Re: Anti-Union Bill Set to Pass In Wisconsin; Massive Protests Move Into Day 3

Originally Posted by
Jason Marcel
Fannie and Freddie are not the reason why the collapse happened.
Unfettered corporate greed is to blame, not poor people, although that is the easiest target for the class warfare crowd.
Credit default swaps and derivatives were the problem, as the big lenders after Glass/Steagall's repeal were able to bundle together junk mortgage policies with inflated housing values attached to them created by the people who run Wall Street.
They turned around and basically sold these junk loans as AAA rated gov't backed securities and they sold them to foreign institutions and gov'ts the world over (which is why Iceland collapsed).
Wall Street was very clever; they lobbied and got all the deregulation they needed to get their complicated scheme done and then got the Fed to back them giving them a license to misuse the people's money and not actually have to go to jail for it.
Wall St lenders artificially inflated housing prices, and then sold junk loans as AAA rated to the world, when really all they were selling everybody was baking soda instead of cocaine.
Blaming poor people who couldn't afford these mortgages has no basis in fact and is a cruel and unusual way of looking at the 2008 crisis since the lenders were the ones who pissed all the earnings away or stole them, inflated the value of the mortgages in order to turn a mighty profit for themselves and then backing out and collecting huge golden parachutes while the public had to come to their rescue.
In Wisconsin, teachers and prison guards and snow removal people are now being blamed for their phony budget crisis because it is politically expedient for Republicans to blame the working classes for the problems their rich buddies created all by themselves, while they walk free as I write this.
Economic expert and the writer of "Bailout Nation" (a great book for anyone interested in a non-partisan account of the economic collapse) Barry Ritholtz has totally debunked the Republican myth that Fannie and Freddie took down the market, when in fact they were not the antagonists, they were simply following the market; his main points for the cause of the collapse are:
-The origination of subprime loans came primarily from non-bank lenders not covered by the [Community Reinvestment Act, a law pushing the two GSEs to purchase more loans in the secondary markets and thus expand access to housing loans to low-income neighborhoods];
-The majority of the underwriting, at least for the first few years of the boom, were by these same non-bank lenders;
-When the big banks began chasing subprime, it was due to the profit motive, not any mandate from the President (a Republican) or the Congress (Republican controlled) or the GSEs they oversaw;
-Prior to 2005, nearly all of these sub-prime loans were bought by Wall Street—NOT Fannie & Freddie;
-In fact, prior to 2005, the GSEs were not permitted to purchase non-conforming mortgages;
-The change in FNM/FRE conforming mortgage purchases in 2005 was not due to any legislation or marching orders from the President (a Republican) or the the Congress (Republican controlled). It was the profit motive that led them to this action.
Federal Reserve Board stats show that 84% of the subprime loans handed out in 2006 for instance were handed out by private institutions, not Fannie & Freddie, who were following the market, not leading it.
Thanks & respect.
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