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

To: koan who wrote (546042)	1/25/2010 6:38:31 PM
From: TimF	2 Recommendations Read Replies (1) \| Respond to of 1575454

Home prices are the bubble that all the leverage and derivatives fed in to. The push to extend credit further and further (at first coming mostly from the government or groups seeking to use the government, but then later taken over by the banks and other financial institutions with gusto as the bubble really got on its way and they started to believe that house prices would keep going up) was an important factor both in the rising house prices (as it increased demand), and the lower quality of the loans. Glass Steagal had little to do with it, OTOH the 40 to 1 leverage (or in some case I think 50 to 1 or possible as much as 60 to 1) was a huge factor. That wasn't lack of regulation, it was poor regulation. In that specific case, poor in the sense of being too lose, but not to extensive. In the case of giving a high value to complex securitized bundles of loans in security requirements, it wasn't either not extensive enough regulation, or not tight enough regulation, it was just foolish regulation. YOU have to decide if you want to live your life according to the truth or make believe. I prefer the truth to the believe that we had a huge financial crisis because we had "no regulation", or because of Gramm–Leach–Bliley, or solely because of CDOs.

To: koan who wrote (546042)	1/25/2010 10:06:04 PM
From: Brumar89	Respond to of 1575454

40 to 1 leverage is actually less than what Clintonite and Obama advisor Franklin Raines, the head of Fannie Mae, told Congress wa acceptable in 2004: "When Mr RAINES himself was challenged by the Republican Christopher Shays, to the effect that his ratio of capital to assets (that is, mortgages) of 3 per cent was dangerously low, the Fannie Mae boss retorted that “our assets are so riskless, we could have a capital ratio of under 2 per cent”. dinocrat.com Message 25138447 Glass Steagall repeal had to do with doing away with the separation of investment and commercial banking. Why did we give 182 billion to AIG no questins asked? Why don't you ask for Senator Obama that?