HeyBub wrote:
George wrote:

But the current events aren't normal ups and downs. Investors were
participating in a rigged game without knowing it. I want to see
regulations and oversight that will give transparency. No one will
ever have confidence without that. The current system because so
convoluted and opaque because of greed that most of the big
institutions can't even put their finger on the actual value of
assets they control.

Greed is good. The players didn't make the rules so it's silly to criticize
them for playing by them.

The actual rules which caused this mess started back in 1976 with the
Community Redevelopment Act under Carter. This caused little discomfort in
the equity business because the system was robust enough to absorb the
problem. It started spiraling out of control in 1995 Clinton-era with new
regulations requiring lending institutions to provide mortgages to
non-credit worthy applicants.

This continued to work as housing prices climbed. When the balloon payment
kicked in, people who suddenly saw their house payment rise from $300/month
to $2200 simply re-financed. The Ponzi scheme collapsed when there were no
more poor people who could be enticed.

Still, it was the 1995 re-regulation that lit the fuse and the continued
refusal of (Democrat-controlled) Congress to land regulations to govern the
new policies. In other words, the 1995 regulations requiring low-interest
loans was not accompanied by regulations concerning proper oversight.


You keep on bringing out the ditto head version where the republicans
are as pure as freshly driven snow. From everything I read and heard
nothing could have ever happened without the machine that sliced, diced
and pureed the mortgages by securitizing them. Barney Frank could have
wet dreams about everyone having a house that they couldn't afford but
it couldn't have happened without the crooked banking process.


The main reason the republicans lost is that none of them stood up and
said they would address such concerns. It was just shrug their
shoulders and when we get elected things will continue as is. Lots of
folks are deeply offended by that.

There was some of that, true. But the Republicans introduced several bills
to provide oversight of Mae & Mac (e.g., McCain was a co-sponsor of such a
bill in 2005), but these bills never got out of committee.


There was a *lot* of that. I don't know why the bill never got out of
committee. And I am not aware of McCain or any other republican stating
they were interested in addressing the lack of transparency in the
market. Therefore many people judged this as a republican declaration
that the rigged game was just fine. That really upset a lot of people's
sensibilities.