Bush ‘Ignored Remarkably Prescient Warnings That Foretold The Financial Meltdown’»

[Joanne98]

As the housing bubble burst and the ensuing economic crisis gained steam, conservatives set about trying to find someone to blame for the meltdown of the mortgage market. First, it was Fannie Mae and Freddie Mac, and then loans made to low-income people through the Community Reinvestment Act.

As The Wonk Room has noted, the problem was actually the Bush administration’s failure to regulate the mortgage markets, while financial institutions developed ever-more sophisticated instruments for securitizing mortgage debt and selling it around the world.

Today, the Associated Press offered more evidence of Bush’s failure, reporting that his administration “ignored remarkably prescient warnings that foretold the financial meltdown,” and “backed off proposed crackdowns on no-money-down, interest-only mortgages years before the economy collapsed, buckling to pressure from some of the same banks that have now failed.”

In 2005, banking regulators proposed a series of regulations that “reads like a list of what-ifs“:

- Regulators told bankers exotic mortgages were often inappropriate for buyers with bad credit.

- Banks would have been required to increase efforts to verify that buyers actually had jobs and could afford houses.

- Regulators proposed a cap on risky mortgages so a string of defaults wouldn’t be crippling.

- Banks that bundled and sold mortgages were told to be sure investors knew exactly what they were buying.

- Regulators urged banks to help buyers make responsible decisions and clearly advise them that interest rates might skyrocket and huge payments might be due sooner than expected.

“In hindsight, it was spot on,” but “people kind of looked at us regulators as old-fashioned,” said Jeffrey Brown, a former top official at the Office of Comptroller of the Currency. Indeed, the administration “trusted market forces and discounted the value of government intervention in the economy,” thus dismissing the proposed regulations.

Continued>>>
http://wonkroom.thinkprogress.org/2008/12/01/bush-warnings/

[tabatha]

1. Yeah, he was stuck on the "economy is strong".

[htuttle]

2. "Goldman-Sachs Determined To Strike In US"

They probably put the warning in his PDB again -- they should know by know that he doesn't pay attention to that stuff. Besides, I'm sure that his advisers told him that it was just 'historic and analytic in nature.'

:eyes:

[Joanne98]

8. Ooh good one!

[OnyxCollie]

10. Do you remember the Al Qaeda threats to Goldman-Sachs?

It was supposedly a hoax.

Letter to Newsday claims Goldman threat a hoax
http://www.newsday.com/news/local/am-gold0807,0,5999094.story

[theoldman]

3. Don't forget that very ignorant people have no foresight.

The same applies to his greedy advisers.

[Vincardog]

4. “trusted market forces and discounted the value of government intervention in the

economy,” thus dismissing the proposed regulations.
As those proposed regulations would have hindered their attempts to perpetrate financial rape on the rest of us.

How did we ever allow people who believe
"Gubmint is da prublem"
to take over our government?

Oh yeah we were illegally overruled in a judicial coup.

[Skittles]

5. wow, he has never ignored warnings before, has he

oh wait

[blm]

6. The media HELPED him ignore it. Did they discuss that part of the 2004 Dem platform

that Kerry personally put up, where he specifically targeted the need to ward off the impending mortgage and credit crisis?

Nah....just like when he warned of growing global terror efforts back in 1997, the issue just wasn't important to the corporate media and their talking heads.

[Joanne98]

9. That's true. We need to stick it to them next year.

[depakid]

12. They did more than ignore it- they actively suppressed information

partially because they had an interest in all the various advertising revenues that went along with the housing bubble and the cheap risky credit being tossed around by the Washington Mutuals of the world.

[blm]

13. I agree - and the reporters who TRY and report it are warned off by management.

I can't even tell you how many times stories were pulled by McClatchy, and they were one of the better news organizations.

[Pirate Smile]

7. Shocking! He ignored the financial equivalent of the "Bin Laden Determined to Strike Inside the US"

Presidential Daily Brief of August 6, 2001.

[Crunchy Frog]

11. Yes, but it's something "nobody could have predicted".

[Octafish]

14. FBI warned him in 2004.

FBI saw threat of loan crisis - A top official warned of widening loan fraud in 2004, but the agency focused its resources elsewhere

Bush is a traitor in every sense of the word.