Reply to: So - who is really to blame for the credit crunch?

[BrilloPad]

Hideously complex derivatives invented by too clever by half bankers.

This was basically to get round SOX. And now they want to add MORE regulation.

[interested]

Oh... so it wasn't Adam Applegarth and Northern Rock's business model after all !!

Nope - my post referred to the root causes, not the subsequent actions by banks.

[AlfredJPruffock]

My first reaction would be to nominate Greenspan who basically turned the dot.com bubble into the property bubble - but surely the root cause of all this is the fiendish Saddam who boasted that the Iraq War would break the US economy - now its clear that the Iraq War was a very clever deception by Saddam to drain the US economy - perhaps we should invade again as a protest.

[Cyberman]

Root causes are:

Community Reinvestment Act 1977 and it's amendment under the Clinton administration which required financial institutions to lend to people who basically wouldn't have got credit before.

Cheap money - Greenspan's fault

Hideously complex derivatives invented by too clever by half bankers.

There's a section in Berkshire Hathaway's annual report by Warren Buffet where he basically says he can't understand half the derivatives on the market and we're doomed if they ever unwind - this was from a few years ago.

Oh... so it wasn't Adam Applegarth and Northern Rock's business model after all !!

[MrMark]

The correct answer is : Sarah Beenie. Who is now under protective police surveillance.

[sappatz]

credit crunch

the answer is simple : George Bush, Tony Blair and the brainless anglos who voted for them

[HairyArsedBloke]

Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

[Pickle2]

do you also read the New York Times?

from 1999?

http://query.nytimes.com/gst/fullpag...=&pagewanted=1

[Troll]

Root causes are:

Community Reinvestment Act 1977 and it's amendment under the Clinton administration which required financial institutions to lend to people who basically wouldn't have got credit before.

Cheap money - Greenspan's fault

Hideously complex derivatives invented by too clever by half bankers.

There's a section in Berkshire Hathaway's annual report by Warren Buffet where he basically says he can't understand half the derivatives on the market and we're doomed if they ever unwind - this was from a few years ago.

do you also read the New York Times?

[interested]

Root causes are:

Community Reinvestment Act 1977 and it's amendment under the Clinton administration which required financial institutions to lend to people who basically wouldn't have got credit before.

Cheap money - Greenspan's fault

Hideously complex derivatives invented by too clever by half bankers.

There's a section in Berkshire Hathaway's annual report by Warren Buffet where he basically says he can't understand half the derivatives on the market and we're doomed if they ever unwind - this was from a few years ago.

[DodgyAgent]

Who's to blame? The government for sitting on its arse and watching personal debt spiral out of control.

If national governments are for anything, it is heading things like that off at the pass.

We on here could see what was happening six years ago, so they should have done.

I can just see it.. CUK takes over Bloomberg

[oracleslave]

Yep, it was a time when mortgage multiples started moving well above three times borrowers' earnings (a historical safety limit), and house prices were rising above the historical average.

Tony Blair was coming on TV telling us to Spend Spend Spend (a few months after 9/11), and people were increasing their mortgages to buy new cars and go on fancy holidays.

Didn't you notice any of this?

I think I've been quite consistent in my view, for many years, that this debt bubble could not last and would end in tears - the longer it went on, the worse it would be when it finally happened.

I guess I have to be honest and say I didn't see it coming 6 years ago. I think you flatter too many members of this board with the assertion that they all saw this coming 6 years out. If you did in fact see it all coming 6 years in advance did you make a killing in BTL?

[stackpole]

Originally Posted by stackpole

"We on here could see what was happening six years ago"

Yep, it was a time when mortgage multiples started moving well above three times borrowers' earnings (a historical safety limit), and house prices were rising above the historical average.

Tony Blair was coming on TV telling us to Spend Spend Spend (a few months after 9/11), and people were increasing their mortgages to buy new cars and go on fancy holidays.

Didn't you notice any of this?

I think I've been quite consistent in my view, for many years, that this debt bubble could not last and would end in tears - the longer it went on, the worse it would be when it finally happened.

[Cyberman]

It's like say that the bar is responsible for selling drinks to the addicts - the addicts bear most of responsibility for their addiction.

Hardly, because we as taxpayers paid multi-millions of pounds in salaries to regulators who simply did not do or were not up to their job, probably because the best brains were working at the banks.

[Another Dodgy Agent]

Ban the production of drinks would solve that problem.

And to stop people making their own.

Ban the growing of any crop that could be turned into drink. Send farmers to prison for causing drunkeness.

It's the only way to be sure.

Alternatively we could nuke the site from orbit...