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Re: GOP Presidential Candidates' Tax Plans Favor Richest 1 Percent

By: clo in ALEA | Recommend this post (0)
Sat, 14 Jan 12 5:08 AM | 80 view(s)
Boardmark this board | The Trust Matrix 		Msg. 06496 of 54959
(This msg. is a reply to 06494 by Cactus Flower)
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Hi Cactus Flower,

I knew 'we' were in trouble when Greenspan was pushing subprime mortgages, while interest rates were at a record low.
WHY, why would he do that? It made ZERO sense (to me)

And why would a bank give a designer mortgage, nothing down, pay only the interest for the first three years, & then let them take out a second mortgage shortly after? Based on WHAT, they had NOTHING invested.

The former Fed chief pushed subprime lending like a shady mortgage broker as he helped promote the second asset bubble in a decade.

By Bill Fleckenstein

Amid all the confusion over subprime lending, it's worth bringing one fact to the fore: Alan Greenspan was recommending adjustable-rate mortgages in February 2004 -- just as short-term rates were making their lows. Then, in a speech on April 8, 2005, he extolled subprime lending:

"With these advances in technology, lenders have taken advantage of credit-scoring models and other techniques for efficiently extending credit to a broader spectrum of consumers. . . . As we reflect on the evolution of consumer credit in the United States, we must conclude that innovation and structural change in the financial services industry have been critical in providing expanded access to credit for the vast majority of consumers, including those of limited means. . . . This fact underscores the importance of our roles as policymakers, researchers, bankers and consumer advocates in fostering constructive innovation that is both responsive to market demand and beneficial to consumers."

much more:

http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/BlameGreenspanForThisBubbleToo.aspx




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The above is a reply to the following message:
Re: GOP Presidential Candidates' Tax Plans Favor Richest 1 Percent
By: Cactus Flower in ALEA
Sat, 14 Jan 12 4:52 AM 		Msg. 06494 of 54959

By the way, clo, Paul Krugman agrees with you.

Even so, he admits he didn't foresee the severity of the crisis or the flimsiness of the financial system in 2006.

And making better decisions in hindsight is so much easier. I think many people saw that there was a housing bubble. But a vanishingly small number of people foresaw the catastrophe which lay ahead.

For myself, I saw the problem with sub-prime fairly early. But it never occurred to me that the whole thing was such a house of cards that was mortgaged against reality. So the extent of the failure of the whole financial and economic neighbourhood was a surprise.

That's the second crisis in a row in which that has been true for me. The inter-connectness of everything makes prediction of scope - beyond the cause of failure - fairly much impossible.


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