Quote:
Originally Posted by docholly
True Republicans believe in a market based economy, supply and demand and capitalism. less government, more states rights. Government bail out is the last thing they would want which just reinforces my long held belief that Bush/Cheney are impostors. Fake Republicans.
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Look at what the OCC in conjunction with the DOJ during 2003 -to 2005 to make sure that these bad loans stayed profitable for a short period of time.
The problem is that through new OCC auditing standards that were changed for the first time in 140 years allowed banks and hedge funds to value paper loans not even at the $500,000 value of years ago but the future estimated value of perhaps $1,000,000. While they hold a loan on a property worth $250k they could actually declare $1,000,000 in assets which would allow them to borrow 10 times that or basically 40 times what they really had.
When people wonder how Bush's daddy's company The Carlyle Group could lose so much money over night, or suddenly Bears Sterns could have $30,000,000,000 in bad debt it's not because people are defaulting, it's because the OCC allowed them to declare 30, 40 and some estimates 100 times the value of real assets.
Normally banks and funds had to have 10% to 15% in actual assets for what they were borrowing. From 2003 until now they only needed 1% to 3% so if values on that money borrowed dropped 2% these companies were broke.
I've been trying to remind people since 2000 of the S&L Crisis, the families that profited and the law makers in power. No one cared.