A question for you Liberals.Follow

Let's be fair though. It wasn't the "banks and Wall St" which did this. It was the GSEs Freddie and Fannie who bundled those securities. It was also the CEO of Fannie, Franklin Raines who testified before Congress that the securities they were bundling were not just safe at 3% asset to debt, but at 2% (that's the 50-1 ratio someone mentioned earlier).


Part of the problem when discussing this issue is that everyone talks about a "lack of regulation", but "regulation" meant (and still means) different things to different people. To the Dems regulation meant more rules requiring specific lending rates to specific sets of people. To the GOP regulation meant that the GSEs should be restricted from handing out more loans than the industry could afford to absorb.


This is why it's a bit misleading when Liberals all point to a "lack of regulation" as the cause. They're right, but the regulation which the Dems sought and which the GOP opposed was *not* the sort of regulation which would have helped. It's the sort which would have made things worse (and arguably, the amount we had certainly caused or at least contributed to the problem). The GOP continually attempted to reign in the lending practices at Fannie and Freddie and were blocked by the Dems at every turn.


So yeah. I don't blame the banks. And I certainly don't blame Wall St. They didn't do anything wrong. They didn't lie about the assets they were dealing with. I blame Freddie and Fannie, the people who lead them at the time, and the politicians who provided them legal cover during the time period in question. Sadly, we've now put those people in charge of the rest of the economy. Crazy! I know...

How was the GOP blocked by the dastardly minority party at every turn?

Are you saying they're even more ineffectual than the Dems?

Let's be fair though.

Ok!

It wasn't the "banks and Wall St" which did this. It was the GSEs Freddie and Fannie who bundled those securities..

Let's be fair, though.

The problem wasn't the bundling of those securities, the problem was that risk was misrepresented. Not by GSEs, however, by private rating agencies. The math (and, yes, I know I just lost you) behind risk assessment was predicated on the government acting as a backstop to any sort of catastrophic loss, as opposed to factoring that risk of catastrophic loss into the overall risk it WAS LITERALLY IGNORED. So, where models should have shown bundled securities as moderately risky, they showed them as having virtually no downside. This is an oversimplification, obviously, and there are other factors, but you couldn't understand any more complex explanation.

Let's be fair though.

You don't understand the dumbed down version, either.



A It was also the CEO of Fannie, Franklin Raines who testified before Congress that the securities they were bundling were not just safe at 3% asset to debt, but at 2% (that's the 50-1 ratio someone mentioned earlier).

Possibly. Hard to tell without a cite as I don't have everything Franklin Raines said during congressional testimony memorized.

Let's be fair though.

They would have been safe at those level of leverage IF THE RISK HAS BEEN CALCULATED APPROPRIATELY. Was Raines aware that these models relied on a ludicrously oversimplified Gaussian copula model that was obviously wrong? Probably. Franklin Raines is a selfish corrupt ****. I have no idea of his politics, but being a brother I'd assume he's a Democrat unless he's of the self hating Mike Steele mold.


Part of the problem when discussing this issue is that everyone talks about a "lack of regulation", but "regulation" meant (and still means) different things to different people. To the Dems regulation meant more rules requiring specific lending rates to specific sets of people. To the GOP regulation meant that the GSEs should be restricted from handing out more loans than the industry could afford to absorb.

Let's be fair though.

The above quote is either an intentional lie or the mark of abject ignorance and lack of desire or ability to learn bordering on a disability suffice to warrant competing in the Special Olympics . Let me be clear, I'm not calling you a liar.


This is why it's a bit misleading when Liberals all point to a "lack of regulation" as the cause. They're right, but the regulation which the Dems sought and which the GOP opposed was *not* the sort of regulation which would have helped. It's the sort which would have made things worse (and arguably, the amount we had certainly caused or at least contributed to the problem). The GOP continually attempted to reign in the lending practices at Fannie and Freddie and were blocked by the Dems at every turn.

Let's be fair, though. The GOP insisted on completely deregulating the derivatives market. Had the derivatives market had the same level of regulation that "straight" equities markets do, the "crisis" would have been impossible. Not that we haven't previously been over this, in detail, but as you've apparently been again afflicted by "*** Kicked Amnesia" where you completely lose memory of posts where your arguments are systematically dismantled in great detail complete with meticulously researched and sites factual sources only to repeat them, essentially verbatim a few months later, let me emphasize that mortgages being the asset at the bottom of the security/derivative stock is about as unimportant a factor as is possible here. The asset in question could have been literally anything.


So yeah. I don't blame the banks. And I certainly don't blame Wall St. They didn't do anything wrong. They didn't lie about the assets they were dealing with.

They did, in fact, lie about the assets they were dealing with.


I blame Freddie and Fannie, the people who lead them at the time, and the politicians who provided them legal cover during the time period in question. Sadly, we've now put those people in charge of the rest of the economy. Crazy! I know...

Let's be fair, though.

You have a great desire to shoehorn the "government trying help poor people killed the economy!!!" narrative into a set of facts where it just can't possibly fit. It's a little sad, really, well, let's be fair, though, not so much sad, but pathetic.

I obvisouly agree with what Smash said. 100%.

But even if we admit that gbaji has a point, because we suddenly live in an imaginary world where things are the way gbaji says they are, then isn't worth re-considering an economic system whereby a bunch of rednecks in some Southern states defaulting on their mortgages causes the whole world's economy to completely collapse? Doesn't this say something about the inherent vulnerability of relying on the financial services for growth? Doesn't it say something about the foundations of our economy?

Another point is that people go on and on about how growth for Wall Street is good for America, or whatever local version we're being sold of this ********* So they get 5-10 years of growth, of which we barely see any profits, and then the system collapses, and we're loaded with gigantic debts for the next 5-10 years. Was it really growth, then? Or, to put it another way, was this growth worth it? We make a bunch of finance twats mega-rich for 5-10 years, and then we lay off whole swathes of industry, see unemployment rise, houses repossessed, etc, etc... And if you complain about that it makes a... communist?

Bit fbucked-up, really.

Girl, you know its true.

I don't think the Atlantic Ocean is big enough to metaphorically express the gap between how you and I see the world, gbaji.

How about the Pacific. It's larger and it has nicer islands.

Don't be so glib, when we're all underwater sharks are going to be our overlords. They will of course be controlled by the dolphins.

There are really only so many "hur hur you live with your parents while you're in college" jokes you can make.

My actual point was that you're not terribly clever.

I'm sayin'. It kinda creeps me out, to be honest.