Monday, December 01, 2008

Bush ignored warnings about mortgage meltdown

C'mon, you all knew this... we just didn't have any concrete evidence until now.

Bush is the same imbecile who had ignored warnings about 9-11, the absence of WMD's in Iraq, the ensuing chaos in occupied Iraq, Katrina, etc, etc... so why not the economic explosion, too?

According to an Associated Press item reported in CNN/Money:

The Bush administration backed off proposed crackdowns on no-money-down, interest-only mortgages years before the economy collapsed, buckling to pressure from some of the same banks that have now failed. It ignored remarkably prescient warnings that foretold the financial meltdown...

Bowing to aggressive lobbying -- along with assurances from banks that the troubled mortgages were OK -- regulators delayed action for nearly one year. By the time new rules were released late in 2006, the toughest of the proposed provisions were gone and the meltdown was under way.

The administration's blind eye to the impending crisis is emblematic of its governing philosophy, which trusted market forces and discounted the value of government intervention in the economy. Its belief ironically has ushered in the most massive government intervention since the 1930s.  [emphasis Kalamazoo Post's]

Truthfully, who did not know this in their heart of hearts?  And, sure, apologists will whine on that nothing can be proved about Bush's neglect, and so be it.

And we continue with bank regulators' warnings being ignored:

In 2005, faced with ominous signs the housing market was in jeopardy, bank regulators proposed new guidelines for banks writing risky loans. Today, in the midst of the worst housing recession in a generation, the proposal reads like a list of what-ifs:

--Regulators told bankers exotic mortgages were often inappropriate for buyers with bad credit.

--Banks would have been required to increase efforts to verify that buyers actually had jobs and could afford houses.

--Regulators proposed a cap on risky mortgages so a string of defaults wouldn't be crippling.

--Banks that bundled and sold mortgages were told to be sure investors knew exactly what they were buying.

--Regulators urged banks to help buyers make responsible decisions and clearly advise them that interest rates might skyrocket and huge payments might be due sooner than expected.

Those proposals all were stripped from the final rules. None required congressional approval or the president's signature.

Barry Ritholtz has noted, "The banks that lobbied most aggressively against the rules reads like a who’s who of bankruptcy and FDIC conservatorship: IndyMac, Countrywide Financial, Washington Mutual, Lehman Brothers, and Downey Savings."  Your tax dollars hard at work bailing out their bad decisions.

So, as we all work that extra decade to make up for our lost retirement funds, we can all rest assured that President Dumbshit and his family are living off a federal pension with full-time secret service and lifetime health insurance-- all at our expense.

And don't worry about Hop-a-Long Cheney: he's been in foreign bonds for quite some time. (Patriot.)


Eric said...

Damn! you are on one, all that turkey must get your hackles up. Either that or christmas puts you in more of a funk than Myself.

The problem is when you have a "Free-Market" guy in the whitehouse, he doesn't realize that there is a role for government in markets... That and that Wall street is like a land of lions, they will eat their young.

Tony said...


Actually I had red meat on T-giving.