pkscottx

Did Lack of Regulation Create the Subprime Mortgage Crisis?

Those darned subprime borrowers and those pesky regulations did it.

I'm so glad you explained it for us economic illiterates.

You kind of breezed passed the whole subject of "dirivatives" a monster created wholly by the financial industry. Of couse these were completely UNREGULATED and everybody was so busy collecting a commission on "credit default swaps" that nobody checked to see if the people who were selling this "insurance" could actually pay up if things went sour. OOPS!

It's the dirivatives and the off balance sheet garbage that has every body soiling themselves. AIG was on the hook for a bunch of these and when they had to pay up they didn't have the cash. That's why they went bankrupt and we now own 80% of their sorry rears.

Then there is the whole question of "transparancy". This garbage is so convoluted and slip shod that few if anyone understands them. Nobody knows how much of it is out there or who has it. It's kind of a grizzly version of Old Maid.

The banks know this, it's a big part of the reason they won't lend to each other.

You also fail to mention that our fearless leaders in Congress are idiots and whores. Fannie and Freddie were throwing obscene amounts of money at them to get them to loosen lending standards and let them increase their leverage to insane levels. Congress didn't FORCE them to do anything.

Ditto every other Financial institution on planet earth.

These same idiots and whores are now falling all over themselves to dish out $700 billion of taxpayers money to them.

I'm puking in my wastebasket.