Why do working class Americans vote against their self interests?

[Toddsterpatriot]

Speaking of gambling, a large part of the crash were the casino operations behind Credit Default Swaps (CDS).

To this day, there are no insurable interest requirements for CDS, which I find outrageous and begging for another disaster.

AIG's collapse was entirely because of credit default swaps.

Of course, AIG collapsed because of CDS. So what?

 

[Toddsterpatriot]

Which is exactly why there are credit ratings and underwriting standards.

Standards which the banks threw out the window during the bubble.

Why did Fannie and Freddie throw out their standards?

And at the end, when all was said and done, by 2008, how much subprime paper did Fannie and Freddie hold?

 

[Toddsterpatriot]

They bought into the derivatives scam (on the wrong side) and lost their shirts… on PRIVATE mortgages

What derivatives did Fannie and Freddie buy?

Why did they do it?

 

[Toddsterpatriot]

A lot less than the broker-dealers did.

It was popular to bash the GSE's after the crash. One of the biggest critics who pushed this meme out there as Newt Gingrich.

What Gingrich was counting on was the public not knowing he worked for the GSEs and made a lot of money doing so.

Not only that, when asked in 2007 about GSEs, he said we needed MORE GSES.

Market-Based Models Are Key to Transforming U.S. Government to a 21st Century Organization - Freddie Mac

web.archive.org

I think a GSE for space exploration ought to be seriously considered I'm convinced that if NASA were a GSE, we probably would be on Mars today.

Certainly there is a lot of debate today about the housing GSEs, but I think it is telling that there is strong bipartisan support for maintaining the GSE model in housing. There is not much support for the idea of removing the GSE charters from Freddie Mac and Fannie Mae. And I think it's clear why. The housing GSEs have made an important contribution to homeownership and the housing finance system. We have a much more liquid and stable housing finance system than we would have without the GSEs. And making homeownership more accessible and affordable is a policy goal I believe conservatives should embrace. Millions of people have entered the middle class through building wealth in their homes, and there is a lot of evidence that homeownership contributes to stable families and communities. These are results I think conservatives should embrace and want to extend as widely as possible. So while we need to improve the regulation of the GSEs, I would be very cautious about fundamentally changing their role or the model itself.


You missed the point. Goldman Sachs should have been given a haircut on their CDS with AIG. But they had a lot of Goldman Sachs alumni in key places who made sure that did not happen, including the Secretary of the Treasury.

AIG cost US taxpayers $182 billion.

A lot less than the broker-dealers did.

Awesome! Be more specific.

You missed the point. Goldman Sachs should have been given a haircut on their CDS with AIG.

I know! Because the best way to stop a bunch of banks from collapsing is to allow banks to continue to collapse.
How much did the US Treasury lose because they stopped the Goldman haircut by rescuing AIG?
How much did the US Treasury lose because they included Goldman in TARP loans?

AIG cost US taxpayers $182 billion.

In losses? I don't believe you.

 

[g5000]

Investor demand was so high for CDO tranches, the broker-dealers began lowering their lending standards in order to produce the necessary number of loans to cram into the CDOs they were selling. This was all about fees from Wall Street's perspective.

At one point, Lehman Brothers decided to buy their own supply chain of brokers so they could control the entire pipeline for CDO creation.

The brokers were then pressured to make loans, any loans, to anyone with a pulse to meet the demand.

Then along came credit default swaps where literally anyone could make bets on the success or failure of any CDO they chose.

AIG accepted these bets, and they were bets pure and simple, in the belief they would never have to pay out since the CDOs were all being rated AAA by the ratings agencies.

AIG believed the CDS payments were free money. So they took all comers. Until round about 2006, IIRC. Then AIG told the planet that things were getting too hinky and they were out. But it was too late for them, but they didn't know it yet.

Rather than clean up, Wall Street started selling CDS to each other to keep the whole rolling train wreck going! I shit you not.

The ratings agencies were pressured by the broker-dealers to rate all the CDOs as AAA.

You know who paid the ratings agencies' salaries? The broker-dealers.

Yeah.

So if the ratings agency didn't rate the broker-dealers shit CDOs as AAA, they didn't get paid.

Some system, eh?

And this is how loans ended up being given to people who couldn't even make their first mortgage payment.

This is how even more mortgages could not be paid after those teaser rates reset three to five years later.

And that's when the CDOs began failing and AIG suddenly found themselves having to pay out money they didn't have.

Bye-bye broker-dealers.

Bye-bye AIG.

All because of the CRA? BWA-HA-HA-HA-HA-HA!

 

[Toddsterpatriot]

Look at the “Buy Mortgages” paragraph

That does not say “originate” or “made”

It says “buy mortgages from lenders”

Private lenders . And it bit them in the ass

I’m not at all surprised that someone who SOLD those bullshit mortgages on the private market (Robert) would be lying about this

Well duh!

Fannie and Freddie never originated a single mortgage ever.

You're kinda clueless.

 

[Toddsterpatriot]

You did not provide a link. Maybe because you left out this part:

In fact, Fannie and Freddie lost market share as the bubble grew: The companies backed roughly half of all home-loan originations in 2002 but just 30 percent in 2005 and 2006.


Like I said, Fannie and Freddie lost market share to Wall Street. Wall Street threw their underwriting standards gained from centuries of experience out the window.

In response to losing market share Fannie and Freddie then began lowering their standards to satisfy their shareholders.

The lowering of credit standards began on Wall Street, and then the GSEs followed.

In an ill-fated effort to win back market share, Fannie and Freddie made a few tragic mistakes. Starting in 2006 and 2007—just as the housing bubble was reaching its peak—Fannie and Freddie increased their leverage and began investing in certain subprime securities that credit agencies incorrectly deemed low-risk.

7 Things You Need to Know About Fannie Mae and Freddie Mac

Fannie and Freddie remain two of the world’s largest financial institutions, but most Americans understand very little about the two mortgage giants.

www.americanprogress.org

In response to losing market share Fannie and Freddie then began lowering their standards to satisfy their shareholders

And in response to government mandates.

 

[Toddsterpatriot]

With the invention of CDOs, Wall Street hypnotized themselves into believing they had eliminated risk and could therefore lend money to people living under bridges.

The CDO was not a bad invention, it was just abused beyond belief due to investor demand.

They did the same thing in 1987 with portfolio insurance.

To err is human.......

 

[Toddsterpatriot]

The tipping point was when the broker-dealers were allowed to over-leverage.

How much subprime crap did HUD under Clinton force Fannie and Freddie to buy?
How much subprime crap did HUD under Bush force Fannie and Freddie to buy?

30% of all their purchases?
50%?
55%?

 

[g5000]

What derivatives did Fannie and Freddie buy?

Why did they do it?

The GSE's bought derivates as a hedge against losses.

Loading…

www.reuters.com

 

[Toddsterpatriot]

Investor demand was so high for CDO tranches, the broker-dealers began lowering their lending standards in order to produce the necessary number of loans to cram into the CDOs they were selling. This was all about fees from Wall Street's perspective.

At one point, Lehman Brothers decided to buy their own supply chain of brokers so they could control the entire pipeline for CDO creation.

The brokers were then pressured to make loans, any loans, to anyone with a pulse to meet the demand.

Then along came credit default swaps where literally anyone could make bets on the success or failure of any CDO they chose.

AIG accepted these bets, and they were bets pure and simple, in the belief they would never have to pay out since the CDOs were all being rated AAA by the ratings agencies.

AIG believed the CDS payments were free money. So they took all comers. Until round about 2006, IIRC. Then AIG told the planet that things were getting too hinky and they were out. But it was too late for them, but they didn't know it yet.

Rather than clean up, Wall Street started selling CDS to each other to keep the whole rolling train wreck going! I shit you not.

The ratings agencies were pressured by the broker-dealers to rate all the CDOs as AAA.

You know who paid the ratings agencies' salaries? The broker-dealers.

Yeah.

So if the ratings agency didn't rate the broker-dealers shit CDOs as AAA, they didn't get paid.

Some system, eh?

And this is how loans ended up being given to people who couldn't even make their first mortgage payment.

This is how even more mortgages could not be paid after those teaser rates reset three to five years later.

And that's when the CDOs began failing and AIG suddenly found themselves having to pay out money they didn't have.

Bye-bye broker-dealers.

Bye-bye AIG.

All because of the CRA? BWA-HA-HA-HA-HA-HA!

Yes, bubbles happen.
Especially when the government helps.

 

[g5000]

They did the same thing in 1987 with portfolio insurance.

To err is human.......

It was greed. Not error.

 

[g5000]

Yes, bubbles happen.
Especially when the government helps.

The government helped by deregulating Wall Street.

 

[Toddsterpatriot]

The GSE's bought derivates as a hedge against losses.

Loading…

www.reuters.com

Derivative losses in 2015 didn't cause the bubble to collapse in 2008.

I didn't see any specifics in that article.

What derivatives? When did they acquire them?

 

[g5000]

How much subprime crap did HUD under Clinton force Fannie and Freddie to buy?
How much subprime crap did HUD under Bush force Fannie and Freddie to buy?

30% of all their purchases?
50%?
55%?

I have no idea why tards still insist the CRA had anything to do with the crash.

 

[g5000]

I'm sure the negroes of Iceland and Ireland had something to do with the crash of their banks, too...

 

[Toddsterpatriot]

It was greed. Not error.

Greed causes bubbles to form.
Greed causes bubbles to expand.
Greed causes people to make investing errors.
Greed causes bubbles to explode.

It's part of human nature.

 

[Toddsterpatriot]

The government helped by deregulating Wall Street.

And by mandating that Fannie and Freddie buy subprime crap, instead of sticking to conforming mortgages.

 

[Toddsterpatriot]

I have no idea why tards still insist the CRA had anything to do with the crash.

CRA has nothing to do with leftists ignoring HUD mandates for the GSEs.

 

[Toddsterpatriot]

I'm sure the negroes of Iceland and Ireland had something to do with the crash of their banks, too...

The greed of their banks and depositors led to those bank failures.