The traitors definitely need to be held accountable for creating a worldwide mess.

To mitigate risk further, wall street implemented derivatives and credit default swaps. Extensive and complex financial models had been developed to assess risk and price it accordingly. Alan Greenspan also endorsed these products as reliable and basically foolproof. Mr. Greenspan was highly respected and no one in government was capable of (or chose not to) questioning his opinion or positions besides there not being any history to compare the viability of these systems. If the real estate market slowed or simply leveled off, these strategies would have worked. However, no one expected, including many respected economists, for real estate to not only level off but DECLINE.

Models are limited to the variables and data used and obviously in this example incomplete. There was no history to develop mature models and many of the necessary variables could not be identified. Economics and human behavior is a complex business and naïve and arrogant to assume it can be modeled with reliability sufficient to be betting trillions of dollars and having widespread effects and consequences.

Moreover, real estate is historically a good hedge against inflation and no other investments exists allowing for the same degree of high leverage. So, with the slowing stock market in 2001, the Federal Reserve dropping interest rates to 1% (which in turn provided financing at below market rates or “free money” in real terms) a similar problem may have evolved regardless of the CRA. Consider the majority of foreclosures exist in areas where the largest run ups occurred between 2003 – 2006 and “subprime” loans were used to finance the 20% down payment and essentially removing any risk to the buyer / mortgagor. Since they had no skin in the property purchase, they could simply walk away if its value declined to less than the financed amounts. This is obviously a very hazardous metric defying fundamental lending practices. But since Wall Street devised products to offset this risk banks would continue to loan money. It had nothing to do with the CRA buyers in that category.

Finally, Wall Street knew they would not be allowed to fail considering the "too big to fail" mentality in addition to the symbiotic relationship that exists between Wall Street and Washington. Since the Federal Reserve can easily create money to fund any bailout (read “The Creature From Jekyll Island” by Ed Griffin for more understanding of the illusion at work) and the staggering amount of money that could be made all along the food chain, Wall Street had little reason to not move full speed ahead.

It appears there is an abundance of incompetence and egregious behavior in the GSE’s and all those involved with preventing oversight. The Bush administration as early as 2002 expressed concern over the risky behavior of the GSE’s and again in the following couple of years. I believe Karl Rove reports that one last attempt to have safeguards put into place around 2003 were frustrated by a Chris Dodd leading a filibuster. Those at the GSE’s profiting the most (Franklin Raines $10 million +), et al should all be investigated and thrown in jail for their complete incompetence and egregious behavior allowing these conditions.

You're right they need to be investigated-and hauled off to jail…….along with the ACORN operatives ……….. A C O R N =

ASSOCIATED CORRUPT OBAMA'S RADICAL NUTS

PLS.KEEP SOUNDING OUT …….. AND TELL EVERYONE TO QUIT WATCHING THE NAT'L MEDIA'S NEWS BROADCASTS ……. THEN MAYBE THEY'LL BEGIN TO CHG. THEIR BIASES TO GET THE VIEWERS TO COME BACK

FYI – I WILL NOT GIVE ACORN ANY CENSUS INFO. — I UNDERSTAND OBAMA VIA RAHM EMMANUEL HAS/IS DIRECTING ACORN TO BE IN CHARGE OF COLLECTING THE CENSUS INFO. ……. NOT IN MY LIFETIME …. BOYCOTT THE CENSUS UNTIL IT IS PROVEN TO BE AN UNBIASED OPERATION AND NOT UNDER THE EXECUTIVE BRANCH……. LOL ………. YOU GO GIRL!

Think about this; the housing boom dramatically increased home values(over inflated) as a direct result of demand. My home in FL tripled in value(not actually but that was what the market drove it to) in five years. Two years after the housing bubble burst, its now worth what it was 8 years ago, and nobody wants to buy it for that price.

How many mortgages in or approaching default status(headed for foreclosure) are homeowners who are upsidedown in their mortgage?

With unemployment hitting 8.9% this week, and El Presidente's less than stimulating stimulus plan, I don't believe that the real meltdown has occurred yet.