Hey Oba mama….
Want to get reelected?….
Put some people in jail! Step up and do your job.
P.s send me my check!
Dohmen: The regulators were in collusion with Wall Street. This wasn’t a failure of capitalism, this was a failure of regulatory agencies and in my opinion some of it was criminal. The Wall Street firms, the big ones, were limited to 12-to-1 margin based on their capital until 2004. Then the head of the SEC, who was a former founder of a very large Wall Street firm, and he had been able to field these Wall Street guys and after that they decided to increase the permitted leverage I believe to 34-to-1. That was absolutely incredible. I remember whey that happened I said, “If these firms only have a 3 percent decline in their speculative investment it wipes out all of the equity.” I wondered how could this be allowed. These guys were just asking for failure. The reason it was allowed because the higher the leverage the higher the potential profits. And I guess the theory was if something goes wrong the taxpayer would pay the losses. They get the profits, the taxpayer gets the losses. And that’s exactly what happened.
We had other things like that in other areas of the housing market. Fannie Mae and Freddie Mac were basically coerced into giving mortgages who had no jobs, no income and no net worth. Yet they got mortgages because the Congressmen said that’s what we have to do. You know the names of these Congressmen. So it was really excess of government, excess of speculation and there was no rationale behind it. Even right now when you consider that the FHA is making mortgage loans with only 3 percent down – 3 percent down! Nothing has been learned in this last episode. And that’s why this crisis is not over. We are just in the middle of it. There’s another 50 percent to go.