Re:Data Broker Opt-Out List
by wavesounds on Sunday September 06, 2020 @01:55AM
(#24389309)
The Financial Crisis Inquiry Commission (FCIC) tasked with investigating the causes of the crisis reported in January 2011 that: "We had a 21st-century financial system with 19th-century safeguards.
The FCIC placed significant blame for the crisis on deregulation, reporting: "We conclude widespread failures in financial regulation and supervision proved devastating to the stability of the nation’s financial markets. The sentries were not at their posts, in no small part due to the widely accepted faith in the self-correcting nature of the markets and the ability of financial institutions to effectively police themselves."
https://en.wikipedia.org/wiki/Government_policies_and_the_su...
There were multiple things that went wrong, and it's extremely disingenuous to put the majority of the blame on Greenspan, Freddie/Fannie. Private risk assessment failed utterly, see
Moody's. CDS allowed for infinite leverage, securitization allowed hiding of risk. These originated with private actors, and infected the system with toxic assets.
> That's not deregulation, that's a problem with how these government agencies actually functioned.
Well sort of yes. But that's first order thinking. The underlying engine that drove those institutions to failure was the deregulation of the banks.
That's the narrative that one side of the ideogical divide went with. The other side blamed deregulation such as the removal of Glass-Steagal
Erm no. 2008 was directly linked to Greenspan (Fed), Freddie Mac (Federal) and Fannie Mae (Federal), all government run entities, which stopped making proper risk evaluation when issuing loans. That's not deregulation, that's a problem with how these government agencies actually functioned.
https://www.fool.com/investing/dividends-income/2008/09/10/t...
> If not the boldest of the group, then at least the most public, Greenspan, the man many are now blaming for the housing bubble (there were a brave few that piped up years ago), has refused to go quietly into his well-padded retirement. The man charged with providing the country with a financial voice of reason fell far short, so much so that it might be comical if it weren't so tragic.
> Greenspan's denial of the possibility of a housing bubble has been widely derided in the past year, but a single statement could be excused as human error. However, a quick scan shows that this wasn't a single event. He also promoted the adoption and expansion of adjustable-rate mortgage (ARM) products in early 2004, when short-term rates were at or near historic lows. That same year he claimed, "securitization by Fannie and Freddie allows mortgage originators to separate themselves from almost all aspects of risk associated with mortgage lending." And separate themselves they did, ceasing to perform any kind of due diligence as to the ability of borrowers to pay for the homes they were buying.