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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers -- Ignore unavailable to you. Want to Upgrade?

To: E. Charters who wrote (61877)	10/23/2008 12:38:51 PM
From: Valuepro	2 Recommendations Read Replies (1) \| Respond to of 78410

Bill Clinton reduced the staff at the Federal Financial Institutions Examination Council by 95 percent. He also signed the bill that allowed the melding of banks and securities firms. However, starting a bit before that time was the securitization of the mortgage market. Much earlier, though changing late in the period, lenders held most of their loans and profited from the interest. Afterwards, there was more money to be made by selling the loans in bundles, taking the loan fees, and perhaps taking back servicing contracts. This process send more money back to the lenders to lend out again. It was a pyramiding cycle that also moved the larger part of risk from the lenders to the buyers of these loans. The purchased bundles then formed the basis of derivatives that supposedly reduced risk all along the path right through to credit default swaps. If lenders could have been made to be primarily responsible for the risks they created (i.e, the mortgages they wrote) for the lives of these loans, this mess would never have happened. In fact, I had a report that such a notion was reviewed (at least) by staff members in the House Banking committee back in '04, but seemingly didn't go any further. It was probably seen as something that would have slowed the mortgage market, and the quick outsized rewards that were ahead for some.