Bloomberg once blamed end of '''redlining''' for 2008 collapse
I'm in real estate, and he's 100% correct. In the run up to the crash, banks were handing out mortgages like candy to anyone with a pulse. But, like his comments on inner city gun violence, it is extremely politically incorrect to state the truth if the truth disparages minorities in any way whatsoever.
I really hope he qualifies for the debate in Nevada. I'm looking forward to seeing the other commies pile on this wannabe autocrat.
Actually he's overwhelmingly wrong; of all the subprime mortgage origination/volumes, private lending accounted for the vast majority (84% origination rate as of 2006), and Fannie and Freddy in the post-mortem along with other GSEs, were found to have played no considerable role; indeed their exposure to the subprime market declined dramatically as it progressed to bursting:
Subprime mortgage crisis - Wikipedia
Moreover it is notable that a similar bubble occurred in commercial real estate as well, which had absolutely zero exposure to Fannie and Freddy, GSEs or government sponsored insurance/guarantees.
Ultimately the foundations of the 2007-8 crisis are attributable to an almost total vacuum of regulation regarding lending standards and the wide proliferation of utterly irresponsible (and predatory) NINJA/subprime mortgages that were effectively ticking timebombs with teaser rates and literally no credit oversight or money down required (and no, this sort of extreme risk taking was not obligated by government programs whatsoever). In truth, private lenders (the Countrywide division of Bank of America most notoriously) spearheaded this drive towards dangerously under-qualified lending, and others followed due to competitive pressures.
Then you had the intermediary stage of bad mortgages being bundled into horrible collateralized debt bundles whose ratings were grossly and inanely inflated by rating agencies in an epic conflict of interest where said agencies were paid by their clients (the banks), thus obscuring the actual risk, while said banks unloaded these shoddy financial products on an unsuspecting public, including their own clients, in many cases clearly knowing full and well their dangerous, risky and toxic nature (featuring such colourful internal references to these securitizations as 'toxic waste' among the lowest quality tranches).
Beyond that was the end stage with another regulatory vacuum featuring derivatives authored by banks and major financial institutions which multiplied the risk presented by these toxic mortgages many times past the underlying mortgage valuation per the mechanism of CDOs and credit default swaps; this is what ultimately made the problem truly systemic and existential in scope and breadth. Essentially you had people on Wall Street making huge outsized bets that these housing prices would continue to go up: issuers of CDOs would get to collect effective (and handsome) premiums from their counterparties so long as the mortgages underlying the derivative didn't go tits up (in which case they would have to pay out, and this payout amount could vastly exceed the nominal value of those mortgages).
The idea that government programs and entities were overwhelmingly responsible for the financial crisis/Great Recession is mostly falsehood and utterly disingenuous revisionist history, meant to minimize and otherwise obscure the dominant and unmistakably seminal role of the private sector in bringing about this catastrophe. Naturally this effort to recast the origins of the crisis derive from political and economic motives that seek to blunt the case for financial sector reform and increased government oversight and regulation.
