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

To: Road Walker who wrote (424699)	10/11/2008 1:28:28 PM
From: Brumar89	Respond to of 1577225

>>The fact that the regulators made a fixed percentage quota tells you that level (50%) wouldn't have been reached under normal circumstances. Else why set a percentage quota?<< I'll admit that it probably lowered the overall quality by small percentage. But a small percentage drop in the quality was not what lead to this crisis. So there's not really a big mortgage problem? Good luck convincing people of that. This was created by the WS 'masters of the universe' inventing a bogus and non-regulated 'insurance' (CDS) that gave originators a market for imbecilic loans. Oh, now there are a lot of bad mortgages, but they were made cause they could be sold to someone who could insure them with a CDS. Not because the government regulators and overseers were coercing the lenders to make the loans and Fannie and Freddie to buy them - although everyone knows they were in fact doing that. I'll still blame the government. Did unregulated CDS's contribute to the problem - maybe, but then thats why the afore-mentioned government wasn't regulating CDS's - it would conflict with the overall regulation of the banks, thrifts, and Fannie and Freddie. --------------------- >>It appears there is total capital, critical capital, and risk-based capital, presumably all defined differently (undoubtedly the latter two are subsets of the total capital). It met the latter two requirements, but was still significantly undercapitalized as to total capital. I think thats enough to say it was not "pretty solid" prior to 2005, which is what I took issue to.<< I disagree. It was 'pretty solid', maybe not 'absolutely solid'. And you are only talking about one quarter out of many, many quarters... so what you are saying is misleading. I cited one quarter in late 2004. It would've been true of earlier quarters and earlier years except for the massive accounting fraud that Fannie and Freddie committed to hide the problem, which came to light in 2004. In light of Fannie and Freddie's collapse, I'll continue to disbelieve that they were "pretty solid" in 2004 as you and Barney insist. ------------------------------------------------------- >>Like all things there are trade-offs. You can't say its a good thing at any cost - for example, if to put more people in home ownership, one has to debase lending stds so much that a lending crisis is created, then a drastic mistake has been made. Its not worth that to get another percent or several in owned homes.<< Again, that isn't what caused the crisis. The crisis was caused by the availability of no money down adjustable rate mortgages to almost anyone. And when such mortgages are made to people who can't handle them, you have a problem. Wall Street enabled those, that the originators sold them to whoever they could; towards the end that included Freddy/Fanny. Blame everyone but the government (excepting the Bush adm), seems to be your goal. ----------------------------------------------- You can't put your finger on one single thing... but the CDSs enabled the investment community to drastically lower standards and make vapor loan marketable, so if I had to pick one thing, it would be credit default swaps. The one element with the least government fingerprints all over it. Thus allowing one to dismiss the other part with those fingerprints all over. And the CDSs are pervasive, not just in the mortgage industry. Interesting. Since its the mortgage industry that blew up, that tends to undercut the 'its not bad govt regulation, its all those CDS's' argument. The 'masters of the universe' pulled a $60Trilion scam... Yeah, lets blame some nameless rich people and ignore the government involvement. and to quote the Good Reverend Wright, "the chickens are coming home to roost". Don't forget "white mens greed drives a world in need" - thats a favorite of Obama from the Audacity of Hope sermon he named his second book after.