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Wabbit season!!
http://www.capitalnewyork.com/articl...isis-not-banks
Mayor Michael Bloomberg said this morning that if there is anyone to blame for the mortgage crisis that led the collapse of the financial industry, it's not the "big banks," but Congress.
Speaking at a business breakfast in midtown featuring Bloomberg and two former New York City mayors, Bloomberg was asked what he thought of the Occupy Wall Street protesters.
"I hear your complaints," Bloomberg said. "Some of them are totally unfounded. It was not the banks that created the mortgage crisis. It was, plain and simple, Congress who forced everybody to go and give mortgages to people who were on the cusp. Now, I'm not saying I'm sure that was terrible policy, because a lot of those people who got homes still have them and they wouldn't have gotten them without that.
"But they were the ones who pushed Fannie and Freddie to make a bunch of loans that were imprudent, if you will. They were the ones that pushed the banks to loan to everybody. And now we want to go vilify the banks because it's one target, it's easy to blame them and congress certainly isn't going to blame themselves. At the same time, Congress is trying to pressure banks to loosen their lending standards to make more loans. This is exactly the same speech they criticized them for."
Bloomberg went on to say it's "cathartic" and "entertaining" to blame people, but the important thing now is to fix the problem.
The breakfast was hosted at the Hilton in midtown by the Association for a Better New York, an organization of New York City businesses celebrating its 40th anniversary. The event featured former New York City mayors Ed Koch and David Dinkins. Former mayor Rudy Giuliani was in California and sent in a brief video.
Wabbit season!!
Congress forced firms to create and trade credit default swaps?
Thank you.
Bloomberg is not reasonable on this, and he flies in the face of every single serious economist on both sides of the political aisle.
His cause of the mortgage crisis is debatable -- no one has proved how banks were "forced" to make these loans -- but the wider financial crisis was something else entirely. If it was just a bunch of defaulted bad home loans, it would not have had the effect that we saw in 08.
What city is wall St in? What city has Bloomberg as a mayor?
Congress has done worse than this...Congress has been bought and paid for for decades and the predictable results are surfacing and will continue to do so.
Bloomberg is a multi-millionaire mayor of the town in which Wall Street uses as its headquarters. He has every reason to lay in bed with the financiers of his town.
It's pretty funny that you even think this is debatable. Every post you make like this is further proof that you lack the requisite intelligence necessary to form a discerning opinion. It's been shouted from the rooftops on this forum what caused the crisis, , DR made a post more than 2 years ago about it if I recall, and yet you still cling to political scapegoating. Lawl.
Wow Darrin with another rehash of the what percentage of the defaults were subprimes mandated by the federal lending agencies. Wasn't it was showed what percentage of the bad debt did indeed fall under that category was not even a majority?
i will grant that such lending practices by those agencies were horrible and needed to be stopped. funny thing is that they have been stopped. The problem is that the packaging of such debts into investment packaging in order to play the game of hide the financial liability is still allowable because Glass-Steagal is still repealed.
Also citing Clinton who helped champion the deregulation of the banking industry is cute and all but completely not an objective analyst as its after all his legacy.
This is another example of why I treat Darrin as such. He has no interest in moving forward. He just throws the exact same out there as what argued months ago all the while the regulation panel is being lobbied incessantly by the same people that pay Bloombergs campaign.
Its more than cathartic to blame people. its how politics works nowadays. What he should be concerned about is how much european debt our major holding houses are responsible for because every time the Greeks fart the DOW drops 200 points. That speaks to troubling derivatives being peddled by more than jsut the firm that went under.
But hey its all Fannie Mae's fault that Goldman Sachs et al created derivatives of said loans plus all the other toxic debt and was allowed to trade it.
Another ty attempt at obfuscation by Darrin. Bravo for doing your part to keep our country on the track of marginalization.
by this criteria, govt doesn't cause crisis unless it directly forces agents to commit errors.
But that's not a realistic view of the role of govt, and it's naive to think in such simplistic terms.
The govt can cause or create scenarios in which crisis occur through legislation that allows for risky investments, or providing incentive unwittingly to cause people to behave badly.
In the end, it wasn't govt that issued out the loans, you're right. But govt regulations that secured risky behaviour provided the environment for such things to happen.
Would we have the same risky investments if there were no federally backed guarantees on mortgages, or if we didn't artificially allow for risky lending by keeping the interest rates low, we can never predict such scenarios to the tee, but what we do know from history is that there is a boom and bust cycle, and that govt intervention can create artificial bubbles that lead to catastrophic recessions. Just look at how loose credit was in the 20's due to govt manipulating interest rates to spur growth..
Sure your always gonna have bad actors and dumb investors, but it would be stupid to just blame them and not the govt for providing the incentives and rewarding their behaviour.
If it wasn't for Freddie and Fannie Mae getting into the mortgage market, the credit bubble would have been less catastrophic, it would have been a choice few mortgage holders and mainly real estate investors who would have suffered the consequences and not normal people for which those loans were guaranteed.
Yes, govt is the reason we are ed right now in this particular way. The lobbyist don't hold a gun to govt, Govt holds the guns. They have free will, but they choose to allow for cronyism for a short term gain.
Bloomberg is right.
that's right doofus.
we need more regulation to secure that people never get screwed and that no one suffers the effects of bad investing. If only we could provide safety nets and more govt security of loans, it will discourage bad investing.
If a dad (govt) tells his son(the public) that he would cover his mistakes, that would encourage his son to make wiser decisions. LOL
what? lol okay.
You just proved how unscientific that profession is with that statement. Why should we give a ?
This particular issue should be the litmus test to see how much of a political hack any particular person is.
The mortgage bubble bursting wasn't catastrophic. How badly the banks and financial district were leveraged against that bubble with instruments of their creation that had nothing to do with government (other than they lobbied like to keep government from regulating them) was what was catastrophic.
You know who else was fighting regulation?
Its about telling banks what they can package and call an investment. its about disclosing the nature of the firm peddling the investment. Its not about a guarantee of anything. Maybe you think snake oil salesmanship is good business practices but I do not.
One of the biggest problems we have right now is there is absolutely no way to track how much our major trading houses have tied up into European debt. A firm did just go under. The market is literally tied to the european debt market.
And its funny that you bring up suffering the effects of bad investments. What do you think the point of packaging bad debt and selling it was? I will give you a hint: it was not about owning up to the mistakes of your bad investments.
i know you want to paint this picture where we should just trust them and the market to work itself out beautifully but that is willfully ignorant.
How did government force (with their guns) banks to give bad loans?
How did government (with their guns) force investment firms to create and trade derivatives?
They encouraged it and guaranteed it.
But they don't guarantee all loans. And furthermore, they were scammed, since they were sold loans rated as AAA which were nowhere near AAA.
The government simply provided a tool to make credit more accessible, and that tool was abused by the lenders. Trying to frame it any other way it's pretty silly, IMO.
There's also the fact that a lot of these companies didn't give a about their shareholders either. It's baloney to say "if the incentive wasn't there, they wouldn't have taken the risk". Well, you're supposed to know what kind of risks you're taking on even when there's an incentive. Obviously, some of that people didn't give a about it.
Where did I say the democrats weren't culpable? See my above comment about the litmus test, dumb ass.
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