Bravo1, dinothefakehomo has already had this op-ed fantasy it spews rammed back up its ass where it came from. Quit wasting time on that, and spend your time forcing it to defend supporting an anti-gay Union scheme.

“Beyond that, Dino is irrelevant.”

A point its mother arrived at long ago, that accounts for its mental illness.

Get back to me when you have some authoritative documentation for what you’ve just written.

From June 2007:

Bear Stearns hedge funds near shutting down: report

NEW YORK (Reuters) – Two Bear Stearns Cos. BSC.N hedge funds that invested heavily in securities backed by subprime mortgage loans are close to being shut down as a rescue plan is falling apart, The Wall Street Journal Online reported on Wednesday.

From the SEC:

SEC Charges Two Former Bear Stearns Hedge Fund Managers With Fraud

Washington, D.C., June 19, 2008 — The Securities and Exchange Commission today charged two former Bear Stearns Asset Management (BSAM) portfolio managers for fraudulently misleading investors about the financial state of the firm’s two largest hedge funds and their exposure to subprime mortgage-backed securities before the collapse of the funds in June 2007.

The SEC’s complaint alleges that when the hedge funds took increasing hits to the value of their portfolios during the first five months of 2007 and faced escalating redemptions and margin calls, then-BSAM senior managing directors Ralph R. Cioffi and Matthew M. Tannin deceived their own investors and certain institutional counterparties about the funds’ growing troubles until they collapsed and caused investor losses of approximately $1.8 billion.

According to the SEC’s complaint, filed in the U.S. District Court for the Eastern District of New York, the Bear Stearns High-Grade Structured Credit Strategies Fund and Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Fund collapsed after taking highly leveraged positions in structured securities based largely on subprime mortgage-backed securities. Cioffi acted as senior portfolio manager and Tannin acted as portfolio manager and chief operating officer for the funds, and they misrepresented the funds’ deteriorating condition and the level of investor redemption requests in order to bring in new money and keep existing investors and institutional counterparties from withdrawing money.

The fall of Bear Stearns

Bear had put many of its eggs in one basket–mortgage-backed securities–and these were fast turning rotten, and impossible to sell, as house prices tumbled.

None of the stories above had anything to do with GSEs. NOTHING. It was all about the greed of Wall Street buying up as many subprime mortgages as possible to securitize and resell. Then the bubble popped, the market dried up and they were caught with their pants down.

Now, try and answer the question:

Why did Bear Stearns, Merrill Lynch and Lehman buy up all those mortgages? If the banks were “forced” to make loans to people with bad credit, why did Wall Street so eagerly and willingly buy them up?

The GSEs may have played a role but that was not the reason the investment firms got involved in buying up loans nor was the CRA or any “forcing” of banks to issue loans.

Here’s one of the questions again:

Why did the big investment houses so eagerly and willingly buy up mortgages to bundle into MBS and CDOs? Did Bear Stearns, Merrill Lynch and Lehman Brothers want to fail? Why did AIG invest so heavily in credit default swaps based on toxic debt? What about WaMu and IndyMac? Why did they make those loans? Countrywide? They weren’t subject to any fair-lending laws. Why’d they do it? Were all these entities, staffed by the finest financial minds in the world, all schooled by good republican business schools in the Friedman mold, just rubes?

Then there’s this thread you ignored because you can’t respond.

I think it’s coincidence that doesn’t indicate causation. Correlation does indicate a functional relationship between two things.

You present speculation, I present a simple question you still will not answer.

Despite any involvement of F&F, the impetus for making the loans was Wall Street’s desire to purchase them. You can speculate on “what ifs” all day. The fact that high-risk mortgages became desirable items had NOTHING to do with F&F’s interests in expanding home ownership. In fact F&F had stricter standards on mortgages they would buy than did the Wall Street firms.

I also notice you did not comment on the widspread fraud involved with charges filed by the SEC.

Now, just explain WHY the Wall Street firms had such a hunger for those loans,REGARDLESS of the involvement of F&F.

Two Bear Stearns Cos. BSC.N hedge funds that invested heavily in securities backed by subprime mortgage loans are close to being shut down…

Little dinostem is either so stupid or so deep in denial that he can’t even understand what is obvious to any educated person. Stem, you were right when you said you are uneducated on this subject. Despite thirty years of coverup by means of Fannie and Freddie, the mandating of bad loan practices had to fail. It’s simple econ, which you simply don’t understand.

Empty insults without refutation.

What goes ’round, comes ’round.

Besides, you haven’t offered anything worth bothering to refute. Fact is, your ignorance and lack of relevant facts to support your contentions just aren’t much of a challenge any longer. Even your insults are predictable and generally not very imaginative.

Unions are wonderful institutions – for those that need to be institutionalized. Including our resident union thug.

Dino,

One last time for the intellectually hard of hearing: The Wall Street investment houses provided funding for the retail mortgage origination market by buying mortgages, bundling and securitizing them and then selling those securities to willing investors because there was a profit, a legal profit by the way, to be earned by doing so. Ir really is just that simple.

Now then, please explain and document this silly assertion:

The game was over by late 2006, it wasn’t any connection to F&F. The market for mortgage-backed securities dried up due to the rising defaults and the fact that investors were wising up to the fraud.

The only fraud I’m aware of was that committed by Franklin Raines, Jim Johnson, Tim Howard, Leanne Spencer, and Jamie Gorelick, all of whom were forced to disgorge the enormous bonuses they “earned” as a result of their fraudulent, ENRON-style accounting practices at Fannie Mae.

As for “the market dried up” apparently you are addicted to public displays of your own ignorance. From the WSJ:

The government-sponsored enterprises Fannie Mae and Freddie Mac were encouraged to expand and buy mortgage-backed securities, including those formed with the risky subprime mortgages.

Government action also helped prolong the crisis. Consider that the financial crisis became acute on Aug. 9 and 10, 2007, when money-market interest rates rose dramatically. Interest rate spreads, such as the difference between three-month and overnight interbank loans, jumped to unprecedented levels.

Diagnosing the reason for this sudden increase was essential for determining what type of policy response was appropriate. If liquidity was the problem, then providing more liquidity by making borrowing easier at the Federal Reserve discount window, or opening new windows or facilities, would be appropriate. But if counterparty risk was behind the sudden rise in money-market interest rates, then a direct focus on the quality and transparency of the bank’s balance sheets would be appropriate.

Early on, policy makers misdiagnosed the crisis as one of liquidity, and prescribed the wrong treatment.

Clearly, your dates are as erroneous as the rest of your so-called “facts.”

You present speculation, I present a simple question you still will not answer.

Despite any involvement of F&F, the impetus for making the loans was Wall Street’s desire to purchase them. You can speculate on “what ifs” all day. The fact that high-risk mortgages became desirable items had NOTHING to do with F&F’s interests in expanding home ownership. In fact F&F had stricter standards on mortgages they would buy than did the Wall Street firms.

I also notice you did not comment on the widspread fraud involved with charges filed by the SEC.

Now, just explain WHY the Wall Street firms had such a hunger for those loans,REGARDLESS of the involvement of F&F.

Dumb little dinostem: Even your attempt at summation illustrates your ignorance. Since the FHA of 1968 racialized the matter of housing, lenders have had the threat of being accused of racial discrimination in housing; as Carter and Clinton ratcheted up their demands for “affordable housing”, lenders had to find marginal people to make home loans to, especially on a racial quota basis. The key here, which you always miss, is that the increased demand for housing, created by the affirmative action home loan mandates, caused the housing bubble, which created all the rest of the bad things.
This is basic econ, about which you admit you are uneducated.
Every time to start drooling about this subject, you get smacked with the truth and humiliated. I guess you’re a masochist. More smacks coming to you, little dinostem.

overcompensatingelinas,

Go away (back to whence you came) silly fool or we shall inflict more images of Doogie Houser in a leather trench coat (your totalitarian nightmare) upon you a second time…

/Holey Grail mode

As always the Feds set up the playing field e.g. regulations in which private corporations operater. Since profit maximation is their primary goal, they the corporations will use whatever leverage they have to achieve that goal. In the case of marginal loans, the lending corporations could readily make them because the risk to them was minimal. Without the ready market provided by Freddie and Fannie Mae, most of these problem loans would never have been made.

Go back to the original contention which was that the banks were forced to lend money to people who weren’t creditworthy and that those loans went bad causing the meltdown. That’s what the conservatives are saying. That’s the point of this debate.

My contention is that this explanation is wrong. Banks did not take on high-risk debt because liberal social engineering forced them to, rather the banks AND Wall Street pursued high-risk debt to package and sell, the highest risk securitized loans bringing the best return.

That leads to the question I keep asking in order to prove that it wasn’t the CRA or other imaginary law or regulation forcing banks to make loans. It doesn’t make sense that the investment banks would so eagerly and willingly buy these loans that were “forced” on the banks. There was money to be made and THAT’S why there were so many high-risk loans written.

So far, you have only been trying to cloud the issue with complications that might be tangentially-related but do not deal with the basic question of what was the impetus for making the loans.

The game was over by late 2006, it wasn’t any connection to F&F. The market for mortgage-backed securities dried up due to the rising defaults and the fact that investors were wising up to the fraud.

Now, back to my question that precedes yours by several years:

Why did the private investment firms like Bear Stearns, Merrill Lynch and Lehman Brothers pursue subprime mortgages so eagerly and willingly? Most were bought from outfits like Countrywide, Indymac and WaMu, not the GSEs. Why would they do that?

I especially love how the usual leftards are twirling away from the actual topic just as fast as they can spin. Too fucking funny.

2H9,

Please believe me, if this was merely a matter of trying to educate Dino I would have changed topics to hot cars, handguns, or how to cook a perfect omelet long time ago. He is little more than an excuse to share information on a topic all too few people really understand. Beyond that, Dino is irrelevant.

Wall Street Firms approved risky loans because they had every reason to think that F & F would guarantee them.

There was also the threat of govt action, in terms of bringing racial discrimination suits against any lenders who didn’t make enough loans to minorities, which required the lowering of standards for making those loans. The carrot and the stick.

You’re right, Poodle, that correlation doesn’t necessarily suggest causation.

That being said, what we have here is Wal-Mart’s being downgraded because of the possibility of card check.

It’s a direct cause-and-effect.

Try again.