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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Brumar89 who wrote (423794)	10/8/2008 2:34:21 PM
From: Road Walker	Read Replies (1) \| Respond to of 1577029

And there'd be no demand for credit default insurance if the government hadn't created a big market for securitized subprime debt. God are you dumb. Countrywide was writing this crap and came to Freddy/Fannie and said the investment banks were dying to securitize the garbage and if Freddy/Fannie didn't lower their standards they would go to the investment banks. This wasn't the government, it was the unregulated investment banks. The stuff was profitable, and Freddy/Fannie had a fiduciary duty to shareholders not to lose market share. You can argue that they shouldn't have been implicitly linked to the Fed government, and you might be right. But that wouldn't have changed anything. Writing subprime mortgages was exactly what the government wanted. It doesn't matter what the government wants... unless there is an end demand for the paper. As for tip-toeing around the law, there wasn't a law so no need to tiptoe. There sure as hell are insurance regulations. CDS were huge institutions writing insurance by another name to get around the regulations. Insurance companies that don't have adequate reserves get shut down before they do more damage.