News: Big Banks Were Enablers of Subprime Crisis

[Indiana Oracle]

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

 

[RodISHI]

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.

 

[editec]

Well duh!

Many of us have been screaming this "news" for the last six months.

 

[tigerbob]

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

Why does this not surprise me?

 

[editec]

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.

 

[RodISHI]

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.

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

 

[Sinatra]

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...

 

[Toro]

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.

 

[Indiana Oracle]

Well duh!

Many of us have been screaming this "news" for the last six months.

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.

 

[sealybobo]

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.

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!

 

[RodISHI]

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.

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!

Very few people want to see the big three bankrupt. That's bs on your part.

GM and Chrysler robbed the kitty and got away with it just like the banks. You are willing to say it is fine for one corporation but not another and others of us out here are saying it simply is not fine for either to take tax dollars when you know darn well you need to go into re-organization. It is not up to the taxpayer to pay for bailouts of corporations that cannot survive on their own. Banks or car companies either one.

GM screwed the American public to send money out of the country to build and expand their factories in China and South America. They are no better than the banksters.

 

[Care4all]

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...

fannie and freddie did not bank roll them, for the most part.

fannie and freddie were under investigation at the time and being watched like a hawk, these other banks took the opportunity to get in to creating mortgage backed securities of which fannie/freddie HAD owned the market place on....about 70% of mbs's were done by fannie, with fairly safe mortgages pooled PRIOR to the real estate boom.

these mega wall streeters wanted a piece of the pie, saw the opportunity and started creating these MBS's themselves, selling them off to mega retirement funds as triple A safe purchases, and to foreign banks and foreign countries and even foreign cities and towns as safe investments....they could not get enough of them....mortgages. They needed more and more of them to keep beating their growth figures....they ENCOURAGED the subprimers to get MORE CREATIVE with their lending....

wall street did this to themselves, i have been screaming this from the beginning...

it was a House of Cards

care

 

[oreo]

And who ENABLED these banks to do the sub-prime--reckless mortgages? OUR GOVERNMENT--which back in the 1990's DE-REGULATED standards in lending--along with requirements for AIG--Wall street & others that could swap & trade for mortgages.

The source of this economic collapse is our GOVERNMENT'S mis-management of Fannie/Freddie. That is ground zero.

Look it up youself!

New York Times
Date: Sept. 30, 1999
Titled: Fannie Mae to reduce credit requirements to aid mortgage lending

I was absolutely shocked to learn that 50% of the mortgages in this country are backed by the American tax-payer THANKS TO OUR GOVERNMENT.

 

[Care4all]

And who ENABLED these banks to do the sub-prime--reckless mortgages? OUR GOVERNMENT--which back in the 1990's DE-REGULATED standards in lending--along with requirements for AIG--Wall street & others that could swap & trade for mortgages.

The source of this economic collapse is our GOVERNMENT'S mis-management of Fannie/Freddie. That is ground zero.

Look it up youself!

New York Times
Date: Sept. 30, 1999
Titled: Fannie Mae to reduce credit requirements to aid mortgage lending

I was absolutely shocked to learn that 50% of the mortgages in this country are backed by the American tax-payer THANKS TO OUR GOVERNMENT.

Fannie and freddie were NOT the problem oreo, it's TIME TO CATCH UP AND READ something else on the topic other than your old and tired link...

READ more on this IF YOU REALLY want to know what happened.

PLEASE....otherwise you are nothing but a PAWN for disinformation, without any mind of your own! damnit!!!!!!! read, read more on it, and then google and read even more!

let the TRUTH set you free....

 

[Toro]

And who ENABLED these banks to do the sub-prime--reckless mortgages? OUR GOVERNMENT--which back in the 1990's DE-REGULATED standards in lending--along with requirements for AIG--Wall street & others that could swap & trade for mortgages.

The source of this economic collapse is our GOVERNMENT'S mis-management of Fannie/Freddie. That is ground zero.

Look it up youself!

New York Times
Date: Sept. 30, 1999
Titled: Fannie Mae to reduce credit requirements to aid mortgage lending

I was absolutely shocked to learn that 50% of the mortgages in this country are backed by the American tax-payer THANKS TO OUR GOVERNMENT.

Fannie and freddie were NOT the problem oreo, it's TIME TO CATCH UP AND READ something else on the topic other than your old and tired link...

READ more on this IF YOU REALLY want to know what happened.

PLEASE....otherwise you are nothing but a PAWN for disinformation, without any mind of your own! damnit!!!!!!! read, read more on it, and then google and read even more!

let the TRUTH set you free....

Roughly half of all mortgages are guaranteed by the government, but over 95% of guaranteed mortgages are qualifying mortgages, i.e. 30 year fixed.

It is estimated that the Freddie and Fannie lowered the cost of mortgages by 0.25%-0.5%.

 

[garyd]

So then the question becomes Why did they make loans that they 'knew' Could go South at any moment? Only at Fannie and Freddie - government spin offs by the way - were the managers paid bonuses for making bad loans.