Capital New York

macduggles commented on Bloomberg: 'Plain and simple,' Congress caused the mortgage crisis, not the banks

Most of the subprime borrowers were actually white or as I like to describe them - ignorant rednecks.

Posted on November 25th, 2011 1:46pm

macduggles commented on Bloomberg: 'Plain and simple,' Congress caused the mortgage crisis, not the banks

With all due respect, I don't know whether Mr. Bloomberg is a fool, a tool or a stool - he may be just drinking the kool-aid of his banker friends - if he actually believes that the biggest bubble of all time is the result of foolish homeowners and government bureaucrats. Usually in a bubble, to find the culprit look to the one party that most profited and ran the thing - in this case the financial intermediaries. I don't know how the fictional story perpetuated by some that the banks were merely stool pigeons got started and blossomed, but from by experience they seem to be mostly waxing some pet prejudices. I found an interesting article about the distortions and how they are created: http://rortybomb.wordpress.com/2011/05/18/peter-wallison-discusses-fannie-and-freddie-for-the-american-spectator-or-where-are-the-fact-checkers/ The real crime is that it was and is not a crime to perpetuate the largest scam of all time. Banks sold mortgage backed securities that were fraudulently rated. They created a bubble in mortgages to create more and more mb-securities which they sold all over the world. When things went sour they shorted the very securities that they had created with credit default swaps. When that soured they were bailed out. To pay back the bail out they sold the worthless securities still held to the federal reserve.

Posted on November 25th, 2011 1:32pm