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PostPosted: Fri Sep 14, 2018 5:58 pm 
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interesting article about when the economy was crashed on purpose and some of the repurcussions accruing 10 years after.


Ten Years After the Crash, We’ve Learned Nothing

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The great financial catastrophe of our times is still badly misunderstood, and led to grotesque consequences, including the election of Donald Trump

Ten years ago, on Saturday, September 13th, 2008, the world was about to end.

The New York Federal Reserve was a zoo. Imagine NASA headquarters on the day a giant asteroid careens into the atmosphere. That was the New York Fed: all hands on deck, peak human panic.

The crowd included future Treasury Secretary Timothy Geithner, then-Treasury Secretary (and former Goldman Sachs CEO) Hank Paulson, the representatives of multiple regulatory offices, and the CEOs of virtually every major bank in New York, each toting armies of bean counters and bankers.

The asteroid metaphor fit. In the twin collapses of top-five investment bank Lehman Brothers and insurance giant AIG, Wall Street saw a civilization-imperiling ball of debt hurtling its way.

The legend of that meeting, as immortalized in hagiographic reconstructions like Andrew Ross Sorkin’s Too Big to Fail, is that the tough-minded bank honchos found a way to scrape up just enough cash to steer the debt-comet off course.

In Too Big To Fail, the “superstar” chief of Goldman, Lloyd Blankfein, along with “smart” Jamie Dimon of Chase, “fighter” John Mack of Morgan Stanley, and other titans brokered the deal of deals, just in time to stave off a Mad Max scenario for us all................

more at link

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PostPosted: Fri Sep 14, 2018 7:29 pm 
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they did learn how to wrap student loans truck loans credit loans into nekked CDOs
(credit default obligations) and sell them as derivatives aka cotton candy.

like stepping a huge boot heel on all the millens, wallst learned how to
sell off all debts in bond packages to god knows who for god knows how long.

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PostPosted: Fri Sep 14, 2018 8:39 pm 
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Did anyone expect that people would learn? Only those who wanted to dig learned anything. The proliferation of books and articles aimed at just about anyone and anything miss the point and will continue to miss the point. The economy does not exist in a vacuum. It is part and parcel of complex social relations. The way society organizes itself is via government. Therefore government is the tool, the ONLY tool, that can be used to establish the conditions of an economy. Pre-industrial, Bronze Age and feudal pre-capitalist economies were conducted much differently than today due to the relationships of humans to land, humans to each other and humans to power structures.

What is most intriguing is that the neoclassical, free-market, lassez-faire asshats are actually right. Except they are dead right. Economies self-correct IN THE LONG RUN. They are incapable of self-correcting on the fly because humans and their psychological problems are the decision makers. Thus landings unless mitigated are hard. There is no gentle return to some imaginary equilibrium. There is only booms and busts unless society uses the one tool it has to even out as much as possible the mania driven insanity of humans when money and power over money is involved.

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PostPosted: Fri Sep 14, 2018 10:21 pm 
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Did anyone expect that people would learn? Only those who wanted to dig learned anything. The proliferation of books and articles aimed at just about anyone and anything miss the point and will continue to miss the point. The economy does not exist in a vacuum. It is part and parcel of complex social relations. The way society organizes itself is via government. Therefore government is the tool, the ONLY tool, that can be used to establish the conditions of an economy. Pre-industrial, Bronze Age and feudal pre-capitalist economies were conducted much differently than today due to the relationships of humans to land, humans to each other and humans to power structures.

What is most intriguing is that the neoclassical, free-market, lassez-faire asshats are actually right. Except they are dead right. Economies self-correct IN THE LONG RUN. They are incapable of self-correcting on the fly because humans and their psychological problems are the decision makers. Thus landings unless mitigated are hard. There is no gentle return to some imaginary equilibrium. There is only booms and busts unless society uses the one tool it has to even out as much as possible the mania driven insanity of humans when money and power over money is involved.

yes, back then EVERYONE was a slave to the king the pharoah the prez the land owner. etc.
then came along this notion of individuality pushed heavily by the new capitalist new
continent stealing european white male hierarchy shoved everywhere on the new large continent
from patagonia to newfoundland you became a buyer, a consumer. it wasnt your choice.

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They are racists hate mongers I piss down the throats of these Nazis Im too old to worry whether they like it Fuck them.
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PostPosted: Fri Sep 14, 2018 11:08 pm 
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They did learn. They have taken the technology that was supposed to bring freedom of information to the masses and used to obfuscate the truth to the point where the truth cannot be known. They have removed protections for the masses at almost every level and continue to chip away at what few commodities and services that remain.

I am not optimistic, and do not see this as plan failed, I am pessimistic and see this as plan achieved.

We are somehow going to make America Great Again while more and more people fail to achieve what were somewhat common dreams, and the truly sad part is that some sections of society were not even allowed the dream. For that I apologize.

A society of renters addicted to credit working more and more to pay bills that will never be paid.

The nation just spent 4 days arguing with a moron about the loss of life directly attributed to said moron's inability to grasp simple concepts or to understand people died while he tossed out the quicker picker upper.

If you give a monkey a gun, and he's shoots someone, you cannot blame the monkey, he is a monkey.

Trump and the Republicans were elected, I would place the blame squarely at the feet of those who elected them.


Last edited by mcslain on Sat Sep 15, 2018 9:52 am, edited 1 time in total.

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PostPosted: Fri Sep 14, 2018 11:36 pm 
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We know exactly what caused the meltdown. And we know why the simple step that would stop what happened in 2008 from happening again, has not been taken. It's not misunderstood at all...much less misunderstood.

Theres no mystery here to anybody who paid attention to what came before the meltdown and how the fucked up country has responded to it since.

Anybody who wants an easy lesson can read "The Big Short" by Michael Lewis. If that's too much work, theres the audio book. Still too much trouble...just watch the movie. And it's a great movie.

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PostPosted: Sat Sep 15, 2018 5:55 pm 
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Quote:
.........The bank-state merger brokered 10 years ago this week socialized the risks of the financial sector, and essentially converted Wall Street into a vehicle for annually privatizing a big chunk of America’s GDP into the hands of a few executives. The same people who were minutes from being (deservedly) destitute 10 years ago are now a permanent aristocracy..........


as Randi Rhodes says, they socialized the risks and privatized the profits

Quote:
.........Secondly, an already-serious economic inequality issue became formalized. The people responsible for the crisis weren’t just saved, but made beneficiaries of another decade of massive unearned profits. Thanks to zero-interest-rate lending and QE and other subsidies, they are making more money than ever, in the new failure-proof profession known as banking with a government guarantee........


this is where an army of donald trumps were elected to interact within our economy despite having lost by scheming and financial crimes

Quote:
........For years since, pundits have been scratching their heads over the rise of “populism,” wondering why the public refuses to accept seemingly obvious economic plans like austerity. The money’s gone. Don’t they understand that belts need to be tightened?......


mcslain wrote:
Trump and the Republicans were elected, I would place the blame squarely at the feet of those who elected them.



Quote:
.........It was only after the public elected Donald Trump that Bernanke had an insight. He realized suddenly that “growth is not enough” (translation: the rich getting richer for eight straight years did not please voters).

Economists, he now said, may actually have a “responsibility” to address inequities in the economy, which he conceded might have been caused by a “proclivity toward top-down, rather than bottom-up, policies.”

Imagine how dense you’d have to be to need 10 years, and the election of Donald Trump, to realize this.

These are the people who got Trump elected. Popular media myths may insist otherwise, but people in charge have to be this clueless and arrogant in order for “Anyone but…” to have real ballot appeal.

“Anyone but” is what we got, and will get again, until............

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PostPosted: Sat Sep 15, 2018 6:14 pm 
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as Randi Rhodes says, they socialized the risks and privatized the profits



this is where an army of donald trumps were elected to interact within our economy despite having lost by scheming and financial crimes







Growth not only isn't enough, it does not accurately describe the health of the nation. unfortunately. economists have duped politicians who in turn duped the electorate into believing that growth means everything. Of course inequality is coming back to roost but how, where, why and when it does and who benefits will be the real question.

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PostPosted: Sun Sep 16, 2018 9:29 am 
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This is a lovely discussion isn't it?

Meantime the stupid fucking people 46 percent of whom get all their information from FOXNEWS and the EIB, will believe that the meltdown happened because of the government...because the Democratic driven Community Reinvestment act, according to asshole conservatives, force poor victimized mortgage lenders to give mortgages to every deadbeat Mexican and black person who wanted one.

When in fact...the mortgage lenders were out on the street dragging unsophisticated seekers of the american dream into their office and writing mortgage paper that gave them thousands of dollars in fees on every mortgage and refinancing they could generate. The mortgage lenders were like a pack of hyenas drooling over a wildebeest carcas.

And isn't it easy to blame Democratic politicians instead of the investment banker gamblers who made this meltdown happen. And how easy not to blame the rating houses, Moody's and in particular, Standard and Poor's, who knew that all these derivative products from Lehman Bros and Bear Stears...all these bundled loan paper products...were full of "D" rated paper, but rated them as "A" anyway.

Who allowed for this meltdown to happen? Standard and Poor's...that's who.

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PostPosted: Sun Sep 16, 2018 9:43 am 
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I agree with you ike about the big short with movie and and film versions.

There is blame to go around everywhere with the financial meltdown. No one wants to do their due diligence. Banks, lenders, hedge fund managers,politicians, regulators, and some blame must go to the consumer as well. Greed effects everyone.


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PostPosted: Sun Sep 16, 2018 11:22 am 
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Going to be showing Margin Call this semester in one of my courses.

I really like that film. It's obvious the fictional firm in the movie is supposed to be Lehman Brothers, but of course, to protect the guilty, they use some other name.

Anyway, it's supposed to be (although not a documentary, of course) a fairly accurate telling of how Lehman's downfall occurred.

Same shit as classic Greek tragedy. Hubris. Alarm bells were sounding all over the analyst desks, they ignored them. A bull was there to ride, fuck the warnings.

What we really need to do is put back Glass-Steagall, regulate the derivatives market, put some actual teeth in SEC, stringent capital requirements for banks. Maybe a bit of antitrust. Yeah, Dodd-Frank was such a halfway measure, and they want to dismantle it.

I also liked The Big Short. You know, the only thing the real life guy shown in the film now invests in is water. He figures that's the one thing human beings are always going to need. :D

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PostPosted: Sun Sep 16, 2018 11:50 am 
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Going to be showing Margin Call this semester in one of my courses.

I really like that film. It's obvious the fictional firm in the movie is supposed to be Lehman Brothers, but of course, to protect the guilty, they use some other name.

Anyway, it's supposed to be (although not a documentary, of course) a fairly accurate telling of how Lehman's downfall occurred.

Same shit as classic Greek tragedy. Hubris. Alarm bells were sounding all over the analyst desks, they ignored them. A bull was there to ride, fuck the warnings.

What we really need to do is put back Glass-Steagall, regulate the derivatives market, put some actual teeth in SEC, stringent capital requirements for banks. Maybe a bit of antitrust. Yeah, Dodd-Frank was such a halfway measure, and they want to dismantle it.

I also liked The Big Short. You know, the only thing the real life guy shown in the film now invests in is water. He figures that's the one thing human beings are always going to need. :D


Maybe I will watch that this week, prof.

Never saw "Bad Santa" till this weekend, funny.

Spacey eh...hmmm. He sure is talented, was. Crazy what happened to these superstars.

Wow, this movie is interesting in how it looks at the human toll of all this. Some good people and some bad people, the real villain is capitalism.

So this was the mortgage swaps? They sold a bunch of them at a discounted rate and they were worth nothing anyway? I wish I understood more, and arent they doing it again?

The irony of Spacey playing a good guy. Or in that group, a good guy...jesus what a talented guy he is, was.

NOW wtching Too Big 2 fail, who is who in this movie vs the other, I know the other was made up names, boy I dont understand most of this, which is why it works..the less we know and understand the more they make

and when they lose they dont, we bail them out And as bad as W administration was, sigh...do I have to finish that

in 2 big 2 fail, is it William Hurt is so good or was Paulson a good guy? If this thing happens now, we are dead, done, gone.


WHAT THE FUCK - Russia owns how much of our real estate market? Just saw that in too big 2 fail..PROFESSOR??? Putin called S Korea and said lets all dump our holdings to crash the US Market?

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PostPosted: Sun Sep 16, 2018 9:58 pm 
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WHAT THE FUCK - Russia owns how much of our real estate market? Just saw that in too big 2 fail..PROFESSOR??? Putin called S Korea and said lets all dump our holdings to crash the US Market?


Remarkably, I was following along fine until I got to this.

What is this?


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PostPosted: Sun Sep 16, 2018 10:03 pm 
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Growth not only isn't enough, it does not accurately describe the health of the nation. unfortunately. economists have duped politicians who in turn duped the electorate into believing that growth means everything. Of course inequality is coming back to roost but how, where, why and when it does and who benefits will be the real question.


does it really matter who, how, where and why though?, the country with all its differences and in its battered state has donald trump as its president. everyone rich or poor, strong or weak has that in common now.

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PostPosted: Sun Sep 16, 2018 10:38 pm 
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Growth not only isn't enough, it does not accurately describe the health of the nation. unfortunately. economists have duped politicians who in turn duped the electorate into believing that growth means everything. Of course inequality is coming back to roost but how, where, why and when it does and who benefits will be the real question.

Good points. The health of our economy isn't dependent how well the stock market or housing markets are doing but upon the economic health of the average worker who spends their income on goods and services. An economy cannot sustain itself if the wealth of a nation is concentrated in the hands of a small percentage of the population because that population cannot purchase enough goods and services to keep the economy going on a nationwide level. The more wealth that is pushed down into the middle class and poor through increased salaries/wages increases consumption resulting in increase production leading to more jobs and the cycle will continue until consumption reaches a "saturation" point where it can no longer be sustained.

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PostPosted: Sun Sep 16, 2018 11:46 pm 
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Good points. The health of our economy isn't dependent how well the stock market or housing markets are doing but upon the economic health of the average worker who spends their income on goods and services. An economy cannot sustain itself if the wealth of a nation is concentrated in the hands of a small percentage of the population because that population cannot purchase enough goods and services to keep the economy going on a nationwide level. The more wealth that is pushed down into the middle class and poor through increased salaries/wages increases consumption resulting in increase production leading to more jobs and the cycle will continue until consumption reaches a "saturation" point where it can no longer be sustained.


It is a good argument but a poor audience if it were to be set before the aristocracy.

An aristocracy has a hive mind. Hive minds don't reason, they act on emotion alone. Usually greed, and they'll eat their own.


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PostPosted: Mon Sep 17, 2018 12:05 am 
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It is a good argument but a poor audience if it were to be set before the aristocracy.

An aristocracy has a hive mind. Hive minds don't reason, they act on emotion alone. Usually greed, and they'll eat their own.

The "aristocracy" have a greedy mind set forgetting back in the 50s even with the high federal tax rate the wealthy still made a lot of money. Back then, income inequality was less pronounced than it is today. Economically speaking, our economy was very good in which almost everyone was able to do well.

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PostPosted: Mon Sep 17, 2018 10:05 am 
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I agree with you ike about the big short with movie and and film versions.

There is blame to go around everywhere with the financial meltdown. No one wants to do their due diligence. Banks, lenders, hedge fund managers,politicians, regulators, and some blame must go to the consumer as well. Greed effects everyone.


A number of independent traders went to S&P and confronted them over their rating of the Lehman derivative products, and the arrogant pricks at S&P basically told them they would be smart if they just minded their own business. So they did...a number of them went short on everything they could afford. And some of them are billionaires for it.

IMHO the majority of responsibility for the 2008 meltdown is on the hands of the rating houses.

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PostPosted: Mon Sep 17, 2018 3:40 pm 
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I blame the ratings agencies, sure. But, if I am selling you shit and telling you it is really ice cream, who's the worse villain? The guy who I slipped money under the table to convince you that yes, my shit is really ice cream (i.e. an A+ rated asset), or me, for trying to sell shit and telling people it's ice cream? I know who the first order villain is, the other is just aiding and abetting.

(In this metaphor, shit = toxic subprime mortgages that are about to go bust, and ice cream = here's this cool tranched derivative made up of sliced, well, shit.)

BTW, speaking of nutty interpretations of the 1st amendment, they had the balls to argue that for the government to regulate their business, it was interference with their freedom of speech. Or, as I said, to convince people that shit was really ice cream.

I would also put a lot of blame on subprime mortgage lenders, who often tricked people into buying houses they couldn't afford, and taking out loans that sounded too good to be true ... because they were, with a balloon that often exploded on the borrower. Then when they couldn't pay back that loan, it got hidden in a derivative that concealed its toxicity, and it was handed off/resold to somebody else like a hot potato ... see above.

Yes, the rating agencies aided and abetted this activity, but the Wall Street firms like Lehman were the ones playing the con game.

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PostPosted: Mon Sep 17, 2018 4:17 pm 
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I blame the ratings agencies, sure. But, if I am selling you shit and telling you it is really ice cream, who's the worse villain? The guy who I slipped money under the table to convince you that yes, my shit is really ice cream (i.e. an A+ rated asset), or me, for trying to sell shit and telling people it's ice cream? I know who the first order villain is, the other is just aiding and abetting.

(In this metaphor, shit = toxic subprime mortgages that are about to go bust, and ice cream = here's this cool tranched derivative made up of sliced, well, shit.)

BTW, speaking of nutty interpretations of the 1st amendment, they had the balls to argue that for the government to regulate their business, it was interference with their freedom of speech. Or, as I said, to convince people that shit was really ice cream.

I would also put a lot of blame on subprime mortgage lenders, who often tricked people into buying houses they couldn't afford, and taking out loans that sounded too good to be true ... because they were, with a balloon that often exploded on the borrower. Then when they couldn't pay back that loan, it got hidden in a derivative that concealed its toxicity, and it was handed off/resold to somebody else like a hot potato ... see above.

Yes, the rating agencies aided and abetted this activity, but the Wall Street firms like Lehman were the ones playing the con game.

How about that Russia Korea thing, wow. They obviously didnt make that up while everything else is accurate in the movie.

So how much of our economy does Putey own?

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PostPosted: Mon Sep 17, 2018 8:05 pm 
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I blame the ratings agencies, sure. But, if I am selling you shit and telling you it is really ice cream, who's the worse villain? The guy who I slipped money under the table to convince you that yes, my shit is really ice cream (i.e. an A+ rated asset), or me, for trying to sell shit and telling people it's ice cream? I know who the first order villain is, the other is just aiding and abetting.

(In this metaphor, shit = toxic subprime mortgages that are about to go bust, and ice cream = here's this cool tranched derivative made up of sliced, well, shit.)

BTW, speaking of nutty interpretations of the 1st amendment, they had the balls to argue that for the government to regulate their business, it was interference with their freedom of speech. Or, as I said, to convince people that shit was really ice cream.

I would also put a lot of blame on subprime mortgage lenders, who often tricked people into buying houses they couldn't afford, and taking out loans that sounded too good to be true ... because they were, with a balloon that often exploded on the borrower. Then when they couldn't pay back that loan, it got hidden in a derivative that concealed its toxicity, and it was handed off/resold to somebody else like a hot potato ... see above.

Yes, the rating agencies aided and abetted this activity, but the Wall Street firms like Lehman were the ones playing the con game.


theres also the role of austerity, wage stagnation, racial discrimination and segregation, and punitive cost increases on the cost of living of the poorest, that helped to put people in such a weakened state that that the toxic loans either were their only option or the easiest closest one to access.

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PostPosted: Mon Sep 17, 2018 10:06 pm 
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Yeah. Well, you know there was an organization whose mission was to protect minorities and other vulnerable populations from predatory lending.

Its name was ACORN.

Also, I would argue, although some revisionists try to blame the subprime mortgage crisis solely on the back of minorities and programs to help them get affordable housing, the reality is, a lot of the suckers were middle class WASPs tricked by mortgage lenders into taking subprime loans on a McMansion they didn't need.

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PostPosted: Tue Sep 18, 2018 11:54 am 
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Yeah. Well, you know there was an organization whose mission was to protect minorities and other vulnerable populations from predatory lending.

Its name was ACORN.

Also, I would argue, although some revisionists try to blame the subprime mortgage crisis solely on the back of minorities and programs to help them get affordable housing, the reality is, a lot of the suckers were middle class WASPs tricked by mortgage lenders into taking subprime loans on a McMansion they didn't need.

Or equity loans to buy boats they didnt need.

Having said that, NOBODY on the consumer end should have had to take the entire brunt of this yet we all did while the fat cat republican bankers walked away with billions.

Oh, not all republicans you say? Maybe not, but at that level of the game politics really no longer matter anyway.

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PostPosted: Tue Sep 18, 2018 11:56 am 
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I blame the ratings agencies, sure. But, if I am selling you shit and telling you it is really ice cream, who's the worse villain? The guy who I slipped money under the table to convince you that yes, my shit is really ice cream (i.e. an A+ rated asset), or me, for trying to sell shit and telling people it's ice cream? I know who the first order villain is, the other is just aiding and abetting.

(In this metaphor, shit = toxic subprime mortgages that are about to go bust, and ice cream = here's this cool tranched derivative made up of sliced, well, shit.)

BTW, speaking of nutty interpretations of the 1st amendment, they had the balls to argue that for the government to regulate their business, it was interference with their freedom of speech. Or, as I said, to convince people that shit was really ice cream.

I would also put a lot of blame on subprime mortgage lenders, who often tricked people into buying houses they couldn't afford, and taking out loans that sounded too good to be true ... because they were, with a balloon that often exploded on the borrower. Then when they couldn't pay back that loan, it got hidden in a derivative that concealed its toxicity, and it was handed off/resold to somebody else like a hot potato ... see above.

Yes, the rating agencies aided and abetted this activity, but the Wall Street firms like Lehman were the ones playing the con game.


The problem is that investors had no way of knowing what exactly was in the derivative bundles from Lehman and other investment banks. There was OK paper in these bundles, but there was too much bad paper. There were school loans and other long term loan paper besides mortgages. And some of the mortgage paper was good paper as well. But there was too much bad paper in them...and the rating houses lied about the quality of the product.

But I've gotten a bit hung up on the assholes at Standard and Poor's. Because the other big factor was bank deregulation, most of which we can hang on Republican politicians...but Democrats share a bunch of the blame as well. The fact remains that on the day Lehman closed...yes, the percentage of home morgage loans in default had doubled. But doubled from what to what? From 1% of all mortgages to 2% of all mortgages. That's right...98% of all home mortgages at the time of the Lehman bankruptcy were still above water. The only reason the market wasn't able to tolerate 2% of mortgages in default was because of how ridiculously leveraged Lehman, AIG and other institutions were at the time. These derivative products were leveraged at an average rate of 40:1. Forty borrowed dollars for ever dollar of the bank's own capital, was used to finance the products.

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PostPosted: Tue Sep 18, 2018 12:11 pm 
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The problem is that investors had no way of knowing what exactly was in the derivative bundles from Lehman and other investment banks. There was OK paper in these bundles, but there was too much bad paper. There were school loans and other long term loan paper besides mortgages. And some of the mortgage paper was good paper as well. But there was too much bad paper in them...and the rating houses lied about the quality of the product.

But I've gotten a bit hung up on the assholes at Standard and Poor's. Because the other big factor was bank deregulation, most of which we can hang on Republican politicians...but Democrats share a bunch of the blame as well. The fact remains that on the day Lehman closed...yes, the percentage of home morgage loans in default had doubled. But doubled from what to what? From 1% of all mortgages to 2% of all mortgages. That's right...98% of all home mortgages at the time of the Lehman bankruptcy were still above water. The only reason the market wasn't able to tolerate 2% of mortgages in default was because of how ridiculously leveraged Lehman, AIG and other institutions were at the time. These derivative products were leveraged at an average rate of 40:1. Forty borrowed dollars for ever dollar of the bank's own capital, was used to finance the products.


Bottom line, since this crash Democrats actions have been all to prevent it from happening again, repubs actions are going to guarantee it will happen again.

And each time it happens many of the people hurt the most will blame the people who tried to prevent it. As usual.

_________________
"Corporate Democrat" phrase created at the same place "Angry Mob" was...People keep falling for rightwing talking points. How sad.


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