Conservative Analysis of Credit Crisis and Economic Downturn
in 1999 there was $160m of subprime loans with a default rate of about 2% as the CDA was offset by strong anti-predatory lending laws and state enforcement.
in 2002 the Executive branch of govt began pre-emption policy telling state AGs not to enforce state laws on predatory lending that were tougher than federal laws. ( http://www.napawash.org/resources/peirce...
in 2002 at the urging of Republican Congress and White House, Alan Greenspan loosens credit and floods market with dollars.
in 2003 the SEC with a Bush minion lifted 12:1 leverage limit on investment banks.
in 2004 federal pre-emption regarding predatory lending became rule, via directive of the Office of the Comptroller, a division of Treasury (Bush appointees).
in 2005 dollar begins to tank in a more pronounded way due to huge money supply and soaring U.S. debts piled up past few years.
in 2006 subprime loans grew to $600b.
in 2007 energy prices (and other commodities such as food) soar, making paying mortgages and other expenses more difficult for middle Americans.
in 2007 Investment Banks were levered to about 40:1, except at month end to satisfy regulators when they were about 30:1
in 2008 foreclosures soar approaching 9% and show no sign of abating until mid to late 2009.
in 2008 Bear Stearns, Lehman, Merrill, Goldman Sachs and Morgan Stanley all had to recapitalize at draconian terms, go bust or be bought for less than 10% of their previous value.
in 2008 credit so siezed up that banks won't even lend to each other for longer than a day or two, creating a business cash shortage and forcing many businesses to cut expenses decreasing employment levels to their lowest pct of workforce in over a decade and a half.
in 2008 bailouts of financial institutions by the Federal Govt will exceed $1 trillion, the economy is noticably slowing, household income is down and unemployment continues to ramp up.
It's all Bill Clinton's fault, vote for McCain.