The “credit crunch”; “Too big to fail”.

S

Supposn

Verified User
The “credit crunch”; “Too big to fail”.

Excerpted from Classic Liberals post to the discussion thread
http://www.justplainpolitics.com/sh...ences-of-eliminating-the-federal-minimum-wage. :
“Government just fucks up what would otherwise be a perfect system!

Government causes unemployment and inflation, prohibits freedom and mandates fucking stupidity and perpetuates disincentive and enslaves the poor to reliance on idiot government!”
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Within my lifetime thus far there has occurred some catastrophic events that brought the most severe harm upon our nation’s and our global economy They were not due primarily to government intervention but rather to government officials failures to exercise due diligence and exercise their legally mandated duty to reign in private enterprises’ excesses. The last such fiasco was described as the “credit crunch”. You might better recall the phrase “Too big to fail”.

“Too big to fail” refers to the consequences of huge enterprises legally subject extremely great loses that also are themselves significantly detrimental to our national economy.
I believe all such USA cases were due to the corporation’s imprudence and/or illegal activity and/or government regulators or legislators failing to exercise due diligence and oversight, and/or undue influence of lobbyists.

[It doesn’t help when our legislators act unintelligently. Commercial interests were granted the opportunity to participate within government sponsored entities in order to increase the pool of available wealth for federally insured loans; that worked well. Commercial participants were able to be represented on the GSEs’ boards; that was reasonable.
GSEs’ were then permitted to deal with loans or portions of loans that were not federally insured; thus GSEs’ were indirectly exposing the federal government to increased risks. That’s less than intelligent. The underlying cause of that foolishness might have been unstated confidence that home values can only increase and never decrease.

[Banks were permitted to sell 100% of a loan to a GSE before the signatures initializing those loans were dry. In such cases, and/or in the cases of federally insured loans, banks were unconcerned with the possibility of overvalued collateral or the creditability of the lender because the banks had “no skin in the game”].

Respectfully, Supposn
 
Wall Street banks were encouraged by the government as far back as Clinton then Bush to write sub-prime mortgages to borrowers who hadn’t a fucking clue how they would pay them back. All was done in the name of home ownership for every American, i. e. another idiot government idea and meddling in a market place in a fashion whereby government has no rational business.

President Bill Clinton publicly declared "the Glass–Steagall law is no longer appropriate."[ http://en.wikipedia.org/wiki/Glass-Steagall_Act



That’s the evidence of your government at work.

“Government is not reason it is not eloquence its force like fire a troublesome servant and a fearful master. Never for a moment should it be left to irresponsible actions.” (George Washington)
 
Topspin said:
I don't have to play the video to know your claim is hot air like all your post!
Click to expand...

“Lovin Eyes Never See.”

I don’t have to study your response but a Nano-second to recognize that you’re surely totally devoid of any rational argument with my “hot air.” Thus, as usual the leftist brain-dead response of attacking the messenger.

Your intellectual genius is breathtaking!!!!!
 
Classic Liberal said:
Wall Street banks were encouraged by the government as far back as Clinton then Bush to write sub-prime mortgages to borrowers who hadn’t a fucking clue how they would pay them back. All was done in the name of home ownership for every American, i. e. another idiot government idea and meddling in a market place in a fashion whereby government has no rational business. President Bill Clinton publicly declared "the Glass–Steagall law is no longer appropriate."[ http://en.wikipedia.org/wiki/Glass-Steagall_Act

[That’s the evidence of your government at work.

“Government is not reason it is not eloquence its force like fire a troublesome servant and a fearful master. Never for a moment should it be left to irresponsible actions.” (George Washington)
Click to expand...

Classic Liberal, no one had to twist the financial industries arms. If they did not believe the loans were to their advantage, the banks would never have issued those mortgages.

The banks were very much aware of the risks; the mortgages were issued at rates exceeding those for credit worthy transactions. The banks did not submit to extortion, they were highly motivated and rushed to what they considered to be “free lunch”. They never considered that (even if the collateral had not been deliberately over- assessed, it was conceivable that real-estate values could possibly decline.

The financial enterprises sold entire mortgages to GSEs and when volumes of the loans finally turned sour, the nation’s good credit were held liable at the expense of current and future taxpayers.
The volumes of such transaction were so great that due to their inventory of mortgages held rather than sold, the banks had for themselves needed bailouts.

The primary cause of the “credit crunch” and the prior “savings and loans” fiascos were (as I have previously written), due to government officials failures to exercise due diligence and exercise their legally mandated duty to reign in private enterprises’ excesses

Respectfully, Supposn
 
Supposn said:
Classic Liberal, no one had to twist the financial industries arms. If they did not believe the loans were to their advantage, the banks would never have issued those mortgages.

The banks were very much aware of the risks; the mortgages were issued at rates exceeding those for credit worthy transactions. The banks did not submit to extortion, they were highly motivated and rushed to what they considered to be “free lunch”. They never considered that (even if the collateral had not been deliberately over- assessed, it was conceivable that real-estate values could possibly decline.

The financial enterprises sold entire mortgages to GSEs and when volumes of the loans finally turned sour, the nation’s good credit were held liable at the expense of current and future taxpayers.
The volumes of such transaction were so great that due to their inventory of mortgages held rather than sold, the banks had for themselves needed bailouts.

The primary cause of the “credit crunch” and the prior “savings and loans” fiascos were (as I have previously written), due to government officials failures to exercise due diligence and exercise their legally mandated duty to reign in private enterprises’ excesses

Respectfully, Supposn
Click to expand...

The financial crisis was caused by the fucking government The historical bailouts of Chrysler and the Savings & Loan corporations set the standard for what in effect became a “banking insurance policy.” Bankers saw the profit advantages of bundling sub-prime mortgages with other mortgages, having them obtain high ratings from rating agencies that the banks pay calling them ”derivatives” and selling them to other banks worldwide and a whopping share of them to Fannie & Freddie. The banks knew their risk was null because the market place hysteria for derivatives was based on the insane premise that housing prices would never go down and the fact that banks were being assured that even if the market collapsed the fucking government would bail it out just exactly as it did. The precedent for bailing out banks had been historically set.

There is a mountain of video evidence to support the fact that numerous Republicans in Congress warned about the looming crisis and wanted to pass legislation to prevent it but a Democrat controlled Congress ignored and denied any crisis existed. Even the Bush administration was pushing for legislation to limit Fannie and Freddie’s exposure to the looming crisis.

The unconstitutional government bailouts have set this nation up for the same fucking crisis to happen again and again.

Government oversight is always pathetic, incompetent and corrupt.

If you like crisis, just wait a minute, government is in the process of creating another one for ya, guaranteed.
 
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