Who or what caused this financial crisis?

Bernanke is directly at fault with this crisis regardless to any policy in place. He is the one who decided to raise interest rates and slow the economy. Not morgage lenders, not banks, not people struggling to pay their house note. He raised rates and when people began to default on the home morgages, he refused to lower them. The bad loans would weed their way out. It wasn't until 6 month's later and about 1/2 millions defaults later did he try to reverse his decision. He slow the housing industry to a complete stop and now he wants to blame subprime loans practices. This make no sense, everyone getting loans since 2003 can't be subprime. The common average Joe is having problem make the morgage if they had variable rates. This is the same rate he has direct control over.

I have read most of the blogs and comments. It would seem to me that the results of this are directly related to the Savings and Loan crisis. At that time the government set up Fannie May and Freddie Mac as the primary lenders. The government said if you followed the guidlines set up by FHA the government would guarantee the loan through Freddie and Fannie. In small print they stated that this was not a government gurarantee. In large print they said it was. Somewhere in these loss figures is the failure to count the value of the assets backing this loss. We know the properties have not devalued by more than 50%. Therefore through foreclosure the entities to who this money is owed will recover at least half their losses. If the congress is buying into the 700B bailout, they should at the very least make all of the Directors, CEO's, and CFO's to pay back all of their compensation in excess of seventeen times the earnings of the employees of the companies involved. That being the difference in execiutive pay between 1980 and the present. I agree with the people who have advocated the reinstalling the Sherman anti trust laws. We should not allow any company to be large enough that its failure jepordizes the economy of the United States. Untill we the people come to grips with the corruption in government it will continue. The last eight years have seen the greateast erosion of civil rights in the history of the United States. Spending another 700B will not help that.

Everyone gets dupped during election time. Most people vote according to party. That ina nut shell is a goodly portion of our problems today. Politicians never address exactly what the will attempt to do for the American people. Everyone of them are more concerned with the Forign Pollicy and the Social Security and the fate of our children's future. Be it known to all who read this: If we take caere of our business today Tomorrow will take care of itself when it gets here. The goovernment of our lives need to take care of us and eleminate the "Lobbist". Special intrest groups have no seat in the government. Individual Business, and Corperate Business need to be regulated by someone with authority to insure that they are conducting fair and "Honest business practices. America needs to let other Nations and countries take care of their own business. Yes we are and have been the victims of greed of those who set at the top. The top means in our seats of government as well as the seayts of "Big business". We need to demand honest government. Believe me Government is not corrupt, people are corrupt. Government bails out corperate America, when do they bail out the people that suffer by the actions of those they bail out. Take the funds they have aquired thru shoddy business prectice. Take two or three of their homes, automobiles and any other property that they have aquired thru decietful business practices and repay the debt they have incurred. Why make the people who were hurt pay for the bail out. They profitted let them pay. Do not put blame on the people who cannot afford to pay the mortgage due to the greed of the industry leaders. Blame the leaders. Iam infavor of change and both candidates for the presidency preach change. I would like to see the entire Political body go thru change. Fire them all and start fresh with all new blood and maybe we can begin to work across party lines. Once a person takes a seat in congress the party should take second seat, The good of the people should always be the first and most important issue at hand. Take the "Money" out of politics. Stop the buy out from special intrest groups.

Our government gives 700 billion to other countries every year and now wants the same amount from us again? We need to become a protectionist country. Let's keep our nose out of other countries affairs, grow our own food and go back to manufacturing our own goods. No imports of contaminated crap and no exports. Bring the 30 thousand troops that have been sitting in South Korea for 50 years home and put them guarding our own borders.
It is time for the American taxpayer to stop trying to support all the other countries with their hands out.

I learned a big lesson in my life when I let someone else overlook my finances. When I let them have control, I got into trouble I didn't know I was in.

Living a life dependent on credit is risky and can be unwise. Minimize the use of credit and keep your eye on the money you have. Minimize irresponsibility. Make repairs where you can. Be happy with your '95 model car that runs. Be happy that you still fit into clothes that were in style last season. Go outside and enjoy the movie that is nature. Walk and talk with someone you love. Pray. THESE...are truly worthy investments with stable returns. When was the last time you counted these blessings?

This is your basic social do good program gone very bad. What I am making of all this: sometime back someone or group in our government decided it would be a good idea to get more people into their own homes. So FM & FM were asked to lower their credit standards. So were born "liar loans" you didn't have to show your income- also know as "no doc loans". This easy money led to a huge increase in the price of houses and lots of people streching to make a payment. The loans were then packaged and sold to investors. These "liar loans" carried a high rate 11% and up. Once the home owners couldn't make their payments, about 25% to 30% of this type loan is in default the s--t hit the fan. Housing values started to go back to normal, the asset no longer covered the debt. No one wanted to buy the mortgage securities and credit dried up. This has happened before, S&L. We would have to be crazy to buy these assets for more than 50 cents on the dollar. The default rate on this type mortgage is over 25% and the assets will drop another 30% or more in value. Our government is not working. THROW THE BUMS OUT! we need term limits.

lacarley - You clearly are a bigot AND a moron.

The Muslim Agenda - Gay Rights and the Destruction of Christianity and This Country and our Economy

Historically, Religious Zealots, like Radical Muslims are smart enough to make LONG RANGE PLANS. The objective of the Radical Muslims is to destroy Christianity. They are making great progress using Americans against Americans. Gays/Lesbians against Heterosexuals.

1. Put Bill Clinton in the Whitehouse and Pelosi in control of Congress. Between the Clintons and Pelosi they have destroyed our economy. Look at the Current Mess.

The Clintons helped with 911 by allowing the Terrorists to enter the Country.

Clintons spent tax dollars to further the Radical Muslim Agenda by Slaughtering 1000's of Christians in Kosovo.

Clintons allowed borrowing to buy stocks - causing the Dot.Com Bust.

Bill sold our technology to China - Making them our competitors.

Bill Enacted NAFTA - outsourcing our jobs.

Bill Signed Legislation using "Food for Fuel" and refused to drill for oil - causing current high food and fuel prices.


2. Let Bush, a Republican take the Blame.

3. Put Barack Hussein Obama in the Whitehouse and continue to pit Gays against Heterosexuals until Gays "win" and Christianity is destroyed.

4. Islamic Law will prevail and of course, ultimately Gays lose because Muslims don't support Gays.

I know, everybody here will say "I'm crazy" just as I was "crazy" in opposing Pelosi's "bail out the Rich Plan" on housing foreclosures. Rich are now being bailed out!

The money is flowing directly to Pelosi, Reid, Dodd and Obama.

While reading all comments and taking note of the large number of the people saying the republicans are to blame and we need a democrat to get us out of this situation.
Those that think that needs to research, the Community Reinvestment Act.

Read the protolcols of the elders of zion

Mike

I have a remedy to resolve this crisis!!

Don't pay any taxes!! The ? is, who has
the guts to follow thru? Stop whinning
America and wake up!! The greed will
continue... Unemploymt will increase,
foreclosures will continue to grow, more
bailouts will be requested, more companies will move offshore, the one with the money will run to safer havens,
Look at how you believed in your government and now you are screwed!!
They know the average American don't
read or understand the workings of regulations, deregulations, tax codes,
etc. I blame us all. The US government
has and will continue to instill the "FEAR"
factor...

This problem actually started when the Fed pressured Congress to pass the Telecom Deregulation Act in 1996. The act wasn't really deregulation in that it left the telephone companies regulated to their rates and service areas while forcing them to give up their private property for less than market value to anyone that wanted to be a service provider. This was government theft.

What it did do is create a boom and the resulting need for massive amounts of money that the banks and the Fed were only too happy to provide at low interest rates. Banks and venture capitalists entered into a feeding frenzy where they battled with each other to be the one allowed to throw money at anyone with a bad idea, no experience in the telecom industry, and, in many cases, not even a business plan.

When they took a breath and realized what they had done, they got out faster than they got in and the bubble popped in 2000. Trillions of dollars were lost. Seeing this, before the shrouds hit the floor, the Fed lowered interest rates, created more money, and a building boom started as people were losing their jobs.

This new bubble became the only thing that was sustaining the economy. Over the next years, up to this point, this new bubble that was even more fragile than the .com bubble because it was not in any way supported by demand, has been sustained by more legislation and more borrowing and money creation.

When Congress mandated that banks issue loans in rural, ethnic, less prosperous, and under served areas, they handed them the nail for the coffin. As banks were forced to become more and more creative in order to issue loans to people who they knew couldn't afford them, the coffin was nailed shut.

Many people are calling for more regulation when government meddling in and regulation of private industry is what caused the problem in the first place.

http://ewebsmith.com/bus/taxpayers.html

1. Each person that sees this posting either should be registered or should become registered to VOTE upon reaching the requisite age.
2. Each person should study the current situation of this country, and talk to others to gain a better understanding of it.
3. Each person should then VOTE his or her convictions, since ones that came before us paid with their lives for that FREEDOM.
4. If you do not VOTE, then you should either pack your bags and leave, or go quietly back to your cave.
5. When you point a finger of fault at someone, you have three others and a thumb pointing right back at you. I have been embarassed by some of the miniscule election day turn outs over the past 50 years. I reckon folks thought someone else could mark their ballots for them!!!

LOOK AT THE DATE!
By STEVEN A. HOLMES

Published: September 30, 1999

In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans.

''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.''

Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market.

In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.

''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.''

Under Fannie Mae's pilot program, consumers who qualify can secure a mortgage with an interest rate one percentage point above that of a conventional, 30-year fixed rate mortgage of less than $240,000 -- a rate that currently averages about 7.76 per cent. If the borrower makes his or her monthly payments on time for two years, the one percentage point premium is dropped.

Fannie Mae, the nation's biggest underwriter of home mortgages, does not lend money directly to consumers. Instead, it purchases loans that banks make on what is called the secondary market. By expanding the type of loans that it will buy, Fannie Mae is hoping to spur banks to make more loans to people with less-than-stellar credit ratings.

Fannie Mae officials stress that the new mortgages will be extended to all potential borrowers who can qualify for a mortgage. But they add that the move is intended in part to increase the number of minority and low income home owners who tend to have worse credit ratings than non-Hispanic whites.

Home ownership has, in fact, exploded among minorities during the economic boom of the 1990's. The number of mortgages extended to Hispanic applicants jumped by 87.2 per cent from 1993 to 1998, according to Harvard University's Joint Center for Housing Studies. During that same period the number of African Americans who got mortgages to buy a home increased by 71.9 per cent and the number of Asian Americans by 46.3 per cent.

In contrast, the number of non-Hispanic whites who received loans for homes increased by 31.2 per cent.

Despite these gains, home ownership rates for minorities continue to lag behind non-Hispanic whites, in part because blacks and Hispanics in particular tend to have on average worse credit ratings.

In July, the Department of Housing and Urban Development proposed that by the year 2001, 50 percent of Fannie Mae's and Freddie Mac's portfolio be made up of loans to low and moderate-income borrowers. Last year, 44 percent of the loans Fannie Mae purchased were from these groups.

The change in policy also comes at the same time that HUD is investigating allegations of racial discrimination in the automated underwriting systems used by Fannie Mae and Freddie Mac to determine the credit-worthiness of credit applicants.

this is what happened
http://www.youtube.com/watch?v=cMnSp4qEXNM

This is the "Truth" watch the video and you will know the "Truth"!!!! Can you handle the "Truth"??
http://www.dailymotion.com:80/video/x6wxmr_burning-down-the-house-what-caused_news
Senator Dodd agrees about the root cause.

In my opinion we have become a nation more interested in having things that we can't afford and were given too much credit from greedy lenders without doing their job to investigate whether a person could pay the debt back. Fifty-five years ago I could not borrow money because I was single and considered not responsible, now at 81 and no job I can borrow all the equity out of my home with no paycheck to pay the money back. Multiply that over millions of people it is no wonder we are in a financial mess. Car dealers will sell you a car with bad credit and no job all because of greed to make a sale and then it is the lenders problem. We are all to blame for the mess! Too greedy and wanting too many toys that we really don't need. I believe it all started when business started staying open on Sunday instead of going to the Church of their choice and when we kicked prayer out of our schools how could we ever expect God to Bless America? But God is forgiving and if we would change our ways, confess or sins he would hear our cry and answer or prayers. God will bless you if play by his rules.