History Lessons

[WillowTree]

[ame=http://www.youtube.com/watch?v=_MGT_cSi7Rs]YouTube - Shocking Video Unearthed Democrats in their own words Covering up the Fannie Mae, Freddie Mac Scam that caused our Economic Crisis[/ame]

 

[WillowTree]

[ame=http://www.youtube.com/watch?v=usvG-s_Ssb0&feature=related]YouTube - Explosive Video, Fannie Mae CEO calling Obama and the Dems the "Family" and "Conscience" of Fannie Mae[/ame]

 

[AllieBaba]

Gosh, where did I hear about this?

Oh yeah, me, every time I told the nimrod dems that they were flat out lying when they said that it was Bush's fault there was no oversight.

Expect this to be dumped into the conspiracy theory room, where all indisputable facts about the left end up eventually....

 

[WillowTree]

Gosh, where did I hear about this?

Oh yeah, me, every time I told the nimrod dems that they were flat out lying when they said that it was Bush's fault there was no oversight.

Expect this to be dumped into the conspiracy theory room, where all indisputable facts about the left end up eventually....

funny thing about you tube!!

 

[Lycurgus]

These current lawmakers and Obama will ruin this country.

 

[Xenophon]

Somebody call Bb Bo the assclown, he insists Democrats are a pure as the driven snow.

 

[midcan5]

That's wonderful propaganda but at heart regulation is taboo to republicans so presenting clips out of context and pretending they tell us something about one side or the other is naive. If Fannie and Freddie were poorly managed did that lead to investors playing games with mortgage backed securities? And who is so naive to think that poor people had this much impact or created the bubble that eventually burst. Did the poor buy high rise apartments in Miami you think!

What really caused the crash was simply greed and greed crosses all lines and all barriers. Think Enron or lots more. In the end the wingnuts will need to point fingers at others as mirrors are missing in their world of spin.

"I think we can sum up the cause of our current economic crisis in one word — GREED. Over the years, mortgage lenders were happy to lend money to people who couldn’t afford their mortgages. But they did it anyway because there was nothing to lose. These lenders were able to charge higher interest rates and make more money on sub-prime loans. If the borrowers default, they simply seized the house and put it back on the market. On top of that, they were able to pass the risk off to mortgage insurer or package these mortgages as mortgage-backed securities. Easy money!"

What Caused The Economic Crisis Of 2008? : Moolanomy

There is a curious similarity to the great depression in our recent crash in that a bubble burst and revealed an underlying system of unhealthy speculation and poor business practices. If business is the answer it should also be looked at as the problem sometimes. And there is no question it is business and a get rich quick mentality that were the chief factors in this latest economic fiasco.

 

[WillowTree]

I see ostrich azz.

 

[American Horse]

Shocking Video Unearthed Democrats in their own words Covering up the Fannie Mae, Freddie Mac Scam that caused our Economic Crisis

This Video is an excellent summary of the events which led up to where the economy is today. Without the failure of Fan & Fred, which precipitated the toxic assets, none of this recent crisis need have happened at all.

There have been repeated articles in the Wall Street Journal since the late nineties laying out the defect in the GSE's Fan and Fred, warning of the need to do something.
Fannie Mahem A History - WSJ . Com (30 clickable links)
Fannie Maye Enron - WSJ . Com (one of the 30 links above)
(SORRY, these take a while to load, but they are worth it - you might want to C&P to a Word Doc where then you can click on a hyperlink)

President Bush, John McCain, and others tried several times to offer legislation to bring F&F under ordinary rules of compliance. The Congress (especially certain members), as shown in the video, rejected that, instead condemning the messenger, charging that the regulators were the ones who should be investigated for damaging "a good thing".

The management, or rather the failure to manage Fannie Maye and Freddie Mac and the toxic mortgages they caused is the biggest debacle in our government's history, and it speaks poorly of our ability to get out of this mess in the future.

We seem to be moving on as if we were actually an "informed citizenry"; as if these two GSE's didn't play a role in our present situation, and as if the failure of our elected politicians to manage them doesn't lie at the very root of ours and the world's present financial crisis.

Without a responsible information reporting media we can expect no better in the future. We have to begin holding them responsible for doing their job. One way to do that is to diversify our information sources. NPR, MSNBC, or the NYT are not enough to get a complete picture. We actually get a more comprehensive viewpoint from this Forum Board.

 

[American Horse]

That's wonderful propaganda but at heart regulation is taboo to republicans so presenting clips out of context and pretending they tell us something about one side or the other is naive. If Fannie and Freddie were poorly managed did that lead to investors playing games with mortgage backed securities?

The funds pushed out the door by F&F was the derivative. When there is practically free money because there is so much of it available, it will go into all kinds of otherwise unlikely investments and to people who will invest it unwisely or borrow too much (too much of a seemingly good thing). The mortgage backed securities resulted from the need to securitize the mortages to free up ever more money, for the lenders and mortgage brokers to make more loans.

And who is so naive to think that poor people had this much impact or created the bubble that eventually burst. Did the poor buy high rise apartments in Miami you think!

Of course not, but these are all a part of the same pie. Being in the real estate market in construction and sales, I saw this monster developing. With so much money available the appraisals went up to match the offers to purchase. Then the internet mortgage brokers got into the game to make money on each customer's mortgage, offering what seemed to be good deals, but at variable rates with a higher price for the borrower to pay later on, pushing loans on ever less qualified borrowers; with so much money chasing new home loans, and because Loan To Value ratios went close to 100%, builders could make more money filling the need for larger products; larger homes mean larger profits so ever larger homes were being built, larger than people needed but instead what they simply wanted. All this money chasing housing created ever more demand and in many markets a housing "bubble" developed, which when it finally burst when doubts set in exposed the underlying risk to all those loans; meanwhile to free up more money these risky loans had gone into multiple types of securities, and of course out into world markets, becuase they had been highly rated by the rating agencies, another form of 'appraisal'.

The failure to understand incentives and the fungibility of money underlies the whole problem.

 

[driveby]

That's wonderful propaganda but at heart regulation is taboo to republicans so presenting clips out of context and pretending they tell us something about one side or the other is naive. If Fannie and Freddie were poorly managed did that lead to investors playing games with mortgage backed securities? And who is so naive to think that poor people had this much impact or created the bubble that eventually burst. Did the poor buy high rise apartments in Miami you think!

What really caused the crash was simply greed and greed crosses all lines and all barriers. Think Enron or lots more. In the end the wingnuts will need to point fingers at others as mirrors are missing in their world of spin.

"I think we can sum up the cause of our current economic crisis in one word — GREED. Over the years, mortgage lenders were happy to lend money to people who couldn’t afford their mortgages. But they did it anyway because there was nothing to lose. These lenders were able to charge higher interest rates and make more money on sub-prime loans. If the borrowers default, they simply seized the house and put it back on the market. On top of that, they were able to pass the risk off to mortgage insurer or package these mortgages as mortgage-backed securities. Easy money!"

What Caused The Economic Crisis Of 2008? : Moolanomy

There is a curious similarity to the great depression in our recent crash in that a bubble burst and revealed an underlying system of unhealthy speculation and poor business practices. If business is the answer it should also be looked at as the problem sometimes. And there is no question it is business and a get rich quick mentality that were the chief factors in this latest economic fiasco.

Speaking of propaganda and conspiracy theories ......

 

[Tech_Esq]

That's wonderful propaganda but at heart regulation is taboo to republicans so presenting clips out of context and pretending they tell us something about one side or the other is naive. If Fannie and Freddie were poorly managed did that lead to investors playing games with mortgage backed securities? And who is so naive to think that poor people had this much impact or created the bubble that eventually burst. Did the poor buy high rise apartments in Miami you think!

What really caused the crash was simply greed and greed crosses all lines and all barriers. Think Enron or lots more. In the end the wingnuts will need to point fingers at others as mirrors are missing in their world of spin.

"I think we can sum up the cause of our current economic crisis in one word — GREED. Over the years, mortgage lenders were happy to lend money to people who couldn’t afford their mortgages. But they did it anyway because there was nothing to lose. These lenders were able to charge higher interest rates and make more money on sub-prime loans. If the borrowers default, they simply seized the house and put it back on the market. On top of that, they were able to pass the risk off to mortgage insurer or package these mortgages as mortgage-backed securities. Easy money!"

What Caused The Economic Crisis Of 2008? : Moolanomy

There is a curious similarity to the great depression in our recent crash in that a bubble burst and revealed an underlying system of unhealthy speculation and poor business practices. If business is the answer it should also be looked at as the problem sometimes. And there is no question it is business and a get rich quick mentality that were the chief factors in this latest economic fiasco.

Unfortunately, you have oversimplified. Convenient and leading to a false conclusion.

There was a convergence of several policies, some business practices and some opportunism that caused this crisis. Among them:

- The Community Reinvestment Act
- The vigorous enforcement of the CRA by the Clinton justice department forcing the expansion of money lent to sub-prime borrowers

But those were just a part of the issue. If it had never exceeded this point, things would have been ok. Now the bad part:

- Mismanagement of Fannie Mae causes increased scrutiny by Congress as potential wrong doing is examined.
- This review causes F&F to pull back from being the market maker.
- Mortgage lenders who had chafed under the standards that F&F had required, looked for a new source of cash to make the market.
- Wall Street banks became that source of money and allowed riskier standards to persist. In other words, where sub-prime had been a rare exception, Wall Street was willing to allow more of this activity because they could sell it to foreign investors.
- In 2003, the Bush Admin proposes sweeping changes the regulations of F&F proposing an independent oversight agency to ensure proper capitalization of F&F. Barney Frank opposes saying there is no problem with F&F that requires regulation and this is a continuation of the Republican war against the poor.
- Continued poor capitalization of F&F persist
- The Fed increases easy money.
KABOOM!!!!

That would be a more balanced way of looking at it. Nobodies hands are completely clean. But, on the balance of equities, the Dems hands are a bit grubbier here.