lol. what a tool.

http://www.huffingtonpost.com/2008/09/14/greenspan-this-is-the-wor_n_126274.html

Because it contradicts McCain's view http://thinkprogress.org/2008/04/18/mccain-economy-plan/

ok, now bear with me....

"Through its control of the federal funds rate, the Federal Reserve is able to foster financial and monetary conditions consistent with its monetary policy objectives."

OMG

Umm...

Maybe you can cut and paste some of the more interesting parts? lol

 

The housing problem has been a long-time coming here in Phoenix.
Even on the furthest outskirts of the metro area, new homes were in excess of $300,000.
There have been next to no lower-cost housing development here and the few times they cropped up, people were waiting in line to get the few available. So people would overextend themselves and buy houses they couldn't really afford because that's about all that was available.

And now there are foreclosures left and right, up and down, east and west... you get the idea.

And it certainly doesn't help matters that we live in a consumer society that's driven by credit cards. Everywhere you look you're being told and pressured to buy something, but nobody is telling anyone how to buy responsibly. That alone is a recipe for economic disaster. I started down the road of debt, accumulating over $12,000 in the matter of two years- not counting mortgage and vehicle. Fortunately I was bailed out and given a clean slate. But many people aren't handed checks for $28,000, and it's damn hard to break out of debt without something like that.

I'm not being paid enough to explain how mortgages connect to banking and how banking connects to the federal reserve system. Just read, you might like it.



Ok, fake loans. I'm sure there were some loans that were just totally forged. I never saw such things, but I heard rumors of bank statement templates and things like that, and I met some personalities in the biz that well, makes things like that sound not so shocking.

With that said, I find it implausible that forged loans are bringing down these mortgage and investment bankers. In finance (and probably any job) though you will come to find that there is a shortcut/loophole/etc. around almost anything. I'm sure that sounds bad, but you have to recognize that this is the system our banks are built upon (google "fractional reserve banking").

So this brings us to what the media has affectionately termed "liar loans". These are a good portion of the loans that were hurting wholesalers like Countrywide. NINA (No Income, No Asset verification) SISA (Stated Income, Stated Assets). These loans were allowed by the lender and basically the client would state how much income they made "within reason" for their job and how much assets they had in the bank. Now there were requirements on these loans, but probably not enough. For example, it was only about the beginning of this year where it became mandatory on all these Stated loans that the clients would need to sign a disclosure, which made them agree to let the lender pull up their tax returns at some point during the life of the loan.

and thats just the tip of the iceberg so to speak. These liar loans aren't really what is killing Fannie and Freddie...