Who Really Caused The Mortgage Mess? Mayor Bloomberg Knows. So Do I.
Well an interesting turn of events has occurred. New York Mayor Bloomberg has spoken the truth as to the cause of the mortgage market meltdown and is now being rebuffed by many a former sycophant and pundit who offered him more than support in the form of political cover. As this truth telling impacted the legitimacy of the "Occupy Group" well it became time to trash Mr. Mayor.
My take on the Mayor is he is a wealthy opportunist but nobody's fool. Maybe opportunist is not a fair 
assessment but let us have a look. A lifelong Democrat who opted to switch party affiliation in order to run for Mayor. I guess his $20 odd billion was beginning to bore the man and he needed more attention or just wanted to push New Yorkers around. (Especially you dastardly smokers) After two terms had expired he bribed, err excuse me he got an exemption to run for a third term. The man built a fine business but I leave it to your respective judgment to determine his motives.
So what did Mr. Mayor say? Well apparently he is at his wits end over these boy/girl scouts camping out in a N.Y. park hurting commerce and exhausting police resources among other offenses. They do play a mean bongo when not toking a bong however. In other words a mess. So the Mayor pointed out that it was not Wall street who created the mortgage mess which created the balance of the meltdown. As an industry veteran of 29 years I concur wholeheartedly with the mayor.
The reality is it all started at FNMA and FREDDIE in the latter 90's and was dictated by political leaders such as President Clinton and Barney Frank. They were just buying votes with someone else's easy money and perhaps good intentions. They altered the lending policies which had served us well to that point. This is in fact the genesis. Pressure was routinely applied to make these substandard loans. Kind of like what the S&L's did in the 80's. Same result. Of course once Wall Street realized there was fee income to be made, they joined the party and the old Guru of Guru's, Dr. Greenspan encouraged the music to play on to keep the game going so as to not implode on his watch. I heard him advise many a lender to get more creative in its loan programs. With my own ears!
Continued on the next page
Follow Technorati