Quote Originally Posted by Lyle View Post
Well the market has already lowered prices on houses, it has already weeded out most of the bad loans, people are out of their homes they couldn't afford and people are out of jobs they abused. Once there is an upturn in the economy which could be in a year, could be sooner people will be ready to buy those houses, hell people are already ready to buy those houses to sell later and make profit on.


Government will of course regulate (too late) but what it really needs is to have and use oversight which it had the opportunity to do before the shit hit the fan (with OFEO an oversight committee created to look over Freddie Mac) but certain politicians blocked the oversight of Fannie and Freddie.
http://www.youtube.com/watch?v=YL36nwCSYUM
F anf F had nothing to do with this Lyle. They're just a cog in the system, and were actually prevented from buying the dodgy subprime stuff by government regulation. Fannie lost 56% of her business in less than two years from 2003 onwards when the GOP allowed (freshly unregulated) mortgage firms to sell mortgages direct to (freshly unregulated) investment banks and similar financial institutions. F and F are only ever mentioned because they're the only way (other than an irrelevant 30 year old Jimmy Carter Act) that the GOP can tie this to Democrats, when in fact not one of the decisions that caused the current mess was made by a Dem, all being made by Republicans.

Once Wall Street got their hands on them they turned them into securities. But these securities still shouldn't have been allowed on the market except as junk bonds. Instead Wall Street firms bribed the (freashly unregulated) credit ratings agencies to give them a high rating. I'll go and get some of the evidence that's come out of the current hearings about this. Somebody emailed it to me but I junked it. There'll be a lot of this over the next months and it might be wort starting a thread for it.