http://freekvermeulen.blogspot.com/2008/11/what-really-caused-2008-banking-crisis.html
And I quote:
Various explanations have been offered for each of these crises, ranging from top management greed, failing watchdogs to insufficient government regulation and inappropriate accounting and governance structures. Yet, there is one common cause underlying all these symptoms and triggers, and that is the structural failure of management.
OK, a failure of management means that all those guys that you revere and hold up as being masters of business are the ones who fucked the economy.
http://en.wikipedia.org/wiki/Financial_crisis_of_2007–2010
And I quote:
Many causes for the financial crisis have been suggested, with varying weight assigned by experts.[17] The U.S. Senate's LevinCoburn Report asserted that the crisis was the result of "high risk, complex financial products; undisclosed conflicts of interest; the failure of regulators, the credit rating agencies, and the market itself to rein in the excesses of Wall Street."[18] Two factors that have been frequently cited include the liberal use of the Gaussian copula function and the failure to track data provenance.[19] The 1999 repeal of the GlassSteagall Act effectively removed the separation between investment banks and depository banks in the United States.[20] Critics argued that credit rating agencies and investors failed to accurately price the risk involved with mortgage-related financial products, and that governments did not adjust their regulatory practices to address 21st-century financial markets
These same business leaders paid off the ratings agencies to falsify their ratings for these high risk financial products, and then turned around and bet against them behind the scenes. Once again, a huge failure in leadership.
http://factcheck.org/2008/10/who-caused-the-economic-crisis/
Quote:
The Real Deal
So who is to blame? Theres plenty of blame to go around, and it doesnt fasten only on one party or even mainly on what Washington did or didnt do. As The Economist magazine noted recently, the problem is one of "layered irresponsibility
with hard-working homeowners and billionaire villains each playing a role." Heres a partial list of those alleged to be at fault:
■The Federal Reserve, which slashed interest rates after the dot-com bubble burst, making credit cheap.
■Home buyers, who took advantage of easy credit to bid up the prices of homes excessively.
■Congress, which continues to support a mortgage tax deduction that gives consumers a tax incentive to buy more expensive houses.
■Real estate agents, most of whom work for the sellers rather than the buyers and who earned higher commissions from selling more expensive homes.
■The Clinton administration, which pushed for less stringent credit and downpayment requirements for working- and middle-class families.
■Mortgage brokers, who offered less-credit-worthy home buyers subprime, adjustable rate loans with low initial payments, but exploding interest rates.
■Former Federal Reserve chairman Alan Greenspan, who in 2004, near the peak of the housing bubble, encouraged Americans to take out adjustable rate mortgages.
■Wall Street firms, who paid too little attention to the quality of the risky loans that they bundled into Mortgage Backed Securities (MBS), and issued bonds using those securities as collateral.
■The Bush administration, which failed to provide needed government oversight of the increasingly dicey mortgage-backed securities market.
■An obscure accounting rule called mark-to-market, which can have the paradoxical result of making assets be worth less on paper than they are in reality during times of panic.
■Collective delusion, or a belief on the part of all parties that home prices would keep rising forever, no matter how high or how fast they had already gone up.
The U.S. economy is enormously complicated. Screwing it up takes a great deal of cooperation. Claiming that a single piece of legislation was responsible for (or could have averted) the crisis is just political grandstanding. We have no advice to offer on how best to solve the financial crisis. But these sorts of partisan caricatures can only make the task more difficult.
What you see here is a failure of consumers to stop consuming, something we are basically trained not to do from childhood in this country, but mostly it was a huge failure in leadership. While they blame the Clinton admin, and rightly so, what Clinton did was a non-partisan move to gain support from the right (repealing Glass-Steigel) and many people claim it actually softened the blow of the crash. What Clinton certainly did do wrong was push for downpayment assistance and lenient credit requirements, which put a lot of short credit people into houses....a dangerous game. The problem with that is they were trying to help the economy, which is what we all want, however misguided they might have been.
Now, here is the interesting part. The Bush admin is cited as having failed to provide the needed oversight in the market. When these high risk loans were being passed off as AAA rated securities, the Bush admin should have stepped in and put a stop to it. So, why did they not do so?
It's very simple actually. The people "in the know" were betting on this to fail. It's the biggest case of insider trading the world has ever seen and it made lots of people filthy rich. The day the market crashed, multiple TRILLIONS of dollars were made by those still unnamed people who had put in bets against these financial institutions. And who do you think made those bets? The only people it could be are those who knew the ratings agencies were passing bad ratings, the people who were supposed to be providing oversight on this market to protect us in the Bush administration, and the people who clearly profitted from this collapse...such as Goldman-Sachs, who has a revolving door from their top level executive department to our national treasury positions in Washington.
It is clear that this is where the smoke is smoldering. The Bush administration, most likely on purpose, did not protect us from the predatory lending practices and now you want me to vote in more Repub crooks to office? You have to be out of your God damned mind.
Now you can write another sentence that levels my entire factual essay (in your own ideaologically propagandized mind) and pretend that you're right, as usual, or you can finally choose to really WAKE UP.
***I just want to ammend this by saying that, while that last sentence may be a bit harsh, you're about the only staunch right winger I have any discussion with in this forum Matt. The reason for that is you do seem like a reasonable guy, and I think you see that a lot of what I am saying is not opinion but an obvious fact. I've just gotten frustrated with your recent posting habits of laying out one liner blanket party statements that only question everything I just spend considerable time writing up for everyones' consideration. The only reason I vote Dem right now is that I am scared to death that voting in another Repub might force my kids to grow up the way my grandparents did, not because I think the Dems are right on everything.