It is Bill Clinton and Andrew Cuomo To Be Blame for the Banking Meltdown
Current mood: angry
Category: News and Politics
In today's financial market meltdown, I have kept hearing that it is all Bush's fault. I am getting sick and tired of that political rhetoric, which is base on ignorance and stupidity. Let us get the facts before jumping into erroneous conclusion.
The problem stems that these financial institutions have made bad investments with the sub-prime markets. For the past many months, these banks have been writing off bad debt and it has come to a point that they are unable to stop the bleeding. Today, Bank of America bought out Merrill Lynch and Lehman Brothers are going under bankruptcy proceedings. I'm glad Lehman Brothers is not being bailed out by the Feds and they're setting an example to those other companies that enough is enough. Why should the American tax dollars be used to offset a mistake of another? Take it on the chin and take it like a man.
It is not the Bush Administration fault. There are many factors that lead to this meltdown. From Greenspan "cheap money" policies to Democrats pressuring bank lobbyists to allow loans to be given to anybody with bad credit or not, there are too many factors that couldn't be President Bush fault. It is also difficult to fix the problem that was left by the last sitting president. Yes, if you want to blame on a president, you need to blame on the Clinton Administration.
This mortgage meltdown started during the latter years of the Clinton Administration and the appointment of an INEXPERIENCE man with no banking nor real estate experience to run and regulate the major home mortgage brokers' Fannie Mae and Freddie Mac.
Andrew Cuomo was the youngest appointee to run as secretary for HUD (Housing and Urban Development). During the period from 1997 to 2001, Cuomo made a series of bad decision that lead to this current crisis. He allowed Fannie Mae and Freddie Mac delved into the sub-prime markets without any regulatory mechanism because of its risky investments. Then he allowed the FHA mortgage program to give out outrageous loans with no money down. Cuomo made it legal to have brokers get a kickback for these loans, which lent us to predatory lending. Then Cuomo decided to provide unrealistic flexible loans to low-income families and minorities with little to no money down. These are the reasons why we are in this mess today. You can blame Bill Clinton for putting an INEXPERIENCE fool to run a huge operation, which now caused more than three million families into foreclosure.
To blame Bush is ignorant and stupid. The regulations of the banking system are as outdated like the IRS code. No one knew that this was going to occur. The signs were there, but no one knew it was going to happen now. It took more than 10 years to see this nightmare come as a reality. So, to say that this is Bush's fault is going over the line. Since 2001, Bush had other things to do and that is protecting this country from terrorism. Besides, once the sub-prime market took roots, it was almost impossible to stop its progression. It had a life of its own. Let me put it another way. You try to have sex all the way to climax and stop before ejaculation. It is impossible and so is this.
For those who are not into the graphics, here is an easier picture to grasp. Each mortgage is a commodity that could be sold again and again from the brokers to the bankers to the securities market. If, at the bottom of this pyramid, the borrower is unable to obligate their responsibility to pay the terms of the loan, the home could be repackaged a second or a third time and either refinanced or dumped on a new victim. This is an ongoing ugly process by passing the buck to the next person until the whole charade falls apart.
We have seen similar scandals of unregulated banking go amuck like the Saving and Loan Scandal of the1980's. In time, the market will correct itself. It's called survival of the fittest. Those banks unable to withstand their own stupid mistake will wither away, while the strong will continue to prosper.
This is a small setback that will heal in time. By looking at the conditions of this market, it is a great opportunity to buy. Do not fall prey into the notion that we are heading to a depression. This market has been resilient for the past seven years because our market fundamentals are strong and valid.