Originally posted by space cadet
reply to post by oozyism
Frivolous loaning is what got the banks in a situation. They loaned money to people for homes, knowing these people could not pay for them. That was
not a good practice. A lot of people lost their homes, and with no one paying the mortages and loans on these homes, the banks are hurting.
Not trying to be rude and be disrespectful, but I'm afraid you're a bit naive my friend!
It was not only the frivolous loaning that got the banks in this situation, if you believe that, you're either misinformed or is only reading the
propaganda from the people who want you to belive this.
No! what got the banks in trouble from the beginning was too high leverage regarding their fraudulent repackaging of mortgage derivatives which
they couldn't cover when the bubble bursted and the info about this leaked out to foreign investors, and even foreign nations who had bought those
fraudulent financial instruments from Wall Street,
These very powerful foreign investors: Banks, Government Pension Funds, and Financial intitution all over the world then demanded to have their
investments back from this Wall Street Banking fraud - DIRECTLY from the U.S Government!
That's why the U.S Government ran around like deperate silly confused headless chickens in the fall of 2008 when Hank Paulson forced your politicians
to agree with the giant bailout transfer to many of these foreign investors and financial institution through AIG - WITH TAXPAYERS MONEY to cover up
for the Wall Street Banking fraud and to please the all foreign entities and institutions who had bought all these repackaged and fraudulent toxic
financial instrument and which didn't have any value.
And as Hank paulson told the politicians, if they had not done that the U.S and World financial system would have had collapsed - and YOU would have
had Martial Law in the U.S.
And yes, it's still a great mess with this ticking derivatives bomb of several hundreds of $ trillion dollars, because the mortgage derivatives were
fraudulent repackaged into new financial instruments (which then was sold overseas) so many times through several Banks and financial institutions on
Wall Street - so in most cases it is impossible to know the underlaying real value from the original derivatives which was based on too high levering
from Moody's and others who stamped them with AAA rating between the repackaging and between the sales of these instrument through a chain of
different Wall Street institutions.
Moody's and others should have not stamped AAA rating on these fraudulent financial instrument from the beginning - Flawed credit ratings on mortgage
derivatives were at the heart of the problem with these Credit Default Swaps derivatives and other financial instruments.
So to say that the Banks got problem and went under because of some of the victims of this fraud (the home owners) is nothing less than delusional and
a damn bad case of bending the truth through propaganda.
What the American home owners (who can't pay the banks) is nothing
compared in money if you compare the value of these fraudulent mortgage
based derivatives which the banks created from people's mortgages and then leveraged the value of the underlaying mortgage value with a factor of
So no! I'm sorry! to blame the mortgage taking home owners for this fraud, and that certain Banks are now in trouble just because of them - is nothing
less than delusional and plain crazy!
But please go ahead and continue to sipp the corporate propaganda kool aid if that is comforting to you?
edit on 6-11-2010 by
Chevalerous because: (no reason given)