[causey]

No banks made bad loans? No "investors" yielded to simple greed? No risk was repackaged and sold downstream? Oh, please.

Do tell what was the problem?

That banks did all that for reasons you wouldn't even consider.

[Green_Manelishi]

That banks did all that for reasons you wouldn't even consider.

Ah, they did all that out of the goodness (or coldness?) of their hearts? Or is it they are controlled by the CFR, Illuminati, Bilderbergers, TLC, etc. and it was all a plot to acquire all the wealth and rule the world?

[causey]

No plot, no. I happen to know a couple of Harvard MBA's: it's a kind of standard dream among them to have a castle in France (and things like that). This is one of the signs of a culture of greed--besides being one of moral stupidity. The less reasonable one's expectations, the more irresponsibly one tends to behave (in, say, administering investing funds). When people with untamed expectations are legion...

[Nesster]

It wasn't Barney Frank 'forcing' banks to loan money. If the government had been a proper watch dog, the bubble would have popped much earlier and with far less damage.

A couple of good articles:
Op-Ed Contributor - I Saw the Crisis Coming. Why Didn’t the Fed? - NYTimes.com
Op-Ed Contributors - How Washington Abetted the Bank Job - NYTimes.com

Essentially, big money squashed any regulatory efforts, with the collusion of both Congress and the Exceutive branches.

The investment banks created a bunch of - yes Ponzi like - derivatives and default swaps that made bad loans not only possible but inevitable.

But yes, there was greed and there was risk repacaging and there was outright lying about the whole thing, the banks did not want their sophisticated and knowledgeable *valued* clients to understand the crap they were being sold.

To single out Frank as the primary cause is silly. To say it is not a good use of government authority to properly regulate financials is not realistic. Who else would you suggest?

The investment bank game is played thus: you come up with ever more complex 'products' because that's where you make the big margins. Once everyone's doing it, the margins get squeezed down. In an anti-regulatory political environment there's no will for the government to keep up with this 'innovation' and so the danger grows.

It's like the cops keeping up with new methods of crime. If the cops aren't permitted to keep up with the crooks, what happens? Saying that it's no business of the cops is equivalent to saying govt regulation of the financial industry is no business of the govt.

[Rupert]

Were any of these losses the result of the moron Bahney Fwank forcing banks to loan money to folks with no proven ability to pay? Of course, the banks then sell the risk to someone stupid, or greedy, enough to assume the risk because in their greed they are convinced they cannot lose and will make lots of $$$. The ponzi-schemers alsoo capitalize on the greed of "investors" who are looking for a "sure thing". There's plenty of blame to go around but the government is hardly the proper watchdog; that's like asking fox to guard the henhouse.

You know, I am often amazed here at the power of old Barney in the tiny little minds of Lap Dogies that do the bidding for their Fat Cat handlers. We have a huge Govt bureaucracy, we have a President, Senators, Congressmen/women, a set of old Supreme guys, and all kinds of Lobbyists.......yet old Barney just ignores them all and makes all the decisions. That damn Barney is a regular Miracle Worker, isn't he? Jesus George could abolish a large part of the Constitution, create the biggest deficit in history, and start a phony war....but he was powerless over Barney, even with a majority Congress at his back. Awesome Barney!
Regards!

Rupert go do a search for my posts were links are for what happened. And how W did try to re-regulate the industry to stop this. And Franks stifled it. Go look at how APORN sued NCNB to make more sub prime loans during Clinton. Forget the fact that the Big O was part of APORN.

Love your revisionist history. Be nice if any were actually accurate.

[GeneV]

It wasn't Barney Frank 'forcing' banks to loan money. If the government had been a proper watch dog, the bubble would have popped much earlier and with far less damage.

I have yet to see the law passed or encouraged by any politician that told the banks to lend to unqualified persons. I am open to a citation to such a statute, though.

I just watched (again) "The Smartest Guys in the Room." The Enron debacle illustrates the same mentality that brought the financial markets down. We have the most brilliant people in the world trying to figure out (with temporary success) how to pull in money without providing any useful product or service. Whenever they succeed, Wall Street applauds. No lessons seem to be learned when they go down.

[B Grace]

Well, I'm a middle-class American who is heavily invested in equities because of my age and I watched my investments drop by about 40% during 2008. It's called a correction because the market was being improperly affected by outside forces (the sub-prime market) and the bubble finally burst. I've also been paying attention since then as my investments have rebounded. That three trillion in lost equity in the markets is now down to about one trillion largely because many of us kept working hard at what we do.

My observations:

1) Corrections happen. Whenever you see growth in the stock market over about 10% annually you need to be cautious, or you need to get out and stay out.
2) No one complained about the double-digit gains each year leading up to the crash.
3) Any American of retirement age who lost all of his or her retirement investments during the recent downturn had chosen a dolt of an investment advisor who should be drawn and quartered. Don't blame the market or the government. Blame your advisor.
4) I'm one Repubican who was in favor of the loans to GM and Cerberus-Chrysler because the jobs were simply too important at the moment.
5) The banking bailout was a deal with the devil which was 100% necessary otherwise our unemployment rate right now might have surpassed the 25% rate of the Big One.
6) No one complained about folks who couldn't afford to buy houses actually buying houses.
7) The folks who complain about the banking bailout simply don't grasp the idea of having US currency in their hands that is worth less than blank paper from Office Depot or having banks without enough equity to cash a paycheck. It's no joke and it's far to serious of an issue to leave to people who are only good at getting elected.
8) The doomsday scenario is not a bunch of our banks failing but all of our banks failing. Just because it was evil doesn't mean there was a better choice.
9) No one has complainted about the billions in profits our government is earning on those loans to those banks which are currently being repaid.

[Nesster]

Rupert go do a search for my posts were links are for what happened. And how W did try to re-regulate the industry to stop this. And Franks stifled it. Go look at how APORN sued NCNB to make more sub prime loans during Clinton. Forget the fact that the Big O was part of APORN.

Love your revisionist history. Be nice if any were actually accurate.

Um... This the W who wanted to privatize social security? Whose Ownership Society explicitly pushed to make those sub prime loans plentiful, so that anyone could afford their own house, distorting the market through Fannie and Freddie?

Um... This the W who wanted to privatize social security? Whose Ownership Society explicitly pushed to make those sub prime loans plentiful, so that anyone could afford their own house, distorting the market through Fannie and Freddie?

Go find the links I posted multiple times that refute this. Actual news stories.

[Rupert]

Rupert go do a search for my posts were links are for what happened. And how W did try to re-regulate the industry to stop this. And Franks stifled it. Go look at how APORN sued NCNB to make more sub prime loans during Clinton. Forget the fact that the Big O was part of APORN.

Love your revisionist history. Be nice if any were actually accurate.

I've read your posts praising the Powers of Barney.....did you read mine? You just can't convince me that old Barney had power over all of George's Kingdom, it makes no sense at all unless you are looking for a scapegoat for your boy Jesus George and his disastrous administration....which it often appears that you are doing. George was a loser, just accept it and move on, he is not going down in history as "The Greatest" as you dream...he is going down as the loser that he was and is. Maybe Sarah will fulfill your dreams, but George had his turn and failed. Since dumb ass George is only half as dumb as Sarah, how do you think that is going to work out for you?
Regards!

[Nesster]

Go find the links I posted multiple times that refute this. Actual news stories.

What thread, I went back 3 pages of your posts and didn't see anything... I'd like to see them.

The truth of the matter is that both parties, and pretty much everyone involved, thought it was in their best interests to let the party keep going. And it sickens me when I see the current batch of bank CEOs in front of Congress paying lip service to what ought to be done, while out in the back their lobbyists are working overtime to make sure nothing significant happens.

What I miss from the political scene are the old style fiscal conservative Republicans, you know, the ones that didn't always have their heads in the sand on social issues and were actually interested in getting government to do good for the People.

[B Grace]

I have yet to see the law passed or encouraged by any politician that told the banks to lend to unqualified persons. I am open to a citation to such a statute, though.

Glass?Steagall Act - Wikipedia, the free encyclopedia

The mortgage lending rules were relaxed during the late 1990's with the above being the starting point. At the height of the bubble in my area first time home buyers could buy new houses with $0 down, no fees, no points, and $500 cash back, with all of those up-front expenses "rolled" into their 30-year mortgages at above-market rates with monthly payments of up to 40% of gross monthly income. Just before the crash, one local builder added a free new car to the deal. One of those new neighborhoods in my area has had a foreclosure rate of almost 50%.

The trigger behind the crash, in my opinion, was the speculative spike in gasoline prices during 2007 and 2008. That's the one satisfying outcome of the crash - many of the investment banks that drove up the price of gasoline took it on the chin when their sub-prime holdings tanked. Serves them right.

The irony behind the sub-prime market was the risks were fully insured but when the crash happened no one could cover the insurance.

[Rupert]

What thread, I went back 3 pages of your posts and didn't see anything... I'd like to see them.

The truth of the matter is that both parties, and pretty much everyone involved, thought it was in their best interests to let the party keep going. And it sickens me when I see the current batch of bank CEOs in front of Congress paying lip service to what ought to be done, while out in the back their lobbyists are working overtime to make sure nothing significant happens.

What I miss from the political scene are the old style fiscal conservative Republicans, you know, the ones that didn't always have their heads in the sand on social issues and were actually interested in getting government to do good for the People.

I'm not sure I ever saw any of those in my lifetime, but as to where they have gone, they have gone for the cash. Democrats and Republicans are in a struggle for the most cash, working for the people is like thinking your NFL Team is only playing for their fans.......it sounds good, but it just ain't happening!
Regards!

[GeneV]

Well, I'm a middle-class American who is heavily invested in equities because of my age and I watched my investments drop by about 40% during 2008. It's called a correction because the market was being improperly affected by outside forces (the sub-prime market) and the bubble finally burst. I've also been paying attention since then as my investments have rebounded. That three trillion in lost equity in the markets is now down to about one trillion largely because many of us kept working hard at what we do.

My observations:

1) Corrections happen. Whenever you see growth in the stock market over about 10% annually you need to be cautious, or you need to get out and stay out.
2) No one complained about the double-digit gains each year leading up to the crash.
3) Any American of retirement age who lost all of his or her retirement investments during the recent downturn had chosen a dolt of an investment advisor who should be drawn and quartered. Don't blame the market or the government. Blame your advisor.
4) I'm one Repubican who was in favor of the loans to GM and Cerberus-Chrysler because the jobs were simply too important at the moment.
5) The banking bailout was a deal with the devil which was 100% necessary otherwise our unemployment rate right now might have surpassed the 25% rate of the Big One.
6) No one complained about folks who couldn't afford to buy houses actually buying houses.
7) The folks who complain about the banking bailout simply don't grasp the idea of having US currency in their hands that is worth less than blank paper from Office Depot or having banks without enough equity to cash a paycheck. It's no joke and it's far to serious of an issue to leave to people who are only good at getting elected.
8) The doomsday scenario is not a bunch of our banks failing but all of our banks failing. Just because it was evil doesn't mean there was a better choice.
9) No one has complainted about the billions in profits our government is earning on those loans to those banks which are currently being repaid.

I would agree with a lot of what you post, but there is a temporal line between a "correction" and a "crash." No one complained about double digit gains over the course of a year, but perhaps someone would have wondered what was going on if the market had gained 20% in a single week.