{"id":6507,"date":"2011-11-05T04:24:32","date_gmt":"2011-11-05T04:24:32","guid":{"rendered":"http:\/\/sonicfrog.net\/?p=6507"},"modified":"2011-11-11T00:28:35","modified_gmt":"2011-11-11T00:28:35","slug":"the-heart-of-the-financial-crisis","status":"publish","type":"post","link":"https:\/\/sonicfrog.net\/?p=6507","title":{"rendered":"The Heart Of The Financial Crisis"},"content":{"rendered":"<div style=\"padding-bottom:20px; padding-top:10px;\" class=\"hupso-share-buttons\"><!-- Hupso Share Buttons - https:\/\/www.hupso.com\/share\/ --><a class=\"hupso_toolbar\" href=\"https:\/\/www.hupso.com\/share\/\"><img src=\"https:\/\/static.hupso.com\/share\/buttons\/share-medium.png\" style=\"border:0px; padding-top: 5px; float:left;\" alt=\"Share Button\"\/><\/a><script type=\"text\/javascript\">var hupso_services_t=new Array(\"Twitter\",\"Facebook\",\"Google Plus\",\"Pinterest\",\"Linkedin\",\"StumbleUpon\",\"Digg\",\"Reddit\",\"Bebo\",\"Delicious\");var hupso_background_t=\"#EAF4FF\";var hupso_border_t=\"#66CCFF\";var hupso_toolbar_size_t=\"medium\";var hupso_image_folder_url = \"\";var hupso_url_t=\"\";var hupso_title_t=\"The%20Heart%20Of%20The%20Financial%20Crisis\";<\/script><script type=\"text\/javascript\" src=\"https:\/\/static.hupso.com\/share\/js\/share_toolbar.js\"><\/script><!-- Hupso Share Buttons --><\/div><p>I&#8217;ve been trying to explain it and clarify it for some Conservative friends of mine, but I&#8217;ve quite gotten to the nub concisely. <\/p>\n<p>Matt Taibbi said it the way I wanted, and couldn&#8217;t quite spit out. Quote:<\/p>\n<blockquote><p>This whole notion that the financial crisis was caused by government attempts to create an &#8220;ownership society&#8221; and make mortgages more available to low-income (and particularly minority) borrowers has been pushed for some time by dingbats like Rush Limbaugh and Sean Hannity, who often point to laws like the 1977 Community Reinvestment Act as signature events in the crash drama.<\/p>\n<p>But Rush Limbaugh and Sean Hannity are at least dumb enough that it is theoretically possible that they actually believe the crash was caused by the CRA, Barney Frank, and Fannie and Freddie.<\/p>\n<p>On the other hand, nobody who actually understands anything about banking, or has spent more than ten minutes inside a Wall Street office, believes any of that crap. In the financial world, the fairy tales about the CRA causing the crash inspire a sort of chuckling bemusement, as though they were tribal bugaboos explaining bad rainfall or an outbreak of hoof-and-mouth, ghost stories and legends good for scaring the masses.<\/p>\n<p>But nobody actually believes them. Did government efforts to ease lending standards put a lot of iffy borrowers into homes? Absolutely. Were there a lot of people who wouldn\u2019t have gotten homes twenty or thirty years ago who are now in foreclosure thanks to government efforts to make mortgages more available? Sure \u2013 no question.<\/p>\n<p>But did any of that have anything at all to do with the explosion of subprime home lending that caused the gigantic speculative bubble of the mid-2000s, or the crash that followed?<\/p>\n<p>Not even slightly. The whole premise is preposterous. And Mike Bloomberg knows it.<\/p>\n<p>In order for this vision of history to be true, one would have to imagine that all of these banks were dragged, kicking and screaming, to the altar of home lending, forced against their will to create huge volumes of home loans for unqualified borrowers.<\/p>\n<p>In fact, just the opposite was true. This was an orgiastic stampede of lending, undertaken with something very like bloodlust. Far from being dragged into poor neighborhoods and forced to give out home loans to jobless black folk, companies like Countrywide and New Century charged into suburbs and exurbs from coast to coast with the enthusiasm of Rwandan machete mobs, looking to create as many loans as they could.<\/p>\n<p>They lent to anyone with a pulse and they didn\u2019t need Barney Frank to give them a push. This was not social policy. This was greed. <strong>They created those loans not because they had to, but because it was profitable. Enormously, gigantically profitable<\/strong> &#8212; profitable enough to create huge fortunes out of thin air, with a speed never seen before in Wall Street&#8217;s history.<\/p><\/blockquote>\n<p>BINGO!<\/p>\n<p>The whole article <a href=\"http:\/\/www.rollingstone.com\/politics\/blogs\/taibblog\/mike-bloombergs-marie-antoinette-moment-20111103#ixzz1cl4VA6se\">is here<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<div style=\"padding-bottom:20px; padding-top:10px;\" class=\"hupso-share-buttons\"><!-- Hupso Share Buttons - https:\/\/www.hupso.com\/share\/ --><a class=\"hupso_toolbar\" href=\"https:\/\/www.hupso.com\/share\/\"><img src=\"https:\/\/static.hupso.com\/share\/buttons\/share-medium.png\" style=\"border:0px; padding-top: 5px; float:left;\" alt=\"Share Button\"\/><\/a><script type=\"text\/javascript\">var hupso_services_t=new Array(\"Twitter\",\"Facebook\",\"Google Plus\",\"Pinterest\",\"Linkedin\",\"StumbleUpon\",\"Digg\",\"Reddit\",\"Bebo\",\"Delicious\");var hupso_background_t=\"#EAF4FF\";var hupso_border_t=\"#66CCFF\";var hupso_toolbar_size_t=\"medium\";var hupso_image_folder_url = \"\";var hupso_url_t=\"\";var hupso_title_t=\"The%20Heart%20Of%20The%20Financial%20Crisis\";<\/script><script type=\"text\/javascript\" src=\"https:\/\/static.hupso.com\/share\/js\/share_toolbar.js\"><\/script><!-- Hupso Share Buttons --><\/div><p>I&#8217;ve been trying to explain it and clarify it for some Conservative friends of mine, but I&#8217;ve quite gotten to the nub concisely. Matt Taibbi said it the way I wanted, and couldn&#8217;t quite spit out. Quote: This whole notion that the financial crisis was caused by government attempts to create an &#8220;ownership society&#8221; and [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[7,60],"tags":[],"_links":{"self":[{"href":"https:\/\/sonicfrog.net\/index.php?rest_route=\/wp\/v2\/posts\/6507"}],"collection":[{"href":"https:\/\/sonicfrog.net\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sonicfrog.net\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sonicfrog.net\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/sonicfrog.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=6507"}],"version-history":[{"count":2,"href":"https:\/\/sonicfrog.net\/index.php?rest_route=\/wp\/v2\/posts\/6507\/revisions"}],"predecessor-version":[{"id":6513,"href":"https:\/\/sonicfrog.net\/index.php?rest_route=\/wp\/v2\/posts\/6507\/revisions\/6513"}],"wp:attachment":[{"href":"https:\/\/sonicfrog.net\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=6507"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sonicfrog.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=6507"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sonicfrog.net\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=6507"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}