Originally posted by marg6043
reply to post by jamie83
One word for you, neither Obama or McCain can fight corporate greed and the take over of America politics by private agendas.
It doesn't matter what any of they preach or lie about what they can do or plan to do, our government doesn't belong to the people anymore.
Lobbyist for private interest rules Congress, our president and our nation.
Praise God, Jesus, Allah, Moses, Zeus, Quetzacoatl......
We have a winner
In 1999 Clinton signed into law the Republican created and sponsored Gramm-Leach-BLiley
which repealed the Glass-Steagall Act of 1933
Try to read closely without politics clouding your thoughts
The Glass Steagall act separated commercial banking from securities/investment banking.
This current economic crisis was not Bush's fault directly, but he can be fairly blamed for a bad fiscal policy that raised inflation and for
inaction against the snowball effect that started in the 90's.
Anyways, now that commercial banks can get into the speculation activity of securities, the human greed factor took over.
A bank can only loan a certain amount of money depending on how much deposits they had on hand, well after 1999 they had a way around it. Now they
can loan someone money and not worry about them not paying it back because they can sell the debt off to someone else. They don't have to worry about
deposits because they just bypassed the entire fractional banking requirements. Grant a loan, securitize the loan, make commission, make new loan.
The loan agents and brokers made tons of money selling homes to people who couldn't afford them. The banks didn't care because they can just pass
off the liability.
Loan origination became big business. Banks bundled and sold loans to investment houses on the basis that the American homeowner was good at paying on
-time. The increased mortgage activity just churned the market more and increased property value which made buying bundled mortgages even more
attractive to pension funds, annuities etc. The real kicker though is that many of these loans were Fannie and Freddie insured
How can anyone
Whatever loans the banks didn't securitize, they kept themselves and used them to boost their asset sheets. (big mistake) They did this because of
the rise in housing prices, if a home forecloses they will repossess and some new flipper will just make the purchase.
The government (both parties) entirely approved of this whole affair, they were making money in the bucketloads from property and income taxes. The
government regulators turned a blind eye.
The booming mortgage business, fueled by low interest rates and soaring home values, was starting to attract shady operators and billions in
losses were possible.
The above translates into : the bigshots in government didn't want to do anything and probably stopped the FBI from investigating when it was most
crucial. I have no proof of this, but it is a logical assumption.
About the foreign debt, especially to China, this is where a lot of it is from. The Chinese needed to lower the value of their currency so they threw
a ton of money , $300 billion, into these FHLMC and FHMA (Fannie Mae and Freddie Mac) backed loans. They seemed to be attractive investments and
they were insured
The current economy is the fault of huge moral hazards and the resulting market churning created by the repeal of a safeguard law.
Well there is one guy at the end holding the loser bag. We all should know that the government has taken over Fannie and Freddie. So the guy holding
the loser bag at the end of all the churning is the American tax payer.
That's right the American tax-payer in general is the guy paying for the house flippers, lying loan applicants, shady loan originators, corrupt
regulatory officials, greedy investment managers, unwise foreign investors, and Chinese currency manipulators.
Doesn't it feel good to know this fiasco was all started by a bunch of politicians that decided to listen to their lobbyists instead of studying
Doesn't it feel good that politicians decided to REPEAL a SAFEGUARD that was instituted to PREVENT rampant speculaltion that started THE GREAT
Doesn't it feel good that we are paying for all this?
Doesn't it feel good to bicker about which party is better for the economy when they all freaking suck?
Obama isn't immune from all this because he is an "outsider". He has friends in places
es_Countrywide_ties_at_issue. McCain has lots of experience and he is a maverick. Why didn't he have the wisdom to call out what was going on
and make an attempt to do something about the subprime mess before it all got out of hand?