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syk4ryo (November 30, 1999 at 12:00 am)
I know. I know: Financial Derivatives is a JOKE!
sketchables (November 30, 1999 at 12:00 am)
@FortNikitaBullion Apparently.
taeonu (November 30, 1999 at 12:00 am)
@joae1975 Search: "Subprime Debacle Traps Even Very Credit-Worthy" for full article on Wall Street Journal Online
taeonu (November 30, 1999 at 12:00 am)
@joae1975 A 2007 Wall Street Journal study showed hat in 2005, the peak of the sub-prime boom, borrowers with good credit scores got 55% of all sub-prime mortgages. Coincidentally, the banker's commission on sub prime loans was multiple times higher than regular loans.
hotwelder2010 (November 30, 1999 at 12:00 am)
Alan Greenspan and his band of deregulating demons are respsonsible for this mess. Greenspan was in for way too long and had too much power........everyone had too much belief and confidence in him.
Juands10 (November 30, 1999 at 12:00 am)
they didnt have a utopian view neccesarily but that is just a way to simplyfy their view. what they essentially were doing is dancing while the music was still playing.this was mentioned in john cassidy's book "how markets fail, the logic of economic calamitites" check it out its a great read and loads of insight on utopian and real economics
BonesRemix (November 30, 1999 at 12:00 am)
@joae1975 Yes, it certainly did not help. BUT, the majority of the banks who were playing risky had nothing to do with the CRA. But as for banks that were affected by this law, they should make FIXED INTEREST RATE payments only. When Bernanke raised the interest rate form 1% to 5%, all these loans blown up, but they would be fine if it was a fixed contract. Sorry for my bad english bro, i'm french XD
dookdawg214 (November 30, 1999 at 12:00 am)
@Evry1LuvsJennieO It's not illegal because deregulation made it not illegal. That's the problem with lax regulation on Wall Street. Banks used to be obliged to invest no more than 10 times the amount of cash they're holding. That's 10/1. Today, some banks are undercapitalized by 40/1. This is what AIG was doing with bogus loans. It's easy to collect premiums when you know you'll never be able to pay anything out.
ScottBrown666 (November 30, 1999 at 12:00 am)
@jbranstetter04 Ding ding ding. I think it was about half of all sub prime mortgages in the US were backed by Fannie and Freddie. The other half ended up insured by AIG and/or fraudulently labeled AAA and sold to pension funds and hedge funds.
ScottBrown666 (November 30, 1999 at 12:00 am)
@jbranstetter04 Something tells me that's not true... |
