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TOPIC: WTF
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Current, after working briefly in secondary marketing for a bank, i totally get your explaination. I knew part of it, and the rest is a natural extension. I predicted the housing market bubble bursting six years before it finally happened.

Fair Oaks TX
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Current what does the words red line districts mean?

Las Vegas NV
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Nutcracker,

You are a political conspiracy theorist, not an economist. And a pretty whacky one at that. Liar loans were created because no one was watching the banks and because there was massive demand for them to feed the insatiable market for collateralized debt obligations. The coupon on these bonds (CDOs) was high but unsustainable due to the glaring inability of the noteholders to pay the notes (a fact intentionally overlooked by the issuing banks because they had no intention of holding any of the notes or bundles securities as investments). That fact was obscured by the fraudulent ratings bestowed on the bonds by the ratings companies. They were paid for these ratings not bribed. It's an important distinction in that they were co-conspirators, not innocent parties enticed by inducements.

So if the banks made money as you said by selling these all over the world (They did of course. And the joke at Deutsche bank was "Whose buying this crap? Dumb money from Dusseldorf I guess!") then how could they lose? If they sold bets against their own crappy bonds underwritten by AIG, it's easy to see how AIG got its ass kicked but why did the investment banks? When they bought their own bets (credit default swaps) back it's easy to see how they didn't make a killing as they hoped betting against their own crappy bonds because AIG went belly up before they got paid. Still, how did they lose? The answer is that they forgot to let their own companies in on the massive fraud/joke. The "Dumb money from Dusseldorf" turned out to be dumb money from Deutsche Bank. All sorts of people in the bond departments of these investment banks couldn't believe the returns they were getting on triple A rated securities. And the poor dears were holding tens of billions of dollars worth of these gold plated dog turds when the wheels fell off.

So...how exactly was this Bill Clinton's fault?

Wenatchee WA
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Current what you typed is scary. Is this what you liberals really believe happened that caused the financial crisis? Or are you smoking some really powerful pot?

Several things cause the financial crisis.

1. Bill Clinton stopped enforcing all business laws in 1993 to make the economy boom so he could get reelected. (Bernie Madoff was turned in to the DOJ and SEC every year many times for the fraud he was committing but Clinton refused to prosecute him)

2. The Democrats sued Citi Bank for discrimination claiming that the banks where discrimination against minorities because whites where getting more home loans then blacks. The court ruled that the banks had to give out the same number of home loans based on race and the percentage of minorities in the populations. It did not matter if they qualified for the loan of had the income to pay the loan back.

The banks where forced to give out home loans that could not be paid back. Wall street got creative since no laws where being enforced created the mortgaged backed security and then bribed the bond rating agencies to give these securities a AAA rating.

Liar loans where created to fulfill the court order and the financial crisis was in the making.

These mortgaged backed securities where then sold all over world, looting the pensions funds in Europe but making Wall Street and the Clinton's and their political cronies filthy rich.

Everyone got in on the free money gold rush until the world ran out of money to buy the mortgaged back securities and then everything collapsed.

Las Vegas NV
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"Bill Clinton forced the banks to give out those crappy loans. Its why the whole economy collapsed in 2006 "

LOL. Nutcracker, you are one of a kind dude. WTF (where) do you get this stuff? Or do you come up with it on your own?

The financial crisis was caused by lax oversight of banks (blame that on both parties) allowing them to make money on transaction fees by writing loans to anyone, with no consequences. There were no consequences to them since they laid the loans off on others. There was actually huge demand for loans, any kind of loans, because of the banks hunger for "securitizing" the loans by converting them to mortgage backed securities (CDOs) which they could also make a transaction fee on selling. The ratings companies (S&P and Moody's) aided and abetted the process by giving blatantly false sound ratings to these CDOs, also for a fee, thereby generating high demand for the polished turd CDO product line and ensuring themselves more business. When someone finally figured out that these bundles of garbage were virtually certain to default, the banks came up with a way to write an instrument to bet against the survival of the CDOs they created (credit default swaps). They made a bunch of money selling these instruments that were underwritten by others, primarily AIG. Then they tried to make a killing by buying them back when it became obvious even to them that their crap CDOs were indeed certain to go belly up. The only way these scumbags actually ended up losing money was because the ratings companies lied so convincingly that the investment departments in their own stupid banks were holding billions of dollars worth of these crappy instruments when the music stopped.

Of course your explanation is much simpler and therefore, even if completely preposterous, easier for stupid people to grasp.

Wenatchee WA
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@ VA, I already know what I hope the sentence is....

Augusta GA
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Bill Clinton forced the banks to give out those crappy loans. Its why the whole economy collapsed in 2006

Right now its just coming out that Obama nationalized Fannie and Freddie Mac and then looted both companies of hundred of billions of dollars. Obama gave that money to the NGO cronies of the Democratic Party and to fund Obamacare.

Are not Democrats such wonderful people?

Las Vegas NV
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@Lacouple,

Not arguing with the "Holy crap!" sentiment. I felt the same way about my first $60,000 mortgage on a house that cost $82,500. Hell of a nice house too.

Traditionally banks have allowed 25% to (rarely) 30% of someone's gross income to be assignable for total housing cost. Right now interest rates are ridiculously low but even at 3.5%, a thirty year fixed will cost you $5,400 per $100,000. Assuming $800 for homeowner's insurance, enough of a down payment to avoid private mortgage insurance and a state with ridiculously low property taxes, $300,000 is more than anyone should lend a person making $60,000.

Of course if oversight is slack enough and banks can offload crappy loans like they did about ten years ago and assume the taxpayers will bail them out, that all goes out the window. In his book "The Big Short" Michael Lewis chronicled a case where a California "strawberry worker" (his gross income was $17,000/year so a one season per year ag worker sounds about right) received a $650,000 mortgage from a subsidiary of Washington Mutual.

Wenatchee WA
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Un-fucking-believable.

A Georgia woman allegedly killed her paraplegic ex-boyfriend last month by dropping him off in the woods and leaving him to die in the freezing cold. Ruby Kate Coursey, 27, was charged Monday with felony murder and neglect of a disabled adult, a felony, in connection with the death of 33-year-old Troymaine Johnson, Upson County, Georgia, Sheriff Dan Kilgore tells PEOPLE.

Johnson was last seen alive on March 14 and was found dead by authorities after midnight on March 17, Kilgore says. The Georgia Bureau of Investigation later determined he died of hypothermia.

Kilgore says that Coursey, Johnson’s ex-girlfriend, allegedly dropped him off on a dirt road in the area of a hunting camp in Upson County, in Middle Georgia. To access the road, she allegedly crashed her vehicle through a gate, he says.

Kilgore says Johnson didn’t have the use of his legs and had only partial use of one arm: “He was totally immobile. ... There was absolutely no way he’d be able to get out of there or call for help.”

As Johnson was stranded overnight, the temperatures dipped into the 20s. “That would have been a very painful way to meet your demise,” Kilgore says.

Windermere FL
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In California the cost of regulations make it incredibly expensive to build a new house. Just the cap and trade and global warming regs in California now add huge amounts of money to a new house being built.

When its to expensive and to much red tape to build the price of existing housing goes through the roof.

Las Vegas NV
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TOPIC: WTF
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