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Valued Social Butterfly
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Re: Recession

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Message 41 of 44

Republicans are claiming Fanny and Freddie "guarentee" mortgages, which is another lie. The Mortgage Backed Securities sold by Fanny and Freddie allowed the worthless sub-prime mortgages to be bundled and sold along with performing mortgages.

 

But the Wall Street Banksters kept adding more and more worthless non-performing mortgages to those "MBS derivatives" and using them as collateral to issue more worthless mortgages. No Government action was involved, in fact, the legislation contained a specific prohibition on using the law as an excuse to sell a mortgage that did not meet the banks' standards for lending.

 

But the biggest driver was the two balanced budgets Clinton executed. Since this dramatically REDUCED the availability of Government backed Treasury issues, the World financial market was in need of a secure replacement, and since Government REGULATION had made US home mortgages "immune" from failure, that's the first place people invested their dollars obtained from the trade deficit. But the deficit grew faster than the legitimate home mortgage market, so Banksters began issuing sub-prime mortgages TO PEOPLE WHO COULD MAKE THE MONTHLY PAYMENTS, but did not have the down payments, which the Government provided under a separate program.

 

That still wasn't enough to soak up all the trade deficit dollars, so Banksters created the MBS to conceal the worthless non-performing mortgages in with a bunch of "good paper" and then for over a year refused to "mark to market" to reveal the true value of their worthless paper, during which time the problem grew into a World Financial Disaster second only to the 1929 market collapse.

 

So read all the Right Wing Capitalist Oligarch controlled media you want - it was DEREGULATION and refusal to enforce what little regs remained by REPUBLICANS that grew a technical problem - not enough Gov't guratenteed Debt (Treasury issues) to soak up trade deficit dollars - into a financial disaster of biblical proportion.

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Valued Social Butterfly
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Re: Recession

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Message 42 of 44

 

Let us consider:

 

It's baloney.

 

 

The government never required banks or mortgage companies to lend money to people who were not credit worthy. 

 

 

In fact

 

 

The sub prime crisis came from mortgage companies that were not required to follow the same rules as banks, the rating companies that gave bogus ratings to bundled securities, and the Republican fantasy that free markets governed by people that love money above all else can regulate themselves.

 

 

The proof is the small traditional banks didn't require bailouts and the Wall Street banks did.

 

The cause :

 

Non bank lenders

Risky borrowers

Risky products 

Fraud

 

These crooks didn't have any skin in the game, they knew government would have to bail them out, they knew they wouldn't be held to account, they knew Wall Street would get the gold mine, they knew Main Street would get the shaft.

 

 

They didn't care.

 

 

Their love for money overcame any moral or ethical restraint. 

 

 

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Trusted Social Butterfly
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Re: Recession

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Message 43 of 44

Zombie faslehoods NEVER die they just shuffle along forever. At least this one is funny. And that's all I'll say, because it's too time consuming and does no good debunking this stuff. I'm sure conservatives will be pulling it out of the graveyard again and again.

 

The roots of this crisis go back to the Carter administration.

http://archive.boston.com/bostonglobe/editorial_opinion/oped/articles/2008/09/28/franks_fingerprints...

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Valued Social Butterfly
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Recession

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Message 44 of 44

On a regular basis the recession caused by the housing boom/bust is laid at the feet on President Bush, ignoring the real reason for it. And usually it includes claiming it was Republican support for rich bankers that gave us the sub-prime.

 

Let us consider:

http://archive.boston.com/bostonglobe/editorial_opinion/oped/articles/2008/09/28/franks_fingerprints...

 

https://www.theatlantic.com/business/archive/2011/12/hey-barney-frank-the-government-did-cause-the-h...

 

https://www.forbes.com/sites/georgeleef/2014/01/10/one-bad-law-usually-leads-to-others-the-housing-b...

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