Re: In Bush, Loyalists See A Good & Steadfast Man Who Has Gotten A Bad Rap

Vince wrote:
> John Briggs wrote:
>> Vince wrote:
>>> John Briggs wrote:
>>>> Vince wrote:
>>>>> Paul J Gans wrote:
>>>>>
>>>>>>> Look,  the reason for this mess is the relaxation of US banking
>>>>>>> regulations over many years and the effect this has had on the
>>>>>>> world banking system.
>>>>>>
>>>>>> He's right about "banking" taken literally.  The problem is that
>>>>>> in the US mortgages can be issued by entities that are not banks
>>>>>> and are not subject to the same kind of regulation.
>>>>>>
>>>>>> While we often use the term "bank" to cover both, technically
>>>>>> it isn't correct.
>>>>>
>>>>> The "issuing" of mortgages as such was not the problem.
>>>>
>>>> Well, it was - in the sense that in their greed for commission, the
>>>> agents responsible for arranging those mortgages misstated the
>>>> income and ability to pay of those applying for mortgages (those
>>>> sub-prime applicants would still have got their mortgages, albeit
>>>> on very different terms, if their cir***stnces had been correctly
>>>> stated.)
>>> See below
>>>
>>>>>  It was the securiitization of repurchased re sliced mortgages
>>>>> though fannie may and Freddie Mac without the slightest quality
>>>>> control
>>>>
>>>> That was a consequence of the above. The securitisation and
>>>> re-slicing of sub-prime mortgages was a perfectly sound idea, but
>>>> was heavily dependent on the original mortgages being correctly
>>>> characterised. (So that real risk could be more accurately
>>>> *****sed.)
>>>
>>> Which was the precise skill FNMA was being paid for.  They bought
>>> crap knew it was crap and lied big time for the fees from
>>> securitization. paid themselves fat salaries and transferred the
>>> risk to the taxpayer They were the root cause since so one would
>>> write a mortgage if fannie and Freddie and Ginnie would not buy it
>>
>> The blame lies with those writing the mortgages. Not for writing the
>> mortgages, but for not accurately characterising them.
>
> Plausible deniability at work
>
> they wrote crap because FNMA wanted crap

No, they wanted quantity - but *not* crap that was misdescribed. They
failed 
to pass this message on clearly enough.

> FNMA crap buyers were paid bonuses for volume, not quality
> "for whatsoever a man soweth, that shall he also reap" (Gal. 6:7,
> kjv).

Yes, but crap that was correctly described as crap would have done just as

well. They knew that, but their suppliers didn't. The whole thing was 
unnecessary. (Although inevitable, because it catered to human greed.)
-- 
John Briggs