Who & What Caused The Financial Collapse - Economics - Page 3 - City-Data Forum

floridasandy · 12-14-2008, 05:37 PM

hedge funds.

tigerwoodsyall · 12-15-2008, 02:28 AM

from what I have been hearing on the news alot of it had to do with those mortgage backed securities (?) and how they put all the bad loans into one single pile and magically through financial engineering they got a AAA rating

I think it was 20/20 special where I heard those.

I also heard that AIG and others insured these debts and when the time came up to pay them because they had defaulted they didn't have the cash flow to do so.

Overall from what I have been hearing is that if it wasn't for these wall street instruments the country wouldn't have been this bad, yes it would have slowed the economy down (the foreclosures) but wall street made it snowball more.

It's truly sad what is happening to the financial industry, before the newscasts I didnt know the rating agencies (S and P, Moody,fitch) got their money from those same places they did ratings on (the securities)...Who is there to trust anymore on wall street?

I honestly don't blame the people who who bought the ARM's , etc.. but I do fault wall street for pretty much going on a drinking binge and not having the farsight to think ahead but just live in the moment.

floridasandy · 12-15-2008, 05:51 AM

goldman sachs controlled wall street. but pretended to be clueless in order to sell their CDOs which are bonds for future payments on housing bought by dead beats who can't even afford teaser rates. (people think the defaults were when the rates were raised but many were during the teaser rates and of course many more will be now that the rates are raising). since everyone is lying, the buyers and sellers both lying, this leads to the inevitable collapse in confidence. Ergo: the system isn't based on people thinking confidently, it is based on trust alone. our fiat money is based on trust alone since we detached from the gold standard. if everyone from top to bottom lies, the system collapses because everyone is cheating each other. madoff is not the only hedge funder to cheat the system, but he was the first to be ratted out.