The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: ChanceIs who wrote (158723)	10/21/2008 10:30:40 AM
From: CalculatedRisk	Read Replies (6) of 306849

He has it backwards. The following is nonsense: "Mr. Baker goes further. He points out that it wasn't the unregulated part of the financial markets that got us here. It was the regulated part. In his own industry, he notes, the lack of a government guarantee means folks do a lot more due diligence before they part with their money." ROFLOL. That is just plain stupid. All the really bad MBS and CDOs started with mortgages from New Century and Countrywide, etc. that were sold to Bear Stearns and Merrill, etc. - and were then packaged into MBS and CDOs and sold to investors. This process was unregulated (although many people were calling for oversight). The Bush administration and Greenspan fought against oversight for ideological reasons - they thought that buyers would "do a lot more due diligence before they part with their money". They were wrong. Fannie and Freddie, for all their issues, were victims of the lack of oversight in the unregulated market. This "blame the GSEs" talking point is so stupid you'd think everyone would just laugh.

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