Will You Help Me With My Next Film? ...a request from Michael Moore

[manu1959]

the government created a policy under carter and expanded it under clinton....that banks and the population took advantage of.....not to mention groups like acron which filed suit against lending institutions for discriminating against people that could not afford the loans......

then the securites and equiteis market bundeled all these various loans and sold them on wall street and around the world.......

everyone got greedy and made a pig of themselves.....

ever been to a party with an open bar....

 

[toomuchtime_]

This is an accumulation of different causes that ended in this crisis, the government can deregulate: then the government bares responsibility of this, but when the banks take too high risks on the backs of all americans who are customers there (a bank has a public responsibility as well as a private one) then they need to be held responsible as well.

It seems that large banks failed in their public responsibilities: are they not accountable for that?

Like if an engineer builds a bridge it has also a public and a private responsibility: if the bad construction of his bridge causes deaths, damages then the engineer bares full private and public responsibility for that.

We don't know specific stories of what the specific banks all did to cause this, their have been major screw-ups from within the banks. It is important that the responsible ones for this don't just run away with it, the press hasn't done its job in giving full coverage of all this & investigation into it.

I'm not sure what high risks you're talking about. The derivatives they are stuck with were rated AAA at the time they bought them, so that can't be what you mean. The high risk (of foreclosure) of some of the mortgages they sold and bought were not really high risk for them since there was a ready market in which to sell them. What is truly stunning is that hardly any of our banks and hardly any of the banks in the rest of the developed world and hardly any of the governments in the developed world seemed to realize that sooner or later the real estate bubble would burst and all these "safe" investments would lose value, although even if they had realized this, I don't think anyone would have guessed AAA rated bonds would lose so much of their value so quickly.

I think it is described in this article:

"By pushing all of this excess credit into the economy, the Fed created a housing and mortgage mania that Wall Street was only too happy to be part of. Yes, many on the Street abandoned their normal risk standards. But they were goaded by an enormous subsidy for debt. Wall Street did get "drunk" but Washington had set up the open bar."

The Bush Economy - WSJ.com

It is obvious that the government made mistakes, but it is even more obvious that some companies made huge mistakes. Lehman Brothers distracted most of the attention, because of its bankruptcy but many forget the other responsible ones. Why are they not accountable?

The author says the banks abandoned their normal risk standards, but he also says these were not normal times. Notice that he states in some detail what the Fed did wrong and what the Treasury did wrong, but he has no details about what the banks did wrong because it was appropriate at a time of rapidly rising real estate prices and low interest rates to change the way they did business. And what changes did they make? They required lower down payments on mortgages and sold them to people who would not formerly have qualified. But the down payment is supposed to be a protection for the bank against the expense of foreclosure and with property values rising so rapidly, the increase in value in the event of foreclosure was already adequate protection against the expense of foreclosure, so the down payment was not necessary. Similarly, the rising property values afforded sufficient protection to allow the banks to sell mortgages to people who would not have previously qualified.

Some of their practices changed to accommodate the changed financial environment, but the risk level remained the same, or so they thought. What the banks are guilty of is not realizing the bubble would burst and property values would fall and that would make these "safe" mortgages very, very expensive. But virtually all the banks in the developed world and all the governments in the developed world failed to realize this, so the banks bear no special responsibility for the financial crisis.

 

[garyd]

Yes it is and it goes back well beyond the 1990's and involves government regulations at every level that have helped price houses out of the reach of the average working stiff.

 

[elvis]

I keep imagining someone in in 2012 making a fahrenheit 9/11 style film about Obama. what content would go into it?

Now now Quayle, keep on wishing and dreaming.

ah, Jeremiah Wright is back for more, I see.