This Is What Caused The Crash ---

Quote from Kicking:

My opinion is that the government created the crash. Without the government we would have had a decline but it is possible it would not have been as fast as the one we witnessed.

I believe that many investors and traders lost money because of the government. Not because of the RE and CDO mess.

I am very upset about this and so should everybody, they intervened in the market and screw everything up.
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With all due respect, your post is quite naive.

There was a total of $35 TRILLION in CDS exposure out there, alone.

Government intervention had nothing to do with this market decline.

LEVERAGE did.
 
Quote from NY_HOOD:

THIS IS WHAT CAUSED THE CRASH--YOU HEARD IT HERE FIRST!

when a homeowner put down 10% for an 800k house and 6 months later an appraisor said it was now worth 975k. then the homeowner would ket a 200k home equity loan and use 10% of that as a down payment for an investment property with his cousin Bob who did the same exact thing. they would then have that investment property appraised and it would of course be inflated and they would get a home equity with that home as well.THEY ALSO FINANCED EVERYTHING ELSE LIKE HOME REPAIR FOR THE INVESTMENT PROPERTY AT HOME DEPOT WITH 0% FOR THE FIRST YEAR....ECT.. now the house of cards falls !!! see how this whole mess happened? then lehman and bear caused confidence in our financial sysytem to crash and it was all down hill from there.
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Again, a rather simplistic post.

Mortgages were pooled together and "repackaged" by investment banks as asset-backed securities which were then sold to investors who LEVERAGED these positions and securities 30:1
 
Yes, but that very leverage was created and encouraged by the government. Who allowed the investment banks to lever from 12:1 to 40:1?

What boggles my mind is why the US government allows the Federal Reserve to sit back and destroy the currency, and thereby the country. Congress has the power to abolish the Federal Reserve but it sits back and let's this banking system conduct its actions in the name of "economic stability." All for what? Simply, and endless supply of money to feed Congress' insatiable appetite to spend.

Quote from Landis82:

With all due respect, your post is quite naive.

There was a total of $35 TRILLION in CDS exposure out there, alone.

Government intervention had nothing to do with this market decline.

LEVERAGE did.
More...
 
Quote from ProfitTakgFool:

Yes, but that very leverage was created and encouraged by the government. Who allowed the investment banks to lever from 12:1 to 40:1?

What boggles my mind is why the US government allows the Federal Reserve to sit back and destroy the currency, and thereby the country. Congress has the power to abolish the Federal Reserve but it sits back and let's this banking system conduct its actions in the name of "economic stability." All for what? Simply, and endless supply of money to feed Congress' insatiable appetite to spend.
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Nice assessment PFT.........not just leverage but promoted leverage.

To modern day Rome...........

"Farewell & adieu to you fair spanish ladies......fairwell & adieu,ladies of Spain......................for we recieved orders to sail back to Boston,thus nevermore shall we see you again"!
 
Quote from ProfitTakgFool:

Yes, but that very leverage was created and encouraged by the government. Who allowed the investment banks to lever from 12:1 to 40:1?
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True, but you didn't bring it ( LEVERAGE ) up in your initial post. Thank the legislators for bringing us the "Commodity Futures Modernization Act of 2000"

Quote from ProfitTakgFool:

What boggles my mind is why the US government allows the Federal Reserve to sit back and destroy the currency, and thereby the country. Congress has the power to abolish the Federal Reserve but it sits back and let's this banking system conduct its actions in the name of "economic stability." All for what? Simply, and endless supply of money to feed Congress' insatiable appetite to spend.
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But I thought that Bush and Paulson were always advocating a STRONG DOLLAR policy, no?

:D
 
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