On 09/09/2026 08:13, BobbieSellers wrote:

ÿÿÿClinton added to economic problems by going along with the
Republicans and relaxing the regulations governing banks which
resulted in the problems of 2008.

Resulted in the problems, from FRAUD, of 2008 and later.
It is one of my pet peeves that it is referred to as the GFC as if it
was a force of nature rather than a result of unnatural greed. Your
simplistic summary is great and it is a pity that people weren't aware
of it back then.

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On Wed, 9 Sep 2026 12:41:48 +1200, Titus G wrote:

On 09/09/2026 08:13, BobbieSellers wrote:

ÿÿÿClinton added to economic problems by going along with the
Republicans and relaxing the regulations governing banks which
resulted in the problems of 2008.

Resulted in the problems, from FRAUD, of 2008 and later. It is one
of my pet peeves that it is referred to as the GFC as if it was a
force of nature rather than a result of unnatural greed.

Easier house loans for those with lower incomes were popular with
voters. The lenders saw a way to cream more profits, using a
simplistic risk analysis that assumed that defaults would not be
correlated, and so were priced accordingly. But if they were caused by
factors such as an economic downturn that resulted in job losses among mortgagees en masse, then of course they would be correlated -- and
more likely to occur.

Leaving lenders and borrowers alike to fend for themselves would
likely have led to a situation that made the Great Depression of the
1930s look like a picnic in the park. Clearly not a palatable outcome
...

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In article <117qq6f$qiig$1@dont-email.me>, Titus G <noone@nowhere.com> wrote: >Resulted in the problems, from FRAUD, of 2008 and later.

It is one of my pet peeves that it is referred to as the GFC as if it
was a force of nature rather than a result of unnatural greed. Your >simplistic summary is great and it is a pity that people weren't aware
of it back then.

Greed -is- a force of nature. That's why we have governments.
--scott
--
"C'est un Nagra. C'est suisse, et tres, tres precis."

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On Wed, 9 Sep 2026 06:01:02 -0000 (UTC), Lawrence D?Oliveiro
<ldo@nz.invalid> wrote:

On Wed, 9 Sep 2026 12:41:48 +1200, Titus G wrote:

On 09/09/2026 08:13, BobbieSellers wrote:

???Clinton added to economic problems by going along with the
Republicans and relaxing the regulations governing banks which
resulted in the problems of 2008.

Resulted in the problems, from FRAUD, of 2008 and later. It is one
of my pet peeves that it is referred to as the GFC as if it was a
force of nature rather than a result of unnatural greed.

One of the few docudramas I have seen, /The Big Short/, includes an
intereview with mid-twenties waitress (IIRC) who owns her house with
very low payments -- and a balloon payment she expects to finesse,
based what she was told when she took out the loan, by redoing the
loan. Actually, she owns five houses that way.

A local loan officer, when hauled into court for writing loan after
loan to people who clearly had no means of paying them, delivered
herself of the opinion that the gummint regulators were supposed to be double-checking her every move and so /they/ were responsible. I don't
think that went over very well in court.

A few years after the disaster, it turned out that transferring a
mortgage from company to company was so done so sloppily that in many
cases, it was no longer possible to say if the loan had been paid or,
if not, who actually owed it and who it was actually owed to. How
/that/ was resolved I have no idea.

Easier house loans for those with lower incomes were popular with
voters. The lenders saw a way to cream more profits, using a
simplistic risk analysis that assumed that defaults would not be
correlated, and so were priced accordingly. But if they were caused by >factors such as an economic downturn that resulted in job losses among >mortgagees en masse, then of course they would be correlated -- and
more likely to occur.

As one of the bond rating companies involved explained: if they didn't
rate the bond AAA because they knew it was rotten, the issuer would
just take it down the street to a rival rating company and get the
commission.

Leaving lenders and borrowers alike to fend for themselves would
likely have led to a situation that made the Great Depression of the
1930s look like a picnic in the park. Clearly not a palatable outcome

Declaring some companies "too big to fail" and shoveling money at them
was not a good idea either. Particularly after they gave the executives-in-charge large annual bonus for "good perormance".Taking
their Boards of Directors out and shooting them as traitors, OTOH,
might have suggested to the survivors that they would be well-advised
to mend their ways.

BTW, /Up in the Air/ does a good job exploring those times and the
impact on The Rest of Us. It's about a man whose job is to fly in and
fire eveyrbody because the person who /should/ be doing is too chicken
to do so. But that's the setting, not the story.
--
"Here lies the Tuscan poet Aretino,
Who evil spoke of everyone but God,
Giving as his excuse, 'I never knew him.'"

--- PyGate Linux v1.5.19
* Origin: Dragon's Lair, PyGate NNTP<>Fido Gate (3:633/10)

Paul S Person wrote:

As one of the bond rating companies involved explained: if they didn't
rate the bond AAA because they knew it was rotten, the issuer would
just take it down the street to a rival rating company and get the commission.

That may be the truth, or it may simply be less embarrassing than the
fact that they were gamed.

"A" students in finance go to wall street. "C" students go to the
rating agencies, and the worst of them go to subprime mortgages.

When they were given a bond to evaluate with the required FICA score,
they gave it an A rating. They didn't look any deeper. Some of these
bonds were dumbbell shaped. They were a combination of very high rated mortgages with very low rated, such that the average earned a A.

But this is not an A rated bond in any sense, as the lower half of the dumbbell is quite certain to forfeit when trouble arises. These bonds
were junk, and bad junk at that.

As for those high FICA scores, many of them were also meaningless. Find
a poor person who has never borrowed money. Lend them 500k to buy a
house, and use their "thin FICA" rating to pump up the average rating of
the mortgage bond you are conning S&P into assigning an AAA rating.

And this was what hurt Morgan Stanley. Well aware that the lower ranked
bonds were suspect, they bought insurance on a few billion B and lower
bonds. But this insurance cost money, which reduced the bond desk's
profit, which reduced bonuses. Can't have that. So they sold insurance
on A bonds. As A rated bond insurance was less costly, they had to
insure many times more A bonds than they had insurance on B bonds.

But since the A bonds were also junk, they all failed, and instead of
making a tidy five billion or so, they lost nine billion.

But at least they got to keep their bonuses, and the guy who organized
the catastrophe got a 200 million severance package.

And thus communism was kept at bay!


William Hyde

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