How Exactly Did Bush Cause This recession?

Freddy and Fanny helped create the vast secondary market that allowed mortgage firms to sell their mortgages and get them off their books. That was the purpose of Freddy and Fanny, to create a secondary market to buy mortgages to free up money for new lending. And it worked for awhile, until they started buying subprime mortgages. Then of course there was an incentive to push subprime mortgages since the mortgage company wouldn't be responsible if the lender defaulted. They would have long since passed it along.

http://www.cato.org/pubs/bp/bp120.pdf

 

It's like a guy arrested for burglary saying, ya know, there's a fence that said he will buy all the stolen goods that people can bring in the door, no questions asked. So you see, officer, it's not my fault! It's the fences fault. He made me do it. I never would have stole that stuff if he didn't say he'd buy it from me.

Of course we know that there were many lenders that chose not to go that route.

 

I know all that, BUT first off under what authority or Power in the Constitution did Democrats create Freddie and Fannie "create the vast secondary market that allowed mortgage firms to sell their mortgages and get them off their books?" Everyone now seems to think MBS are a bad idea, but Fannie Mae started using them from day one to replenish THEIR money so they could invest in MORE mortgages keeping the Secondary Mortgage Market afloat.

Gee, what would have happened without the Democrat Wizards of Smart inventing the Secondary Mortgage Market? Well for one there would be a lot less liquidity in the home market. That means home prices would be a lot lower. Perhaps someone could only need to get a 15 year (or less) mortgage instead of a 30 year mortgage for the same house... Gee that sounds really bad... Also, I guess since loans would be harder to get I guess only the really qualified would be able to get them. Gee, isn't that kind of what people are complaining about now, the fact that people were getting loans for which they lacked qualifications? I guess without the Secondary Mortgage Market banks would have to hold the mortgage paper until maturity, and simply make money on the mortgage payments every month. I guess that sort of thing would not have produced much of a bubble. Gee, without much of a bubble I guess there would be very little risk so I guess derivatives, and other "casino investments" would simply not be attractive due to the lack of risk one needs to distribute. It all just sounds horrible!

Now someone want to explain the "good" things the Democrat Wizards of Smart did when they violated the Constitution and created the Secondary Mortgage Market in spite of the natural free market?

 

But we don't use "the metric used during the great depression", the calendar has moved forward and so has the country.

 

I applaud your efforts to enlighten certain people, you have far more patience than I!

I agree the CRA played a part, but it was such a small part it's not even worth mentioning.
This CRA fanny freddy thing is nothing more than the rightwing media, controlled by the GOP shifting blame away from them and onto the Democrats, no matter how far fetched it is.
The blind swallowed their lies and here we are a mere 5 years later trying to set history correct.
It's an up hill battle and you are doing a great job!

 

Except in this case, the fence is the government.

 

All you need is some YouTube clips and they'll follow you off a cliff.

 

LOL!! True that!

 

Seems Iriemon wants nothing to do with posts 217, 218, or 219

BTW, get ready fr a large spike in the number of foreclosures. Now that the stalling tactic of the lawyers is almost over (who signs the docs) the pipeline is about to be uncapped and the banks will take back the property

BTW, any comment on borrowers who have not made a mortgage payment in YEARS and yet the banks are made out to be the bad guy when the h/o is evicted from the property?

 

They wrote the loan. They went nuts writing loans they new they had no business writing. Nobody made them do it. They received bailouts...the homeowners not so much.

217,18,19 were covered about a dozen times. Stupid little YouTube videos. You guys need some new material.

 

From what I understand the cutting up and repackaging of sub-prime loans was a creation of very bright college grads that thought it would be a never ending source of income. Also, from what I understand, when it all went south, no one on Wall Street had a clue to how many bad loans were involved.

I don't expect that anyone in the government knew either.

What happens is human nature. When things are going good, even though you may see a problem, it is better to leave it alone and not (*)(*)(*)(*) anyone off. Possibly the biggest problem was an lack of understanding in what was actually going on. I don't think you can blame republicans or democrats for that. The government certainly had a hand in it, but so did many others, including those taking out loans.

I don't think the collapse of the housing market was a politically caused issue but rather a bubble created by good ole human nature that thinks all things are rosy when they are on the way up.

 

They lended to meet the standards Fannie and Freddie set to qualify for F&F to purchase the loan. Countrywide loans wasnt covered by the CRA, but Fannie and Freddie who purchased most of countrwides loans were covered by the acts.

 

Except, stealing goods is against the law, giving a home loan is not.

 

All the investment banks are a part of "Wall Street". You dont have a clue. And the biggest players were solely investment banks. Even though they could have engaged in consumer banking, they did not. repealing Glass-Stegal had nothing to do with the crisis.