Posted on 11/23/2008 3:32:59 PM PST by BuckeyeTexan
WASHINGTON — Federal Reserve Chairman Ben Bernanke acknowledges he was wrong in believing that there would be limited fallout to financial markets from risky mortgages that soured after the housing market's collapse.
"I and others were mistaken early on in saying that the subprime crisis would be contained," Bernanke said in an article in the Dec. 1 issue of The New Yorker magazine.
"The causal relationship between the housing problem and the broad financial system was very complex and difficult to predict," he said in the piece titled "Anatomy of a Meltdown."
Subprime mortgages made to people with tarnished credit or low incomes were especially hard hit once the housing boom went bust. Foreclosures spiked and financial companies wracked up huge losses as these investments turned bad.
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(Excerpt) Read more at newsmax.com ...
My husband was working of a small holding company (bank) back then and thought that it was a bad idea to let people use their homes as ATM’s and also mentioned that the banks were held hostage to the CRA. They could not say, open a new location, unless they could prove they were giving out those sorts of loans. It never seemed like a good idea to encourage people to get in over their heads, and even an idiot should have known that we would one day be paying the piper. Too bad people like you and I are doing the paying.
The Dems are going to continue to ram these type of bailouts through in the name of saving us all. The automakers, citigroup and God knows who is next to crash.
You're right - please don't let this idiot also travel by private jet...
PSST! Lady GOP, the insider scoop is money is to be made in government contracting printing press manufacturers.
Keep it under your financial hat as long as you can though. ~snort
That's OK, Ben. Luckily, we've just elected and reelected just the team that can fix this little problem - Nancy Pelosi, Harry Reid, Chucky Schumer, Barney Frank, Chris Dodd, Jamie Gorlick, Barak Obama, Rahm Emanuel, Al Franken, Henry Waxman,...
We are So-ooo-oo-ooo screwed!!
Well I guess that settles it. Capitalism failed.
In some cultures, he would be executed. Oopsie! Sorry, I made a mistake!
Bush has shown very poor judgement in the people he’s hired. There’s a lot I like about the President, but he has been very poor here throughout his Presidency.
Same old adage applies. If you don’t like the message
shoot the messenger.
Ayn Rand had it, “You can avoid reality but you cannot avoid
the consequences of avoiding reality.”
Not until Alzheimer's kicks in anyway....
Let’s ignore the Freakin’ Elephant in the room....ACORN, Obama, Barney Frank, etc. Excuse me while my head explodes!!!
If you ignore the obvious, you will continue To Screw The People. This govenment must STOP!
Well, look at the bright side, it's all up hill from here NOW!
??
Could you elaborate a bit gathersnomoss?
History review:
U.S. Government guarantees Freddie Mac & Fannie Mae Mortgages
Mortgages tied to Mortgage-backed-securities investments...
Mortgage-backed-securities investments tied to Credit default swaps
U.S. Government says they can't guarantee all the mortgages that are going to Default
The rest is two generations of tax servitude and push to legalize illegal immigrants to pay off the debt
... but, I digress...
An older guy that had moved here from England was bagging my groceries one time when he picked up my carton of Nestles chocolate milk gave a funny look and said he’d never tried that before. I told him don’t try it now, you’ll kick yourself.
Capitalism didn't fail. Common sense and quasi capitalism failed..
I have a question. We’re told when the foreclosures started the value of these securities went down. Haven’ there always been foreclosures? Why was it so bad this time? Is it because the value of the property plummeted as well when during “regular” foreclosures the property value stays the same or appreciated. Am I correct?
The key to understanding this is to examine a plot of both the median house price and the median household income as a function of time. For many years prior to the Carter administration the median house price tracked about 3X the median family income. When prudent loans were made, that is what consumers could afford. With the passage of the CRA during the Carter administration, housing prices began to rise more quickly. The bubble didn't really get going until the Clinton administration with the great expansion of Fannie and Freddie. All this increase in valuation was caused by easy credit. When that went away during the collapse of the sub-prime market, values had to fall to closer 3X median household income. Globalization is putting great stress on median household income, so I think housing prices cannot increase until income rises make more expensive houses affordable.
Great.
Let’s “stimulate” the economy NOW (with massive borrowing)... and look forward to a MUCH bigger recession down the road - when the eventually jack up our taxes to pay for all this.
Most people don't want to acknowledge my expertise. I saw what was happening early in 2004. People shouted me down. Others posted insults. Others posted slanderous attacks. A few still attack me recklessly. They do not see what is coming just over the hill like a vast tornado.
Most just want to post brief comments on FR. Some view this message board as a diversion. Others take pot shots at strangers, then jump giggling back into reality. Lurkers show their wisdom by remaining silent.
People are obsessed with politics here. But these problems were not caused by party politics, grand political stupidity or our greedy politicians. The same people that caused this financial crisis stand to benefit the most from the bailout. I say, 'Greenspan, Bernanke, and Paulson ought to be lined up in front of a pock-marked wall.' But I'm just joking. Nobody take me seriously, anyways.
If you really want to understand what happened on Wall Street, read the article below. A shi'ite storm is coming our way. Obama bought into the same **** that Bush did. Change is not coming. Meet the new boss, same as the old boss. They all take orders from the CFR . . .
How the Thundering Herd Faltered and Fell
Yada, Yada 'Nuff said here.
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