> RoMunn wrote: > Securities backed by mortgages. Duh. > I guess you're not getting it and I don't blame you because it's far from clear for anyone.
The point is, however, that the misinformation is flying fast and furious and you're repeating it. So rather than repeat what Rush has told you, just think it through and ask basic questions: (1.) Somebody made the bad loan. Why? Why would anyone lend a bad risk their money? If they did that a lot wouldn't they go bankrupt? What regulations govern that behavior? (2.) Somebody bought the bad loan. Why? If the loans are worth X% return, why sell in the first place? What regulations govern that sale? (3.) Somebody packaged bad loans into securities. Why? Why package them into a security? What regulations govern how somebody can do that? (4.) Somebody bought one of these securities. Why? Why would anyone buy securities based on bad loans? What regulations govern that? (5.) If one of the loans in the security defaults what happens to the security? How does the value change? What regulations govern that? Now. If I follow your own numbers, both freddie and fannie bought, roundly, $200B in these securities. Yet they back trillions in mortgages. Roundly 50% of all american mortgages, in fact. So if the problem is, as you say, GSEs buying only $200B in sub-prime securities, and the ENTIRE sub-prime market is only 2% or mortgages, and the GSEs own 50% of all mortgages worth trillions, how could that possibly be the problem? And if $200B in sub-prime debt is the cause of the "crisis" why did we ask for $700B? And why do some say that $700B is only a few percent of the problem? How could that be if the problem is the GSEs buying $200B in securities? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Adobe® ColdFusion® 8 software 8 is the most important and dramatic release to date Get the Free Trial http://ad.doubleclick.net/clk;207172674;29440083;f Archive: http://www.houseoffusion.com/groups/cf-community/message.cfm/messageid:271686 Subscription: http://www.houseoffusion.com/groups/cf-community/subscribe.cfm Unsubscribe: http://www.houseoffusion.com/cf_lists/unsubscribe.cfm?user=89.70.5
