EternalHoH
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Joined: 5/30/2010
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quote:
ORIGINAL: Sanity
Psst - Dear Leader voted against regulation of Fannie and Freddie as a Senator
Okay, 2 things.
First -
He was one vote, in a process that requires 100. So yea, go ahead like an average educated Idahoan and lay that outcome all on Dear Leader's lap.
Second -
Let me buy you a copy of the book "Financial Crisis of 2008 for DUMMIES"
Fannie & Freddie (and other private banks) only created the mortgages and sold them to investment banks. That is where their role in the financial crisis of 2008 ends. It doesn't go beyond that. They were all encouraged to make these loans, with the blessing of Greenspan. Remember that Greenspan was ideologically against regulation, even though he held the most critical regulatory job on this earth, the job of regulating the US money supply. Such a conflicting combination of responsibilities vs. ideology resulted in his money printing presses running on overtime, printing up the cash needed to lend to the liars.
Once the loans were in Wall Street's hands, then all kinds of wild shit happened, wild shit that was 100% detached from the action or motives of Fannie & Freddie. The investment banks bribed the ratings agencies to certify mortgage junk as AAA rated instruments, which allowed them to sell this junk to pension plans and mutual funds. When they sold the actual mortgage securities to investors, they also sold "insurance" on the investment - an unregulated form of insurance called a Credit Default Swap. Normal insurance in heavily regulated, and one of those regulations require adequate capital be held in reserve for the proverbial rainy day. But credit default swaps were an unregulated form of insurance, and rather than maintaining adequate cash reserves, Wall Street blew all that money they made selling the swaps on themselves, in the form of bonuses.
So when the liars started defaulting on mortgages, the securities sold as investments rotted, and investors now reached for their insurance policies. When the investors came to collect on the insurance, they found that the people who sold them the insurance had no assets backing the paper. And that is what imploded the investment banks and AIG. Your TARP dollars only dealt with the swaps part of the crisis. The right of insurance claimants who were waiting to get paid were the actual "toxic assets" that your tax dollars purchased for pennies on the dollar. The most expensive component in the financial crisis, and the element that almost blew up the global financial system, was related to the unregulated insurance, and not the actual liars mortgages or real estate involved.
The mortgage mess was a weather-able storm by its own. The insurance mess, which contained all the side bets, was not, and is what drove the need for the bailouts.
The party of doom could have been stopped at a number of steps along the way -
1- Greenspan could have shut down the printing press, drying up the source of loan money, but he did not.
2- The ratings agencies could have grown a conscience, returned the payola, and tightened their standards, but they did not.
3- Fannie & Freddie could have had their wings clipped legislatively, but were not.
4- The homebuyer could have grown a brain, and realized the roof over their head should not be used as an investment vehicle, but they did not.
5- All forms of unregulated insurance could have been outlawed, but it was not.
6- The unregulated insurance proceeds could have been kept in reserve rather than blown on Wall Street bonuses, but it was not.
Your links only focus upon #3, as if #3 is what drove the entire profit-making bus. It did not. So I don't know why you think educational salvation lies behind door #3 only. Care to explain your queer stance in Idahoeese?
Conservative media often focuses on #3 and #4, but acts as if #1, #2, #5 and #6 don't exist. So much for 'fair and balanced'.... lol
The entire episode was a financial deregulation ORGY that began under the Big R (yes, your hero), containing participation from both sides of the aisle. And you being critical of not regulating Fannie & Freddie? Anybody who voted to regulate anything during that time would have been exiled to the moon.
Along with the dire calls to regulate Fannie & Freddie that give all of us such a patriotic hard-on, where were the right wing calls to regulate the unregulated insurance? Or the bonuses? Or the ratings agencies? Or to oust Greenspan for not doing his job as a regulator?
< Message edited by EternalHoH -- 8/24/2011 3:34:19 PM >
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