The Truth about Financial Crisis

After reading and listening and learning about Wall street and the housing bubble I have reached conclusion. Why? Because I am a genius.

The U.S. Government backed a mortgage company to push low income home ownership. With U.S backing this entity was able to lower cash reserves from 10 percent of liability to 2.5 percent.

The private market tried to compete and lowered its thresholds. With low capital and low liquidity the Arabs raised gas prices so they could get more. The low income working stiff lost 10 percent of deposable income as jobs were outsourced and the Arabs too theirs. Default was widespread.

The cracker jack appraisers gave the bank what they needed as an appraisal to justified any loan, prices skyrocketed. Deceptive and predatory lending took over to get to the next level to satisfied the share holders and justify more bonuses.

Loans were made between wall street corporations and called with limited liquidity. The dominoes fell with those with Government ties receiving the poor working stiffs money.

Bottom line. The crisis was the result of Government backed mortgage companies Freddie May and Freddie Mac. The U.S. Congress and Senate was blinded by campaign contributions and greed.

Don't forget the greedy and/or ignorant people who accepted the terms of the loans. Without them this would not have happened.

herkdriver wrote:Don't forget the greedy and/or ignorant people who accepted the terms of the loans. Without them this would not have happened.

Not a chance. Take the poor family and show them the promise land. You can refinance in three years if you make your payments.

Press hard 5 copies. Barney Franks are you watching? You aint no Ted Kennedy.