Quote:FBT, your biggest problem is that you believe that Fannie and Freddie were the problem at all.

 

Fannie and Freddy just buy mortgages from originators. It was the unregulated practices of the private market and the bizarre unregulated derivatives market that lead to the housing bubble and the 2008 banking crash.

 

The banking crash was directly related to the lack of derivatives regulation. DIRECTLY.

 

It's not the democrats that insist on "get(ting) rid of all the job killing regulations"

 

Nobody is denying that there was a lack of derivative regulation, and that this contributed heavily to the banking collapse.  In fact, I've pointed out elsewhere in this very thread that the repeal of Glass Steagall was at least partly to  blame for the lack of regulation.  I should have been more specific I suppose.  That change in the laws led to the creation of derivatives as an investment instrument.  Toss in excessive liquidity in the credit markets as a result of Greenspan/Bernake's great weapon of choice in trying to prop up the economy by dropping interest rates, and toxic investments like sub-prime loans, and it was a self inflicted collapse.  That's why I say Bush is at least partly to blame since they were pushing the Fed hard to keep pushing down the prime lending rate, but it was Clinton that signed the repeal of Glass Steagall. 

 

I worked for Merrill Lynch during the meltdown.  I worked in the global wealth management area that was bundling those sub prime loans and using them as investment instruments.  It was the same business unit that also encouraged people to use their investment portfolios to purchase more and more real estate because the market was just growing by leaps and bounds with no end in sight. They were also heavily vested in the derivative market.  These moves destroyed a great company. 

 

You don't think Fannie/Freddie were a part of the problem at all, but by carrying the paper on those sub prime mortgages, they artificially inflated the real estate market at a time when Joe Six Pack was using his home as an ATM to pay for cars, trips, toys, and more real estate.  When they had to be bailed out, and the foreclosure mess rocketed forward, that was yet another stake in the heart of the economy that was absolutely a direct result of democrats refusing to do their jobs as oversight. 

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