The 1994 "contract with America" Newt Gingrich GOP Congress led the charge to dereg the financial industry. And Phil Gramm, McCain's former overt financial adviser and present covert adviser, was instrumental in this deregging.

The mortgage securities were never adequately collaterized, and helped inflate the housing bubble during most of the Bush Admin. This bubble kept the U.S. consumer artificially aloft and helped the GOP to political victories in 2004. It also provided gigantic profits for financial institutions and executives up to the time of this bank bust.

Many members of Congress (especially GOP, but Demo also) are in the pockets of K Street lobbyists working to create profits for reckless, greedy, financial corporations. Not only must new financial regulations be established, but we need new lobbying and campaign finance fire walls as well.

The crisis is akin to a Pyramid scheme, the only differance is that the guy on the top of the Pyramid gets bailed out by Uncle Sam and he knows he is going to get bailed out (wiht the money provided by the golden parachute-he has a house in Bahama and a yatch in Montecarlo and a Cessna waiting to take him to the paradise.) The U.S. Budget is about 16 Trillion and the war has cost or will cost close to 3 Mil. and the bail out will cost another 2 Trillion, to a total outlay of close to 5 Trillion. There is no way any economy can sustain itself with one third of the GDP going towards unjust enrichment of the CEO's and Board of Governors who are scratching each other backs and in turn the Corporations are in bed with the Politicians. There is no end to this story. When these three factions are happy...You may not need an ending.

YOUR GOVERNMENT SCREWED YOU..
anyone with half a brain could see $800,000 for 800sf in Cal. with an income
of $32,000 per year was not going to be
paid back! But your Bush admin. promoted this so people would "flip"
houses 3 times a year, generating 9 times the capital gains tax to the Feds.
HOW DO YOU THINK WE FUNDED THE
IRAQ WAR?

I feel that the repubs with p.gramm doing the thinking, J.Mccain asleep in the oversight meetings, and other repubs went and deregulated the banking system. Greed prevails, and more so in the republican ranks. They have never done anything for the middle class. They run a scare campaign, but cannot govern while in office.This adminastration proves that.

Well, it's about time you made the connection to the S&L crisis of the 80's. Looks like the GOP used the same playbook that ole Jeb Bush used then. So who's at fault? The American public for falling for the same tactic's once again. Wake up America! Stop complaining about which political party is at fault and look at yourselves, you did this.

The TRUE reason why we're in the housing crisis we're now in. I have always wondered how we could be in such a mess if the sub-pirme market is only 4% of the total loans in America and not all of them were expected to go into default. So here's what I've heard is the TRUE reason.
The TRUE cause of the housing crisis is because sub-prime loans were mixed in with prime loans and sold as AAA rated securities. Based on these fruadulant ratings, Wall street bankers bought them and paid a premium price for them. They then used them as collateral to borrow even more money. As some of the sub-prime loans went into default it was clear that the rating companies had falsely rated the securities. When this was discovered, those holding the mortgage securities as collateral called them due, and those buying the securities stopped.

If this is the case, then every American who's either loss their jobs (those related to the mortgage business), homes, or equity because of this is a victim. Many of the current foreclosures are people who bought their homes many years ago, with normal down payments, and with great credit. But, are now forced into foreclosure because their homes are worth less than what they paid.

Not to mention the fact that no one is talking about helping investors who are being hit hard for the same reasons and in many cases are letting multiple homes go into foreclosure. I know investors who will be forced to let many of their homes go because of these changes. One had excellent credit until he was forced to let one go, now he won't be able to refinance the others when the time comes. If you own more than 4 homes you can't get a loan. With these ridiculous changes, and the canceling of lending programs for investors I suspect we will have this housing crisis for many years to come.

Every American homeowner who's loss a job, property, their good credit, ability to refinance, or equity as a result of this fraud I believe has a potential lawsuit. I suspect a class action suit will be started and I would sure like to join it.


The 2nd cause is because when home values dropped because of reason #1 lenders refused to lock in the initial rate on the ARM's forcing everyone from Prime to subprime borrowers into foreclosure. The lenders sold these loans telling borrowers "YOU MUST REFINANCE OUT OF THEM BEFORE THEY ADJUST", but now they have made it impossible for anyone to get out of them short of a foreclosure.

When did we as Americans abandon personal responsibility? Who made anyone take out a second or third mortgage at gunpoint? Or,for that matter, by a $300,000 house on a $75,000 a year salary?
This problem has grown to it's current proportions because to many Americans have decided they want it all, now, at low cost. And if it all goes South, somebody else must be to blame.
The best way to reach the American people with a message these days is to offer an easy fix for them. Just ask Obama. Offer no real solutions, just say that all you have to do is pick me and I will fix everything.
This crisis is an oppurtunity to learn. It wil be difficult, but we will get through this like we have gotten through all the others.
If we as Americans want our problems fixed, let's fix them. Stop looking for someone else to solve your problems. Stand up like real Americans, fix what is broken in your own life, stop spending money you don't have, and decide for yourself whether or not you think your house will really appreciate 30% in 2 years, and whether or not it should.
Sorry, don't mean to preach, just had to get that off my chest.

Vet for Mcpalin

Within the roughly 50% of Americans who are Republicans, one should assume that a good portion of them are reasonably intelligent. So then, how come there is still close to 50% of the population ready to vote for these guys ? In view of what is happening now, common sense tells me that no more that 5 or 10% should lean towards them. Do these folks still have brains ? Maybe they are simply masochists and suicidal.

What caused this economic problem?
The fact that no one bothered to look up the definition of "DEREGULATION".
DEREGULATION means "removing the rules and laws!"
And when you remove the rules and laws, you free up all the thieves to steal everything, WITHOUT ANY OVERSIGHT OR PUNISHMENTS.
So now the taxpayers end up rewarding the biggest thieves!

they should have all the excutings in jail and take there money to instead of paying big bonuses to them

The Real Culprits in This Meltdown

INVESTOR'S BUSINESS DAILY
Posted 9/15/2008
Big Government: Barack Obama and Democrats blame the historic financial turmoil on the market. But if it is dysfunctional, Democrats during the Clinton years are a prime reason for it.
Obama in a statement yesterday blamed the shocking new round of subprime-related bankruptcies on the free-market system, and specifically the "trickle-down" economics of the Bush administration, which he tried to gig opponent John McCain for wanting to extend.
But it was the Clinton administration, obsessed with multi-culturalism, that dictated where mortgage lenders could lend, and originally helped create the market for the high-risk subprime loans now infecting like a retrovirus the balance sheets of many of Wall Street's most revered institutions.
Tough new regulations forced lenders into high-risk areas where they had no choice but to lower lending standards to make the loans that sound business practices had previously guarded against making. It was either that or face stiff government penalties.
The Justice Department stood ready to ruin (fine or jail) any mortgage company and or individual that refused a loan or even inquire if the loan could be repaid; when dealing with certain people. Who were these people? They were so called "minorities":
If a Murphy Brown (single mother) came in for a loan. You had better not ask if she had the means to repay. You would be a sexist / discriminator and subject to fines and jail.
If a person(s) with dark pigmentation asked for a loan. You had better not ask if they had means to repay. You would be a racist / discriminator and subject to fines and jail.
If a person(s) that could not speak English came in for a loan. You had better not ask for proof of citizenship. You would be a racist/ xenophobe and subject to fines and jail.]
The untold story in this whole national crisis is that President Clinton put on steroids the Community Redevelopment Act, a well-intended Carter-era law designed to encourage minority homeownership. And in so doing, he helped create the market for the risky subprime loans that he and Democrats now decry as not only greedy, but also "predatory."
Yes, the market was fueled by greed and overleveraging in the secondary market for subprimes, vis-a-vis mortgaged-backed securities traded on Wall Street. But the seed was planted in the 90s by Clinton and his social engineers. They were the political catalyst behind this slow-motion financial train wreck.
And it was the Clinton administration that mismanaged the quasi-governmental agencies that over the decades have come to manage the real estate market in America.
As soon as Clinton crony Franklin Delano Raines took the helm in 1999 at Fannie Mae, for example, he used it as his personal piggy bank, looting it for a total of almost $100 million in compensation by the time he left in early 2005 under an ethical cloud.
Other Clinton cronies, including Janet Reno aide Jamie Gorelick, padded their pockets to the tune of another $75 million.
Raines was accused of overstating earnings and shifting losses so he and other senior executives could earn big bonuses.
In the end, Fannie had to pay a record $400 million civil fine for SEC and other violations, while also agreeing as part of a settlement to make changes in its accounting procedures and ways of managing risk.
But it was too little, too late. Raines had reportedly steered Fannie Mae business to subprime giant Countrywide Financial, which was saved from bankruptcy by Bank of America.
At the same time, the Clinton administration was pushing Fannie and her brother Freddie Mac to buy more mortgages from low-income households.
The Clinton-era corruption, combined with unprecedented catering to affordable-housing lobbyists, resulted in today's nationalization of both Fannie and Freddie, a move that is expected to cost taxpayers tens of billions of dollars.
And the worst is far from over. By the time it is, we will all be paying for Clinton's social experiment, one that Obama hopes to trump with a whole new round of meddling in the housing and jobs markets. In fact, the social experiment Obama has planned could dwarf both the Great Society and New Deal in size and scope.
There is a political root cause to this mess that we ignore at our peril. If we blame the wrong culprits, we will learn the wrong lessons. And taxpayers will be on the hook for even larger bailouts down the road.
But the government-can-do-no-wrong crowd just does not get it. They will not acknowledge the law of unintended consequences from well
meaning, if misguided, acts.
Obama and Democrats on the Hill think even more regulation and more interference in the market will solve the problem their policies helped cause. For now, unarmed by the historic record, conventional wisdom is buying into their blame-business-first rhetoric and bigger-government solutions.
While government arguably has a role in helping low-income folks buy a home, Clinton went overboard by strong-arming lenders with tougher and tougher regulations, which only led to lenders taking on hundreds of billions in subprime bilge.
Market failure? Hardly. Once again, this crisis has government's fingerprints all over it.

The current crisis was caused by unbridled greed without any oversight to prevent the massive redistribution of wealth stemming from the massive losses incurred at the beginning of this decade from the dot com bust. The economic policies of the Clinton Administration are the root cause of all of our woes today along with a few bad moves made by Bush 41.

The financial market deregulation that enabled Goldman and other investment banks to broker commodity contracts signed in the early '90s was a big factor. Coupled with the worst government action fo the past 50 years, repealing the Glass-Steagall Act. This didn't matter as much when the key interest rate was still high. But when the bottom dropped out of the US economy and the key interest rate dropped to 1% the unregulated banking system went on a borrowing and lending binge.

Essentially what was left of the US banking infrastucture after the savings and loan crisis looked to increase thier balance sheets in the '90s. The only way to do this was to loan more money out at high interest rates or raise money from the sale of stock. The dot-com era was the perfect tool since massive ammount of capital was needed to fund all of the operations. Banks would loan the money and brokerages would hype the stocks. When the stocks went public the brokerage made a bundle. This was done for quick money to shore up balance sheets, not to make products in sound business practice.

It was a market shell game. The '90s became an unprecedented period where the big box idea became the market darling. Huge mergers coupled with the loss of virtually all independent retail outlets created massive corporations held not to productivity and sales, but quarterly projections and the bottom line. Billions upon billions were traded up and down based on growth targets and pie in the sky numbers rather than true profit and the production and supply of product.

This all happenned during the baby boomer peak earning period. Many people saw 401k portfolios explode to a few hundred thousand dollars overnight. People borrowed massive ammounts of equity, which would later end up to not be there. All of this flush cash led to a consumption boom.

The consumption boom couldn't last forever becuase it was based on paper wealth based on poor business fundamentals. Much of what created the stock wealth could never generate an actual operating profit. The dotcom crashed and we never really recovered.

Investment brokerages and banks lost billions that needed to be recouped. Because of the major losses sufferred by main street small business in America through the '90s there just wasn't enough gas left in the economic engine to get us started again. Lending to small business is one of the principal factors for a healthy economy.

The solution came along with access to very cheap money and housing acts passed by the Clinton administration. Massive increases in the welfare state under Clinton enabled banks to loan money through HUD programs to those who could not afford the loans. Many of these loans were sold to people who did not understand the variable rate principal. Those who did were all told that they would be able to refinance later to a lower rate if need be.

Under the leadership of Clinton adrvisors and staff, Freddie Mac and Sallie May along with other brokerages bought trillions of dollars in mortages from the principal lenders in order to repackage them as high interest securities. The packages were sold off as easy investments with quaranteed high margin profit due to the high interest rates that were locked into long term loans. Lending $100k meant a guaranteed $200k or more in profit over a 30 year period. Rather than the extremely low yield on other bonds.

The federal rate stood far lower than the market interest rate allowing banks to make more points off mortages than the could previously. this led to the massive corruption in housing appraisal, in order to lend more money. Seemingly overight people saw their property double or even triple in value. Just like the dotcom stock profits people borrowed against this massive equity to fuel another consumption boom. Once again based on paper rather than real hard earned money. Many people used this equity to buy a second house or upgrade to a far bigger house than they ever needed.

A few high power brokerages did see the writing on the wall, even though they kept selling the mortage backed securities becuase of unbridled greed. They just couldn't help themselves from making easy money. As long as the upward appraisal of the housing market continued.

Those that did see the writing on the wall saw a huge opportunity in the commodity market that was deregulated from the early Goldman appeal in the '90s. A further deregulation signed by bush 43 that allowed for unregulated commodity trading in foreign markets signalled the start of the commodity boom. Every base commodity shot up in worth, far beyond what the market dictated.

Goldman and other high power brokerages were looking for leverage against what looked like a coming collapse in the mortage lending industry. When the base cost of commodities sent inflation soaring this pushed many of the new homeowners living on the brink into default. The rate of forclosure looked to skyrocket. Investment groups seeing the value of mortage backed securties in a freefall sought out the commodity market to balance these losses. As losses mounted the buyout of commodities accelerated.

Once again unbridled greed took over as the price of oil leaped from $20 a barrel to $147 over a short period. Hundreds of billions in wealth was now being transferred away from working Americans as they now had to pay nearly triple at the gas pump. Lumped with dropping housing equity this only served to increase the default rate even further. The wholesale dropping of SUVs then caused Detroit to enter into its worst period since the Great Depression.

Our current crisis is unlike ones before because the factors of a housing bust, rampant inflation, a credit crisis, liquidity problems, lack of competition, and huge government intervention all happenned at once. The government bailouts have to be paid for somehow. However with a slow economy and a population that is nearly broke, we cannot increase taxes to pay for the bailouts. A tax increase would only fuel the fire and cause even more defaults.

What is sad is that nearly all of this could have been prevented by one small government oversight. A law that would require the lender or a mortage to service and hold the mortage. With this safeguard in place this collapse may not have happenned.

40 years of trying to guarantee equal outcome instead of equal opportunity.40 years of trying to make things fair. 40 years of social and academic engineering.40 years of trying to make anything that slightly breathes a voter. 40 years of buying votes through "Big Poverty" gets us the looser Governments running every major urban area,looser unions running our education system,looser bureaucrats at every level. We have to fix our fundamentals and make people earn their place in society not be awarded it.

All the problems belong to the money hungry CEO,s that are doing nothing but taking down million dollar salaries and million dollar bonuses. They have no thought of the ordinary citizen who is scraping to try and make ends meet and trying to support and provide health benefits for their families while these top excutives get all their benefits paid for.

I concur with Iridium. The simple fact remains that Greed overcame the sense of most of these people. The fact that the govt. didn't even begin to limit this infectious sin doesn't help matters much either. But the fact remains that these incredibly wealthy individuals saw a way to increase their wealth by double or triple the amount and it became insatiable.

As bad as it may sound, I am glad this financial crisis is happening as the economy had become bloated and fat then it had a heart attack and now it's at the gym dropping the dead weight to get in shape again. All will be well in a few years time just like it always is...

No need to say a lot.....just that most of what I have read here are comments from seriously misled individuals. The blame game is simple:

40% to Congress (mostly to the DEMS who always want to give everything away and the rest to the REP for not stopping them or blowing the whistle to the public)

25% to the CEO's who knowingly took advantage of the situation.

25% to the Speculators who jump on every opportunity to steal from the uninformed.

15% to the Bush Administration for not using it's full power to regulate.

That's it in a nutshell!

The ratings agencies.

The ratings agencies were asleep at the wheel.

The problem is the unexpected lose of credit accross the board. Yes, started by bad loans but is fueled by fear. I am a person who has lost my equity in my home plus a lot more (40%). My car business is dead due to consumer credit and lost job problems. My point is I am not a dead beat that can't read the contracts I sign. My FICO score is in the 800's and I have money in the bank. I am really pissed off about the way my mortgage company won't even talk to me about help since I am not in the toilet... yet. Let me tell you what pissed off people do. If I don't get my house, no one does Mr Bank. I will strip it of everything I can. I'll take the the screens to the dumps. I'll even pay workers to help me. Thanks Litton Mortgage! Oh, you want to threaten me Mr Bank? I'm 70 years old.

I believe combination of a&b

WOE to them...


The sins (PRIDE & GREED)

of the fathers,

Visited Upon the children (Us)



Coupled with a Lot of 'SELF' Exalting

& DECEPTIVE practices

= our Present financial, RED/Black HOLE...