“Please elaborate.”
“The derivative market was the bottom line that gave the government enterprises the capability to sell off the bad loans after they purchased them from the banks. It’s really a funny kind of Ponzi scheme. They put blinders on the watchdogs and then went into business selling bad paper. All it took was a breathing bag of skin that could successfully sign a loan application. If dogs and cats could have signed the loans they would have done that too. If they could not have transfered those bad loans somewhere then they could not have screwed us. But they had that covered. They made a law preventing any government agency from monitoring that market. That was a Clinton administration & congress that did that. Remember how home ownership was the big achievement? You have to love our government when it does what it does the best. It took suckers to take out the loans and lending institutions like the two government enterprises to create this freight train disaster.”
The regulation that caused this was making sure that the over the counter derivatives market remained in the dark. As long as a house could be purchased and then sold six months to a year later everyone was riding that gravy train.
If you dump a truck full of gold nuggets in a stream and then tell anyone that could crawl that they only needed to go down and jump in then guess what happens. It was a Ponzi Scheme. The government makes Bernie Madoff look like a saint compared to this.
Just look at those jack asses telling the world it was because of deregulation. It was their deregulation and Greenspan just met his own Waterloo.
Bingo!..the banks would have never made those bad loans but for the fact Fannie and Freddie would take them off their hands....once that was made clear, the banks had a field day making “bad loans” and pocketing the fees before passing them along....No risk for the banks!
Remember the “redlining” threat banks were held hostage with??.... Congress solved that!...Dumb a$$es!