Simple explanation of the Sub Prime market

How subprime mortgages are put together, who finances them, how it's pooled into a easy to purchase security, how subprime instruments effect house pricings and why didn't the fed regulate this better?

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News & Politics

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• fiscal
• crisis
• failure
• credit
• market
• questions
• answered
• 2
• subprime
• explaination

[mannywind]

very articulate fellow good explaination thanks

[Waldfrosch1]

1 day

[mahagaek]

around 620...

but its up for debate..

its not written in stone u know

[TankMonster105]

Who's responsible?

While Obama & the Democrats were cashing their big paychecks from FannieMae, McCain and 18 other REPUBLICAN Senators were loudly predicting this disaster and trying to STOP it.

Their letter, dated May 5, 2006:

tinyurl (dot) com/3q6dc9

(fix the "dot")

NO Democrat signed this letter.

Where was Sen. Obama that day? Running for President, too busy to give a shit.

Democrats pimped loans to unqualified borrowers, now the chickens came home to roost.

[chrisg1113]

DON'T WATCH, he says below 750 fico score is subprime, WRONG, subprime credit scores are much lower.

[1jsummer]

as well as just recently blocking free trade with columbia. Amazing democrats in action. what would free trade have done? allowed our american made goods sold for much lower price (no embargo on them from foreign governments) so demand would rise and could have the potential to boost the economy and make jobs. Why did the democrats do this to our most powerful ally in the region? simple. they want to ensure they can hold the economy over McCains head in this years election.

[1jsummer]

woah there asianamerican68. republicans? you said yourself president BILL CLINTON!!!! signed off on getting rid of the glass stegall act(1999). where do you think the clintons millions came from??? lobbyists. yes lobbyists (as most of Obama's as well). The glass stegall act should have never been signed off on. this was democrats greed in action. don't point fingers at republicans when this is another one of Bill's legacy's.

[AsianAmerican68]

BTW, PHIL GRAMM is JOHN McCAIN's Senior Economic Advisor for the McCAIN Presidential Campaign, and has every intension of coming BACK to wreak even MORE HAVOC on the US TAXPAYER with FURTHER REPUBLICAN SPONSORED DEREGULATION OF WALL STREET.

The REPUBLICANS say "TRUST US", we can self-regulate ourselves on WALL STREET. Let's GET RID of the FED and the SEC. They just "GET IN THE WAY".

[AsianAmerican68]

So, between PHIL GRAMM's GLBA of 1999 and CFMA of 2000, the "SHADOW FINANCIAL SYSTEM" of "DARK MARKETS" allowed "COMPLEX DERIVATIVES" to rise up as the "SUB-PRIME MORTGAGE FIASCO" of "MORTGAGE BACKED SECURITIES"... leaving the US TAXPAYER, who had nothing to do with it's creation, holding $30 BILLION (so far) of their DEBT!!

BEAR-STERNS was "TOO BIG" to "GO UNDER"... huh? But I am not.. why?

[AsianAmerican68]

That's not all PHIL GRAMM has done.

On November 12, 1999, PHIL GRAMM got the "GRAMM-LEACH-BLILEY Act" passed by Congress and signed into law by BILL CLINTON, overturning the 1933 Depression Era GLASS-STEAGALL ACT, which had a FIREWALL between Depository Banks and Stock Brokerages, to protect the Bank Customers from risky Stock Investments, and BEAR-STERNS was just ONE of them. It allowed BANKS, STOCK BROKERAGES, and INSURANCE COMPANIES to combine into single FINANCIAL SERVICES COMPANIES.

[AsianAmerican68]

Why should they? There is NO REQUIREMENT to REPORT ANYTHING to ANYBODY (thanks to PHIL GRAMM), and has created a "SHADOW FINANCIAL SYSTEM" of "DARK MARKETS" with ZERO TRANSPARENCY... you cannot see anything, and you cannot know anything... "TRUST US", said PHIL GRAMM and the WALL STREET REPUBLICANS... lol!!

[AsianAmerican68]

Thanks to former REPUBLICAN TEXAS US Senator PHIL GRAMM, the "COMMODITIES FUTURES MODERNIZATION Act" of 2000, has completely deregulated (as in ZERO) "COMPLEX DERIVATIVES", of which "SUB-PRIME MORTGAGE BACKED SECURITIES" (which is causing the "SUB-PRIME MORTGAGE CRISIS") is just ONE type!!

BEAR-STERNS $30 BILLION DEBT to US TAXPAYERS is just the beginning.

We don't know how many more BS's there are, because NOBODY is FESSING UP they are the NEXT BEAR-STERNS (and LOSE THEIR JOB!!).