Matt Taibbi tramples Bloomberg's blame Congress meme & Bloomberg himself

[tpsbmam]

As a reminder, Bloomberg asserted that the OWS anger was misdirected -- Congress was to blame for the mortgage meltdown, not Wall Street. From FDL:

“I hear your complaints,” Bloomberg said. “Some of them are totally unfounded. It was not the banks that created the mortgage crisis. It was, plain and simple, Congress who forced everybody to go and give mortgages to people who were on the cusp. Now, I’m not saying I’m sure that was terrible policy, because a lot of those people who got homes still have them and they wouldn’t gave gotten them without that.

“But they were the ones who pushed Fannie and Freddie to make a bunch of loans that were imprudent, if you will. They were the ones that pushed the banks to loan to everybody. And now we want to go vilify the banks because it’s one target, it’s easy to blame them and congress certainly isn’t going to blame themselves. At the same time, Congress is trying to pressure banks to loosen their lending standards to make more loans. This is exactly the same speech they criticized them for.”

Part of Taibbi's brilliant response:

<snip>

Did government efforts to ease lending standards put a lot of iffy borrowers into homes? Absolutely. Were there a lot of people who wouldn’t have gotten homes twenty or thirty years ago who are now in foreclosure thanks to government efforts to make mortgages more available? Sure – no question.

<snip>

In order for this vision of history to be true, one would have to imagine that all of these banks were dragged, kicking and screaming, to the altar of home lending, forced against their will to create huge volumes of home loans for unqualified borrowers.

In fact, just the opposite was true. This was an orgiastic stampede of lending, undertaken with something very like bloodlust. Far from being dragged into poor neighborhoods and forced to give out home loans to jobless black folk, companies like Countrywide and New Century charged into suburbs and exurbs from coast to coast with the enthusiasm of Rwandan machete mobs, looking to create as many loans as they could.

They lent to anyone with a pulse and they didn’t need Barney Frank to give them a push. This was not social policy. This was greed. They created those loans not because they had to, but because it was profitable. Enormously, gigantically profitable -- profitable enough to create huge fortunes out of thin air, with a speed never seen before in Wall Street's history.

Much more at Taibblog.

:applause:

[libinnyandia]

1. I could never understand how Bloomberg was able to appeal

to enough New Yorkers to win election 3 times. Then , of course, I could never understand how they elect Giuiliani twice. Thank God they vote better for President.

[zbdent]

2. and how many of those "forced mortgages" were actually still with the

original bank that initiated them, anyway?

I remember a WHOLE lot of "bundling" going on, where a bank "needed cash" (to acquire another bank, in many cases, or to fix their books to appease the major shareholders), and sold a huge number of loans "bundled together" to another "lending institution" ...

[SomethingFishy]

3. Taibbi is 100% correct. I had a friend who bought a house

during the "boom" and he told me the bank spent an insane amount of time trying to convince him to borrow way more than he could afford. He said he had to literally fight with his bank to get a loan small enough that he could afford to pay it off.

[myrna minx]

4. K&R n/t

[applegrove]

5. If only we could show bloomberg this: Proof that the ceos were pushing deregulation.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x2239828