"Frank Boettcher" wrote in message
...
On 8 Sep 2008 14:48:02 -0500, Dave wrote:

On Mon, 8 Sep 2008 11:27:41 -0700, "Capt. JG"
said:

The current problems with Fan and Fred long antedate the current
administration, and can be traced in substantial part to the fact the
legislators, and particular Dem legislators, have been in Fan and
Fred's
pocket for years. As I said before, follow the money--not your left
wing
nut
blogs.


So, you think things have gotten better or worse in the last 7 years?

In this area, what we've seen over the last 7 years is a continuation of
trends long in the offing. When it comes to assessing blame, we have a
huge
cast of characters, beginning with individuals who thought real estate
purchases involved all reward and no risk. The cast includes:

Very good job of listing the entire chain of shame.

Home buyers who believed it was ok to lie about their ability to pay
mortgages because their homes could only keep going up.

Two subdivisions here. Those who were buying homes to live in that
they could not afford with trick mortgages and no down payments.
Strongly encouraged by liberal politicians. No skin in the game.

Those who were simply speculating, in many cases signing
pre-construction deals with neither the means nor the desire to close
the deal, simply intending to resell before they had any skin in the
game.

Real estate brokers who persuaded them of the above.

Appraisers whose income depended on referrals from brokers, and were
willing
to do whatever it took to come in with appraisals that would yield a
commission to the referring broker. (I was looking at one of those deals
just last week.)

Mortgage brokers who made enormous amounts but were paid only when
mortgages
were closed, and were more than happy to encourage the borrowers to lie,
telling the customer that "everybody does it.".

Once again, no skin in the game.

Banks willing to buy the mortgages without looking too closely at the
documentation because they could resell them immediately to a greater
fool.

Hey, no skin in the game.
Mortgage buyers who bought from the banks without looking very closely
because they could sell the mortgages in a securitized bundle.

No skin in the game.

Investment bankers who deluded themselves and investors into thinking that
financial engineering could remove the risk of defaults.



Rating agencies who got paid to give ratings after telling the investment
bankers what to put into the package.



"Structured finance" lawyers who should have known better, but didn't ask
the right questions.

Auditors who never bothered to check transaction documents in auditing
financial statements (a few months ago I got a relatively prominent
auditing
firm fired by a client for that very reason).

Regulators who hadn't a clue about accounting issues.

One thing that might help the situation is a few very prominent
prosecutions
for mortgage fraud by home buyers. But I don't see that happening.

The underlying problem is the same as the one that caused the pension
problems of the 70s, the S&L crisis of the early 90s, the dot com bubble
of
2000, current issues with skyrocketing medical costs, and the social
security problem--a misalignment of risks and incentives: the belief that
you can get something for nothing and somebody else is gonna pay for it.
And
that has been the Dem mantra since forever.

No skin in the game.



You may not have skin in the game, but millions do. Some, for sure, deserve
what they get, being speculators. A huge number were bamboozled by predatory
lending practices.


--
"j" ganz @@
www.sailnow.com