Bill Moyers & William K. Black

[lutherblsstt]

The financial industry brought the economy to its knees, but how did they get away with it? With the nation wondering how to hold the bankers accountable, Bill Moyers sits down with William K. Black, the former senior regulator who cracked down on banks during the savings and loan crisis of the 1980s. Black offers his analysis of what went wrong and his critique of the bailout


Invalid Link Removed

 

[lutherblsstt]

I fear that Black is correct about fraud being the major cause for this crisis. Look at the recent revelations about AIG from Institutional Risk Analysts:
Invalid Link Removed


It looks like AIG has been some sort of Ponzi scheme for years. I'm not sure why this information hasn't gotten more attention - it's as though we just want to sweep all of this fraud under the rug now and get on with "the recovery". But the recovery can't happen in a sustainable way until all of this fraud is exposed and dealt with. Welcome to Japan from the early 90's till now - because that's what our economy will look like... if we're lucky.

 

[Dwight Schrute]

AIG nor any of these institutions are the cause...its the fact that all these loans were guaranteed by the government through either Fannie or Freddie and banks were mandated by law to produce sub prime loans. The reason you won't hear much of it because the people who run the financial services committee and the people who oversee these government run agencies are the people still in power.

If you want to look at the cuase, then find out who allowed such companies to leverage 40-1 on risky loans. Private companies cna't make laws that allow this.....only government can and it was created in the mid 90's and the first bundle was packaged and resold in 97 by Bear Stearns. The rest is history.

Blacks assertation that they are "liar loans" is simply incorrect. In fact most of the loans given out were perfectly legal. AIG's losses weren't a result of giving out huge loans, it was insuring billions of dollars in bad loans.


The Japan comparison isn't accurate either. The way they tried to solves the problem was very small injections of capital over a long period (aka the lost decade)....we are doing the opposite. Now whether it will work, that's another issue...