CDZ Video on the 2008 Mrtgage Market Collapse and How it was Fixed

Discussion in 'Clean Debate Zone' started by JimBowie1958, Sep 23, 2019.

  1. Toddsterpatriot
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    Toddsterpatriot Diamond Member

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    You're welcome.
     
  2. Mac1958
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    Mac1958 Diamond Member

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    It was the Wild West, some truly lousy things were done, and the perpetrators made a fortune.

    Just astonishing.
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  3. JimBowie1958
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    JimBowie1958 Old Fogey

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    Allowing companies to have a CDS on an equity that you do not own is like letting people take out life insurance policies on the 89 year old dude that lives down the block from you. That would obviously invite scamming and grifting into insurance markets.

    For every US dollar that was involved in CDOs, MBSs, etc, there was about $20 tied up in CDS's riding on their failure.

    I don't get why Toddster thinks this is a 'tiny part' but he is laughably wrong about it, unless I am misunderstanding him.
     
    Last edited: Sep 25, 2019
  4. Mac1958
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    Mac1958 Diamond Member

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    The overall approach to the Meltdown from one end of the spectrum is to downplay anything that might suggest that more/better regulations should have been in place, and should be in place. The Greenspan approach, that markets are efficient and self-correcting. Greenspan, of course, himself admitted that he screwed up. To function properly, capitalism needs effective controls and regulation.

    So they just deny much of what happened and blame it all on the Democrats, regardless of the massive amounts of information that are out there.

    My own fault. I broke my rule about not discussing the Meltdown with some people.
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  5. JimBowie1958
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    JimBowie1958 Old Fogey

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    Ideologues live in their own private Reality.
     
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  6. Toddsterpatriot
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    Toddsterpatriot Diamond Member

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    Allowing companies to have a CDS on an equity that you do not own is like letting people take out life insurance policies on the 89 year old dude that lives down the block from you. That would obviously invite scamming and grifting into insurance markets.

    Someone bought a CDS and caused the home owners to default?

    I don't get why Toddster thinks this is a 'tiny part'

    Is $80 billion (or so) CDS written aby AIG a huge part of a $20 trillion( approximate) mortgage market?
    Fannie and Freddie held at least $1.2 trillion in subprime mortgages.
     
  7. Toddsterpatriot
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    Toddsterpatriot Diamond Member

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    The overall approach to the Meltdown from one end of the spectrum is to downplay anything that might suggest that more/better regulations should have been in place, and should be in place.

    One of the problems was, the regulations in place included forcing Fannie and Freddie to buy 55% of their mortgages from the subprime end of the pool.

    My own fault. I broke my rule about not discussing the Meltdown with some people.

    Yeah, lots of people on talk radio who say the problem wasn't CDS. Durr
     
  8. sartre play
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    sartre play Gold Member

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    Finance not my domain, but do remember both Obama & Mc Cain running to Washington too see what was going on neither one was president at that time. many went down, many lost a lot. what ever was done had too be done in haste. what a horrible position for a newly elected president too be in.
     
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  9. Mac1958
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    Mac1958 Diamond Member

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    The political fallout of the word "bailout" really clouded what was happening. We came damn close to seeing the whole thing come down. Maybe it's better that it went that way - if more people knew what was actually happening, there would have been serious panic.
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  10. Toddsterpatriot
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    Toddsterpatriot Diamond Member

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    Most of the heavy lifting was done by the time he took office.
     
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