It's actually not terribly complicated. The sudden purchasing craze by Fannie and Freddie created a can't-lose environment for the banks in the early going since Fannie and Freddie underwriting had almost no requirements. This drove up the cost of housing, leading to the assumption throughout the financial industry that between the generous federal buy environment and the real estate resale costs loans couldn't lose money.
But then the buyers also had that same delusion. If the fabled McDonald's worker bought a $700,000 home, and then couldn't make payments when the Arm expired then no big deal, they could just flip the house for $850,000 and walk away with more money then they had ever seen.
Nobody was a victim, everyone was operating on the same motivations, and it was all fueled by a federal loan buying program that essentially broke the risk model that the banks have been operating on forever.
Those of us who had no clue that this garbage was going on got ****ed. Big time. I saw my property value drop by 60% of my purchasing price. Those who had good credit and were responsible didn't even imagine that those who weren't were being handed money.
Tucker Case - Tard magnet.
DID the doing away with Glass-Steagal cause the 2008 finincial collapse ? No.
Warren just reaches out to your average low information Liberal via the " evil bank narrative" and keeps her lying mouth shut when it comes to who put the policies in place that lowered 100 year old Standards for banks and 60 year old standards for Fannie Mae.
All done under the false pretenses of "discriminatory" practices by lenders.
In 2004 when Fannies regulator was warning Congress of the two GSEs eventual Collapse, Democrats were sitting in front of Republican held Comitees lieing their asses off.
As the Republicans were trying to pass stricter regulations Fannie was doubling down on their extremely corrupt and irresponsible behaviour by getting into NINA loans and buying up massive amounts of privately issued mortgage backed securities.
What any investment bank or lending corporation did as far as unethical practices pales in comparison to the Corruption that Continued through questioning of investigative comittees at the GSEs.
When I hear her address the Government Sponsored Criminals at Fannie and Freddie I'll listen up but so far she's just another useless Democrat that only appeals to low information voters.
Things move slowly, and the financial system is very much interconnected and complex.
The repeal gave us the "casino mentality" and also all those credit default swaps and everything else that gave us the bubble that then deflated.
Run your own nation, play Cybernations."Conservatism is the blind and fear-filled worship of dead radicals."
- Mark Twain
My understanding is that Glass-Steagall is largely a red-herring. People like simple answers and it's appealing to pinpoint the cause of the financial crisis to something as simple and specific as the repeal of a solitary law. But, other than arguably making Citibank's situation worse, how did GLBA contribute to the crisis? What specific bad lending practices by, say, Lehman Bros or Bear Stearns would have been prevented by Glass-Steagall?