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Politics : The Obama - Clinton Disaster -- Ignore unavailable to you. Want to Upgrade?

To: sandintoes who wrote (646)	11/8/2008 8:16:42 PM
From: LLCF	2 Recommendations Read Replies (2) \| Respond to of 103300

That means that blaming FNM for this mess is sort of ignorant. DAK

To: sandintoes who wrote (646)	11/9/2008 4:34:47 AM
From: DuckTapeSunroof	Read Replies (1) \| Respond to of 103300

Re: "Okay, can you decipher this for me?" No problem, Sandi. I'm saying that even if you took the ENTIRE VALUE of all the subprime mortgages issued in America over, say, the last two or three years (which is the period where the vast majority of all problem subprime loans were made), and ADDED THEM ALL TOGETHER you would still have but a small fraction (most likely a single digit percentage) of the full extent of the Global financial bust. Unregulated Credit Default Swaps (essentially: 'insurance contracts' sold with INSUFFICIENT or even NONEXISTENT collateral or reserves to back them up --- "liars contracts" and what collapsed AIG to name just one corporate name...) alone amounted to a notional value in EXCESS of 50 or so TRILLION DOLLARS. While all the subprime mortgages sold in America over the last few years put together would be unlikely to amount to any more then 1/2 a Trillion, probably far less. (That's, like 1/100th. of the CDSs that were sold!) And, NOT ALL of those subprimes have gone bad. Only a fraction of them, with the rest still performing OK. So, I think you are looking at an occasional sapling or two, while missing the Big Forest of problems. American subprime may be the fuse... but 'fuses' don't blow-up very large on their own, the MASSIVE AMOUNT of LEVERAGE (banks levered 50 or more to one... $50 loaned out for every $1 held in reserve) allowed in the financial system, and the MASSIVELY FRAUDULENT NATURE of much of the Trillions created in unregulated, 'party-to-party' CDS paper is the dynamite that exploded the global financial system. Furthermore, even if you want to 'blame' Fannie or Freddie, how do you get around the fact that they DON'T ISSUE MORTGAGES? (All they do is buy-up privately conforming issued mortgages. Make a secondary market in them [buy them up and hold them for a long time] so the private mortgage lenders [mostly Banks, or Bank look-a-likes] can go back and issue more mortgages.) The problem can clearly be traced to the fact that a Global Ponzi scheme was allowed to grow to monstrous proportions --- while the regulators and 'Cops on the beat' were put to sleep or removed from the scene.