I noticed a rather successful counter campaign that has convinced a significant portion of the masses that the government forced the banks to grant loans to poor people that they could not afford to pay, thus all blameless except federal government.
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The government certainly created some dumb incentives to originate subprime loans, but what happened from there was fraud.
No one told Wall Street to invent CDOs that took one pile of bad loans and sliced/diced them around the world as supposedly safe debt for pension funds. No one told AIG and the banks to create endless speculative "insurance" swaps so that they could load up their balance sheets with loans they wrote with willful blindness and convinced themselves they were "hedged." These people can't be brilliant in one breath but so blind in the next. As an outsider I can understand how it was all a house of cards built on interlinked BS CDS's, so the folks doing it sure as heck knew.
No one told the ratings agencies to put "AAA" ratings on debt instruments that were so complex they had to ask the issuers themselves to build the ratings models.
No one told the banks that they should continue accepting "low doc" loans that everyone in the industry brazenly called "liar loans."
And no one told the borrowers who were lying on those loans they had to do so.
The fraud was systemic and well known. Bad judgement (getting in over your head on a loan or writing a sub-prime loan that goes bad) is one thing. Lying repeatedly on loan docs, knowingly issuing 6 mortgages to a nanny, or telling telling shareholders/regulators that you've bought loan insurance to protect your balance sheet while at the same time selling loan insurance on the same piles of crap back to the other bank is fraud.
Government regulators being asleep at the switch -- and in a revolving door with Wall Street -- was the icing on the cake.
As Jimmy Buffett reflected in "A lot to Drink About":
Repeat after me, it's so easy to see
We're just talking 'bout simple greed
(Yes, I'm still really PO'd about all this
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