Don't expect any commentary from Calor, Smoothsailing or any of the other leftwingers around here.

You just don't want to admit that youv'e been duped.

Thats pretty much it in a nutshell. He warned about the various factors that were causing the problem to get worse but never put any backbone into it. IMHO he should have tightened money supply and forced a recession since it was obvious congress was gridlocked and turning a blind eye, wall street obviously wasnt going to fix anything, and many of the investors simply weren't listening.

The argument that Democrats caused this crisis is ridiculous.

This is no different than saying Republicans cause every economic down turn because they are more firm believers in the free market.

The Democrats did push for more loans to the poor and instituted this policy with Fannie Mae and Freddie Mac. But that's not the same as saying that the Democrats caused the subsequent melt down.

What happened is that starting in the 90s, credit in general got to be very easy to come by. When the dot-com bubble burst in the late 90s, there was still a ton of money to be invested but no where to put it. 

But greedy wallstreet bankers hatched a great idea - interest only loans on adjustable rate interest rates. Loan to people who could barely afford it, then when interest rates rose, the poor wouldn't be able to pay and the wallstreet bankers would end up with a house that had appreciated faster than inflation.

What they didn't count on was the housing market collapsing so abruptly at the same time interest rates were going up. Usually interest rates go down when the market declines but in this case, both went up.

So instead of foreclosing on houses that were appreciating in value at a fast clip when the interest rates went up, they were foreclosing on houses that had lost value and could not unload them on anyone else which dried up the banks liquidity.

Without cash, the banks can loan money or even pay their own bills precipitating the mess we're in.

If you want to blame anyone, why not blame Bush's pressure on Greenspan to have such low interest rates?  The fed rate was ridiculously low for so long that it made credit insanely easy to come by.

Now they call for no Golden Parachutes because they already made their millions.

I find Dodd, Frank and Schumer absolutely loathesome and slimey.  I can't believe they had any say on this matter.

In Greenspan's defense,

He got very low key and careful with his wording on dire predictions after his first couple of years in office.  For a while, every time he opened his mouth, the markets swung a couple of hundred points.  Congress quoted him out of context to back every position they wanted from tax cuts to large spending increases when throughout his career he preached paying off the debt as the first priority.  With that kind of "E.F.Hutton" power, I'd be afraid of putting "backbone" into warnings too.

That said, I think a very effective case can be made for blaiming government (both parties) as "unindicted co-conspirators" in the wall street mess.

Bush and his finance ministers for the last several years have been routinely stating that the economy is fine and all these naysayers are just chicken littles. NOW, suddenly they've changed their tune and are saying that they've known about and have tried to stop this for years. Ha!

Satire doesn't even come close to how ridiculous this whole farce has become.

Bush has had the Whitehouse for the last 8 years. The secretary of the treasury, the chairman of the federal reserve, and the fella running the SEC are ALL  with Bush. He's enjoyed majorities in the congress and the senate for considerable periods throughout those 8 years as well.

But nevermind the fact that this was predicted years ago by reputable economists (Nouriel Roubini hit this nail on the head years ago) but yet they were dismissed as alarmist fools by the folks currently in power.

Then suddenly a few weeks ago the other shoe dropped and suddenly it becomes:

"Even though we're the ones at the wheel and were warned about this years ago, we tried everything in our power to stop it.... oh, and the democrats are entirely to blame for this entire fiasco!!!"

The gestures made by various members of the house and senate to increase regulation were just that, gesures, and most of that regulation was stripped away with much ideological fanfare that it was helping the "free market" by removing the hand of big bad government and all the red tape involved.

 There was no serious intent behind regulation otherwise it would have dominated the public discussion. Instead, the congress and senate were too busy passing flag burning ammendments and pontificating about gay marriage and abortion. This wasn't a part of the mainstream discussion because it's a very complicated topic that simply can't be summarized properly into a 30 second sound byte or talking point.

 This goes way beyond the easy to understand "po people with no money are ruinin' things" and delves into the mechanics of how banks lend and invest money. This is a world that very few politicians understand. Very few bankers even understand the monster they have created, as was illustrated by the fact that in the last weeks many major firms have had their employees pull all nighters, going through the books to figure out how much capital and debt they did or didn't have. When the banks don't know what their OWN picture is, the market freezes because no one wants to lend to each other.

Currently, Bernanke and Paulson have more power than Bush, the Congress or Senate. And they want more!!!

There are many issues, mostly related to the fact that the banks have been selling lies for years now. BOTH political parties are equally culpable in allowing this to happen, but mostly they allowed this to happen out of ignorance.

How many members of congress, do you think, truly understand the 62 trillion market of CDS? (credit default swaps)?

How many members of congress and the senate understand how CDO's and "structural investment vehicles" funneled billions of dollars in debt to off-book ventures that magically turned into trillions of dollars of nonexistent money???

Very few. I don't even understand it, nor do I pretend to.

Reid was telling the truth when he said "no one knows what to do"

I thought this video was dynomite...and now it's gone from view...interesting?? 

Don't you even feel a little bit silly for making that claim just below a video that shows Bush's finance minister warning us about the possible crisis several years ago?

Arty is right.  It is time to stop this silliness.  We should all BLAME CANADA!

The original question is what caused the financial crisis and this video shows who (the Democrats) suported it or helped cover for Fannie....

http://ca.youtube.com/watch?v=_MGT_cSi7Rs

You should look for videos that aren't edited by partisan hacks. Then you will realize that there are people from both parties who carry some blame. One has to remember that Fannie and Freddie were mainly the secondary market for mortgages. It is other companies....mainly mortgage companies, that actually made the bad loans and then resold them to the GSE's. Electronically no less.

Give it a break...How far back do you want to go? One could argue that  Fannie  Mae became a mixed-ownership corporation in 1954 so maybe Ike is to blame. Its ludicrous what people try to claim but really what you need to do is look at your own Senators and Representatives very closely and see just how they may or may not have helped screw things up.  One thing I can say is that when I look at many of the things that have allowed this particular problem to occur there are not many politicians that don't have a reason to run for cover.

There were warnings along time ago. But the fact is its both parties.There is no question FNMA was cooking the books when Raines was CEO but if you look at who they lobbied and who they gave campaign contributions to it involves both parties. He was cooking the books between 1998- 2004 when the republicans controlled both houses as well as the committees that pertained to them. The most money went to who was in power at the time so if you go back before 2006 you will see that GOP candidates were getting more until the dems were gaining control of congress. This is not a partisan thing. The deregulation that led up to the bubble was passed by both parties, a blind eye was cast by members of both parties, etc etc etc. None of the politicians raised an eyebrow before it was known that Fannie was ccoking the books, even though if you look at some of the OFHEO reports you will see that they were actually submitting reports as early as 2001 asking for more regulation and better insight.