEO's lied to him. What more proof do we need?

    Now conservatives/republicans probably understand this is true too, but they are so wired to defend free markets and corporations that this blows their whole theory out of the water. They can't admit that the oil companies, electric companies, defense companies, phone companies, banks, credit card companies, mortgage lenders, insurance giants, wallstreet are the enemy because they are so used to defending them. The only corporations they hate are American companies, because they employ American workers, who are lazy and cost too much. Most obvious are the Big 3. They want them to go bankrupt. Nice!
     

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