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Goldman Sachs and Morgan Stanley did that after the fact. Goldman Sachs had already received their bailout by September 2008.
Also from the article you linked
In exchange for subjecting themselves to more regulation, the companies will have access to the full array of the Federal Reserve’s lending facilities. It should help them avoid the fate of Lehman Brothers, which filed for bankruptcy last week, and Bear Stearns and Merrill Lynch — both of which agreed to be acquired by big bank holding companies.
Goldman Sachs argued that they did not need a penny of bail out money but the government still forced them to take it. Goldman Sachs was still flush full of money from selling what they knew were bad investments
Perhaps they needed to join the rest of the clubs that run our government in which our tax dollars can payoff this "Goldman Sachs Settles Largest Fraud Case In US History For $550 Million".
Gauging a little snippet of recent history, the orgy just keeps going and going...So, everyone hang on to your wallet, you'll need to, except of course those ingenious thieves with skin in the game.
Goldman Sachs argued that they did not need a penny of bail out money but the government still forced them to take it. Goldman Sachs was still flush full of money from selling what they knew were bad investments
Is that tongue in cheek having to do with the bonuses?
Weren't they flush with cash because Treasury Secretary Hank Paulsen, a former Goldman Sachs CEO (dont you love crony capitalism?) did the bailouts? They received 13 mil from the AIG bailout, 3 billion of which they retained.
That response doesn't correlate with the facts, the private investment companies and brokerages have everything to do with the melt down, Fannie Mae was a small part of the 2008 meltdown. Really no sense in discussing this anymore, you are way off target and hijacked yet another thread with your fixation on Fannie Mae rather than addressing the intended purpose of the thread. I have yet to hear your answer on the original post.
So the 2 companies that guaranteed the most mortgages by far played no part?
I was in the industry, fannie mae and freddie mac are the ones that came out with the stated income/asset loans, the no doc loans, the alt a that should have been subprime. Ignoring all that and blaming it all on the banks only means you are falling for the government lies.
So the 2 companies that guaranteed the most mortgages by far played no part?
I was in the industry, fannie mae and freddie mac are the ones that came out with the stated income/asset loans, the no doc loans, the alt a that should have been subprime. Ignoring all that and blaming it all on the banks only means you are falling for the government lies.
There were many causes, not just one leading up to the bubble most of the toxic mortgages originated in private hands like Countrywide. The failure of these loans was just waiting for a market downturn, banks took the next step in packaging these bad loans that very few understood and selling them as investments making a bad situation worse.
So here we are again and congress sees fit to allow risky investments by banks that are backed by tax payer dollars.
So the 2 companies that guaranteed the most mortgages by far played no part?
I was in the industry, fannie mae and freddie mac are the ones that came out with the stated income/asset loans, the no doc loans, the alt a that should have been subprime. Ignoring all that and blaming it all on the banks only means you are falling for the government lies.
I would never proclaim that no fault lies with the GSEs, but how many CDOs did the GSEs create or market?
Is that tongue in cheek having to do with the bonuses?
Weren't they flush with cash because Treasury Secretary Hank Paulsen, a former Goldman Sachs CEO (dont you love crony capitalism?) did the bailouts? They received 13 mil from the AIG bailout, 3 billion of which they retained.
They said they didn't need any bail out. The government demanded they take it anyway. They argued that if some took it while others didn't it would lead people to believe the ones that didn't were in bad shape and lead to them collapsing. Never mind that they should have collapsed.
There were many causes, not just one leading up to the bubble most of the toxic mortgages originated in private hands like Countrywide.
Originated would be correct but they couldn't write so many bad loans if the government wasn't willing to buy them. (and yes, it was the government backing them)
Quote:
The failure of these loans was just waiting for a market downturn, banks took the next step in packaging these bad loans that very few understood and selling them as investments making a bad situation worse.
Yes, they were fraudulently represented and absolutely no one was held accountable for that.
Quote:
So here we are again and congress sees fit to allow risky investments by banks that are backed by tax payer dollars.
Dodd/Frank backed the banks up with tax payer dollars. Just fewer of them and if there had been a crash the government would have done the same thing anyway. The solution is to not have anyone outside of the investors back them.
Originated would be correct but they couldn't write so many bad loans if the government wasn't willing to buy them. (and yes, it was the government backing them)
Your assertion is simply not true. A growing number of loans had zero government backing and were not being purchased by government entities.
What follows is excerpted from All the Devils Are Here: The Hidden History of the Financial Crisis by Bethany McLean and Joe Nocera.
...
Like other mortgage originators, Countrywide kept the riskiest piece of a securitization, the residuals, on its own balance sheet. By the end of 2006, Countrywide had $2.8 billion worth of residuals on its balance sheet, representing about 15% of its equity. The company’s internal enterprise risk-assessment map — a key risk report — was flashing orange. Then, starting in 2005, Countrywide began to keep both pay-option ARMs and a chunk of home-equity loans — both the loans themselves and the residuals from home-equity securitizations –on its balance sheet as well.
... By the end of 2006, Countrywide had $32.7 billion worth of pay-option ARMs on its balance sheet, up from just $4.7 billion at the end of 2004. As Mozilo later wrote in an e-mail, “We have no way, with any reasonable certainty, to assess the real risk of holding these loans on our balance sheet … The bottom line is that we are flying blind on how these loans will perform in a stressed environment.” The risk of Countrywide’s dependence on the market could be mitigated if it were tightly managed. But the more loans and residuals that were put on Countrywide’s balance sheet, the harder that became.
...
In a last, desperate grab for market share, Countrywide had waited until March 2007 to stop offering “piggy back” loans that allowed borrowers to purchase a home with no money down. As other, weaker correspondent lenders — those that made loans themselves but then sold their loans to bigger lenders — began to go under, Countrywide ramped up its business of buying loans. Since Countrywide was no longer entering into agreements to sell its loans before they were made or purchased, the company was bearing all the risk that the market would crack on its own books.
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