Red Tag Sale Photo Comment

[chuck]

While the Fed may have made it available, the financial institutions didn't have to loan it out (aka the dance floor was getting pretty crowded). While it is true that the federal government does print money and mint coins most of the money is floated by the banks and financial institutions based on "guidance" from the Federal Reserve. The banks were the ones that were literally creating money out of nothing (with the blessing of the Fed) by making loans with insanely low backing. "Conservative" banks were doing this at the rate of 20-1 (aka they created $20 for every $1 they had in assets). I hate to think what the rest of the group was doing.

[Steamfan77]

Why don't they just put a bag of shite on someone's stoop, light it on fire, and ring the bell

Andy

[Rufus T. Firefly]

The banks were the ones that were literally creating money out of nothing (with the blessing of the Fed) by making loans with insanely low backing.

Yup. And folks that should never have been approved for a loan were approved and went out buying houses and stuff that they really couldn't afford.....and then it was the banks' fault that these folks made bad decisions (in part it was...but not entirely).

And then the banks get bailed out, and instead of loaning the money they actually did have, they pocketed it.

Makes you sort of

[Roy]

I'd like to know what math they used, that allowed instruments that included sub-prime mortgages to be rated AAA.

[Rufus T. Firefly]

I'd like to know what math they used, that allowed instruments that included sub-prime mortgages to be rated AAA.

They just made it all up and stamped approved on it. That's this past year's lesson: just make stuff up and say it repeatedly if you want to be believed.