Greenspan drove up the price of houses by artificially keeping interest rates low. The banks gave those loans out without verifying income requirements and assets because if they actually did that then they couldn't have given those loans out. Government played a role by requiring that banks relax standards but private business ignores government policies that they don't like but in this case they made billions from this deception and drove up housing costs more. They own the government. FRAUD
Thanks michael0156, indeed I have watched the Frontline documentary "The Warning" a few times. It is one of my favorites when the interviewed Greenspan admits basically "My whole world view was wrong"! Every Alisa Rosenbaum enthusiast should see it.
1- It's not the company's standards, but people in charge
2- Money is the root of all evil, a cliche appropriate for the last 30 years in USA & the world
3- I think you deflect from the deliberate wrecking of our economy & are avoiding placing the blame where it squarely belongs, with corporate/banking executives. Bribable govt officials are secondary. 3rd there is "We the People", who are not vigilant & were duped
Did you watch the PBS documentary "The Warning" as I recommended?
@michael0156 Currently whatching "The Warning". (thanks for passing that along." I don't know were the blame belongs..I'm trying to uderstand the issue, really. For what it's worth, I was having open conversations with my workmates during the run-up, thought something was odd about it -seem surreal. I've no finacial knowledge, just had a sense. "We the People" generally told me to shut up - especially the ones making money at the time.
@michael0156 Regarding "The Warning"... Interesting piece of the puzzole. I'm wondering how many other
warning, about how many other sectors of the economy, were made. I suspect there were many such details that never got to see the light of day. I'm guessing, too, a lot of information, about many sectors of the fianancial system, and government, including those pertaining to regulation, or the lack thereof, and consequences, still never see the light of day -until the deals are done.
Greenspan duped us. Rubin & Summers helped him & banksters
Every Central Bank I have investigated performs a variation of the debt fraud the USA Fed has perpetrated
The Fed, a private bank, prints money. We borrow FIAT $ $ & give them Treasury bonds. The Fed banks use bond interest to run the banks & return excess interest to the Treasury
Instead of holding the bonds, The Fed sells them, creating fraudulent debt for the USA. The Fed should pay those fraudulent bonds & reimburse us
@michael0156 It sounded like Greenspan was mistaken, if you take him at face value when questioned. I am tempted to think he was mistaken about what were once considered known aspects of human nature. I also think that's true regarding Barney Frank and the goverment backed mortgage lenders, and much else that gets done in the name of attempting to help people by legislation going either way... A blind eye, turned by popular demand, seems to be the norm. Probably affects all parties.
@59arkady Greenspan was not mistaken, he KNEW he was wrong & helped cause the 2008 economic crisis & sink the US govt by fraudulently bankrupting it
Greenspan helped strip Brooksley Born's office of regulating derivatives. If she had been allowed to do her job in the 1990s we would not have been involved in the worldwide collapse of 2008
Greenspan worked with Rubin & Summers to deregulate the derivatives market & destroy the Glass Steagel act
Look up the results of a bi-partisan committee on the crisis for this and more info. In Wikipedia: "Wall Street and the Financial Crisis: Anatomy of a Financial Collapse".
59arkady -- No, Fannie/Freddie existed for 30 years with no hazard b/c they had high standards. I know this personally: I got my 1st mortgage in 1982.
When lobbyists got Glass-Steagall repealed & other regulations relaxed Wall Street securitizing entered the mortgage market. Standards went out the window as the new players competed. Sub-prime borrowers were draw into the insatiable market. Fannie and Freddie were playing catchup, they did not lead.
Amazing how many liars are out there! Michael you are right on in your analysis. Too bad You Tube, a basically useful tool, is swamped by those with an ax to grind. For facts on this & more, simply look up "Gramm–Leach–Bliley Act" and "Glass-Steagle" on Wikipedia.
@pas9ify Does the existence of Freddie Mac, and Fannie Mae create the moral hazard they are speaking of? Would lenders take the risk if they weren't there? If legislation was passed that did shift the risk to taxpayers, does that create an atmosphere that enables greed by reducing risk to the instittutions, and individuals involved? Is it necessarily "one" or the "other" government policy, or banks, or could it be that one couldn't operate so without the policy of the other?
@pas9ify thanks for your encouraging words. Yes, I agree with you. Reviewing those two pieces of legislation and the CFMA & The Federal Reserve Act will open the eyes of anyone with enough intelligence to read and understand
Also search for- Frontline Brooksley Born Alan Greenspan - A great PBS documentary about how Greenspan Rubin Summers set up our country for failure by stopping Brooksley Born from regulating derivatives. The Derivatives market was unleashed with the Republican 2000 CFMA
"there's an old saying: capitalism without bankruptcy is like religion without hell."
really? and how old would this "old" saying be? bc I've been studying economics and public policy for years and have never heard it. something tells me Ms. Scowls-a-lot in the video here might've made up this "old" saying.
What a bunch of crap. I guess Enron was the governments fault as well. This is the type of stuff youtube should be blocking, not my favorite music video.
Bank execs lobbied for relaxing regs requiring banks to hold mortgage notes. This video tries to wrongly blame corporate greed on the govt. This is part of a concerted corporate world's attempt to get rid of govt regulation by bankrupting/demonizing govt AND it's people
Just as free people require laws by which to live, "free markets" need regulations within which they must function
Freeing bankers didn't force them to make bad loans, they did it out of greed
@michael0156 Maybe. Could you substantiate the lobbying with claim with independant documentation. Also, please explain the how a bank would benefit by making risky loans. In past time the banks refrained from making loans if risk was high, that behavior has obviously changes, why? What laws were instituted that enabled the behavior, or what regulations were suspended to make this possible?
@59arkady Banking regs changed so banks could sell mortgages. Banks began loaning to unqualified buyers to make upfront fees & even more profit by bundling fraudulently rated AAA loans & selling them to unsuspecting investors. This is WIDELY known... "liar's loans"
Regarding the lobbying claim... Do you doubt for-profit lobbying goes on every day in DC?
Let's take the 2008 collapse- caused by 2000 CFMA, not the housing bubble. CFMA allowed regulated institutions to gamble w/o oversight
@michael0156 No, no - I'm sure there's lobbying of all sorts for all sides of just about anything involving money. I'm simply attempting to understand the issue - and there are several aspects of the discussion and a lot of finger pointing, so it's not easy to sort out...
1- What issues are you trying to understand? Be specific
2- Where do you, in your opinion, place the blame for our debt & job losses?
3- What aspects of what discussion are you talking about?
You do a lot of indirect finger pointing of your own, all tending to blame govt & regulations for our fiasco
It's been the destruction of regulations & proper trade barriers (protecting Americans from unfair competition) beginning with Reagan & continuing with Obama that caused our collapse
@michael0156 There's no such thing as corporate greed. Corporations are made up of people. Politicians are also people. They're all greedy. You're greedy. Everyone is greedy.
The problem with your assessment is that you are confusing what the government does with regulation. Do Fanny/Freddie REGULATE? No, they exist to serve the purposes of the few (those politicians and evuuuul corporate types with sufficient clout) at the expense of all other citizens and honest politicians.
@world - of course there is no problem with my assessment
We have to elect representatives and we have to monitor them as a responsible citizen should do. Properly regulated representatives will properly regulate corporations and people too... laws regulations... we are in the business of controlling behaviors
It is not easy and our current political systems are set to discourage true participation by citizenry... but the alternative is extreme poverty for the majority of Americans
This video is a lie when it comes to Frannie and Freddie. F+F's market share dropped 20 percentage points during the housing bubble, and defaults on securities were 6 times higher in the private sector. This completely shatters this fantasy that banks were relegating their "dodgy loans" to the government. Complete factual inaccuracies on her part. Please, though, feel free to rebuttal :)
How can anyone regain faith in the market as long as Summers, Bernanke and Geitner are still the main-players? They almost destroyed the entire financial system and spent $ 5.1 trillion of tax payer money to save Fannie, Freddie, Bear and AIG, that convinced millions of Americans that real estate was equivalent to a money tree. They should be in prison. But no, they are running the country! It´s mad!
Det trevliga är att allt är gratis! Det man kan dock köpa till realtid och lite annat extra smaskigt. Men detta är den bästa sidan för småsparare, studenter och andra som inte vill köpa dyra program och gillar bra uppbyggda communities.
Det är alltså en ny community, packad med funktioner man inte vetat att man saknat. Du kan sätta upp din egna portfölj, rekommendera aktier genom ett snabbt tryck,Det är den bästa jag sett än så länge.
she is right on. I went through the system and it is a joke as you can own a home and pay up to 42% of your pretax income. This is so very true and can tell you as I went through the system. the gvt needs to stop and let the free market and conservative rules from the mid early 70s prevail when it was 28% of your income.
It is so easy to defend the free market IN THEORY, but respected economists such as Stiglitz have showed, scientifically how the market can be irrational.
"Irrational", in what sense? Classical? Neoclassical, e.g. like Milton Friedman? The pleionastic, Austrian sense?
And it would be easier to point to empirical successes of the free market if someone would actually try it sometime, except such is not the nature of political economy.
Again, "irrational" in what sense? Exactly what do you mean when you use that word? Because a great many things have been meant by it by different people at different times, some of them obviously false, others axiomatically true and yet others true only under certain circumstances.
Even the term "market" is ambiguous. As I define it, the earlier claim of the poster tonybonez is simply and obviously mistaken, as such an organization has not yet taken place in history.
This is the fake stuff we are teaching at school leaving students not knowing what the hell is going on. Meanwhile the government is embezzling millions of dollars on Wall Street.
Its not Moral Hazard. Its what we call, "you want to be sure that...".
America, our Government, wants people to buy homes. They help you buy allowing you to borrow money from lenders. They also protect you and them from problems.
Rational means logical. Good common sense. Market is buying, selling, trading, and lending. What we call business.
"Market is buying, selling, trading, and lending. What we call business."
I've never heard that before, and I don't think I could ever have guessed it. I shall call it the "existentialist notion of rationality": wherever any interpersonal exchange takes place, there is a market, and it is rational.
"You want to be sure" is called a subsidy, and moral hazard is when the state subsidizes risk-taking, usually by offering to compensate entrepreneurial losses with tax money.
First of all a Subsidy is bull crap. Second, this is what America is teaching to the world and they are actually believing it and creating their Stock Exchanges. Did you know the Stock Exchange caused WW1 WW2 and every other war related to Government?
@heartlessvietboy WW2 for one was caused because germany paid for its post-war with a fiat printed currency, caused inflation, civil unrest, a power vacuum. Then came Hitler.
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"Community Re-infestment Act", B. Franks (D-Mass), C. Dodds (D-C), P. Murray (D-Wa), Senate hearings April 4th, 2010, Attorney Generals' testimony 85% of people in sub-prime default commited fraud. They are currently engaging in another fraud called short sale stripping the home of cash! My compasion for dead-beats and debt-beats have reached it's limits! NO!
Lenders made foolish loans, ...listen to Maxine Waters D-Ca, propose giving people who got NINJA (No Income No Jobs Asset) loans with no down payment and are currently behind on payment and underwater on their mortage. She proposed giving these people reverse mortage with banks paying them money on bad mortages. THAT'S FRAUD! Normal people get 20 years in jail for that misconduct. Maxine Waters, ...DEMOCRATIC CONGRESS WOMEN! Cspan Housing Hearing!
Michael S. Barr, a Treasury Department official under President Clinton has admitted that about 50% of the sub prime mortgage loans came from banks at least partly regulated by the CRA and "former Fannie Mae CEO Franklin Raines said (CRA) might have been a catalyst encouraging bad behavior".
Also, CRA was only PART of the problem. The biggest Moral Hazard was Fanni and Freddie buy risky mortgages from private banks. That was asking for trouble.
I sincerely doubt that the makers of this video took the time to look at relavent data. If they had, they would see that of all loans that were part of mortgage backed securities that became toxic, 6% were created under the CRA mandate. I welcome anyone to make a case that 94% of loans that had nothing to do with CRA didn't contribute to the crisis.
That 6% figure comes from only a CERTAIN KIND of loan. A so called "higher price loan" That obviously doesn't mean that 94% of the toxic loans had nothing to do with the CRA. You have to be more careful with your reading, government officials can be tricky like that.
That is poor account of the financial crisis. The Community Reinvestment Act attempted to increase home ownership among the poor. No, it did not force banks to lend to people who couldn't pay it back.
"The Community Reinvestment Act attempted to increase home ownership among the poor. No, it did not force banks to lend to people"
Actually it did. In 1995 regulators of the CRA strengthened it. "Banks now had to show that they had actually made a requisite number of loans to low- and moderate-income (LMI) borrowers"
Fannie and Freddie were a HUGE in making the LMI loans "By 2007, Fannie and Freddie were required to show that 55 percent of their mortgage purchases were LMI loans"
Michael Moore also brought these problems up in 'Capitalism: A Love Story'. For example companies taking out life insurance policies on their workers. In short, you die, they collect!
Certain workers are too valuable to a company (i.e. a CEO) to lose and there loss would hurt the company financially if higher ups were lost. Companies do not insure peon workers, they can be easily replaced. Moore is a moron because America hasn't had free market capitalism in the last 100 years. What we are witnessing as a failure is social (more specifically fascism), cronie capitalism, and corporatism.
Capitalism started with the first time ever man traded with another man an item for another item. You sound like you don't understand what free market capitalism is. It is the process of the bartering for other's good and/or services for resources that you acquire and the other person wants. i.e. If I have a Playstation 3 I want to sell you, we come to a mutual understand of what that item is worth and trade equal value for it. Money is just the tool used for bartering.
I'm not going to sell you my PS3 :P What I'm saying though is the tool that is used to barter with (Dollars) are being destroyed in value by the government and central banks through the process of inflation and increasing money supply without an increase in goods produced. i.e. More dollars are chasing the same amount of goods, that causes prices of those goods to increase. Very simple concept to understand.
The legislation for all this came LONG before Obama's presidency. Additionally, the real culprits were not those seeking homes or the banks who bought the paper, it was the 'middle men" who brought the bad paper TO the banks, often hiding dozens of 'bad buyers' in with 1000s of 'good buyers.' Race & gender had NOTHING to do with how it all came tumbling down! The laws that she speaks of? BUSH & COMPANY! Read the dates. WE are ALL responsible. We, the PEOPLE.
Had the "quasi- government" entities (whatever that means) not backed these loans the rates might of been higher and the hurdle to close the loan higher as well - we would all be in less trouble.
Here's how you know the video is not striving for objective, nonpartisan economic analysis: pics of Barney Frank and Chris Dodd--but where is George W. Bush? Hmm? Not any mention. If you know somethin' is fishy in your source then push it away.
I didn't know George W. Bush was a member of congress when the government forced freddie and fannie to start offering sub-prime loans. In fact last I heard Barney Frank and Chris Dodd were the major proponents of the bill. Did you ever stop to think that their pictures are included because of their close involvement in the source of the problem? That they're not being included simply because of their political affiliation? Why not just have a class picture of the congress in 1998?
Hey please listen to my girlfriend singing if you have the time. I wanna help her raise her confidence so she'll continue to practice. Type in "discoverbec" or click my name to listen. Good comments and constructive criticism are highly appriciated *and no that is not me telling to to say she is good, i want your honest but non slanderous opinion*
the govt entities of fannie and freddie were left unregulated. The Bush administration was trying to regulate fannie and freddie but democratic controlled congress would not allow it. This is common knowledge that was actually touched on during the presidential campaign. This apparently needed to be explained to some. The recession didnt come from lack of business regulations. It came from unregulated govt intervention. AKA fannie and freddie. and it happened because dem. made it happen
ok but unemployment would prob be at 20%, there would be high crime, politcal turmoil and most importantly i lose of trust in america's private financial firms. with government intervention it showed the international community that the u.s. government is willing to insure its important financial sector.
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Wow, you don't have the slightest clue what you're talking about. It sounds all fancy from an economics perspective, but it's completely wrong if you really understand economics! Deregulation caused the banking system to fail and reregulating it is the only thing that will save the system.
Maybe if you're lucky, they'll put you on FAUX News where you belong.
This comment has received too many negative votesshow
If you're gonna get up on a soap box, you'd better make sure you're not making a complet and utter hash of what you're talking about.
What is the word "moral" doing in the expressing "moral hazard", given the definition here?
You are a twit, woman. you are a complete and utter twit. you are playing the trendy word game that only twits go for.Doubtless many word-twits will now go around reciting the new mantra like word twits generally do. ho hum
You are an idiot. In a market with less regulations mortgage backed securities would be even more common.
People made billions off of MBS. You could give someone a $500k loan then sell that loan as "stocks" for $500k cash (leaving others with unsalvageable loans).
The same companies selling MBS were also rating them AAA (with regulation it would likely be illegal for rating agencies to be paid off by MBS sellers and they would not let someone rate No-Income-No-Job loans as AAA).
Is it really that hard for some people to understand? Before the INCREASE in regulations FORCING certain governemnt entities to offer sub-prime loans there was NO SUCH THING as a sub-prime loan. Banks refused to lend to high risk clients because of.... RISK. When you take the RISK out of the equation like the Clinton administration did then greedy businessmen will prosper. That's the whole point of the video. Without the moral dilema created by "risk vs. return" people get greedy.
"Banks refused to lend to high risk clients because of.... RISK"
Let me make it simple.
$500k Ninja loan = $500k risk
$500k loan sold as MBS = $500k cash
$500k cash = $500k NO RISK
The risk is sold FROM banks to people buying mortgage backed securities.
Without regulations against these types of deals you could easily make billions and billions while passing off your risk to fools who believed your own "AAA" ratings (similar to a Ponzi scheme).
And where in my comment did I begin to suggest that this didn't occur? What I said was before the government forced their own lending entities to offer these SPL banks refused to because of the RISK of bankruptcy. Without the backing of the government regulation these kind of loans would never have seen the light of day, and before this new regulation they never did see the light of day. The market regulates itself when allowed, but some people just can't understand that.
No I'm really not ignoring the main cause. You just don't seem to understand the entire thought process involved. Without the high risk, or sub-prime, loan there is no such thing as a "Mortgage Backed Security". Therefore the governement regulation forcing lending agencies to offer loans to high risk customers created a massive influx in mortgage backed securities. The high risk of the client mixed with variable rates=forclosures galore. Causing massive securities failures.
... and you don't understand that there is not high risk selling MBS (which is why people made so much money).
It is like creating a Ponzi scheme, scamming someone or stealing from someone. It is very easy. Even without government aid they would have made nearly as many MBS (without regulation and laws there would have been even more).
The problem is that it is immoral, that it is harmful to the public (and that is why we must regulate against fraud like MBS).
I can't believe I have to say this again, maybe I wasn't clear before. Although this incident did not invent the "mortgage backed security", it did increase the ammount of them very quickly. Without the sub-prime lending there would have been no massive influx in the creation of MBS, and without the government telling people to offer sub-prime loans banks never would have. The problem originates from the regulation, not from the MBS.
The supply was money held by people foolish enough to buy MBS that were not legitimate loans. The demand was people willing to scam foolish people.
Sub-prime lending may have been a tool, but it was neither the supply nor the demand in this issue. Without sub-prime lending they would have still done Ninja loans once someone thought up the MBS scam.
It's like you're blaming subsidized farming for a thief stealing food.
YOU ARE A IDIOT... DO YOUR RESEARCH.. LOOK UP BARNY FRANK AND CHRIS DODD.. THEN TALK YOU FREAKING IMBECILE.. Sorry I was just venting, but seriously Theopolitical check the statements and actions of (Barny Frank, &Chris Dodd). They pressured banks through acorn, they even took away licenses to banks if they did not comply with lacks lending standards. Remember the banks did not scam anyone, they did not steal either.. ITS THEIR MONEY AND IT IS NOT YOUR RIGHT TO HAVE THEIR MONEY!! DO YOU GET IT?
"MBS that were not legitimate loans." You said it all right there. You just summed up MY argument. Without the existance of the sub-prime loans the high risk MBSes would not exist. Therefore nobody would have been scammed into buying a product they didn't want, and therefore the securities failures would have never happened. The whole thing starts with sub-prime lending. Without it there is no crisis!
Oh and just so we're clear... If subsidized farming allows a farmer to lower his prices, which makes his product available to new markets that have a higher rate of crime, then the fruit is at a higher risk of being stolen. Did the thief play a part in the crime? Yes, but without the subsidized farming the fruit from that farmer would never have made it to that specific market.
LOL if a market never existed without assistance, yes, someone didn't write it on the blackboard in a community college class for you that "they could not survive without subsidies because they never existed in the first place due to lack of profitability", but the reality is if an industry is profitable, someone likely would have started a business already. you can ponder whether or not loans, or "farmer" are hypothetical for not having existed before, but how much stupider can a question get
The entire question was hypothetical, and I wasn't criticizing subsidies. It was simply a hypothetical answer to your hypothetical comparison between the two situations. My answer relies on a lot of variables, but the main similarities still remain.. Without government intervention in the market (farming or housing), the risk remains constant and the crisis is avoided. As soon as government interjects their two cents things often go wrong.
Did the lenders greed lend a hand to this crisis? Of course it did I'm not denying that, but the MBSes were a result of the increased regulations forcing/encouraging sub-prime lending. In order to make a MBS you have to have mortgages first, and the influx in sub-prime mortgages made the MBSes far more volitile then they had been before. A secure MBS is not a problem in itself, but one with sub-prime loans passed off as secure loans is dangerous to the economy and taxpayers.
In order to comply with government search warrants on user data, Google created a backdoor access system into Gmail accounts. This feature is what the Chinese hackers exploited to gain access.
@falconxlc "The lenders did make foolish loans, but they didn't care since the government bought those loans from them. Greed is held in check by the fear of losing money. When the government takes away the fear of losing, all that is left is greed." - Peter Schiff
tbh both parties held an equal share. The whole we'll vote anything in as long as it's popular and will get us voter brownie points even if the experts are flailing their arms about screaming not to do it.
I'd like for you to point out to the rest of the people watching this video where the part defending the actions of Bush is. Go ahead and leave a time stamp link so we can watch it immediately because this has to be the most egregiously biased video, and I missed the most biased part of it. Nevermind what the message of the video is, I want to see the part defending the Bush administration.
Free market=Corporatism a.k.a the wealthy elite ruling all of us with their lobbyists and dubious friendships with our politicians. Capitalism is good, but we have to be cognizant of greed & avarice. Absolutely no regulation means economic anarchy with growing disparities between the rich and the poor.
East India Company ring any bells? The US revolution, the 2nd attempted US revolution a couple years later.
Business and government has been in bed before even the British first realized that a bank could hand out 20 lbs worth of gold notes with only having 1 lbs of gold in the bank.
Free market is NOT equal to corporatism. Corporatism is when the govt regulates corps too much such that corps bribe politicians in order to gain unfair advantage in the market place. But this is NOT the free market. Under the f.m., corps can gain no special advantage against competitors via laws.
The US is headed towards a soft form of fascism: a variety of socialism in which corps are granted special powers via "bought" politicians.
This is worse for the poor than a true free market.
You could say the begining of the US interest in foriegn affairs rose out of corperation interest in the Mckinley/T Roosevelt times and the Spainish/American War and the later Phillipine/American war
Roosevelt who obviously hated vile big business did the bidding of what he considered "good" big business.
But i guess thats how progressives (and everyone really) have always been.
"Saying you can't own slaves = Restriction on the free market"
A free market is a market without economic intervention and regulation by government except to regulate against force or fraud (wikipedia). Slavery = force.
With all due respect, I encourage you to do a some homework if you want to be taken seriously and to engage in a real debate, or else you will lose credibility... like now. By the way, your comment did not follow logically from the statement you quoted.
I think we are having trouble because we do not share a common definition of "a free market."
For me, a truly free market has two key features:
1) Enforcement of the individual right to property
2) The right to trade your property freely is also defended. This means free exchange within the borders and for import and export.
Slavery violates 1) because it denies some individuals the right to property in their own persons. It violates 2) as well because they can not trade their labor freely.
It would be incorrect to say that the free market IS corporatism, as corporatism is essentially government intervention on behalf of big business. In a free-market, there is no intervention by government except to regulate against force or fraud. One could arguably make the statement that free-market capitalism can lead to corporatism; however, what you claim is not only wrong, but also intellectually dishonest.
this vidoe was SO BAD!!! i should know, because im the official video critic forr youtube, AND fred figglehorn's alt account!!!!1 youll believe me wen you watch my fantabulous videos!!!!!!!1
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i think they were trying to collect as much money as they could , knowing the plans for the falling dollar-- necessary for Americans to beg for socialism and dependency on gvmt so that they can continue on their plan to herd us all up under control for the one government world
This is a paid political video provided to you by the Heritage Foundation. An ultra conservative think tank. The general gist of the topic is almost correct but there are significant political undertones. Please watch with a critical eye. lol
What "political" undertones are you talking about? It is what it is - economic reality. If there are certain politicians who are oblivious to such things, then sure, I guess it is "political." But it is just the truth.
EXCELLENT! Dodd down, Frank to go. Now that Hillary knows that Schumer, Reid and Mafiosi were plotting against her from 2006 on, maybe she'll ko those crooks for us. Don't think you're safe, GOP, you fat cat spenders can't hide and pretend you don't know what pay to play
The "crash", was the result of a HUGE theft of money through Derivatives and other "schemes". Once they diluted the instruments enough all trading in them stopped, and the ponzi scheme collapsed.
This will never stop until Banks are forced to be "Banks" and these kinds of "instruments" are made illegal. Just watch!
No, this is just the propaganda answer they want everyone to believe. The housing market exploded because they DROPPED CAPITAL GAINS TAXES!!! Then the housing market, usually mostly families, became filled with speculative investment and is now unstable.
Even when the "crash" came, the repossessions never would have crashed the banking system. That was crashed by the "Derivatives" that were created and traded back and forth. They were GUTTED of value and diluted until everyone stopped trading
no SS is not a right under the constitution. And we how that is being abused. alond with many other social programs. It was a nice idea to try and help people who lived past their retirement savings, but unfortunatly it has become the defacto retirement plan for millions and is completly unsustainiable. This is why the govt should not get involved in such things . because this is always what happens
Bill Clinton, Barney Frank and Chris Dodd are responsible for this mess. President Bush wanted to set regulations, but the democratic senate majority would not allow him to do so.
deebaser -- but the reason there was a market for mortgage backed securities of virtually any quality was because there was an implicit guarantee of value from the federal government, via Fannie and Freddie
This is a very dishonest analysis of the mortgage crisis. Selling RMBSs and CDOs on the open market made banks a lot of money, so they ignored due diligence. The free market failed us.
that is exactly why he does not want to vote for it on a federal level, he believes it is a states issue and should be up to the states if they want to implement it. The federal govt. should not hand down mandates to the states. States have a right to make decisions for their own people, the fed govt. should not tell everyone what to do, one size does not fit all. ex. an electric car might work well in NYC but it doesnt work real welll driving through state of wyoming,b/c it is too far b/w stops
Greenspan drove up the price of houses by artificially keeping interest rates low. The banks gave those loans out without verifying income requirements and assets because if they actually did that then they couldn't have given those loans out. Government played a role by requiring that banks relax standards but private business ignores government policies that they don't like but in this case they made billions from this deception and drove up housing costs more. They own the government. FRAUD
Buddy212002 1 week ago
Explained so Well, Thank you
pritpalsandhu100 1 month ago
Thanks michael0156, indeed I have watched the Frontline documentary "The Warning" a few times. It is one of my favorites when the interviewed Greenspan admits basically "My whole world view was wrong"! Every Alisa Rosenbaum enthusiast should see it.
pas9ify 2 months ago
@59arkady
1- It's not the company's standards, but people in charge
2- Money is the root of all evil, a cliche appropriate for the last 30 years in USA & the world
3- I think you deflect from the deliberate wrecking of our economy & are avoiding placing the blame where it squarely belongs, with corporate/banking executives. Bribable govt officials are secondary. 3rd there is "We the People", who are not vigilant & were duped
Did you watch the PBS documentary "The Warning" as I recommended?
michael0156 2 months ago
@michael0156 Currently whatching "The Warning". (thanks for passing that along." I don't know were the blame belongs..I'm trying to uderstand the issue, really. For what it's worth, I was having open conversations with my workmates during the run-up, thought something was odd about it -seem surreal. I've no finacial knowledge, just had a sense. "We the People" generally told me to shut up - especially the ones making money at the time.
59arkady 2 months ago
@michael0156 Regarding "The Warning"... Interesting piece of the puzzole. I'm wondering how many other
warning, about how many other sectors of the economy, were made. I suspect there were many such details that never got to see the light of day. I'm guessing, too, a lot of information, about many sectors of the fianancial system, and government, including those pertaining to regulation, or the lack thereof, and consequences, still never see the light of day -until the deals are done.
59arkady 2 months ago
@59arkady
Greenspan duped us. Rubin & Summers helped him & banksters
Every Central Bank I have investigated performs a variation of the debt fraud the USA Fed has perpetrated
The Fed, a private bank, prints money. We borrow FIAT $ $ & give them Treasury bonds. The Fed banks use bond interest to run the banks & return excess interest to the Treasury
Instead of holding the bonds, The Fed sells them, creating fraudulent debt for the USA. The Fed should pay those fraudulent bonds & reimburse us
michael0156 2 months ago
@michael0156 It sounded like Greenspan was mistaken, if you take him at face value when questioned. I am tempted to think he was mistaken about what were once considered known aspects of human nature. I also think that's true regarding Barney Frank and the goverment backed mortgage lenders, and much else that gets done in the name of attempting to help people by legislation going either way... A blind eye, turned by popular demand, seems to be the norm. Probably affects all parties.
59arkady 2 months ago
@59arkady Greenspan was not mistaken, he KNEW he was wrong & helped cause the 2008 economic crisis & sink the US govt by fraudulently bankrupting it
Greenspan helped strip Brooksley Born's office of regulating derivatives. If she had been allowed to do her job in the 1990s we would not have been involved in the worldwide collapse of 2008
Greenspan worked with Rubin & Summers to deregulate the derivatives market & destroy the Glass Steagel act
Summers duped Clinton to sign the 2000 CFMA
michael0156 1 month ago
@michael0156
watch front line the warning
Placebogsu83 2 months ago
Look up the results of a bi-partisan committee on the crisis for this and more info. In Wikipedia: "Wall Street and the Financial Crisis: Anatomy of a Financial Collapse".
pas9ify 2 months ago
59arkady -- No, Fannie/Freddie existed for 30 years with no hazard b/c they had high standards. I know this personally: I got my 1st mortgage in 1982.
When lobbyists got Glass-Steagall repealed & other regulations relaxed Wall Street securitizing entered the mortgage market. Standards went out the window as the new players competed. Sub-prime borrowers were draw into the insatiable market. Fannie and Freddie were playing catchup, they did not lead.
pas9ify 2 months ago
@pas9ify A good question might be: why would a company with high standards suddenly abandon them to catch up?
59arkady 2 months ago
Comment removed
michael0156 2 months ago
Amazing how many liars are out there! Michael you are right on in your analysis. Too bad You Tube, a basically useful tool, is swamped by those with an ax to grind. For facts on this & more, simply look up "Gramm–Leach–Bliley Act" and "Glass-Steagle" on Wikipedia.
pas9ify 3 months ago
@pas9ify Does the existence of Freddie Mac, and Fannie Mae create the moral hazard they are speaking of? Would lenders take the risk if they weren't there? If legislation was passed that did shift the risk to taxpayers, does that create an atmosphere that enables greed by reducing risk to the instittutions, and individuals involved? Is it necessarily "one" or the "other" government policy, or banks, or could it be that one couldn't operate so without the policy of the other?
59arkady 2 months ago
@pas9ify thanks for your encouraging words. Yes, I agree with you. Reviewing those two pieces of legislation and the CFMA & The Federal Reserve Act will open the eyes of anyone with enough intelligence to read and understand
Also search for- Frontline Brooksley Born Alan Greenspan - A great PBS documentary about how Greenspan Rubin Summers set up our country for failure by stopping Brooksley Born from regulating derivatives. The Derivatives market was unleashed with the Republican 2000 CFMA
michael0156 2 months ago
She explained this very clearly in under four minutes; why can't the real crooks in Washington get this message????
lawritzmann 3 months ago
Dam....she's so hot...i just want to bang her
DEEPGNOSTIC 3 months ago
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"there's an old saying: capitalism without bankruptcy is like religion without hell."
really? and how old would this "old" saying be? bc I've been studying economics and public policy for years and have never heard it. something tells me Ms. Scowls-a-lot in the video here might've made up this "old" saying.
madbowler6 4 months ago
Comment removed
madbowler6 4 months ago
I hate the way you talk.
TheAndrewWCurtin 5 months ago
Chris Dodd and Barney Frank were willing to screw the taxpayers over for votes. Ironic.
cincyblows 6 months ago
What a bunch of crap. I guess Enron was the governments fault as well. This is the type of stuff youtube should be blocking, not my favorite music video.
bolletrie 6 months ago
Bank execs lobbied for relaxing regs requiring banks to hold mortgage notes. This video tries to wrongly blame corporate greed on the govt. This is part of a concerted corporate world's attempt to get rid of govt regulation by bankrupting/demonizing govt AND it's people
Just as free people require laws by which to live, "free markets" need regulations within which they must function
Freeing bankers didn't force them to make bad loans, they did it out of greed
This shows regs are NECESSARY
michael0156 7 months ago 4
@michael0156 Maybe. Could you substantiate the lobbying with claim with independant documentation. Also, please explain the how a bank would benefit by making risky loans. In past time the banks refrained from making loans if risk was high, that behavior has obviously changes, why? What laws were instituted that enabled the behavior, or what regulations were suspended to make this possible?
Thanks.
59arkady 2 months ago
@59arkady Banking regs changed so banks could sell mortgages. Banks began loaning to unqualified buyers to make upfront fees & even more profit by bundling fraudulently rated AAA loans & selling them to unsuspecting investors. This is WIDELY known... "liar's loans"
Regarding the lobbying claim... Do you doubt for-profit lobbying goes on every day in DC?
Let's take the 2008 collapse- caused by 2000 CFMA, not the housing bubble. CFMA allowed regulated institutions to gamble w/o oversight
michael0156 2 months ago
@michael0156 No, no - I'm sure there's lobbying of all sorts for all sides of just about anything involving money. I'm simply attempting to understand the issue - and there are several aspects of the discussion and a lot of finger pointing, so it's not easy to sort out...
59arkady 2 months ago
@59arkady
1- What issues are you trying to understand? Be specific
2- Where do you, in your opinion, place the blame for our debt & job losses?
3- What aspects of what discussion are you talking about?
You do a lot of indirect finger pointing of your own, all tending to blame govt & regulations for our fiasco
It's been the destruction of regulations & proper trade barriers (protecting Americans from unfair competition) beginning with Reagan & continuing with Obama that caused our collapse
michael0156 2 months ago
@michael0156 There's no such thing as corporate greed. Corporations are made up of people. Politicians are also people. They're all greedy. You're greedy. Everyone is greedy.
The problem with your assessment is that you are confusing what the government does with regulation. Do Fanny/Freddie REGULATE? No, they exist to serve the purposes of the few (those politicians and evuuuul corporate types with sufficient clout) at the expense of all other citizens and honest politicians.
worldofdraculas 1 month ago
@world - of course there is no problem with my assessment
We have to elect representatives and we have to monitor them as a responsible citizen should do. Properly regulated representatives will properly regulate corporations and people too... laws regulations... we are in the business of controlling behaviors
It is not easy and our current political systems are set to discourage true participation by citizenry... but the alternative is extreme poverty for the majority of Americans
michael0156 1 month ago
This video is a lie when it comes to Frannie and Freddie. F+F's market share dropped 20 percentage points during the housing bubble, and defaults on securities were 6 times higher in the private sector. This completely shatters this fantasy that banks were relegating their "dodgy loans" to the government. Complete factual inaccuracies on her part. Please, though, feel free to rebuttal :)
Trimbler00 7 months ago 2
Very good video. I liked how you zero'd in on the specific mechanisms of manipulation. Well played.
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YESSENIAREIMANNuh 9 months ago
why is woman teaching economics? in soviet russia, she would be beaten on Red Square
poiuy0174 10 months ago
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ParrhesiaJoe 9 months ago
How can anyone regain faith in the market as long as Summers, Bernanke and Geitner are still the main-players? They almost destroyed the entire financial system and spent $ 5.1 trillion of tax payer money to save Fannie, Freddie, Bear and AIG, that convinced millions of Americans that real estate was equivalent to a money tree. They should be in prison. But no, they are running the country! It´s mad!
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ugotpimp 11 months ago
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heartlessvietboy 1 year ago
she is right on. I went through the system and it is a joke as you can own a home and pay up to 42% of your pretax income. This is so very true and can tell you as I went through the system. the gvt needs to stop and let the free market and conservative rules from the mid early 70s prevail when it was 28% of your income.
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jessicakaylai 1 year ago
It is so easy to defend the free market IN THEORY, but respected economists such as Stiglitz have showed, scientifically how the market can be irrational.
tonybonez 1 year ago
@tonybonez
"Irrational", in what sense? Classical? Neoclassical, e.g. like Milton Friedman? The pleionastic, Austrian sense?
And it would be easier to point to empirical successes of the free market if someone would actually try it sometime, except such is not the nature of political economy.
PanzerDivisionBOM 1 year ago
How many irrationals can there be?
heartlessvietboy 1 year ago
The market can not be irrational. It does not have a brain.
heartlessvietboy 1 year ago
@heartlessvietboy
Again, "irrational" in what sense? Exactly what do you mean when you use that word? Because a great many things have been meant by it by different people at different times, some of them obviously false, others axiomatically true and yet others true only under certain circumstances.
Even the term "market" is ambiguous. As I define it, the earlier claim of the poster tonybonez is simply and obviously mistaken, as such an organization has not yet taken place in history.
PanzerDivisionBOM 1 year ago
This is the fake stuff we are teaching at school leaving students not knowing what the hell is going on. Meanwhile the government is embezzling millions of dollars on Wall Street.
heartlessvietboy 1 year ago
@heartlessvietboy
Your comment is a non-sequitor.
Do you care to clarify what you meant by your earlier use of the terms "rational" and "market"?
PanzerDivisionBOM 1 year ago
Its not Moral Hazard. Its what we call, "you want to be sure that...".
America, our Government, wants people to buy homes. They help you buy allowing you to borrow money from lenders. They also protect you and them from problems.
Rational means logical. Good common sense. Market is buying, selling, trading, and lending. What we call business.
heartlessvietboy 1 year ago
@heartlessvietboy
"Market is buying, selling, trading, and lending. What we call business."
I've never heard that before, and I don't think I could ever have guessed it. I shall call it the "existentialist notion of rationality": wherever any interpersonal exchange takes place, there is a market, and it is rational.
"You want to be sure" is called a subsidy, and moral hazard is when the state subsidizes risk-taking, usually by offering to compensate entrepreneurial losses with tax money.
PanzerDivisionBOM 1 year ago
First of all a Subsidy is bull crap. Second, this is what America is teaching to the world and they are actually believing it and creating their Stock Exchanges. Did you know the Stock Exchange caused WW1 WW2 and every other war related to Government?
heartlessvietboy 1 year ago
@heartlessvietboy WW2 for one was caused because germany paid for its post-war with a fiat printed currency, caused inflation, civil unrest, a power vacuum. Then came Hitler.
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umayanarosy 1 year ago
This is not economics but republican ideology that led to the problem in question.blaming someone else for the problem you caused?
mainafra 1 year ago
@mainafra I think you are the idiot blaming others for the problem you support.
RationalWorld 1 year ago
lol.
heartlessvietboy 1 year ago
Donks have done it again.
alphecca2539 1 year ago
"Community Re-infestment Act", B. Franks (D-Mass), C. Dodds (D-C), P. Murray (D-Wa), Senate hearings April 4th, 2010, Attorney Generals' testimony 85% of people in sub-prime default commited fraud. They are currently engaging in another fraud called short sale stripping the home of cash! My compasion for dead-beats and debt-beats have reached it's limits! NO!
myHome109 1 year ago
Lenders made foolish loans, ...listen to Maxine Waters D-Ca, propose giving people who got NINJA (No Income No Jobs Asset) loans with no down payment and are currently behind on payment and underwater on their mortage. She proposed giving these people reverse mortage with banks paying them money on bad mortages. THAT'S FRAUD! Normal people get 20 years in jail for that misconduct. Maxine Waters, ...DEMOCRATIC CONGRESS WOMEN! Cspan Housing Hearing!
myHome109 1 year ago
Great lesson.
nottingham2222 1 year ago
Michael S. Barr, a Treasury Department official under President Clinton has admitted that about 50% of the sub prime mortgage loans came from banks at least partly regulated by the CRA and "former Fannie Mae CEO Franklin Raines said (CRA) might have been a catalyst encouraging bad behavior".
Also, CRA was only PART of the problem. The biggest Moral Hazard was Fanni and Freddie buy risky mortgages from private banks. That was asking for trouble.
Aliothemage 1 year ago
I sincerely doubt that the makers of this video took the time to look at relavent data. If they had, they would see that of all loans that were part of mortgage backed securities that became toxic, 6% were created under the CRA mandate. I welcome anyone to make a case that 94% of loans that had nothing to do with CRA didn't contribute to the crisis.
1590ckemp 1 year ago
"6% were created under the CRA mandate"
That 6% figure comes from only a CERTAIN KIND of loan. A so called "higher price loan" That obviously doesn't mean that 94% of the toxic loans had nothing to do with the CRA. You have to be more careful with your reading, government officials can be tricky like that.
Aliothemage 1 year ago
That is poor account of the financial crisis. The Community Reinvestment Act attempted to increase home ownership among the poor. No, it did not force banks to lend to people who couldn't pay it back.
1590ckemp 1 year ago
"The Community Reinvestment Act attempted to increase home ownership among the poor. No, it did not force banks to lend to people"
Actually it did. In 1995 regulators of the CRA strengthened it. "Banks now had to show that they had actually made a requisite number of loans to low- and moderate-income (LMI) borrowers"
Fannie and Freddie were a HUGE in making the LMI loans "By 2007, Fannie and Freddie were required to show that 55 percent of their mortgage purchases were LMI loans"
Aliothemage 1 year ago
Michael Moore also brought these problems up in 'Capitalism: A Love Story'. For example companies taking out life insurance policies on their workers. In short, you die, they collect!
Intransitman 1 year ago
Certain workers are too valuable to a company (i.e. a CEO) to lose and there loss would hurt the company financially if higher ups were lost. Companies do not insure peon workers, they can be easily replaced. Moore is a moron because America hasn't had free market capitalism in the last 100 years. What we are witnessing as a failure is social (more specifically fascism), cronie capitalism, and corporatism.
residentzombie 1 year ago
Comment removed
Intransitman 1 year ago
Capitalism started with the first time ever man traded with another man an item for another item. You sound like you don't understand what free market capitalism is. It is the process of the bartering for other's good and/or services for resources that you acquire and the other person wants. i.e. If I have a Playstation 3 I want to sell you, we come to a mutual understand of what that item is worth and trade equal value for it. Money is just the tool used for bartering.
residentzombie 1 year ago
One mans trash is another mans treasure!
Intransitman 1 year ago
I'm not going to sell you my PS3 :P What I'm saying though is the tool that is used to barter with (Dollars) are being destroyed in value by the government and central banks through the process of inflation and increasing money supply without an increase in goods produced. i.e. More dollars are chasing the same amount of goods, that causes prices of those goods to increase. Very simple concept to understand.
residentzombie 1 year ago
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dimaniak 2 years ago
The legislation for all this came LONG before Obama's presidency. Additionally, the real culprits were not those seeking homes or the banks who bought the paper, it was the 'middle men" who brought the bad paper TO the banks, often hiding dozens of 'bad buyers' in with 1000s of 'good buyers.' Race & gender had NOTHING to do with how it all came tumbling down! The laws that she speaks of? BUSH & COMPANY! Read the dates. WE are ALL responsible. We, the PEOPLE.
terryliciareed 2 years ago
You cant get any clearer than that. wake up folks.
maggie1715 2 years ago 2
excellent video, ty
xdrslash 2 years ago 10
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mbruds 2 years ago
OK - a point missed here is that not only were banks given the opportunity to make bad loans, they were forced to make bad loans.
HUD policy and equal lending policy forced banks to loan to high risks. The guarantees were intended to mitigate the risk to the banks.
This is not the free market - it is misguided social engineering at it's worst. Barney Frank and Chris Dodd should be prosecuted.
inblack99 2 years ago 2
You are RIGHT ON THE MARK!
Had the "quasi- government" entities (whatever that means) not backed these loans the rates might of been higher and the hurdle to close the loan higher as well - we would all be in less trouble.
FreeAgain2 2 years ago 2
balbalbla oppertunistic behaviour blablabla
worm0101 2 years ago
Forget partisan objectives here, this video is right on the money.
hoozyerdaddi 2 years ago
Here's how you know the video is not striving for objective, nonpartisan economic analysis: pics of Barney Frank and Chris Dodd--but where is George W. Bush? Hmm? Not any mention. If you know somethin' is fishy in your source then push it away.
AllySmells001 2 years ago
I didn't know George W. Bush was a member of congress when the government forced freddie and fannie to start offering sub-prime loans. In fact last I heard Barney Frank and Chris Dodd were the major proponents of the bill. Did you ever stop to think that their pictures are included because of their close involvement in the source of the problem? That they're not being included simply because of their political affiliation? Why not just have a class picture of the congress in 1998?
sedatedlife18 2 years ago 2
this woman sounds very smart!! geez. I think all these information was very valuable!! thank you!
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DiscoverBec 2 years ago
the govt entities of fannie and freddie were left unregulated. The Bush administration was trying to regulate fannie and freddie but democratic controlled congress would not allow it. This is common knowledge that was actually touched on during the presidential campaign. This apparently needed to be explained to some. The recession didnt come from lack of business regulations. It came from unregulated govt intervention. AKA fannie and freddie. and it happened because dem. made it happen
MalesCantMarryMales 2 years ago
Nikki, you rock.
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packerswarriors2 2 years ago
This comment has received too many negative votes show
she is biased. and what if the government listened to this moron and allowed companies to failed. can you imagine the shit storm we would be in now?
buzwazfuz 2 years ago
@buzwazfuz
can you imagine the shitstorm we are in now because of all the debt? An to top it off the same banks and failing companies still exist.
SuperWilly33 2 years ago 2
ok but unemployment would prob be at 20%, there would be high crime, politcal turmoil and most importantly i lose of trust in america's private financial firms. with government intervention it showed the international community that the u.s. government is willing to insure its important financial sector.
buzwazfuz 2 years ago
it was going so well until about :50
pyr666 2 years ago
This comment has received too many negative votes show
dumb bitch
buzwazfuz 2 years ago
This comment has received too many negative votes show
Wow, you don't have the slightest clue what you're talking about. It sounds all fancy from an economics perspective, but it's completely wrong if you really understand economics! Deregulation caused the banking system to fail and reregulating it is the only thing that will save the system.
Maybe if you're lucky, they'll put you on FAUX News where you belong.
kafkaskid 2 years ago
@kafkaskid
No thats not completely true. It was more poor regulation than a lack of regulation that caused the mess.
SuperWilly33 2 years ago 3
This comment has received too many negative votes show
If you're gonna get up on a soap box, you'd better make sure you're not making a complet and utter hash of what you're talking about.
What is the word "moral" doing in the expressing "moral hazard", given the definition here?
You are a twit, woman. you are a complete and utter twit. you are playing the trendy word game that only twits go for.Doubtless many word-twits will now go around reciting the new mantra like word twits generally do. ho hum
word twits
Crapulency 2 years ago
What the...?
Really, your nit picking over a word that's been established in general use?
God Lord man, why would purposely show your ignorance?
DaShroom 2 years ago 3
You are an idiot. In a market with less regulations mortgage backed securities would be even more common.
People made billions off of MBS. You could give someone a $500k loan then sell that loan as "stocks" for $500k cash (leaving others with unsalvageable loans).
The same companies selling MBS were also rating them AAA (with regulation it would likely be illegal for rating agencies to be paid off by MBS sellers and they would not let someone rate No-Income-No-Job loans as AAA).
Theopolitical 2 years ago
Is it really that hard for some people to understand? Before the INCREASE in regulations FORCING certain governemnt entities to offer sub-prime loans there was NO SUCH THING as a sub-prime loan. Banks refused to lend to high risk clients because of.... RISK. When you take the RISK out of the equation like the Clinton administration did then greedy businessmen will prosper. That's the whole point of the video. Without the moral dilema created by "risk vs. return" people get greedy.
sedatedlife18 2 years ago 8
"Banks refused to lend to high risk clients because of.... RISK"
Let me make it simple.
$500k Ninja loan = $500k risk
$500k loan sold as MBS = $500k cash
$500k cash = $500k NO RISK
The risk is sold FROM banks to people buying mortgage backed securities.
Without regulations against these types of deals you could easily make billions and billions while passing off your risk to fools who believed your own "AAA" ratings (similar to a Ponzi scheme).
In other words, it is fraud.
Theopolitical 2 years ago
And where in my comment did I begin to suggest that this didn't occur? What I said was before the government forced their own lending entities to offer these SPL banks refused to because of the RISK of bankruptcy. Without the backing of the government regulation these kind of loans would never have seen the light of day, and before this new regulation they never did see the light of day. The market regulates itself when allowed, but some people just can't understand that.
sedatedlife18 2 years ago 2
"the government forced their own lending entities"
That created sub-prime mortgages; it DID NOT create Mortgage Backed Securities.
MBS had a greater effect on our economy than sub-prime mortgages.
You're ignoring the main cause and focusing on a minor one.
Theopolitical 2 years ago
No I'm really not ignoring the main cause. You just don't seem to understand the entire thought process involved. Without the high risk, or sub-prime, loan there is no such thing as a "Mortgage Backed Security". Therefore the governement regulation forcing lending agencies to offer loans to high risk customers created a massive influx in mortgage backed securities. The high risk of the client mixed with variable rates=forclosures galore. Causing massive securities failures.
sedatedlife18 2 years ago 2
"Without the high risk"
... and you don't understand that there is not high risk selling MBS (which is why people made so much money).
It is like creating a Ponzi scheme, scamming someone or stealing from someone. It is very easy. Even without government aid they would have made nearly as many MBS (without regulation and laws there would have been even more).
The problem is that it is immoral, that it is harmful to the public (and that is why we must regulate against fraud like MBS).
Theopolitical 2 years ago
"It is very easy"
* Without regulations and laws to make such practices more difficult.
Theopolitical 2 years ago
I can't believe I have to say this again, maybe I wasn't clear before. Although this incident did not invent the "mortgage backed security", it did increase the ammount of them very quickly. Without the sub-prime lending there would have been no massive influx in the creation of MBS, and without the government telling people to offer sub-prime loans banks never would have. The problem originates from the regulation, not from the MBS.
sedatedlife18 2 years ago 3
"Without the sub-prime lending"
You are confused.
The supply was money held by people foolish enough to buy MBS that were not legitimate loans. The demand was people willing to scam foolish people.
Sub-prime lending may have been a tool, but it was neither the supply nor the demand in this issue. Without sub-prime lending they would have still done Ninja loans once someone thought up the MBS scam.
It's like you're blaming subsidized farming for a thief stealing food.
Theopolitical 2 years ago
YOU ARE A IDIOT... DO YOUR RESEARCH.. LOOK UP BARNY FRANK AND CHRIS DODD.. THEN TALK YOU FREAKING IMBECILE.. Sorry I was just venting, but seriously Theopolitical check the statements and actions of (Barny Frank, &Chris Dodd). They pressured banks through acorn, they even took away licenses to banks if they did not comply with lacks lending standards. Remember the banks did not scam anyone, they did not steal either.. ITS THEIR MONEY AND IT IS NOT YOUR RIGHT TO HAVE THEIR MONEY!! DO YOU GET IT?
mproductions12 2 years ago 2
"MBS that were not legitimate loans." You said it all right there. You just summed up MY argument. Without the existance of the sub-prime loans the high risk MBSes would not exist. Therefore nobody would have been scammed into buying a product they didn't want, and therefore the securities failures would have never happened. The whole thing starts with sub-prime lending. Without it there is no crisis!
sedatedlife18 2 years ago 2
Oh and just so we're clear... If subsidized farming allows a farmer to lower his prices, which makes his product available to new markets that have a higher rate of crime, then the fruit is at a higher risk of being stolen. Did the thief play a part in the crime? Yes, but without the subsidized farming the fruit from that farmer would never have made it to that specific market.
sedatedlife18 2 years ago 2
"without the subsidized farming the fruit from that farmer would never have made it to that specific market"
Wow... you really just attacked subsidization based off a hypothetical thief?
There are many reasons to oppose subsidization. Hypothetical thieves (even real thieves) are not one of them.
Theopolitical 2 years ago
LOL if a market never existed without assistance, yes, someone didn't write it on the blackboard in a community college class for you that "they could not survive without subsidies because they never existed in the first place due to lack of profitability", but the reality is if an industry is profitable, someone likely would have started a business already. you can ponder whether or not loans, or "farmer" are hypothetical for not having existed before, but how much stupider can a question get
spyletu 2 years ago
The entire question was hypothetical, and I wasn't criticizing subsidies. It was simply a hypothetical answer to your hypothetical comparison between the two situations. My answer relies on a lot of variables, but the main similarities still remain.. Without government intervention in the market (farming or housing), the risk remains constant and the crisis is avoided. As soon as government interjects their two cents things often go wrong.
sedatedlife18 2 years ago
Did the lenders greed lend a hand to this crisis? Of course it did I'm not denying that, but the MBSes were a result of the increased regulations forcing/encouraging sub-prime lending. In order to make a MBS you have to have mortgages first, and the influx in sub-prime mortgages made the MBSes far more volitile then they had been before. A secure MBS is not a problem in itself, but one with sub-prime loans passed off as secure loans is dangerous to the economy and taxpayers.
sedatedlife18 2 years ago
@sedatedlife18 What are some examples of specific government legislation forcing banks to issue high-risk loans?
Trimbler00 10 months ago
Moral hazard=Criminal intent
TheHauptsturmfuhrer 2 years ago
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Snoopy592482 2 years ago
good video
HoldemPro09 2 years ago
in a nut shell this is the reason come nov your senator is going to be a conservative.
MalesCantMarryMales 2 years ago
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sonotnews 2 years ago
CUM C Y PPLE WIT MORALS LUV MY VIDS!
karenhamway1970 2 years ago
Wow, this is exactly why we had the financial crisis, caused by the government run entities
falconxlc 2 years ago 13
@falconxlc "The lenders did make foolish loans, but they didn't care since the government bought those loans from them. Greed is held in check by the fear of losing money. When the government takes away the fear of losing, all that is left is greed." - Peter Schiff
residentzombie 1 year ago
by the goverment... conservatives idiots like bush and other crooks, yes trust them again... right??
Hellooo20 2 years ago
tbh both parties held an equal share. The whole we'll vote anything in as long as it's popular and will get us voter brownie points even if the experts are flailing their arms about screaming not to do it.
Fitzcard 2 years ago
I'd like for you to point out to the rest of the people watching this video where the part defending the actions of Bush is. Go ahead and leave a time stamp link so we can watch it immediately because this has to be the most egregiously biased video, and I missed the most biased part of it. Nevermind what the message of the video is, I want to see the part defending the Bush administration.
sedatedlife18 2 years ago
Economics is governed far more by politics than theory and facts.
An economist has a paradigm that he/she will have creating personal bias.
We have the human element, regardless of education.
soundsliketruck 2 years ago
Free market=Corporatism a.k.a the wealthy elite ruling all of us with their lobbyists and dubious friendships with our politicians. Capitalism is good, but we have to be cognizant of greed & avarice. Absolutely no regulation means economic anarchy with growing disparities between the rich and the poor.
GGLebo23 2 years ago
Umm, it's kinda been that way for some time now.
East India Company ring any bells? The US revolution, the 2nd attempted US revolution a couple years later.
Business and government has been in bed before even the British first realized that a bank could hand out 20 lbs worth of gold notes with only having 1 lbs of gold in the bank.
Fitzcard 2 years ago
Free market is NOT equal to corporatism. Corporatism is when the govt regulates corps too much such that corps bribe politicians in order to gain unfair advantage in the market place. But this is NOT the free market. Under the f.m., corps can gain no special advantage against competitors via laws.
The US is headed towards a soft form of fascism: a variety of socialism in which corps are granted special powers via "bought" politicians.
This is worse for the poor than a true free market.
freesk8 2 years ago
Yea, It won't be anywhere as bad as after the civil war and up to the square deal, but it is a step back in that direction.
I was pretty damn bad back then, Business didn't even try and hide they ran things.
Fitzcard 2 years ago
You could say the begining of the US interest in foriegn affairs rose out of corperation interest in the Mckinley/T Roosevelt times and the Spainish/American War and the later Phillipine/American war
Roosevelt who obviously hated vile big business did the bidding of what he considered "good" big business.
But i guess thats how progressives (and everyone really) have always been.
Fitzcard 2 years ago
"Free market is NOT equal to corporatism"
No, in a truly free market those with money are dictators who can choose who lives and who dies.
Saying you can't own slaves = Restriction on the free market
Most people agree that some regulations (laws) must be put in place. Don't pretend that the free market is some pure bastion of goodness.
"bought politicians"
In a truly free market they would not need to buy politicians; because people with money would already have all the power.
Theopolitical 2 years ago
"Saying you can't own slaves = Restriction on the free market"
A free market is a market without economic intervention and regulation by government except to regulate against force or fraud (wikipedia). Slavery = force.
With all due respect, I encourage you to do a some homework if you want to be taken seriously and to engage in a real debate, or else you will lose credibility... like now. By the way, your comment did not follow logically from the statement you quoted.
aljinvesp 2 years ago
I think we are having trouble because we do not share a common definition of "a free market."
For me, a truly free market has two key features:
1) Enforcement of the individual right to property
2) The right to trade your property freely is also defended. This means free exchange within the borders and for import and export.
Slavery violates 1) because it denies some individuals the right to property in their own persons. It violates 2) as well because they can not trade their labor freely.
freesk8 2 years ago
GGLebo23,
It would be incorrect to say that the free market IS corporatism, as corporatism is essentially government intervention on behalf of big business. In a free-market, there is no intervention by government except to regulate against force or fraud. One could arguably make the statement that free-market capitalism can lead to corporatism; however, what you claim is not only wrong, but also intellectually dishonest.
aljinvesp 2 years ago 2
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YooTubeVideoCritic 2 years ago
this women would eat her own children....
iamborghini1 2 years ago
@iamborghini1 it's just economics. this is accepted economic theory and well established.
Gilgamesh417 2 years ago 3
yea... but doesn't she look like she would eat her own children if she had to?
iamborghini1 2 years ago
this is all carefully planned. ones that run the world run this. look into the Bilderberg group
martic1280 2 years ago
i think they were trying to collect as much money as they could , knowing the plans for the falling dollar-- necessary for Americans to beg for socialism and dependency on gvmt so that they can continue on their plan to herd us all up under control for the one government world
jennyrgar 2 years ago
This is a paid political video provided to you by the Heritage Foundation. An ultra conservative think tank. The general gist of the topic is almost correct but there are significant political undertones. Please watch with a critical eye. lol
pongman 2 years ago 2
What "political" undertones are you talking about? It is what it is - economic reality. If there are certain politicians who are oblivious to such things, then sure, I guess it is "political." But it is just the truth.
apt3444 2 years ago
This is a good explanation of what happened.
jacktrades5 2 years ago
EXCELLENT! Dodd down, Frank to go. Now that Hillary knows that Schumer, Reid and Mafiosi were plotting against her from 2006 on, maybe she'll ko those crooks for us. Don't think you're safe, GOP, you fat cat spenders can't hide and pretend you don't know what pay to play
MissPlacedLoyalties 2 years ago
To finish the previous statement.
The "crash", was the result of a HUGE theft of money through Derivatives and other "schemes". Once they diluted the instruments enough all trading in them stopped, and the ponzi scheme collapsed.
This will never stop until Banks are forced to be "Banks" and these kinds of "instruments" are made illegal. Just watch!
enjoyoutdoors 2 years ago
No, this is just the propaganda answer they want everyone to believe. The housing market exploded because they DROPPED CAPITAL GAINS TAXES!!! Then the housing market, usually mostly families, became filled with speculative investment and is now unstable.
Even when the "crash" came, the repossessions never would have crashed the banking system. That was crashed by the "Derivatives" that were created and traded back and forth. They were GUTTED of value and diluted until everyone stopped trading
enjoyoutdoors 2 years ago
Vote for Common Sense Conservatism!
Parke1409 2 years ago
god
55634100 2 years ago
no SS is not a right under the constitution. And we how that is being abused. alond with many other social programs. It was a nice idea to try and help people who lived past their retirement savings, but unfortunatly it has become the defacto retirement plan for millions and is completly unsustainiable. This is why the govt should not get involved in such things . because this is always what happens
JASONZx6R 2 years ago
@Sentrawoods: No, Bush and the Republicans wanted to reign in F+M but were stopped by Congress, specifically Dodd and Frank.
hillsideum 2 years ago 2
Bill Clinton, Barney Frank and Chris Dodd are responsible for this mess. President Bush wanted to set regulations, but the democratic senate majority would not allow him to do so.
wclaurence 2 years ago
I love the Lenin and Goebbles-like credo you seemingly follow: ''Repeat a lie often and it will become the truth.''
TheSpiritOfTheTimes 2 years ago
deebaser -- but the reason there was a market for mortgage backed securities of virtually any quality was because there was an implicit guarantee of value from the federal government, via Fannie and Freddie
bagodonuts 2 years ago 3
This is a very dishonest analysis of the mortgage crisis. Selling RMBSs and CDOs on the open market made banks a lot of money, so they ignored due diligence. The free market failed us.
deebaser 2 years ago
that is exactly why he does not want to vote for it on a federal level, he believes it is a states issue and should be up to the states if they want to implement it. The federal govt. should not hand down mandates to the states. States have a right to make decisions for their own people, the fed govt. should not tell everyone what to do, one size does not fit all. ex. an electric car might work well in NYC but it doesnt work real welll driving through state of wyoming,b/c it is too far b/w stops
adaismeus1 2 years ago
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RappingIsThePriority 2 years ago
Excellent Video.
rialcnis 2 years ago
Economics 101 ! This is just common sense. Why can't the Dems realize this.
Tazman9672 2 years ago
You are painting a false dichotomy.
infinit888 2 years ago
Gov. Sarah Palin recommends this video. Therefore, it is worth watching and comtemplating. Palin/Bachmann, 2012.
shiankiang 2 years ago
Talk about moral hazard... They apparently never saw this:
Exd 22:25
If thou lend money to [any of] my people [that is] poor by thee, thou shalt not be to him as an usurer, neither shalt thou lay upon him usury.
Or:
Deu 23:19
Thou shalt not lend upon usury to thy brother; usury of money, usury of victuals, usury of any thing that is lent upon usury:
OR:
Webster:
Usury (from Latin usura "interest") This would have included charging a fee for the use of money.
KidVolcano 2 years ago
And the root of all evil
rialcnis 2 years ago
The LOVE of money is the root of all evil. I hate it when people try to cite the Bible yet don't even know what they're saying.
And it's obsession. It doesn't mean you have to throw out all your money and become an ascetic.
apt3444 2 years ago
Hey Kid: And God also wants you pay on your obligations, pay what is owed to Cesar, and be debt free.
thomqkat 2 years ago