I am not blaming on one party or the other only pointing out s few facts. One of the other little tidbits is that any policy put in place to "help" an economy in the short term normally doesnt rear the ramifications until 8 to 10 years later.
Community redevelpment act is one that come to mind. It was expanded under Clinton to ensure that banks would no longer be able to require a strict down payment, or proof of income. Ten years later was the mid 2000's and what happened? The housing bubble........

Yeah, and when that murderer does NOT present any evidence to prove innocence, kind of makes you think he's guilty, huh?

I guess you can think whatever you want. Accused are not required to prove their innocence in this country. The state is required to prove guilt beyond reasonable doubt. In the absence of such proof, the accused goes free.
It's pretty much the basis of American freedom. :rolleyes:

There's a jury instruction in criminal trials that addresses that.

Tragically, in Larry's world, the instruction is not provided until after the lynching...

I seem to remember someone on here going off on a huge self-martyring rant not too long ago about being accused guilty until proven innocent and how awful it was. Funny, the name slips my mind right now though....

Actually....

A lot of loans were made to people who could not afford them. Creative finance made this possible.

And then those loans were bundled with other loans and sold to investors. But the investors wanted some assurance the loans they were buying were worth it, so Bond Rating companies became involved to let investors know what they were getting and the risks involved.

They did not do this for free.

And they did not really do it at all. Several Bond raters just bought junk loans, mixed them in with good loans and rated them all A+++. This had the effect of making them worth far more than they had been purchased for, or, as those in the biz called it: Money for nothing.

But it was all OK because all of the loans were insured, so when they went bad the Mortgage insurance would make them all good, so everyone got rich and slept well at night. What could go wrong with a plan that turned straw into gold and left the insurance company to pick up the pieces?

As it turns out not only were the Rating companies telling a lie about what the loans were worth to investors but AIG was telling lies to everyone by saying they could cover all the policies they were writing. Since AIG thought they were writing coverage on A+++ loans they also asked: What could go wrong?

And then, when everyone figured out that AIG could not cover even a fraction of the loans that were going bad, and no one could figure out why so many A+++ loans were going bad, everyone stopped loaning money for home loans.

And the bubble, which was fueled by easy credit and loose lending standards, went 'Pop'.

There was too much greed to go around and not enough accurate information to rely on, and then, like every bubble in history, it burst.

Today loan rates are at levels I have not seen since the late 50's, but since there is still a lack of accurate info on how to cover their risk a lot of mortgage companies are leery about loaning to anyone with out amazing credit and 20% down.

But money is starting to come out of the mattresses and back into the market since it appears that the bubble is at least leveled out. In California Realtors are reporting that some of the homes being bought are being paid for in cash, and the last time I can remember that taking place was during the oil boom of the early 80's.

For all the doom and gloom predictions of how the Dollar is becoming worthless... Sorry, but the marketplace says this is nonsense.

Pooka--
That is surely part of the truth, but is it the whole truth?
You blame GREED of the money guys, and surely they were greedy.
But greedy money guys don't lend out money that they have little to no chance of getting back. The government, therefore bears some responsibility for demanding that these loans be made, and then guaranteeing them.
How about full accountability from everyone?

You must have missed the part about how the loans were insured by AIG. I was told at the time about several investments that had zero risk since they were insured by AIG.

These were investments in the oil businesses, something I know more than just a little about. It took me almost five seconds to understand that what was being pitched was unworkable, so the deal was only as good as the insurance that was backing the investment. Since I don't know that much about insurance companies I passed. As Warren Buffet says: If you don't understand a deal then stay out of it. I understood this one enough to know that if AIG went under the whole thing was going south.

When AIG could not cover the loans the lenders, like Fannie Mae and Freddie Mac, took a serious hit. FHA loans also suffered, but they are covered by an in house insurance program and did not suffer to the same degree since there really was some money left to pay claims.

I understand that it is easy to blame 'the government' since that requires no thinking. But if you really want to understand what took place, and how to prevent it in the future, you have to dig deep and when you are digging into something that is made to be complicated to prevent this digging it can start to make your head hurt.

Private ownership of housing has been a goal of the US government since the Eisenhower administration came up with it, and everything really was going well until lenders took advantage of the 'no risk to them' situation when it presented itself.

The S&L scandal of the mid 80's is a better example of a government policy gone wrong. Reagan led the charge to deregulate the S&L's and before the ink was dry people were making deals that scammed the FDIC. One of G. W. Bush's brothers, Neil, is said to have cleaned out Silverado Savings and Loan to the tune of $500,000,000 and he was one of the lesser players in that fiasco. The S&L deregulation set the taxpayers back $394,000,000,000 dollars and it is still being unwound to this day.

(I think it is funny to hear Conservatives whine about the $60,000,000,000 spent on GM, all of which the US will get back through payroll taxes, when Ronnie pulled $394,000,000,000 out of our pockets to clean up his deregulation mess and that is money that is gone forever.)

And the greedy guys DID loan out money with little or no chance of getting it back. It was all insured, so what could go wrong?

We disagree only on terms, it seems. If the loans were insured, then there was no risk--the greedy guys knew they would get their money back.

Wasn't there some sort of federal legislation that addressed a perceived racial bias in mortgages that resulted in forcing lenders to lower the standards for securing a mortgage? I think it originated under Clinton and expanded under Dubyuh.

Greedy people will take advantage of loopholes.

The powerful people ( government) forced the greedy people to make loans to the people w/o either power or money, or the prospects to repay the loan. The powerful people guaranteed the loans with OUR money so they could look good and get re-elected, and think well of themselves for caring so much about others-(while spending none of their own money on charity).