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This is bananas. This is like piling explosives around the base of every skyscraper in Manhattan, connecting it all up with fuses and then blaming the ignition

This is bananas. This is like piling explosives around the base of every skyscraper in Manhattan, connecting it all up with fuses and then blaming the ignition of that fuse for the ensuing disaster. Yes, we get it. Mortgage credit was too easy to come by in the 2000s. That availability was driven by government subsidized lending. But that bubble should've burst and triggered a recession that was perhaps a bit worse than ordinary. It left a crater in the global economy because the financial products it tourched off happened to connect every major financial institution in a way I don't think anyone understood until the autopsies of the Great Recession started to come in.

TimJYoung 8y ago
Yeah, I can't remember the exact numbers being thrown around at the time, but it was in the many trillions of dollars of derivatives that had been created. If you replace the word "derivatives" with "bets", you get a better understanding of how far astray Wall Street has led us. The fact that these "bets" jeopardized the health and wellbeing of millions of people around the globe is direct evidence that regulators and central bankers were either inept, corrupt, or both.
InclinedPlane 8y ago
The government was not responsible for the sub-prime mortgage crisis, only a tiny fraction of sub-prime loans were due to legal mandates (6%). https://www.cbsnews.com/news/loans-to-low-income-households-did-not-cause-the-financial-crisis/ https://www.cbsnews.com/news/loans-to-low-income-households-...
- DubiousPusher 8y ago
  I'm saying it doesn't matter either way. To me it doesn't matter who built or lit the fuse. The piles of interconnecting ordinance were the derivatives. Any asset in a bubble that had decent exposure in a derivatives market could've triggered the disaster. The layers of deals too complex for anyone to understand that entwined many major financial firms are what made the Great Recession "Great".

TimJYoung 8y ago

Yeah, I can't remember the exact numbers being thrown around at the time, but it was in the many trillions of dollars of derivatives that had been created. If you replace the word "derivatives" with "bets", you get a better understanding of how far astray Wall Street has led us. The fact that these "bets" jeopardized the health and wellbeing of millions of people around the globe is direct evidence that regulators and central bankers were either inept, corrupt, or both.

InclinedPlane 8y ago

The government was not responsible for the sub-prime mortgage crisis, only a tiny fraction of sub-prime loans were due to legal mandates (6%). https://www.cbsnews.com/news/loans-to-low-income-households-did-not-cause-the-financial-crisis/ https://www.cbsnews.com/news/loans-to-low-income-households-...

DubiousPusher 8y ago
I'm saying it doesn't matter either way. To me it doesn't matter who built or lit the fuse. The piles of interconnecting ordinance were the derivatives. Any asset in a bubble that had decent exposure in a derivatives market could've triggered the disaster. The layers of deals too complex for anyone to understand that entwined many major financial firms are what made the Great Recession "Great".