Replies to post #432299 on Fannie Mae-No Politics (FNMA)

[lumpina]

If you are right, then you presented the "doomsday" scenario; which, if true, is why we won't (or should not) ever find out about.

But, could it have really been THAT bad when the so-called crisis started? I have my doubts, but nothing much surprises me any more.

I hope you are wrong.

I hope the documents show that "some people" just made some bad decisions and want to cover their butts. That's the best outcome. I don't want to think about the alternative.

[Donotunderstand]

You misrepresent - big time --- Greespan who felt the BANKS needed zero regulation ... that the market would correct for all risks

He has admitted he was entirely wrong

The essence

If a highly profitable product issued by a bank (or a practice of the bank) would BLOW UP once every 50 or 60 years - any sane CEO paid by bonus based on that year's results AND in most cases with Platinum or Golden parachutes ..... any sane CEO would keep doing that product and running that process ---- the odds are like 1 in 50 it will blow up and 49 in 50 he gets a fatter bonus

Regulators seeing such product or practice - with a 2% chance of blowing up with major consequences --- would BAN it 100% or severely limit it

The entire GOVERNMENT fell in love with the odds that they should have feared but the bank saw as a clear green light to actions that did blow up

(That was a summary of how Greenspan himself explained his errors)

[BaGr]

Actually it was Phil Graham that pushed the deregulation of CDOs and CDSs but failed to pass congress. It was hidden in an appropriation bill in the last months of Clintons term which he signed.