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

To: GROUND ZERO™ who wrote (10113)	3/30/2009 1:49:55 PM
From: DuckTapeSunroof	Read Replies (1) \| Respond to of 103300

Re: "They were encouraged to do this by the same politicians I already named..." The you left out a Hell of a lot of politicians who FOUGHT (in the CFTC reauthorization Act) to insert a provision into federal law which actually PROHIBITED any and all regulation of these off-exchange derivative securities. Phil Gramm let the charge (Lieberman was one prominent Dem who backed the anti-regulation vote) and the incoming new Bush administration was, of course!, 100% against all such regulation as well for the entire duration of it's two terms.... And thus, we wound up with a situation where a 'normal-sized' bubble in subprime mortgage originations (not a huge problem in and of itself... certainly one well withing the ability of our financial systems to handle) became MASSIVELY MAGNIFIED OVER TEN TIMES just from the actions of AIG (who proceeded to sell $10 worth of CDS for every $1 of subprime mortgage paper that existed in the entire United States... And sold those gambling chits without any collateral backing them.) Along with MANY MORE Hedge funds, I-Banks, and "Shadow Banking" types around the world... who sold even more of these unregulated, unsecured CDS --- blowing the bubble in CDS up to $50 to $70 TRILLION in notional valuation... reducing the original subprime mortgage paper itself to the relative equivalent of just a wart on the hind side of a very big, and very smelly pig. Don't miss the forest, for focusing on a few trees at the edge.