You are the most uninformed financial idiot around here. That is exactly the point. The banks did not stand to loose on their loans for the simple reason that they thought they had sold the loans on where they were securitized and divided into tranches which were further securitized and insured by the likes of AIG - recall that name?
So the banks made their fees up front, originating the loans and selling them on for others to be at risk for the losses. By others, I mean the pension funds that ultimately hold these things, and oh yes, the taxpayer, who it turns out underwrote AIG even when we did not know we were going to do so.
You’re the IDIOT, idiot.
They were able to bundle and sell these as ‘derivatives’ precisely BECAUSE the government (FANNIE and FREDDIE) guaranteed them
The bottom line, is that the GOVERNMENT SET THIS WHOLE PROCESS OFF
Idiot
And besides that’s EXACTLY what I said you freakin’ moron
I SAID the banks DO NOT lend money they know they will lose. SO!!!! (and this is the part where you need to read the entire post and use your brain) SO... THEY KNEW THEY WOULD NOT LOSE THIS MONEY
why? (still following me?)
BECAUSE THE GOVT GUARANTEED THEY WOULD NOT LOSE- Which is exactly what you said, AFTER I said it...
And.. (listen carefully here... this is the good part)
ANDREW CUOMO IS HERE ON THIS VIDEO SAYING SO!!!!!!!!!!!