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Politics : President Barack Obama
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To: Little Joe who wrote (125489)10/28/2012 1:39:40 PM
From: Sr K  Read Replies (1) of 149317
 
lj: You conveniently left out the fact that the CDO's were backed by mortgages which were worthless and there came a time when everyone realized this fact, which is what caused the crisis.

Not true.

If you wanted to make a fake point, you could have said they were trading at 6¢ or 20¢ on the Dollar. But those were times to buy. They recovered, in many cases to 60¢ on the Dollar. Or higher.

The New York Fed made money on Maiden Lane I and II (i.e., they got them too cheap from Bear Stearns (JPM Chase) and AIG).

6¢ or 20¢ on the Dollar is not "worthless" and where a security trades is not the same as the fair value of the underlying securities or assets or business. Excessive fear and uncertainty brought derivative values below their fair value. That's why the banks wouldn't sell them for 20¢ or even 40¢ on the Dollar.

Republicans and people short the S&P were hoping they would go to zero. They wanted the S&P to go to 600 and then to 400. Limbaugh wanted America to fail, whatever it would take to knock Obama out in 2012.

I looked back to posts on the PfP thread from January 21, 2009, including some by you, and there was fear the banks would not survive. They eventually crashed to lows in February and the markets bottomed in March.

But the fear of a banking crisis was palpable in January 2009.

To deny that was the atmosphere Obama faced as he took office is typical of Republican rewriting history during this campaign season, including what Romney said he was for and against during the primaries.
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