Cynthia Tucker writes Dumbest Article Ever
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yes CDO's did have underlying collateral hence the term collateralized debt obligation. CDS many times did not. you obviously know jack **** about finance. and the CDS wouldn't have blown up, you know since they are called credit default swaps, if there weren't defaults on the CDOs. and the defaults were caused by massive foreclosures.
No, a bunch of c- credit rolled up and rubber stamped as a+ credit isn't proper. Why blame only F&F? You do realize there is a mortgage industry out there besides them. In fact F&F were more prudent than most of the strictly private sector. Odd that people are coming out of the woodwork with Barnie Frank quotes, but no Angelo Mozilo quotes.
volinbham
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Mozilo is to blame as well. So is Greenspan, Bernanke, etc. etc. To the post that launched this whole thing - Droski stated Obama was clueless by blaming it all on Bush and Republicans. He (Droski) was right - this situation has fingerprints of all sorts of people all over it from both the public and private sector. Simply blaming Bush and Rs is either purely partisan or indicates a lack of understanding of the real causes.
and why do you think it was rated as A+? it couldn't have been years of rising home prices and low defaults right? but god forbid we blame the idiots who bought houses they can't afford. because surely it would have blown up anyway right? i don't only blame fannie and freddie, but since they were 50% of the market (now 85%) when it all hit the fan i think we can safetly assume they had some culpability.
Everyone else in the finance industry isn't who it was mostly shoveled off onto. It's not as if JP Morgan was dumping onto Goldman Sachs. They were sold all over the place from pension funds to small town governments in Norway with the assurances from the seller they were such a great risk. In my home state Florida there was an article in the paper a couple months ago about the teachers pensions losing billions of dollars on this.
you seem to have missed the hundreds of billions of losses by goldmen, citi, bofa, etc. or did you miss the billions we had to give the banks? i very much doubt they would have kept this stuff if they thought they were going to crap out. as for the pension funds i suggest they blame the pension fund managers rather than the underwriters. fact remains that these things worked just fine until the housing market collapsed which is why they were rated high in the first place. bubbles work that way. hindsight is 20/20.
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Well, they lost billions, but how much did they make? Not that it matters because the workers don't have the long-term interests of their company in mind. They were making tons of money in a huge whirlwind and were only concerned with their bonuses. The nature of wall street promotes risk far too heavily for anyone's best interest even wall street(hence the call for better regulation). As for the other point, I was 100% sure you were going to blame the pension managers. The only problem is the pension fund managers are playing with other peoples money, and are overly compensated for adding risk as well. In the case I alluded to it was LB that sold to the Florida teachers fund so LB made money the fund manager makes money and it if all fails guess where the fund manager has a cush VP job waiting for him(luckily not in this instance). So, only the teachers who did absolutely no wrong lose their retirement. Now, instead of just blaming the buyer and all that other business wouldn't it be better to just have a ratings industry that isn't by its very nature corrupt?
the banks didnt' have to keep those assets. they did so willingly. if they knew they MIGHT blow up i very much doubt they would have kept those assets. i.e. they still would have made billions either way except they wouldn't have gone under.
you do realize that the overwelming majority of public pension funds are run by the employees themselves right? i.e it's their own fault. plenty of smart pension funds avoided these assets or at least didn't stupidly concentrate in them. as for losing their retirement almost 100% of the pension funds are backed by the taxpayers if they don't meet the obligations. it's the taxpayers getting screwed, not the teachers.
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