S&L Crisis, Dot.com bubble, Enron & WorldCom ..now

[Gary Allan]

This just gets better all the time. You've got to love it when a plan comes together.

Quote:

---

Now, as then, Wall Street firms and entrepreneurs made fortunes issuing questionable securities, in this case pools of home loans taken out by risky borrowers. Now, as then, bullish stock and credit analysts for some of those same Wall Street firms, which profited in the underwriting and rating of those investments, lulled investors with upbeat pronouncements even as loan defaults ballooned. Now, as then, regulators stood by as the mania churned, fed by lax standards and anything-goes lending.

Investment manias are nothing new, of course. But the demise of this one has been broadly viewed as troubling, as it involves the nation’s $6.5 trillion mortgage securities market, which is larger even than the United States treasury market.

Hanging in the balance is the nation’s housing market, which has been a big driver of the economy. Fewer lenders means many potential homebuyers will find it more difficult to get credit, while hundreds of thousands of homes will go up for sale as borrowers default, further swamping a stalled market.

---

NY Times - subscription required

 

[Al]

This country lives (and will die) on debt. The Federal Government is awash in debt, the balance of payments against the U.S, and individuals are all in debt. What's the surprise here.

 

[Master ACiD]

i say good riddance. the lenders have been too greedy anyways.

 

[Pablo]

Quote:

---

Now, as then, Wall Street firms and entrepreneurs made fortunes issuing questionable securities,

---

Oh those evil people - I guess the NYT has dropped all pretense of partiality and no longer uses words like "some", or "a few" or "selected". Lumping these incidents together is historically silly and purposely divisive. The similarities between the "S&L crisis" and the "DOT.com" mania may appear superficially similar, but last time I checked no senators were caught with their hand in the cookie jar because too many people paid too much for homegrocer.com equity.

I know NY Times is doing their best to twist this, but the housing market is not going to nosedive, the fact remains that the so called "sub-prime" loans are a relatively small portion of the traded mortgage-backed securities.

I am not saying "throw caution to the wind". There have been some pretty bizarre loan practices, and loans given to poor folks with too little unstable income and too much existing debt. To the chagrin of folks who have pulled it off and come around, this practice must cease. But to throw up the all out "crisis" flag is just some weird fear mongering.

 

[427Z06]

Quote:

---

This just gets better all the time. You've got to love it when a plan comes together.

Quote:

---

Now, as then, Wall Street firms and entrepreneurs made fortunes issuing questionable securities, in this case pools of home loans taken out by risky borrowers. Now, as then, bullish stock and credit analysts for some of those same Wall Street firms, which profited in the underwriting and rating of those investments, lulled investors with upbeat pronouncements even as loan defaults ballooned. Now, as then, regulators stood by as the mania churned, fed by lax standards and anything-goes lending.

Investment manias are nothing new, of course. But the demise of this one has been broadly viewed as troubling, as it involves the nation’s $6.5 trillion mortgage securities market, which is larger even than the United States treasury market.

Hanging in the balance is the nation’s housing market, which has been a big driver of the economy. Fewer lenders means many potential homebuyers will find it more difficult to get credit, while hundreds of thousands of homes will go up for sale as borrowers default, further swamping a stalled market.

---

NY Times - subscription required

---

How old is this article? I thought I read something very similar just a few months ago?