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If lending to poor American people caused the financial crisis, why was it a global crisis?
It was a global debt crisis, much of which was precipitated by the threat of Fannie and Freddie-issued MBS, which foreign banks had bought and was counted as part of the capital on which their lending was based (fractional reserve lending), being worthless.
Remember all the uproar about the Bailout Bill that most Americans didn't want? Listen very carefully to what Congressman Brad Sherman says about where that money was supposed to go:
Eventually, the Fed Gov got around that by creating $2 trillion in additional national debt and having the Federal Reserve buy and hold $2 trillion worth of Fannie and Freddie MBS on their balance sheet. Those mortgage backed securities will eventually roll off the balance sheet as they mature, even though many will default, and taxpayers are stuck with that additional $2 trillion in national debt yearly interest and all. There's still $1.75 trillion worth of those MBS on the Federal Reserve's balance sheet.
Please tell me more about the 'bundling'. Who did the bundling? How were decisions made about what to bundle?
Where exactly are you going here? We all know what happened. I am NOT trying to excuse the banks. I placed most all of the blame in their laps. I was pissed when Obama lied to us and did not prosecute them like he promised to do. There are a long list of bankers that should have been ruined and sent to prison. We hurt the poor and rewarded the bankers.
The Fed Gov tells banks to lend to the poor. Consequently, banks lend to the poor, many of whom can't pay their mortgages.
Do you finally see where the problem lies? Go to the source of the problem: the Fed Gov.
Banks don't enter into contracts in which it's likely they'll lose money. They only made the loans to the poor because 1) the Fed Gov told them to and 2) They knew they could sell those loans to Fannie and Freddie which had been mandated by the Clinton/Cuomo-era HUD, as a parting shot at Bush before he took office, to have over 50% of the loans they buy from banks be made to low-income and/or credit-compromised borrowers.
You mean you actually like those trailer park dwelling, meth using, toothless, sister humping, high school dropping out, sleeveless t-shirt wearing, racist, homophobic, misogynist working class folk who live in worthless red states.
Can't tell reading some of the posters here who've said all of the above and more. In fact I seem to remember you saying similar things. I'd classify it as "contempt", but that's just me.
Best post yet. If you consistently mock working class Americans and then think a new post will have everyone forget previous posts, that's called hypocrisy . Happy New Year!!
Where exactly are you going here? We all know what happened. I am NOT trying to excuse the banks. I placed most all of the blame in their laps. I was pissed when Obama lied to us and did not prosecute them like he promised to do. There are a long list of bankers that should have been ruined and sent to prison. We hurt the poor and rewarded the bankers.
Quote:
Originally Posted by ChiGeekGuest
Wholeheartedly agree about getting past the blame game. The blame game does nothing or very little IF the focus is on troubleshooting or resolving or solving problems. The blame game sets up inertia, that's all, & very little else, often viewed as a mental masturbatory strategy, or some type of Orwellian 'duckspeak'.
Take this unhelpful (IF problem solving is the focus) response to a previously poorly or undefined contextual analysis of the recent global financial imbroglio:
Aside from the impossibility of 'time travel' as a strategy, how is it helpful to blame 1 person for a global financial crisis? Is it the 'butterfly effect' or what?
Why not take a more critical thinking styled approach?
The following piece even contains a recommendation for those diehards who authoritatively insist on playing the Blame Games:
Lending to Poor People Didn't Cause the Financial Crisis
Where I'd like to be going is getting back to troubleshooting or resolving or solving problems using a critical thinking framework.
We (speaking about the US here) are capable of doing so, & we've done it before & when we had a similar situation.
Consider how Glass-Stegall Act came into existence. The legislation stemmed from the Pecora investigation, & recommendations were made based on the findings to prevent recurrence. (Mr. Pecora wrote a book explaining the circumstances surrounding, his conclusions based on a summary of evidence, recommendations, & directed follow-up actions, etc.)
The 'usual suspects' have been chipping away at GSA since its inception & bit by bit stripping it of its effectiveness in both protecting the stability of the economy & in preventing another 'great depression' like economic event.
The Savings & Loan scandals of the 1980s apparently taught US very little or nothing. Similar systemic risks, including the morally hazardous conditions were considered 'scandalous' then & now? It's the new normal.
The stunningly familiar ideology enabling all three systemic financial imbroglios is one recommending that government be small enough to strangle in a bathtub & little or no regulation to prevent recurrence.
Where I'd like to be going is getting back to troubleshooting or resolving or solving problems using a critical thinking framework.
You can't do that without understanding why something happened.
Quote:
We (speaking about the US here) are capable of doing so, & we've done it before & when we had a similar situation.
Consider how Glass-Stegall Act came into existence. The legislation stemmed from the Pecora investigation, & recommendations were made based on the findings to prevent recurrence. (Mr. Pecora wrote a book explaining the circumstances surrounding, his conclusions based on a summary of evidence, recommendations, & directed follow-up actions, etc.)
The 'usual suspects' have been chipping away at GSA since its inception & bit by bit stripping it of its effectiveness in both protecting the stability of the economy & in preventing another 'great depression' like economic event.
The Savings & Loan scandals of the 1980s apparently taught US very little or nothing. Similar systemic risks, including the morally hazardous conditions were considered 'scandalous' then & now? It's the new normal.
The stunningly familiar ideology enabling all three systemic financial imbroglios is one recommending that government be small enough to strangle in a bathtub & little or no regulation to prevent recurrence.
We put people in prison over the S&L scandal. Enron gave us Sarbanes Oxley and we have refused to enforce it. How do you resolve a problem when those in charge of doing that refuse to use the tools they had to do so?
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