So when Barney Fwank, Dodd and Cuomo forced banks to make bad loans and then assured the public over and over again that everything was peachy keen that's supposed to be different?
“So when Barney Fwank, Dodd and Cuomo forced banks to make bad loans”
You might want to check your facts. You are confusing CRA regulated depository banks with Wall Street investment banks. This concerns investment banks, not commercial banks. Wall Street investment banks weren’t subject to regulations forcing them to make loans.
Not only weren’t they forced to make subprime loans, they actively sought to get laws changed to let them get into that market. They were cranking out trillions of dollars of risky paper because it made them incredible amounts of money.
While that is one of the reasons, loans to people with bad or no credit had been around for decades. That was just used as one of the weapons.
What really caused this disaster what mainly deregulation acts like repealing glass-steagall and Phil Gramms idiotic “Commodity Futures Modernization Act of 2000” which greenlighted all these companies to leverage themselves to the hilt and made it actually illegal to regulate credit default swaps. Thus the big players developed a thirsting for more mortgages to package as investments, even subprime garbage, like a vampires thirst fresh blood. And with all those deregulation moves, they could keep a lot of it “off-books” to hide the real carnage going on.
I count those events as the defining moments that set this disaster truely in motion.