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The fact that the whole mortgage thing was corrupt was obvious to anyone who dealt with it.
I had friends that were getting mortgages for 5-8 times their yearly income, and didn't have any assets. Any. They couldn't even pay closing costs.
The mortgage system failure was caused by politicians imposing completely irrational rules on banks to appease a hard core, hate filled, political movement.
Learn to read.
Your friends were getting those mortgages for a reason. The local lending institution that they were dealing with had no intention of keeping that risky mortgage on their books. They knew that an investment bank like Lehman Brothers or Morgan Stanley would buy that mortgage from them before ink was even dry. The Wall Street meltdown was the result of greedy bankers and rating agencies that participated in unethical and unlawful behavior. You really are clueless to the scam that the investment banks were running. You should follow your own advice and learn to read.
difference between a judgment and a settlement. A judgment means you were tried and convicted, whereas a settlement means you agreed to pay a sum to avoid a lengthy and expensive court fight. To quote from your own link:
"Moody’s said that it stands behind the integrity of its ratings and noted that the settlement contains no finding of a violation of law or admission of liability."
When I wrote the post to the hillbilly about the rating agencies, I did not use a link. The court could have given a formal decision. The governments case against Moody's and Standard & Poors happened years ago dipshit. You try to make a big deal about the fact that they settled which is what I wrote in the second post regarding the agencies. The main point was (which the hillbilly didn't seem to know) is that Moody's and Standard & Poors agreed to pay the government 2 Billion dollars for participating in unethical behavior which contributed to the financial crisis of 2008. For example like knowlingly putting false information on a prospectus. I bet both of them wrote that check to the government with a big smile on their face.
Were you in those meetings between the bankers and ratings agencies when they set up their sweetheart deal? You give us triple "A" ratings on all of our products and we'll give you all of our business. The Wall Street meltdown is not as complex as you make it out to be. The combination of greedy bankers who participated in unethical and unlawful behavior. They took full advantage of the fact that there was no Dodd Frank type bill on the books at the time. This link sums of nicely the corruption by Morgan Stanley. Now chew on that you little Harvard dweeb.
From the link:
But the documents suggest a pattern of behavior larger than this one deal: people across the bank understood that the American housing market was in trouble. They took advantage of that knowledge to create and then bet against securities and then also to unload garbage investments on unsuspecting buyers.
who doesn't understand the myriad causes of the 2008/09 financial crisis
You are the ignorant one who does not understand a complex scam. Freddie Mac and Fannie Mae sued eighteen different financial institutions for participating in unethical and unlawful behavior. That myriad you are talking about was basically plain old cheating.
From the link:
In 2011, the agency had a number of other big banks in the crosshairs as well. JPMorgan (JPM) was one of 18 financial institutions the FHFA sued back in 2011, accusing them of selling Fannie and Freddie securities that "had different and more risky characteristics than the descriptions contained in the marketing and sales materials". Fannie and Freddie, the government-backed housing finance firms, sustained massive losses on mortgage-backed securities as the housing market imploded, requiring a bailout of over $187 billion
Complex scam? Hardly. The entire mortgage crisis boils down to dimbocrats forcing banks to make loans to minority applicants even if they had NO possible means of making the payments. Under threat of a lawsuit for discrimination. Bush warned the dims constantly about this and got laughed at by your hero Frank who said everything was fine. Until it wasn't. Then Holder and Obumbler wanted to go back and do the exact same thing that started the problems.
Complex scam? Hardly. The entire mortgage crisis boils down to dimbocrats forcing banks to make loans to minority applicants even if they had NO possible means of making the payments. Under threat of a lawsuit for discrimination. Bush warned the dims constantly about this and got laughed at by your hero Frank who said everything was fine. Until it wasn't. Then Holder and Obumbler wanted to go back and do the exact same thing that started the problems.
Congress did not tell the banks to stop doing income verification and credit checks. The local lender was processing fradulent loans because they knew an investment bank from Wall Street was going to buy it.
Why would a bank want buy a loan that could possibly be fradulent? The investment banks had cut a deal with the rating agencies. The knew that any mortgages that they could bundle into a security would get triple "A" rating. The gift triple "A" rating makes it easier to sell the security to unsuspecting customers. Just ask Freddie Mac and Fannie Mae who purchased billions of dollars worth of the bundled mortgages from Investment banks like Morgan Stanley and Bear Stearns. Freddie Mac and Fannie Mae sued 18 different Wall street financial institutions for being deceived. Run along now newbie, you don't know what you are talking about.
Hedge funds and the trades they though up had a lot to do with it. The most famous being the Magnetar trade. The hedge fund Magnetar helped create mortgage-based securities, pushed for risky things to go inside them and then bet against the investments, resulting in billions in losses for investors and ultimately making the financial crisis worse.
According to bankers and others involved, the Magnetar Trade worked this way: The hedge fund bought the riskiest portion of a kind of securities known as collateralized debt obligations -- CDOs. It then placed bets that portions of its own deals would fail.
At least nine banks helped Magnetar hatch deals. Merrill Lynch, Citigroup,JPMorgan Chase. and UBS all did multiple deals with Magnetar.
When the crash came, nearly all of these securities became worthless, a loss of an estimated $40 billion paid by investors, the investment banks who helped bring them into the world, and, eventually, American taxpayers
Congress did not tell the banks to stop doing income verification and credit checks. The local lender was processing fradulent loans because they knew an investment bank from Wall Street was going to buy it.
Why would a bank want buy a loan that could possibly be fradulent? The investment banks had cut a deal with the rating agencies. The knew that any mortgages that they could bundle into a security would get triple "A" rating. The gift triple "A" rating makes it easier to sell the security to unsuspecting customers. Just ask Freddie Mac and Fannie Mae who purchased billions of dollars worth of the bundled mortgages from Investment banks like Morgan Stanley and Bear Stearns. Freddie Mac and Fannie Mae sued 18 different Wall street financial institutions for being deceived. Run along now newbie, you don't know what you are talking about.
Hey, Barney Frank: The Government Did Cause the Housing Crisis
“Barney Frank was the principal advocate in Congress for using the government's authority to force lower underwriting standards in the business of housing finance. Although he claims to have tried to reverse course as early as 2003, that was the year he made the oft-quoted remark, 'I want to roll the dice a little bit more in this situation toward subsidized housing.' Rather than reversing course, he was pressing on when others were beginning to have doubts.”
Barney Franks’ “most successful effort was to impose what were called ‘affordable housing’ requirements on Fannie Mae and Freddie Mac in 1992. Before that time, these two government sponsored enterprises (GSEs) had been required to buy only mortgages that institutional investors would buy--in other words, prime mortgages--but Frank and others thought these standards made it too difficult for low income borrowers to buy homes. The affordable housing law required Fannie and Freddie to meet government quotas when they bought loans from banks and other mortgage originators.
“At first, this quota was 30%; that is, of all the loans they bought, 30% had to be made to people at or below the median income in their communities. HUD, however, was given authority to administer these quotas, and between 1992 and 2007, the quotas were raised from 30% … to 55% …
“It is certainly possible to find prime mortgages among borrowers below the median income, but when half or more of the mortgages the GSEs bought had to be made to people below that income level, it was inevitable that underwriting standards had to decline. And they did. By 2000, Fannie was offering no-downpayment loans. By 2002, Fannie and Freddie had bought well over $1 trillion of subprime and other low quality loans. Fannie and Freddie were by far the largest part of this effort, but the FHA, Federal Home Loan Banks, Veterans Administration and other agencies--all under congressional and HUD pressure--followed suit. This continued through the 1990s and 2000s until the housing bubble--created by all this government-backed spending--collapsed in 2007. As a result, in 2008, before the mortgage meltdown that triggered the crisis, there were 27 million subprime and other low quality mortgages in the US financial system. That was half of all mortgages. Of these, over 70% (19.2 million) were on the books of government agencies like Fannie and Freddie, so there is no doubt that the government created the demand for these weak loans; less than 30% (7.8 million) were held or distributed by the banks, which profited from the opportunity created by the government. When these mortgages failed in unprecedented numbers in 2008, driving down housing prices throughout the U.S., they weakened all financial institutions and caused the financial crisis.”
Complex scam? Hardly. The entire mortgage crisis boils down to dimbocrats forcing banks to make loans to minority applicants even if they had NO possible means of making the payments. .
Seriously dumbshit, you need to do some better research....
...that is like saying a hummingbird cause a tornado.
OK everyone in this thread who thinks that the big crash of 2008 was because people were not able pay their mortgage should not buy
or sell stocks, should not manage their own 401K, should not play poker, should not gamble in any way because they ARE the sucker at the table.
Here is a video that pretty well explains why.
In it the CDO manager says that just 50 million in mortgages becomes ONE FUCKING BILLION in CDOs and a lot of people pushing the CDOs are betting against them. When the defaults go up the whole ONE BILLION goes up in smoke. For years people have been faulting on their mortgages but up until now it had not been a problem because the high risk were in high risk pools. There was a way to reduce the exposure to risk. It was when investment firms and hedge firms got the bright ideas of CDOs that increased the risk. They bundled the riskier mortgages and bundled them and made people forget about the risk that never went away. And when a default rate hit a certain point everything exploded and all the dumb fucks like the people on this thread blamed the people who could not make the mortgage instead of blaming the people who really caused this. The people who came up with the CDOs and CDOs Squared and so on.
Your friends were getting those mortgages for a reason. The local lending institution that they were dealing with had no intention of keeping that risky mortgage on their books. They knew that an investment bank like Lehman Brothers or Morgan Stanley would buy that mortgage from them before ink was even dry. The Wall Street meltdown was the result of greedy bankers and rating agencies that participated in unethical and unlawful behavior. You really are clueless to the scam...
Think you have it all figured out, flighty? Good for you!
Here's a couple of questions:
1) If none of the lenders had to keep that risky mortgage on their books, why did any of them need to be bailed out?
2) If Wall Street was so greedy, why did they knowingly concoct a "scam" that was certain to blow up, push many of them to the brink of collapse, and cause ignorant fucks like you to react with crushing over-regulation?
Moody's and Standard & Poors agreed to pay the government 2 Billion dollars for participating in unethical behavior which contributed to the financial crisis of 2008.
No, they didn't. They agreed to pay the DOJ to drop the lawsuits without any admission of wrongdoing on their part, legal or otherwise.
Quote:
Originally Posted by flghtr65
For example like knowlingly (sic) putting false information on a prospectus.
That's called fraud, flighty. The SEC requires prospectuses to be accurate. More importantly, the rating agencies don't even write the prospectuses; the securities issuers do. You obviously don't understand how the process of underwriting and selling securities works.
Quote:
Originally Posted by flghtr65
Were you in those meetings between the bankers and ratings agencies when they set up their sweetheart deal? You give us triple "A" ratings on all of our products and we'll give you all of our business. The Wall Street meltdown is not as complex as you make it out to be.
Your ignorance is astounding. The banks sliced up pools of mortgages into tranches that were each separately rated from AAA to single-B. No one was ever promised AAA ratings on all of their products. That's laughable. And Moody's and S&P would never promise a rating or ratings in advance. You stupidly make a mockery of the entire process of analyzing risk, something you have no background in. Just because you don't understand how something works doesn't mean you have to make sweeping, ignorant statements about it. Smart people avoid subjects that are over their heads.
Yes, the rating agencies screwed up... but you are the last person qualified to explain how and why it happened!
