Skip to comments.U.S. panel sifts subprime wreckage, blames Greenspan (MSM covering for corrupt politicos w/agendas)
Posted on 04/07/2010 4:34:52 PM PDT by NormsRevenge
WASHINGTON (Reuters) The wreckage of Wall Street's subprime mortgage machine was laid bare on Wednesday by a U.S. congressional panel that pointed the finger at Alan Greenspan for not stopping it from running out of control.
The former Federal Reserve chairman -- once revered as the oracle of economic wisdom -- defended his legacy before the panel, which also heard a former Citigroup (C.N) executive say he had warned of the subprime danger.
The Financial Crisis Inquiry Commission kicked off three days of hearings with a look at securitization of subprime mortgages, in which risky home loans were bundled and resold in the secondary debt market.
At the peak of America's real estate bubble, Wall Street firms were securitizing huge amounts of subprime loans, putting bad assets on financial institutions' books and unmanageable debts on the shoulders of many homeowners.
It all came crashing down two years ago, triggering a devastating wave of foreclosures, paralysis in capital markets, and the worst financial crisis in generations. Since then, the market for subprime mortgage debt has virtually vanished.
"The Fed utterly failed to prevent the financial crisis," said commission member Brooksley Born at a hearing where Greenspan, other regulators and banking executives testified.
In reply to Born and other commission members, Greenspan, who is 84 and retired as Fed chairman in 2006, said:
"Did we make mistakes? Of course, we made mistakes ...
"Managers of financial institutions, along with regulators, including but not limited to the Federal Reserve, failed to comprehend the underlying size, length and potential impact" of market risks that contributed to the 2007-2009 crisis.
(Excerpt) Read more at news.yahoo.com ...
The blame isn’t as widespread as it superficially seems. The people responsible are trying to point at the ones downstream for repackaging bad loans, but the culprits were those that encouraged, mandated and wrote the bad loans. Together with those who wroted laws setting up Freddie and Fannie, putting the US taxpayer on the hook.
I'm sure he came up with that description while in bed with Andrea.
Now I have to scrub my brain with a wire brush and bleach...
So true. The derivative market was the bottom line that gave the government enterprises the capability to sell off the bad loans. It’s really a funny kind of Ponzi scheme. They put blinders on the watchdogs and then went into business selling bad paper. All it took was a breathing bag of skin that could successfully sign a loan application. If dogs and cats could have signed the loans they would have done that too. If they could transfer those bad loans somewhere they could not have screwed us. But they had that covered. They made a law preventing any government agency from monitoring that market. That was a Clinton administration & congress that did that. Remember how home ownership was the big achievement? You have to love our government when it does what it does the best. It took suckers to take out the loans and lending institutions like the two government enterprises to create this freight train disaster.
Greenspan is just a convenient scapegoat here. The real cause of the collapse was Congress, in particular the democrats and little corrupt fascists like Barney Frank and Christopher Dodd.
ANDREW CUOMO AND FREDDIE AND FANNIE
How the youngest Housing and Urban Development secretary in history gave birth to the mortgage crisis
By Wayne Barrett (8-5-08)
There are as many starting points for the mortgage meltdown as there are fears about how far it has yet to go, but one decisive point of departure is the final years of the Clinton administration, when a kid from Queens without any real banking or real-estate experience was the only man in Washington with the power to regulate the giants of home finance, the Federal National Mortgage Association (FNMA) and the Federal Home Loan Mortgage Corporation (FHLMC), better known as Fannie Mae and Freddie Mac. . .
But do they ever blame themselves? The financial press?
Never. They never do their duty when it counts.
The press spends too much time protecting their pols, instead of the public.
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