--- In FairfieldLife@yahoogroups.com, "John" <jr_esq@...> wrote: > > --- In FairfieldLife@yahoogroups.com, Bhairitu <noozguru@> wrote: <snip> > > The bankers showed how dumb they actually are with their > > derivatives and hedge funds. It was like a bunch of kids > > playing with matches and oops burned the house down. And > > they should pay the full price for it. The public should > > not bail them out. Catch them at every excuse to sell the > > public we should help them out and sound a resounding NO! > > The bankers believed that their actions relating to the housing > mortgage debacle were legal and that they would be supported by > the federal government. Apparently there was a federal law that > was passed to lower the requirements for some borrowers so that > they can buy new homes.
Please, inform yourself. Start with this: http://en.wikipedia.org/wiki/Government_policies_and_the_subprime_mortgage_crisis http://tinyurl.com/7t9e5uz The Wikipedia article has lots of references, including to other Wikipedia articles on the 2008 financial crisis. It's much more complicated than you dream. Bhairitu is essentially correct that it was the securitization of risk in mortgage lending with derivatives and such that was the primary contributor to the crisis. Just for one thing, the vast majority of the subprime loans were not made by FDIC- insured banks. For another, most of the loans that went bad were not made to low-income borrowers. And for still another, commercial loans were just as problematic as home loans.
