gillards socialist history, page-40

GFC was caused by many things that accumulated over the years.

But primarily over-regulation or more correctly "regulations to enforce social engineering experiments" starting from Carter's "Community Reinvestment Act".

This was a fairly innocuous regulation until Clinton supercharged the enforcement of this act and forced banks and other financial institutions into so-called "ninja" (no income, no job, no assets) loans to people for amounts that they could never afford in a world of some financial common sense.

In order to get the banks to make these ridiculous, "sure-to-default" loans, the loans were guananteed by Fannie Mae and Freddi Mac that were government entities for finance and insurance of housing related loans...

Since the "sure-to-default" loans were guaranteed essentially by the US Government, of course this attracted a swarm of fast-buck artists and close-to-conmen selling housing loans and encouraging the use of the family home as a cash withdrawal machine...

An interesting side story is that when Clinton left office, a mass of clinton operatives moved into lucrative and powerful management positions within Fannie Mae and Freddie Mac... I guess they were in on the plan...

Interesting enough Clinton also revoked the 1933 Glass-Stegal act that created a seperation between investment banks and deposit taking banks and between prevented the coupling of investment banking and lending.
Once Clinton removed this regulatory safeguard teh floodbanks opened for aggressive financial manipulation of the housing finance market.

When GWB took office, efforts were made time and time again by the republicans to audit and get some financial sanity into the housing finance industry, particular Fannie Mae and Freedie Mac... These republican efforts were blocked time and time again by democrats...

The housing finance system was a system adjusted primarily during the Clinton adminstratiuon to be one that could be pumped and dumped and manipulated by trading the various indexes set up to track both bank finances and housing values and loans.

And of course the system was gamed to produce enormous profits for players on the inside... Soros for example..


The GFC is just another an example of what wrong headed social engineering experiments can do to a robust financial system...