Republicans: explain why Wall Street had nothing to do with bringing down the economy

[sparky]

If the housing bubble was our only major economic problem we would have already recovered from that.

yup, but while that sentiment is being drowned out with the usual canards, may i suggest what's being said about this outgoing cabinet member>


Elizabeth Warren - Wikipedia, the free encyclopedia

 

[whitehall]

You radical lefties need to get a handle on anger. We have a government and we have a private sector. The government makes the rules that the private sector must follow. How can the left blame Wall Street for the downturn in the economy? Is the hatred based on a Michael Douglas movie? Every pension plan, public or private, is based on the Stock Market. The government spends your money. The stock market creates wealth. Why are radical lefties who allegedly enjoy all the benefits of a free and just Country attacking Wall Street when they saw Fannie Mae collapse while the democrat in charge of supervising Fannie (the House Banking Committee chairman) told us Fannie was doing fine? Politicians are too dumb or too crooked to even run a Post Office without creating some sort of scam to steal stamps.

 

[martybegan]

All right, from the top:

30 some years ago you had to have a down payment and a good credit rating to buy a house. You had to essentially prove you could afford it, your mortgage couldn't be higher than 30-40% of your income unless you forked over more money on the down payment.

Then the gov't changed all that, basically did away with all of it so that any swingin' dick could buy a house. They created Adjustable Rate Martgages (ARMs) that were initially very low but would accelerate the rate over time depending on the prime rate. Fannie and Freddie backed the loans and the gov't all but forced banks to loan money to people that wouldn't have been able to qualify years earlier. The regulators relaxed the enforcement, people took out mortgages on those ARMs deals, and anybody who raised objections or questions from either party or no party was summarily dismissed.

Bunches of sub prime mortgages were lumped together and sold as AAA rated securities when in fact they werreobviously not that secure. And all was well until the interest rates started to go up and people couldn't make their payments on the mortgages. And it all came down like a house of cards.

Were the Wall Street bankers and Investment firms responsible? Sure, but no more than the gov't who pushed this far beyond what was financially sound, and the regulators and credit ratings agencies and the underwriters and the people themselves who had to know they were buying something that they couldn't afford down the road. And of course Fannie and Freddie, who many think were the chief architects of the whole mess.

The key thing is the value of a house vs. a yearly income. My grandfather bought a house for $5600 on a $4000 per year postmans income, roughly 1.4 to 1. My father bought a $43k house on $55k income, around the same ratio. now in NYC you have people buying a $400k house on $90k income, a more than 4 to 1 ratio. The value isnt the problem, its the ratio from yearly income to house value that is screwed now.

 

[StashMan]

I am brand new to this forum and am impressed with many of the threads so far. However, I am amazed at how many folks are missing the true culprit in all of this. It's called The Federal Reserve System. It is this entity that has caused the financial crisis. Folks the Fed is not part of our Government. It is owned by a collective of private banks. This is NOT a conspiracy theory, it is a bon-a-fide fact.

Since I am new and have yet to post 15 times I am not allowed to provide a link here, but if you go to YouTube and search The Fed, G. Edward Griffin, you will see how it came into being.

There is a book called, "The Creature From Jekyll Island" by G. Edward Griffin that every American should read. Our money is printed out of thin air and is not backed by anything. Our currency has not been backed by gold since 1971. When they print money out of thin air they deflate the dollar. Our dollar today is worth 4 cents as compared to what it was in 1913 when congress enacted The Federal Reserve Act.

They print money out of thin air, loan it to the government with interest, who give it to the banks, who loan it to us. They then keep the interest, all from nothing at all. They have been doing this to us for a long long time now. Get Informed, and let's END THE FED. RON PAUL 2012

 

[JRK]

person A makes a loan to person B
person A does not do his DD
person B cannot pay back person A
It is wrapped up with other toxic loans and called a security
The rating agency does not do there DD
they rate this security A-AA-AAA

Wall street does theres and according to Moody's and the bank that was first to make this loan should have been secure ( security)

there you have it

wall street got hurt just like we did, except they got a bailout, The working people, non union, got no help and will not get any

 

[editec]

Well certainly not every firm on wall street, and certainly not every company listed in the stock exchanges had anything to do with this mess.

Most corporations and most people in this nation are in NO WAY responsible for this disasterous economy.

 

[California Girl]

Could I suggest, rdean, that you draw yourself a diagram, linking all the separate issues that came together to cause the current clusterfuck. It might be helpful. I have. Take each separate issue, such as:

1. Rampant greed and dishonesty on Wall St
2. Rampant greed, dishonesty, and corruption at Freddie & Fanny.
3. Rampant greed and stupidity by ordinary Americans
4. Decade after decade of political incompetence
5. The globalization of banking.

Once you have bottomed out each individual issue above, put the 4 side by side and then link the impacts of one on another.

That is what happened. A perfect storm. They are all responsible.

Stop looking for one individual or group of individuals to 'blame', because that makes you as dishonest as those who caused this.

 

[martybegan]

Could I suggest, rdean, that you draw yourself a diagram, linking all the separate issues that came together to cause the current clusterfuck. It might be helpful. I have. Take each separate issue, such as:

1. Rampant greed and dishonesty on Wall St
2. Rampant greed, dishonesty, and corruption at Freddie & Fanny.
3. Rampant greed and stupidity by ordinary Americans
4. Decade after decade of political incompetence
5. The globalization of banking.

Once you have bottomed out each individual issue above, put the 4 side by side and then link the impacts of one on another.

That is what happened. A perfect storm. They are all responsible.

Stop looking for one individual or group of individuals to 'blame', because that makes you as dishonest as those who caused this.

You also have to add to the situation above that EVERYONE was making money off this. Wall St was making money. The feds and any state/municipality charging and income tax made money. places with property taxes made money off of the increased real estate values. Real estate places made money flipping houses. Plus people got to buy houses they really couldn't afford. Everyone was winning, no one was losing, so no one stood up and said that this model wasn't really sustainable.