"
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."

http://www.capitalnewyork.com/article/culture/2011/11/3971362/bloomberg-plain-and-simple-congress-caused-mortgage-crisis-not-banks

To a point he is correct. I think the banks are definitely at fault for the bond ratings that helped spread the resale of the worthless mortgage based debt to investors.

But had the loans never been encouraged (by government regulation) and had the loans never been taken (by unrealistic borrowers/speculators), our economy would be nowhere near as fucked as it is.

idontlikebeingrightaboutshitlikethisbutiam



Edited 21 time(s). Last edit at 5/31/1967 05:57AM by WingNut.

Last edit at 11/30/2015 01:37PM Last edit at 5/14/2015 03:52PM Last edit at 1/28/2014 05:57AM Last edit at 11/29/2015 01:10PM Last edit at 3/14/2011 11:52PM Last edit at 7/20/2012 04:07AM
Last edit at 6/29/2013 11:18PM Last edit at 3/19/2011 01:02PM Last edit at 3/26/2012 09:07PM

Without the AAA ratings bestowed by the agencies, the bonds would've had to pay much higher interest rates of 9, 10, or 11 percent. The home sales would've completely died and the market collapsed.

Without the AAA ratings, the investment banks wouldn't have been able to borrow in the money markets to finance these securities.

Without the AAA ratings, the securities could not have been sold to pension funds, sovereign wealth funds, and many other investors.


"Companies pay the credit ratings agencies to receive a rating, the financial market's version of a seal of approval. Before the financial crisis, banks shopped around to make sure rating agencies would award favorable ratings before agreeing to work with them. These banks paid as much as $100,000 for ratings on mortgage bond deals, according to the Financial Crisis Inquiry Commission, the Times said.

Critics say this business model is riddled with conflicts of interest since ratings agencies might make their grades more positive to please their customers."

There are many more problems with the mortgage debacle caused by the banks.

You should stick to writing about things you know something about, which is nothing....

Eh, not too fast. Wingnut isn't wrong. The banks don't shoulder the blame 100%. Gov't policy has a hand: see FNMA and FHLMC(plus $150 billion or so of tax payer money and counting...), see the CRA, see EVERYTHING Barney Frank supported, yes, the ratings agencies played a part, as did the FRB and their easy money policy, what else...third-party mortgage originators, the CLO manufacturers.... Yup, there is a ton of blame to go around. Banks played a part. It was more of an ensemble cluster fuck.

Everyone is to blame, from the ratings agencies, to Congress, to the banks, to the people who lied on their loan applications to get the loan in the first place. This is why nothing has been done to bring people to justice, because it would involve implicating everyone. "Too big to jail."

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Edited 1 time(s). Last edit at 11/02/2011 10:22AM by WashingTone-Locian.

This is like the drunk blaming the bar for his DUI.

lamers Wrote:
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> This is like the drunk blaming the bar for his
> DUI.


Actually, if a bar slashed the price of drinks to $1 and sold 20 of them to a minor, the bar would be in trouble. In some cases, that's not too far off from what the banks and mortgage brokers did.

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Bloomberg wants to sell Sharia compliant ATM's throughout the
Middle East so you'd better believe he wants to shift the blame.

There is a long laundry list of those who are to blame for the mortgage meltdown crisis, and the banks certainly were not solely responsible. What Bloomberg is doing isn't correcting the facts but creating a myth.

Congress and Federally created/funded institutions certainly were pushing programs designed to spread home ownership by getting banks to expand the pool of people they were lending to. They were not, however, telling banks to make potentially bad loans. This was the banks doing. Banks saw more profit in complying with the Federal programs by making loans to marginal borrowers at higher interest rates than they could make by seeking out lower income safe borrowers and lending at lower interest rates. And since the banks were not keeping the loans in their portfolios, but instead were selling them off to investors, the banks thought they had little to lose if the borrowers defaulted. Now since Fannie Mae et. al. were among the largest buyers of these loans they were in a position to catch what the banks were doing and minimize the damage by stopping purchasing loans until the problem was corrected. However while they facilitated the problem the banks were the ones who perpetrated it.

Bill.N. Wrote:
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> Now since Fannie Mae et. al. were
> among the largest buyers of these loans they were
> in a position to catch what the banks were doing
> and minimize the damage by stopping purchasing
> loans until the problem was corrected. However
> while they facilitated the problem the banks were
> the ones who perpetrated it.


And the GOP never want to acknowledge that most of those activities at Fannie Mae occurred on the watch of Daniel Mudd, a Republican supporter of Bush who gave exponentially more to Republican candidates and Republican causes than he did Democrats. In fact, of the $77,500 he did give, I believe less than $5K went to Democrats. Mudd was the biggest initiator of buying up bad mortgage instruments.

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Edited 1 time(s). Last edit at 11/02/2011 11:45AM by WashingTone-Locian.

Of course it's the banks fault.

Typical Jew response.