The Financial Crisis Explained

1. Why did the financial meltdown happen?

2. Who is to blame for it?

3. What, if anything, can be done to fix it?

I know many of you don't have the patience to read more than the absolute minimum, so I start by giving some of the briefest answers possible:

1. Cause? The price of housing - and therefore mortgages - was too high, which in combination with high leverage (such as >30:1) caused those institutions who bet on the wrong direction of the market to go bankrupt in an accelerated fashion.

2. Blame? Most of the blame is simply in the hands of those who were too optimistic on the housing/mortgage market. Those who shorted those markets made lots of money.

3. Solution? Basically nothing. Asset bubbles happen every few years (remember the Internet boom 1999-2000?) and they will happen again. Prices must simply be allowed to adjust down.

Here is more detail:

Why did the financial meltdown happen? In and around 1997, the US Congress – supported by President Clinton – did two things. One was the real estate capital gains tax cut, which eliminated the capital gains tax on primary home real estate held over two years up to $250,000 for a single filer and $500,000 for a married couple. This may be the biggest tax cut ever, and it made real estate the most favored investment class. Small wonder, then, that real estate prices rose in an unprecedented manner for approximately ten years in a row. At some point, however, as in any bubble rising, it went too far. It became easy to see at some point after year 2000 when in many places it had become cheaper to rent than to own, pointing to over-inflated prices.

Around the same time, Congress was persuaded to pressure the mortgage industry to provide loans to those it claimed it had been unjustly denied loans in the past – the poor, blacks, et.al. The mortgage companies were basically told to make loans with lower standards than in the past…or else. If they played ball, unlimited funds would be available from Freddie Mac (FRE) and Fannie Mae (FNM). If they didn't play ball… well, John Edwards is a great trial lawyer going after those evil big corporations.

At the center of what turned into a highly unsound feeding frenzy were Freddie Mac and Fannie Mae, ostensibly private companies but ones where the leadership were politically appointed. Basically, these two institutions were run by political hacks from both parties, feeding the mortgage industry with billions of dollars earmarked for loans to those who previously didn't qualify for home ownership.

Around 2003, Fannie/Freddie admitted that their financial statement couldn't be relied upon, and it's not clear that they ever put them in order since. There were several proposals from The White House in recent years to change this system drastically, but efforts to do so were rebuffed by Congress and in particular Chris Dodd and Barney Frank. As long as home prices kept rising, these highly unsound practices didn't bother most people. In fact, the companies who originated the mortgages managed to sell them to Wall Street firms such as Bear Stearns and Lehman Brothers (LEH), who were looking to obtain higher yields on their proprietary trading portfolios. Leveraging up over 30:1, this became very profitable for those firms, until the bubble burst. Remember, at 30:1 leverage, you are bankrupt at as soon as losses exceed 3%.

Who is to blame? If by blame you mean losing money, obviously everyone who were long real estate after the peak in or around 2005 are to blame. But losing money isn't illegal; it happens in the market every single day – for every buyer, there is a seller, but the market only goes in one direction. Per definition, after the fact, every trade has a winner and a loser. What about doing something illegal? If there is something illegal here, I haven't seen it. Lots of stupidity and the usual bubble mania, but those things aren't illegal.

Certainly Congress is at fault for having created the monster organizations Freddie Mac and Fannie Mae. Neither one should have been created to begin with, because the government has no legitimate role in conducting commerce. It is equivalent to the government starting airline companies for the purpose selling subsidized airline tickets. In addition, the pressures Congress put on the mortgage organizations to make loans to those who didn't deserve them were extremely complicit in this debacle. Some of the investment banks shot themselves in the foot by taking on bad mortgage paper and leveraging up, leading to their demise.

What's the solution now? Sadly, the milk has already been spilled, because some people who didn't deserve mortgages already received them, and others bought homes at prices too high. There is simply no painless solution to this fundamental situation; prices must be allowed to fall. Those who are heavily exposed – indeed leveraged – to overvalued financial instruments, will have to take losses and some may go bankrupt.

One final word of caution and moderation: We had a 10-year real estate boom in which more wealth was created than in any previous boom or bubble. In the last 18 months, we have given back some of those gains, but far from all. Booms and busts do happen, but as with the Internet boom a few years earlier, on balance more wealth was created than destroyed as the bubble burst and some of the gains given back. It's happened before, and it will happen again – just like Summer turns to Fall, Fall turns to Winter… bubbles and business cycles are part of economic – and therefore human – nature.

Disclosure: None

Comments

[R Carlson:]

Right On!! At the core of this disaster was Federally controlled Fannie Mae & Freddie Mac "encouraged" by Congress to get into the disastrous Sub-prime business. If the two GSE's had stuck to their original charter of repackaging prime mortgages, none of this would have happened.

2008 Sep 18 08:40 AM

[satguru:]

I am really at a loss to understand how much money in dollars and cents was given out on sub-prime to the poor and blacks as stated in this article as the primary cause of this debacle. Why is this cancer worldwide? Did the sub-prime caused by FNM and FRE also make the whole world financial markets collapse? Are the poor and blacks tied in any way to investment banks such as Merrill and Goldman and Morgan Stanley? What kinda of BS excuse are you folks using for the creed and corruption of the rich. The poor and blacks and minorities are always used as scapegoats. What about the enormous billions spend now on the corporate bailouts and who gets the massive golden parachutes for creating this mess. It's people like you Mr Anton Wahlman that make me sick. Tell me what is the dollar amount of funds that went for sub-prime mortgages to the poor and blacks and what has been to total dollar amount given out so far used to bailout wall street globally to date??? You a**holes make me sick!!!
I live in an affluent neighborhood and five of the homes went on foreclosure and guess what none of them are owned by poor and blacks. These are rich white folks who used there homes as ATMs buying fancy SUVs and boats and spending lavishly on everything. This is where the big cost of mortgage financing went to the fat cats. SO CUT YOUR BS!!!!

2008 Sep 18 10:35 AM

[Rich S.:]

satguru sounds like a stereotypical angry liberal... If you paid attention, you would understand that the home buyers (poor, black, green) are not entirely responsible for this mess. It was Congress who forced banks to approve loans to people who did not deserve them. This affected every demographic, but a significantly higher percentage of low-income/minority buyers defaulted because they were barely able to make their payments from day one. In fact, most of those foreclosures happened within the first year. The Internet is full of data on this if you'd take a minute to research before lashing out.
I personally know two bank managers who predicted this mess years ago after being forced to approve loans to high-risk minority buyers simply because they were minorities (affirmative action, anyone?). Those buyers often had zero savings in addition to low incomes and/or unstable employment, so any financial hiccup would prevent them from making a payment. The banks would sell those loans as fast as they could, knowing they were too risky. Ironically, and unfortunately, those banks would invest their customers' money in the big Wall Street firms who were leveraging the same bad mortgages. These are global institutions and investment vehicles with many foreign investors, which is why it affects the entire world economy. It's a delicate house of cards.

2008 Sep 18 12:00 PM

[H&S:]

He forgot to mention that the Banking industry and its lobbyists put the one system that worked for home lending out of business-savings & loan associations.
Then, we brilliantly created a system run by mom&pop sized companies that would get a fee for brokering mortgages which in turn were accepted without any real underlying credit analysis by the Freddie/Fannie fiascos. These fiascos did not have a clue as to underlying credit quality and did not have to because using the full faith & credit of the good old USA they could get rid of the toilet paper they had bought on a global basis and get another fee for it.
Further, whereas the S&L's had some controls and local market knowledge, many of the unregulated mortgage brokers did whatever it took to keep the fees coming in together with the realtors and appraisers[MAI- Made AS Instructed].
Finally, my fellow Republicans need to remember that free markets need rules just like football/basketball/ba... which we all understand would be no fun without rules. Rules make the playing-field level and tend to highlight the rule-breakers more quickly!!!!!
John McCain has not learned this lesson yet-will he ever????

2008 Sep 18 02:17 PM

[moneymoe:]

I kind of agree with the analysis of fiancial crisis. One thing is for sure - the ordinary person does not make rules but he is aksed to follow rules. The higher ups come up with a game plan and make it so comlex and broad that eventually we forget where we started from. Now we need to ask why credit companies are sucking the blood of consumers by charging interest rates as high as 28%? No rules! Exponential growth for credit companies and free fall for consumers!

2008 Sep 19 12:17 AM

[Smalltownba...:]

I have to disagree with a high percentage of this piece. Fannie and Freddie were trailing the market into the Subprime mortgage arena. The charge was led by Wall Street and the higher LTV, lower credit score trend did not begin in 1997, it began after 2000 so pointing the finger a Clinton is off base at this point.

Sub-prime mortgages are a critical part of this equation but the real issue was stated income and no-doc loans across the entire credit spectrum. Until 2002-2003 Low Doc loans were reserved for individuals with normal down payments of 20% or more. After that time the trend moved rapidly towards the 0% down payment which was allowed even on investor owned property which was insane from the first loan made.

When low doc loans required large down payments you had a reason to believe the person actually had the income to support the loan and the common sense not to sign a note they could not afford to repay. When you eliminated the down payment and the documentation you essentially cut 2 legs off the 3 legged stool of underwriting a loan and it wobbled and balanced itsself until values started to fall then collapsed and no amount of loan modifications will fix the problem until those individuals who cannot afford their homes lose them.

When that occurs we will see a bottom to home prices and can begin the process of recovery.

2008 Sep 19 08:40 AM

[rm:]

[There is simply no painless solution to this fundamental situation; prices must be allowed to fall. ]

You're wrong- dead wrong.

Crisis... what crisis?

Don't you understand that the bailouts and the housing legislation and the possible RTC II are going to help us AVOID a crisis?

2008 Sep 19 09:22 AM

[John Preston:]

This may be the beginning of true dialogue on the housing and mortgage issue. Few, if any, commentators have centered on Fannie/Freddie (F/F) changes which began in the 1990's...and really set the tone for our problems.

During the Clinton administration, F/F were encouraged to expand housing opportunities..and they did. The compensation abuses and accounting irregularities were a byproduct of the expansion process F/F embarked on.

Anyone directly involved in mortgage lending will know that F/F, through the AUS (automated underwriting system), really blew the doors off of the traditional credit criteria approval process. The guidelines that were printed were not related in any fashion to the results generated by the AUS.

A review of mortgage lending product market share (conventional prime, ALT and subprime versus government) show that the government portion shrank for 12-15% in the late 1990's to about 3% in 2006. Government loan criteria NEVER changed. As I said, without the expansion of credit criteria by F/F, and subsequent expansion by other lenders, we don't have a housing bubble.

I postulate that the F/F expansion set the one for all lending. I add to the mix that the major lenders, together with Wall Street, went well beyond reason in creating a system of back-end finance that was far too profitable and too little understood. There was no financial limit on funding mortgage loans.

This back-end system created far too much available funding for all loans, and the F/F guideline expansion lead the "easing of credit".

How can credit criteria be "easier" one moment, and "tighter" the next. Isn't credit criteria really a constant???? Arbitrarily expanding and contracting the pool of approvable borrowers is an abuse of power and a shunning of responsibility.

Interest rates are a variable...as are asset valuations and income...BUT CREDIT CRITERIA SHOULD BE A CONSTANT.

A significant issue is that this is not the first time that the credit criteria were treated as a variable by the lending community for busines growth and profit. The first ALT/Stated/No Doc loans were introduced in the mid-1980's...and withdrawn around 1990...so, this is our second experience with this "accordion" process of easing...and tightening...???

This is my point...F/F took a constant, and mixed in "flexibility-for-profi... and influenced ALL of the mortgage lending standards.

The other part of the story is the fact that Congress has oversight over F/F...and they blew it. They had the right and the responsibility to keep F/F under control, and Congress chose to do nothing, ultimately allowing this process to begin, thrive, and crash.

To address specifically Mr. Wahlman's three points:

1. By allowing this to process to occur, FAR too many people became buyers/borrowers...sim... supply and demand says that prices will go up. In a constant and consistent credit climate, that cannot happen.

2. I really blame Congress and those charged with oversight of F/F. I believe they are at the root of the problem. Wall Street is second on the list. Without the back-end funding, the process would slow down and rates would have gone up.

3. Here I disagree. Housing is directly related to the overall economy. Congress, F/F, Wall Street, regulators, along with large corporate mortgage holders, shunned their duty. They created a false market, put housing in peril, and set up the economy for a big fall. And, I truly believe they hoodwinked Main Street.

My proposal: Directly address Main Street...immediately. There is a way to do this and I have posted it elsewhere. Main Street is the foundation of our economy. We have a top-down problem, and we need a bottom-up solution.

Overall, this article heads in the right direction.

2008 Sep 19 09:51 AM

[kend:]

This AM the Treas. Sec. and the Pres. said the success of the massive tax payer bailout will be dependent on borrowers' continuing ability to pay off their debt. That causes me much pessimism about the world's economic future ( as goes the USA, so goes the world.) The bull in the china closet is rising unemployment, jobs exportation, and low wages. The next failure will have to be fixed by the only ones with enough money to do so; i.e., the muslims who have all that oil wealth. They will be more than willing to step up; however, part of their required collateral will be TOTAL CONTROL OF EVERYTHING. May God continue to bless the USA.

2008 Sep 19 12:21 PM

[eyeswideopen:]

I have to agree with Satguru. Loans to lower income people were not the problem. CRA loans are not subprime loans. I worked in the mortgage industry for 25 years, and now I am out of a job because of this mess.
The problem is deregulation, no oversight whatsoever. Buying a house was easier than buying a car. It made no sense, but since the loan products were available, greedy people sold them. Everyone is to blame hear, EVERYONE, not just Congress, not just Wall Street, but the lenders, the brokers, the Realtors and the buyers, borrowers. But,
lower income people and the loans that have been made available to them are definitely not to blame. There's a reason why banks had to offer such loans, if the banks would just treat every borrower equally, then they would never have been "forced" to provide that type of financing in the 1st place. So, I have lost my job after 25 yrs in the lending industry, will the govt bail me out?

2008 Sep 19 01:02 PM

[axelrod608:]

19 years ago, the most expensive real estate and stocks in the world were in Japan. Years of "irrational exuberance" and a flood of money had pumped up an enormous bubble. Perhaps not identical to 2008 USA, but very similar circumstances. !8 years ago, the bubble in Japan popped. Japanese banks and financial institutions were suddenly facing bankruptcy. Japan's leaders felt that the banks were too big, too important to fail, so the government stepped in, flooded them with money so they wouldn't fail. At the same time, the Nikkei stock exchange tanked. They"saved" the banks. But at what price ? Today, after 18 years, you can still buy real estate and stocks in Japan for half or less than you would have paid 19 years ago.

Was this an unusual outcome ? No. Economists at the World Bank studied all national financial crises for a 30 year period - over 100 events. Their conclusion was that in EVERY case, the amount of money the country poured in to fix the problem was directly proportional to the length and depth of the ensuing recession. So why are Bernanke, Paulson, the Fed, the Treasury all pouring massive amounts of money into a bunch of insolvent companies ?? One reason - the underlying assumption is that while individual companies are "too big to fail", the US government is not. The assumption is that our economy is unbreakable. Personally, I think it is very unwise to test that assumption.

At best, if the Japan experience hits us, and the World Bank study says it will, we will have a flat economy for the next decade or two, real estate prices will end up at about 50% of what they were in 2005 and we will have a bunch of inefficient, overstaffed, bureaucratic banks and financial institutions still run by the same irresponsible folks who got us into this mess. Worse, the financial sector will be run by the government which has proved for decades that it is incompetent at everything it touches.

What the US government is doing is nationalizing the financial sector of the economy. Bernanke and Paulson are protecting and rewarding their incompetent buddies on Wall Street with no regard for "we the people" on Main Street. Anyone who thinks this is all going to work out swell had best take off the rose colored glasses. We are on the yellow brick road to ruin led by people who are going to repeat the disasters that history predicts for those who are paying attention. Our "leaders" just are not paying attention.

I hope I'm wrong. But if I were betting my money on it - and we all are - I'm buying gold.


----------------------...

2008 Sep 19 01:37 PM

[specks:]

I can hear the rusty screendoor going creak-creak, creek-creek as it swings back and forth between blame and shame.
We should do nothing and let the system cleanse itself. But, of course, all of the politicians and academics want to SOLVE THE CRISIS OF THE BUBBLE! Well, guess what, I think I just heard a great big WHOOSH! Listen...can you hear it too??

2008 Sep 19 03:24 PM

[Rhett:]

Anyone remember the outcry against banks for "red-lining" areas where loans would be risky? Those banks were eventually coaxed or intimidated into removing the "red lines" and look at the whirlwind we have reaped.

2008 Sep 19 11:27 PM

[williambanzai7:]

Wall Street, Bush, AAA Lawyers and the Demise of Accountability

We live in a time when political and business leaders are able to avoid being held accountable for their acts of gross negligence and wilful misconduct. Sounds like lawyer talk. Well lawyers are intricately involved in this sorry state of affairs. Lets take the Bush administration. What did all the Republican cronies like Cheney learn from the Nixon saga? Don't put yourself in weak position legally. Don't testify under oath, better yet don't testify. Don't provide information under threat of perjury and obstruction of justice, better yet don't provide information. They have artfully avoided political accountability for a litany of constitutional abuses, executive misconduct and malfeasance. They are also getting AAA legal advice.

OK, now lets consider what has happened in the financial services industry. Until recently, our securities laws forced Wall Street to worry about the way it conducts business. Don't play by regulatory rules with origins in Roosevelt's New Deal and sooner or later the SEC or Elliot Spitzer will hunt you down. You had to worry about adequate disclosure and a battery of rules designed to protect average public investors. If you misbehaved, you also had to worry about a ravinous plaintiff's bar charged with the duty of prosecuting claims on behalf of investors unable to fend for themselves (for a generous fee, of course). More AAA lawyers.

Those New Deal rules are still there. However, Wall Street has managed to water everything down to the point where a manmade Katrina hits the financial markets and there is little or no means to hold the perpetrators accountable. Don't hold your breath waiting for the SEC to chase the bankers that designed, peddled and later lied about their exposure to toxic jackass backed securities. What about Credit Default Swaps? Oh, those so called financial weapons of mass destruction are not securities within the meaning of the securities laws. Those are cutting edge risk management tools. How about investors like poor old AIG banding together to sue those who set them up with these improvised financial explosive devices. Never mind, those were sold to "sophisticated" and "accredited" investors able to fend for themselves. Sales to these financial sophisticates are not subject to the same legal regime. We now see that "sophisticated investor" means one who expects to be bailed out by Uncle Sam. Finally, you won't be seeing any widows and orphans starting class action suits, because no one sold them any securities. Instead, they are accused of being financially culpable in this mess because they fell prey to the army of mortgage/real estate brokers who aggressively peddled shadow bank loans. Mortgage brokers in some instances owned by who else? Wall Street investment banks like Lehman and Bear Stearns. Shadow bank loans? Yep, more AAA legal advice.

Let the markets regulate themselves! That is the fundamentalist mantra of the lords of the Street. Well, that is what the market was actually doing until this past Friday. Self regulation came in the surprising form of punishment by the shorts. After all, it was the unregulated hedge fund industry, Messrs Einhorn et al, and not the SEC that called Lehman and AIG to the carpet. Not to worry, Mr. Cox, a Wall Street lawyer who runs the SEC, has fixed the short problem for his former clients/masters. Trading bets against financial institutions are now banned. In a comic twist, the SEC is apparently planning to force hedge fund managers to testify under oath. Something more than you can expect from the likes of Harriet Myers, Esq. and Alberto Gonzalez, Esq. Ultimately, the reckless bets that the investment banks made with shareholder capital will go unpunished. Still more AAA legal advice.

Well you begin to see how what seems like one big scam is actually a legally airtight apparatus for screwing Grandma, Grandpa and Joe public in an indirect manner without being held legally accountable. Time to throw out all of the New Deal regulatory assumptions and start all over again. Wall Street, like the Bush administration, has managed to innovate its way out of corporate accountability-- the old fashioned way: hire innovative AAA lawyers. 

One hundred years ago a man named Franklin Keyes, Esq. (you guessed it, a Wall Street lawyer) published a tract titled: "Wall Street Speculation, Its Tricks and Its Tragedies". In it he says: "Wall Street is dominated by some of the brainiest and shrewdest men in the country, natural born sharpers and schemers, and before the average man can get the better of them, except through the merest chance, he will have to eat brain food for a long time." Well said Mr. Keyes. Nothing seems to have changed, particularly the need to hire AAA lawyers.

WilliamBanzai7
September 2008

2008 Sep 20 08:36 AM

[DougM:]

While I agree that shoddy lending practices, bad tax law, and unbelievable leverage levels all fed into this mess, you've not mentioned a few other salient factors.

The unregulated swaps market, which has been growing since the early 90s, has reached the point where it threatens to bring down the entire financial system if a single large player fails. This should not have been allowed to happen - regulators, but specifically Alan Greenspan, were asleep at the switch. This systemic risk creates the need for government action now.

Moreover, the mark-to-market accounting change couldn't have been more poorly thought out or timed - when there is no functioning market, this rule creates a balance-sheet vicious cycle that's adding fuel to the fire. Throw in the the complete lack of enforcement of the rules against naked shorting and you have a recipe for violent market action.

Finally, how can you not take note of the fact that Greenspan took the funds rate too low for too long, driving even more investors into the only asset classes that were still producing any yield?

2008 Sep 21 02:44 PM

[chrisfarmd:]

So forgive me for asking, but I am trying to understand the current financial crisis. It appears that mortgages were given to those who were unable to pay in the first place. Therefore, when the housing market reached its cap and homes were no longer appreciating, these individuals, already in over their heads, were forced to default on mortgage payments. Again, I'm looking for a simplified answer so am I close to the problem at hand? Any input is appreciated. Thanks

2008 Sep 24 11:20 AM

[wrongodd:]

You think a tax cut was responsible for this? Community reinvestment act, Chris Dodd, Barney Frank, Bill Clinton, Janet Reno had nothing to do with it....it was the Bush tax cut? You are not dealing in reality.

2008 Sep 26 03:51 PM

[User 275604:]

I must be living in lala land. I got a mtg just a few years ago the uder writers wanted every thing credit check, pay stubs tax returns, property appriasal etc. and I assume they wanted these things for one fact only to determine my ability to pay back the mortage. The broker (sales man) wanted to give me it right a wya but he wasn;'t the one that was going to be on the hook. The underwriter was. Sure they could sell it back to fanimaie and freddiemac but they wante to ASSES THE RISK and hears the kicker at the INTEREST RATE I WAS TO RECEIVE.

Now there were all other kinds a load Ajustable rate, interest only, no document etc, etc. all high risk all HIGH INTEREST (GREED!!!!) to subprime markets. They soaked these people for evrything they could get and when they hadn't go enough they went to there rich Uncle Sam for a bailout. Not to mention the derritive makets.

Granted I am not a economist ut I am not blind either. I could see the hurried, flush eagerness in the lenders ot get all they could get. Now let them pay the price.

Of course the second part of this equation is housing prices the portfolio profitability\risk is all off kilter or exsaperated by the housing bubble burst. There is one thing I do not understand that maybe some one with more finance knowledge than me could explaine, I ask sencerly, how do you take a snapshot appriasal for a security that has a 30 year life at the moment it is originated. I mean the crisis is indelibly tied to time. I mean if you could keep everything the same and flash foward 10, 15 years these portfolio evaluation would seem that bad. I would just think that the appriasal and evaluation should be measured over the life of the instrument, that would seen to take some of the volitility out of the market.

2008 Oct 07 02:41 PM

[Cowtrack:]

I was wondering how long it would take for someone to re-start the Bush bashing! No long at all. I should teach my grandkids the art, I'm sure it will still be in vogue.

To the article writter...thank you for an explanation I can underatand and to all the others who had "thoughtful" insight!

Feb 23 12:56 PM

[User 363514:]

Interesting
Found another article:
knol.google.com/k/marc...

Feb 24 02:25 PM

[vicnic:]

So many unhappy, angry and frustrated people. I agree with you all. Why is the smokescreen so thick?

It is really simple. When a bank provides a loan, it creates a new account in its system for the amount money loaned out. Bankers literally create money as debt by typing figures into these new accounts they create. They do not have the equivalent in savings deposits in their vaults. Banks today only carry a tiny fraction of what they loan out.

So, the fact of the matter is that banks can legally create money as debt as they loan out more and more. This is based on the promise to repay signed by the lender and enforced by the law. The rest of this story is even more sickening.

What makes the situation even worse is that governments loan money from commercial banks and become indebted. The US government is the prime example. The US national debt has that many noughts on it, I struggle to count them.

I believe that those who choose to see 'The truth about money as debt' on YouTube will be staggered at what has passed unnoticed before our very eyes.

Apr 17 05:39 PM

[vicnic:]

Hey there, read my comment. Vic


On Sep 18 10:35 AM satguru wrote:

> I am really at a loss to understand how much money in dollars and
> cents was given out on sub-prime to the poor and blacks as stated
> in this article as the primary cause of this debacle. Why is this
> cancer worldwide? Did the sub-prime caused by FNM and FRE also make
> the whole world financial markets collapse? Are the poor and blacks
> tied in any way to investment banks such as Merrill and Goldman and
> Morgan Stanley? What kinda of BS excuse are you folks using for the
> creed and corruption of the rich. The poor and blacks and minorities
> are always used as scapegoats. What about the enormous billions spend
> now on the corporate bailouts and who gets the massive golden parachutes
> for creating this mess. It's people like you Mr Anton Wahlman that
> make me sick. Tell me what is the dollar amount of funds that went
> for sub-prime mortgages to the poor and blacks and what has been
> to total dollar amount given out so far used to bailout wall street
> globally to date??? You a**holes make me sick!!!
> I live in an affluent neighborhood and five of the homes went on
> foreclosure and guess what none of them are owned by poor and blacks.
> These are rich white folks who used there homes as ATMs buying fancy
> SUVs and boats and spending lavishly on everything. This is where
> the big cost of mortgage financing went to the fat cats. SO CUT YOUR
> BS!!!!

Apr 17 05:41 PM