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      09-10-2012, 02:32 PM   #11
yakev724
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Just want to clarify.


Quote:
Originally Posted by BKsBimmer View Post
But that's kind of difficult to do especially since George W Bush and friends left us with worst financial crisis in history since the great depression - all wrapped up in a bow and handed it to the incoming president like an orphaned infant laid on an unsuspecting person's doorstep.

The credit/mortgage crisis cannot be blamed squarely on Bush. It was a product largely of forces out of his administration's immediate control.

The bailout of a hedgefund in 1998 (LCTM) added significantly to the plagued risk-ignorant culture on Wall St. Then, Clinton signed some brilliant legislation. First Gramm-Leach-Bliley, aka repeal of Glass-Steagall, allowing investment and commercial banks to merge, growing them to sizes requiring some sort of bailout if they were to fail, and more importantly, allowing them to play with regular clients' money. Next, Clinton signed the Commodity Futures Modernization Act, allowing for unregulated trading of complex derivatives which would play a central role in the 2008 crisis. The banks would later convince the SEC to allow them to leverage past 12:1 in 2004, which also had a tremendous effect on the bubble.

From the tech crash in 2000 and through the next few years, Greenspan continuously lowered interest rates, trying to spur the stock market. Low interest rates brought about a necessity for large ETFs and mutual funds to look for ways to increase returns, growing the mortgage fraud, subprime lending, risk-passing, and the credit bubble overall.

Once it burst, Bush's admin. didn't act, so the Fed stepped in and assumed a ton of power, most of which it still holds. If Bush is to be blamed for one thing economically (not including the wars), that should be it.




Quote:
Originally Posted by BKsBimmer View Post
The stock market is at an all time high, and Wall Street is having record profits.
No.
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