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I was already aware of varying opinions but I will make up my own mind...Why does it matter to you?...Write your blog with your one sided material..Who cares?
Hmmmm! I wonder what you "think" about this:
"Peter Wallison of the FCIC Explains the financial Crisis????? "
It's far from over because new details coming out every day for example:
"As first reported by Kate Berry for American Banker, Linda DiMartini, a supervisor and operational team leader for the Litigation Management Department of BAC Home Loans Servicing, testified in the foreclosure case of John T. Kemp that it was "customary for Countrywide to maintain possession of the original note and related documents."
If that's true, then Bank of America may discover that it has millions of loans on its books that it thought it had transferred to trusts that issued mortgage backed securities, because 96% of Countrywide loans were ostensibly securitized. As the Congressional Oversight Panel explained, that outcome alone could cause massive damage to a bank's balance sheet. And as bad as that would be, it isn't the only problem that could result from Countrywide hanging on to the notes.
If the mortgage-backed securities aren't in fact "mortgage-backed," investors who bought them could be able to force BofA to buy the securities back. A significant number of buybacks could on its own destroy BofA's balance sheet. Nor could BofA stave off either outcome retroactively by delivering those notes today. First, the contracts that created the trusts would typically forbid transferring the loans into the trusts now. Second, even if somehow that could happen, such a transfer would destroy the special tax status the mortgage backed securities enjoy and give the investors a different reason to put back the securities or sue over them.
See full article from DailyFinance: http://srph.it/ar7Mlc
It's getting down to the end of the year and my threshold of tolerance is waning. because it's the same old posters trying to discredit everything I post by either calling me a liar or twisting my words to suit their agenda. I welcome a difference of opinion backed up by a credible source. In a matter of a week, four posters have taken my words out of context to suit their agenda and I'm aware that that's par for the course of an open online forum but I don't have to be a pincushion.
I'm not that naive to think that $8 trillion of wealth that vanished was due exclusively to Fanny & Freddie but I'm aware the marketists that believe in the market Gods have to believe this or else their world will be shattered. I can't see how anyone can dismiss the role Goldman Sachs played in the financial crisis. Rollingstone Magazine's Matt Taibbi said this about Goldman Sachs" a great vampire squid that wraps around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money."Imigine any other industry that lost a $8 trillion of wealth; yet they were able to hand out record bonuses.
As for jailing the people responsible for this fiasco; it's complicated because the whole thing was preparatory in nature; predicated on deception... Michael Lewis author of "The Big Short" said this of those responsible for the financial collapse of Wall Street" There were more morons than crooks but the crooks were higher up." .... A couple of Bear Stearns fund leaders were charged but were acquitted because "The jurors, who waded through a stack of financial lingo and complex investments, reached their verdict after six hours of deliberation.The jury of eight women and four men, drawn mostly from working-class neighborhoods, essentially found that while Mr. Cioffi and Mr. Tannin may have made bad investments, making a bad investment was not a crime.
A lot of the shenanigans were made legal in previous years,as I am now finding out.
Your free to write your each own version of the financial crisis with a blog of your own, instead of criticizing everything I write...i.e. I DIDN'T mention the S&L crisis but took a direct quote from the authors from their step by step analysis leading up to the preparatory loans and various dubious players that led to the financial crisis.
Any other attempts to discredit my blogs without reason other than to promote your own agenda will be DELETED.... Have no fear; you can post your own blog but you don't know any more than anyone else of what really happened; what was legal; what was illegal, what the unintentional consequences of any financial institution.... I gave very little detail and most of it was just a broad analysis.
The usury rates were raised in the 80s...FactThe hard rules were relaxed in the 80s...Fact
I will complete the book in mid December and then I will post and my opinions.I'm very aware that the marketists would love it to be all about Fanny and Freddie but nothing I have read indicates that.... I'm not going to spend all afternoon arguing with a brick wall,so it is just much easier for you run along and write your own blog or get all of your posts DELETED...
Go give your opinion to someone that believes marinalrevolution.com..lol
"In 1980, the Depository Institutions Deregulation and Monetary Control Act; abolished state usury caps. Now, financial firms could now charge higher interest rates but this act also erased the distinction between loans made to buy a house and actual loans. New players came into the game like Household Finance, Beneficial and Associates making money by providing loans, using second Liens ,as collateral...."
This is all prior to the SNL crisis in the late 80's. Thanks for the history lesson but it's irrelevant. The problem starts and ends with Fannie and Freddie. The author of the book "All The Devils.... said that Fannie and Freddie were not touched by "financial reform" because the politicians and others were afraid to because they are so powerful and they are such a big player - too big to fail in other words.
This link is a little primer on F&F and how they were a major player in the financial crisis. It's important that we get this right otherwise it is going to happen again - there are signs that it is already starting with "green energy." Making energy "affordable" - have some mercy!
Mike..." a series of arrests of hedge managers, bond raters, and stock brokers would cripple our shaky economy... What country would want to invest in America?"
I don't know, pardner. It MIGHT make investors, foreign and domestic think that the US really is interested in turning things around. If some of the managers and brokers did go to prison -- and I don't mean some Club Fed -- I think it would send a strong message that we are going to clean up our act and not stand for more shenanigans by investment firms.
That's true but if we were dealing with hogs, at the end of the day, at least you would have some hogs.:-)... These guys(Goldman Sachs being the biggest player) were selling junk mortgages with AAA ratings, and making side bets that the junk mortgages would fail. A win, win, all you needed was a steady supply of worthless mortgages that could be sold with AAA ratings.... Federal law prohibits pensions to be invested in securities that do not have the AAA ratings or sold through the GSEs... Government sponsored enterprises have the full backing of the United States government; it didn't take Wall Street long to get around that wall.... Intentionally or unintentionally ,this financial crisis got its start in the 1980s with a law that was intended to help the savings and loans get into the game. In 1980, the Depository Institutions Deregulation and Monetary Control Act; abolished state usury caps. Now, financial firms could now charge higher interest rates but this act also erased the distinction between loans made to buy a house and actual loans. New players came into the game like Household Finance, Beneficial and Associates making money by providing loans, using second Liens ,as collateral....
I could go on and on, but no one has gone to jail over this financial crisis... On one hand; I can see where intent would be hard to prove and on the other hand; a series of arrests of hedge managers, bond raters, and stock brokers would cripple our shaky economy... What country would want to invest in America? Congress is unwilling to pass serious reforms; so there's nothing out there to prevent another " too big to fail."
Have a good day and a Happy Thanksgiving
MikeAs a small investor, I like your math - Wow, 33,000 percent return. But like some other great deals, we forgot something, like adding the principal we were insuring. That puts us in a loss.That is the way things go, the price of hogs went up and I did not have any.Have a good day.
I know I should have known better than to cut and paste direct quotes from a book you are quoting from and giving your opinions - sorry about that.
BTW check out this graph of subprime mortgage growth - yeah another cut and paste. Do you know what happen in 1998 when subprime mortgages exploded? If you guess that's when Andrew Cuomo took over at HUD and started the "affordable housing" initiative you'd be correct.
That's when F&F got their mandate to make more subprime loans and to lower their lending standards to accomplish that goal. That same relaxation of standards applied to the banks and other lending agencies.
So firms like Country Wide got after it making loans to anyone they could drag in the door and selling those mortgages to Fannie who would then securitize them and sell those "securities" all over the world - great job.
I didn't forget to mention ANYTHING but I'm taking a VERY careful approach to put it in its proper context because of the 50 pages I have read, she lists lewis Ranieri, a messianic bond trader, who ran Solomons Brothers mortgage desk,Larry Fink ,of BlackRock ,the world's largest asset management firm at the time and David Maxwell, chief executive of the Federal National Mortgage Association, known as Fannie Mae as the three biggest culprits in creating a vehicle called mortgage- backed securities.
Fannie Mae got its start in the depression to buy up mortgages for the Veterans Administration and the Housing Administration... From what I've read so for Fannie and Freddie have been vilified, praised, and vindicated, so depends on the time, the events, and circumstances.
I'm not ready to give an all out indictment before I finished the book.... I will probably go back and reread some chapters before it all fits into place for me.... I don't have a vendetta to satisfy nor do I want to perpetrate a lie.... I'm just reading for personal general knowledge not for political satisfaction.
This blog is about all three books and MY general understanding,NOT a cut and paste from someone's point of view.
You forgot to mention the great enablers of this financial disaster - from a review of All the Devils. And BTW I saw the author's interview with Brian Lamb on C-Span, when asked about Fannie and Freddie she just rolled her eyes and I could see her asking herself, where to begin.
"Lots of excellent material in McLean and Nocera's All the Devils are Here. In addition to devils there are also a few skeletons: in 1990, for example, Fannie paid Paul Volcker to defend and endorse its low capital standards.
A highlight is the chapter on the GSEs and how tightly they wound themselves into the political process.
Everything the GSEs did was behind the scenes. But for Congress, it was the homeowners who mattered, since they were the constituents....Johnson solved this problem by establishing what Fannie Mae called partnership offices. Officially, these were operations dedicated to finding opportunities to purchase mortgages...unofficially, they were the grassroots of a highly sophisticated political operation. Fannie's first partnership office was in San Antonio, which just happened to be home to Representative Henry Gonzales, then the chairman of the House banking committee...
There was a certain formula to these offices. They were staffed by someone close to power--the son of a senator, a governor's assistant, a former congressional staffer. They held ribbon-cutting ceremonies, always with a politician present, to announce, for instance, that Fannie was going to put millions into a senior citizen center. There were as many as two thousand ceremonies a year in partnership offices all over the country....
Fannie Mae also funneled money to politicians....Over the years, the foundation became one of the largest sources of charitable donations in the country. It made heavy donations to, among others, the nonprofit arms of the Congressional Black Caucus and the Congressional Hispanic Caucus.
Fannie hired key insiders to plum jobs..[long list of names,AT]..."It was like the local Tammany Hall operation--a jobs program for ex-pols!" says one closer observer."