“Fed Misread Fiscal Crisis, Records Show” ~ N Y Times 12/22/2014
“As Crisis Loomed, Yellen Made Wry and Forceful Calls for Action” ~ N Y Times 02/22/2014
SERIOUSLY? The crisis was caused by the banks and their actions and by Congress and their inaction. The Feds were simply ugly cheerleaders. The “banks,” and I use the term loosely, caused and are still causing the crisis. Those banks knew exactly what they were doing. If the banks had not previously been very conscientious about safeguarding depositor’s funds, I could say “maybe.” However, the banks knew that people could not afford the homes they were financing and they did it just to collect as much money from those poor people that they could. then, as fast as they could, they jumbled up all those mortgages, without even signing them and sold them to other people and institutions, knowing full well that the homeowners would eventually default. On top of that, some of them even made side bets to cover their “losses.”
When the crash came, most of the damage could have been averted had congress declared that the banks could not foreclose on any of those properties. All of the homeowner’s mortgages should have been renegotiated at a reasonable assessed value for the dwelling and then at an affordable rate that would not bankrupt the homeowner- at a fixed rate over 30 years. The banks were simply going to write those houses off and they would sit vacant and deteriorate until the 1%ers could snap them up and “rent” them back to the people who were kicked out, anyway.
This would have prevented many people from being thrown out on the street. It would have preserved the credit rating of those people and it would have instantly stabilized the housing market. What it would not have done is transfer billions of dollars to the 1%ers.
Essentially, the banks stole the equity that the people had in those homes and they also stole those homes. They continue to screw with the people who are lucky enough to still have their homes and still Congress does nothing to help them.
Actually Congress did act, but not to improve the situation. Congress wrote checks to the banks to reimburse any losses they may have suffered when they perpetrated this whole scheme. They gave the banks additional billions of tax dollars with absolutely no strings. This is exactly where they could have required the banks to act responsibly, but they did no such thing and the bankers laughed all the way to, well, you know where, the Caymans.
Now we are being asked to believe that no one in the Fed knew what was going on? Just where do you think those Feds came from any way? Wall Street, of course. MS Yellen did not become a billionaire because she does not know what is going on. Ben Bernanke only shows two million in accumulated wealth. One can only speculate where the balance is kept.
And, then there is that whole LIBOR corruption that was perpetrated by? Why yes, those very same banks we bailed out. They were rigging the interest rates from the beginning and Still, no one has gone to prison. What I am really surprised at is why Wall Street doesn’t look like Freedom Square, over in Kyiv. “Occupy” certainly would have been a place to start.