Replies

You decide who is at fault in this disaster!

1 posted on 09/21/2008 2:53:35 PM PDT by Renkluaf

2 posted on 09/21/2008 3:00:24 PM PDT by sam_paine (X .................................)

Democrats, with the help of spineless Republicans who feared being called a racist, even though there were a number of white people that shouldn't have gotten loans either.

Nothing to see here folks, please move along.. everything is SNAFU, as usual.

3 posted on 09/21/2008 3:06:27 PM PDT by AFreeBird

So what does all this mean? Simple, banks and mortgage companies were coerced into making mortgages available to many who were not able to handle the debt. I have no doubt there were some unscrupulous mortgage lenders because every industry has those who abuse the rules.

While I agree with your summary insofar as Government action is concerned, I think you place far too little blame on the huge financial houses, who were more than happy to operate in the environment that the government created. You make it sound like a matter of, "yeah, there were a few bad apples, but..." But the incredible magnitude of the failures in question make it pretty clear that there were a whole LOT of bad apples, making a whole lot of really stinky deals.

Lehman Brothers, Countrywide, and all those others were not forced by the government to get in so incredibly deep as they did. They were busy making (illusory) big bucks on shady deals, and eventually the false basis of their financial arrangements came home to roost.

FWIW, I think you probably need to add another contributing factor; namely, the changes in banking regulations allowing multi-state mergers, letting banks deal in securities, and so on.

One of the major reasons why this crisis is so huge, is because of the significant concentration of assets within a quite small number of financial institutions that have been created over the years by bank mergers and acquisitions. Once those huge banks began engaging in the highly questionable financial arrangements that have now crashed, it was only a matter of time before a too-huge-to-allow type of failure occurred.

5 posted on 09/21/2008 3:15:08 PM PDT by r9etb

Because money turns a blind eye to otherwise repulsive men.

6 posted on 09/21/2008 3:22:20 PM PDT by februus

I’ve been reading all day about this .......the Glass-Steagall Act which Clinton killed in 1999. Comments sought.

http://www.investopedia.com/articles/03/071603.asp

7 posted on 09/21/2008 3:26:07 PM PDT by Squantos (Be polite. Be professional. But have a plan to kill everyone you meet)

The fundamental problem was that Freddie/Fannie did not have to uphold any standards to maintain their AAA credit rating. If they weren’t viewed as being government-backed, they would not have engaged in the sort of games they did since the resulting drop in credit rating would have hurt them severely in the marketplace.

8 posted on 09/21/2008 3:49:06 PM PDT by supercat

Stellar post. Thank you. Bump.

9 posted on 09/21/2008 4:23:10 PM PDT by Weirdad (A Free Republic, not a "democracy" (mob rule))

Nice summary! And up there in your early bullets points, don't forget about DOJ's doctrine of "disparate impact" back in the early 90s. Regulators and prosecutors arm in arm.

PC Lending.

"Now that the United States Department of Justice has taken to enforcing the doctrine of "disparate impact," no lender of sound mind can allow a person's character to enter into a credit decision. Such a judgment could never be defended in any statistical analysis of a bank's loan files."

10 posted on 09/21/2008 4:38:49 PM PDT by gotribe (The right pick!)

Excellent, and thank you so much!!

11 posted on 09/21/2008 4:59:50 PM PDT by MarMema (regime change in Russia!!)

12 posted on 09/21/2008 7:34:18 PM PDT by TeleStraightShooter (When BH0 was 8 he attended his mosque in jakarta; Bill Ayers was simultaneously bombing the Pentagon)

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