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Barack Obama:
Untrue. Untrue. Untrue.
Someone ask him about the Community Reinvestment Act of 1977. Ask him about Clinton's changes to that plan. Ask him about how Clinton's changes to that act in 1997 are directly to blame for what is happening today.
Securitization: is a structured finance process, which involves pooling and repackaging of cash-flow producing financial assets into securities that are then sold to investors. The name "securitization" is derived from the fact that the form of financial instruments used to obtain funds from the investors are securities. Dictionary definitions HERE.
Why is this important?
Because in 1997, Bill Clinton changed the CRA so that mortgage lenders (banks) could create these loans, package them into mortgaged backed securities, and these were sold in the stock market so the risk is spread out across several different investors. The benefit was, if a community should have an unforeseen collapse, the local bank wouldn't necessarily go under, as the risk would be spread out across multiple communities / states / nations.
Enter the reason our stock market is falling so quickly. You have all these mortgaged back securities in the financial markets, and the housing prices are plummetting. These stocks are now worth much less then what they were worth before, and people are getting out of them. No one will by them. Companies like Lehmans, Bear Stearns, AIG are now stuck with junk stock, and have to do billions of dollars worth of write downs. No company can withstand those sorts of losses, so they are going bankrupt.
Revisionist history isn't going to help anyone retiring in the next few years. The well intentioned Doctrine (to use a popular phrase) of the 70s to help every American own a home was turned into something that forced banks to offer every American a home and that created false demand for product. You had houses that were selling for way more than they were worth, and you have people buying homes with zero down on horrible APRs because banks knew there was a lot of money in the securities market.
If home prices continued to go up.
They didn't care if the loan recipient had good credit or bad, it didn't matter, the home value was going to go up, right? And they could make a lot of money off the securities.
There are people to blame for this, and history will name them, but it is not the Republicans.
Read these items if you're thirsty for information, as I am:
The Real Culprits In This Meltdown
Financial experts: Greed to blame for Wall Street woes
Democrats Blame Phil Gramm; Ignore 89 Other Senators, Including Joe Biden, Who Voted For Same Bill
In the face of uncertainty, I always find reading up is the way to go. If I have misunderstood anything here ... feel free to correct me.
Democratic rival Barack Obama blamed the Republican anti-regulatory fervor of recent years for part of the mess, saying the crisis is "a stark reminder of the failures of crony capitalism and an economic philosophy that sees any regulation at all as unwise and unnecessary."
Untrue. Untrue. Untrue.
Someone ask him about the Community Reinvestment Act of 1977. Ask him about Clinton's changes to that plan. Ask him about how Clinton's changes to that act in 1997 are directly to blame for what is happening today.
Securitization: is a structured finance process, which involves pooling and repackaging of cash-flow producing financial assets into securities that are then sold to investors. The name "securitization" is derived from the fact that the form of financial instruments used to obtain funds from the investors are securities. Dictionary definitions HERE.
Why is this important?
Because in 1997, Bill Clinton changed the CRA so that mortgage lenders (banks) could create these loans, package them into mortgaged backed securities, and these were sold in the stock market so the risk is spread out across several different investors. The benefit was, if a community should have an unforeseen collapse, the local bank wouldn't necessarily go under, as the risk would be spread out across multiple communities / states / nations.
Enter the reason our stock market is falling so quickly. You have all these mortgaged back securities in the financial markets, and the housing prices are plummetting. These stocks are now worth much less then what they were worth before, and people are getting out of them. No one will by them. Companies like Lehmans, Bear Stearns, AIG are now stuck with junk stock, and have to do billions of dollars worth of write downs. No company can withstand those sorts of losses, so they are going bankrupt.
Revisionist history isn't going to help anyone retiring in the next few years. The well intentioned Doctrine (to use a popular phrase) of the 70s to help every American own a home was turned into something that forced banks to offer every American a home and that created false demand for product. You had houses that were selling for way more than they were worth, and you have people buying homes with zero down on horrible APRs because banks knew there was a lot of money in the securities market.
If home prices continued to go up.
They didn't care if the loan recipient had good credit or bad, it didn't matter, the home value was going to go up, right? And they could make a lot of money off the securities.
There are people to blame for this, and history will name them, but it is not the Republicans.
Read these items if you're thirsty for information, as I am:
The Real Culprits In This Meltdown
Financial experts: Greed to blame for Wall Street woes
Democrats Blame Phil Gramm; Ignore 89 Other Senators, Including Joe Biden, Who Voted For Same Bill
In the face of uncertainty, I always find reading up is the way to go. If I have misunderstood anything here ... feel free to correct me.
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