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The people in denial that the government caused this needs to watch the movie The Big Short.
The Big Short does not place it all in the lap of the government. I saw it, I thought it was a great movie and it placed the blame where it belonged. Everywhere.
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It explains it quite well how the government and the rating agencies colluded with Wall Street. The government oversighit placed the bt agencies were NOT doing their jobs and they turned a blind eye to what was going on. They also pressured the ratings agencies to keep the bundled mortgages at AAA ratings while the actual mortgages were below B and were being defaulted on. They did this so the big WS banks could unload these bundled messes onto smaller banks to get WS out from under them. THEN the ratings agencies lowered the ratings causing the crash. It was a giant conspiracy on the part of the Feds, the rating agencies and Wall Street.
Correct......colluded. Perhaps you were noting that people are denial that the government wasn't at fault, also. I agree with that.
The people in denial that the government caused this needs to watch the movie The Big Short. It explains it quite well how the government and the rating agencies colluded with Wall Street. The government oversight agencies were NOT doing their jobs and they turned a blind eye to what was going on. They also pressured the ratings agencies to keep the bundled mortgages at AAA ratings while the actual mortgages were below B and were being defaulted on. They did this so the big WS banks could unload these bundled messes onto smaller banks to get WS out from under them. THEN the ratings agencies lowered the ratings causing the crash. It was a giant conspiracy on the part of the Feds, the rating agencies and Wall Street.
I've seen the movie and the pressure on the private rating agencies was coming from the private investment banks. The private investment banks needed 2 AAA ratings in order to sell the CDOs to prudent investors (ie large institutional investors like pension funds). There were 3 private rating agencies that would be accepted by most prudent investors. The private investment banks would threaten to take their lucrative business to the 3rd agency if they didn't get the rating they wanted. None of that involved the Federal Government.
Actually if you guys think, it becomes very clear -
So much had been built upon and hedges using the fraudulent rated bonds, it means not only collapse internally but globally, as well as Un-pegging the US Currency as a Reserve Currency. You can't fathom a scenario of devaluation to that magnitude. It would result to be World Economic Calamity, and Astronomical Inflation as the Values of currency globally would become devastated.
President Obama put things in place in many sectors but when he went toward Wall Street, Republican blocked the measures and they blocked measures again when he proposed enacting further regulatory management over banks.
You can't make full circle full depth correction without doing so to Banks, Insurance companies, Wall Street and Hedge Funds games playing.
Under the plans that did pass, the Stress Test put banks to the test, unfortunately, the right wing congress continue to fight for allowance of them to have a back door exist to increase profits by collusive means, and propped up on match-sticks.
America chose to live by Paper Shuffling, when it adopted the obsession with Outsourcing, Acquisition and Mergers and all the Economic destroyer pump and dump, puff and rip games, which ALWAYS negatively impact the lives of the American Average Citizen.
I've seen the movie and the pressure on the private rating agencies was coming from the private investment banks. The private investment banks needed 2 AAA ratings in order to sell the CDOs to prudent investors (ie large institutional investors like pension funds). There were 3 private rating agencies that would be accepted by most prudent investors. The private investment banks would threaten to take their lucrative business to the 3rd agency if they didn't get the rating they wanted. None of that involved the Federal Government.
The government is suppose to oversee and regulate all of this. No?
Actually if you guys think, it becomes very clear -
So much had been built upon and hedges using the fraudulent rated bonds, it means not only collapse internally but globally, as well as Un-pegging the US Currency as a Reserve Currency. You can't fathom a scenario of devaluation to that magnitude. It would result to be World Economic Calamity, and Astronomical Inflation as the Values of currency globally would become devastated.
President Obama put things in place in many sectors but when he went toward Wall Street, Republican blocked the measures and they blocked measures again when he proposed enacting further regulatory management over banks.
Total B.S. Obama didn't do squat but make sure the rich got even richer over the entire mess.
Quote:
You can't make full circle full depth correction without doing so to Banks, Insurance companies, Wall Street and Hedge Funds games playing.
Under the plans that did pass, the Stress Test put banks to the test, unfortunately, the right wing congress continue to fight for allowance of them to have a back door exist to increase profits by collusive means, and propped up on match-sticks.
America chose to live by Paper Shuffling, when it adopted the obsession with Outsourcing, Acquisition and Mergers and all the Economic destroyer pump and dump, puff and rip games, which ALWAYS negatively impact the lives of the American Average Citizen.
When Obama took over the (D)'s held the White House and large majorities in both the House and Senate and did nothing but make the people personally responsible for the next collapse.
It really doesn't matter how you look at it, it boils down to these GSEs not operating properly. Once again government policy messing things up, and in this case, cratering the economy.
It does matter how you look at it. There's a huge difference in saying, "The GSE's should not exist," and saying, "The GSE's caused the mortgage crisis."
The Federal Reserve bought privately-issued MBS for Maiden Lane. That program ended, and the Federal Reserve no longer holds any privately-issued MBS.
The Federal Reserve also bought GSE-issued MBS, and STILL TO THIS DAY holds $1.75+ Trillion of GSE-issued MBS.
Follow the created money... THAT'S where the problem is.
The Federal Reserve lent money to the Maiden Lane LLC which bought the MBS.
Of course the Federal Reserve still holds the GSE MBS. They also hold around 2.5 trillion in Treasuries. The Federal Reserve will hold them until the Federal Reserve feels they can unwind the positions without negatively impacting the economy. Now that the Federal Reserve has taken initial steps to start raising interest rates, I suspect that the unwinding of the LSAP positions will not be to far behind. There is currently no need to rush the unwinding.
Total B.S. Obama didn't do squat but make sure the rich got even richer over the entire mess.
When Obama took over the (D)'s held the White House and large majorities in both the House and Senate and did nothing but make the people personally responsible for the next collapse.
Sounds nefarious. The government would never do such a thing.
(lightning strikes me and I fry typing at my computer)
I watched the market the entire year of the financial crisis, particularly after Bear Stearns went down in March 2008. That was the tip-off that something was very wrong. It took a while to work through, and the government even tried to issue $300 checks to Americans (I think that was in September) to spur the economy. Kind of wish I hadn't cashed that check, as it would be an interesting historical piece.
As far as Bank of America (BAC), Merrill Lynch, an investment bank, was also part of the government's orchestrated purchase. Ken Lewis was the then-CEO of BAC. My interpretation of what Lewis was saying at the time was that he was basically doing this for the good of the country. There was, of course, controversy that he put government intervention over shareholder interests, as there should have been. BAC had been minding their own business before all of this, but they had an enormous deposit base, and that's why the government needed them to buy ML and Countrywide: They could adsorb it.
If it were me, I would've made sure there was a clause that would've put the government on the hook for any lawsuits arising from anything specifically related to what was on ML our Countrywide's books, but it is what it is. If that could've been possible, to be sure. The only people who have a real beef are the BAC shareholders. And any officers from ML and Countrywide could still be sued personally. That I'd have no problem with. Otherwise, had Lewis refused to purchase them, ML and Countrywide were both going down, and it would've dragged the financial system down with it, so they say.
Lewis has kind of been forgotten for his part in all of this, which I think is unfortunate. IMO, BAC gets a get-out-of-jail-free card for Countrywide. The rest of it is just lawyer mumbo jumbo for jumbo-eating lawyers.
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