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Dear Lord, NOW He Admits It?



March 14, 2008 – Comments (6)

Just noticed this via housingpanic. Nice to see Ben finally got some religion, but he's a couple years too late, and he neglects to mention that it was his job to oversee lending. So, essentially, he's coming close to admitting that he shirked his duty.

Some of us have been screaming for months (and no one more loudly or entertainingly than HousingPanic) that this isn't a subprime problem, its a problem with the entire lousy mortgage industry, the crooked National Association of Realtors, greedy Americans, and a giant slug of negligently complacent new media.

Nice, but not quite there, and way too late.

Discussing the current housing crisis, the Fed chairman pointed out that, contrary to popular opinion, 'the current high rate of delinquencies and foreclosures is not confined to the subprime market.'

Last year, about 45 pct of foreclosures were on higher-rated prime, near-prime or government-backed loans.

'Across market segments, delinquencies are rising fastest on the more complex loans originated in the past few years,' Bernanke said. Many of those went to borrowers in weaker financial conditions or who may hot have fully understood what they were undertaking.

6 Comments – Post Your Own

#1) On March 14, 2008 at 7:52 PM, mickeyc21 (29.82) wrote:

"Many of those went to borrowers in weaker financial condition or who may not have fully understood what they were undertaking"

Translation: Lied on application, aided by mortgage originator.

I don't even read opinion pieces anymore if I see the word "subprime" because I know the writer has no idea. Saying this is a subprime problem is like saying the San Diego fires were a heat related problem. 

TMF - how do you get away with stating the obvious? The Motley Fool appears to be a 100% stock pump website and if I understand correctly the "TMF" in your name means you work there? 

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#2) On March 14, 2008 at 7:57 PM, TMFBent (99.45) wrote:

It means I work here, but review my work and I think you'll find I'm anything but a "pumper."

And this "obvious" thing has been something I've been trying to get people to pay attention to for quite a while now. Sometimes, it takes more than a few people to get everyone else to realize the emperor's butt is showing.


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#3) On March 14, 2008 at 8:08 PM, FourthAxis (< 20) wrote:

Don't worry, it's still earth.

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#4) On March 14, 2008 at 8:50 PM, mickeyc21 (29.82) wrote:

TMF - I read all your posts. I'm aware you're on the side of reality. The overall tone of MF is go long regardless (I've seen five "buy now!" Motley Fool ads on other websites today) of the situation. Those who suggest being in cash on this site or - horror- being short are guaranteed an attack reply.


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#5) On March 15, 2008 at 5:36 AM, saunafool (< 20) wrote:

Mickey, If you spend time in Fooldom, you'll realize that about the only time you get attacked is if you say something bad about Apple, maybe Google, or if you expose someones favorite penny stock as a fraud.

A couple years ago I did some freelance writing for the Fool and I wrote about investing in Gold, probably the most un-Foolish asset class, especially during a bull market in stocks:

Solid Gold in the 70's

Gold Better than a Dollar

I'll Take the Gold

Not only did the Fool publish these articles, the vast majority of the comments I received were positive. I don't even think I received any hate mail for saying I'd take Gold over Google.

Just in the interest of disclosure, I still own IAU, GLD, and I've added SLV over the last 2 years.

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#6) On March 15, 2008 at 10:56 AM, TDRH (96.61) wrote:

What I don't understand is how these investment banks continued down the path of destruction. The individuals that lead these organizations are some of the best and the brightest, but they could not plan for this to happen? For the financial sector to experience this large of a collapse during relatively high employment and low interest rates is incredible to me.

I can understand not being able to plan for a major catastrophe like 9-11 and or Katrina, but the economy is still relatively strong, employment levels are high and interest rates are still at historically low levels. These companies and their leaders have been grossly negligent.

TMF is not a pump and dump site. The only thing they try to sell are their reports. They consistently disclose their own investments and in my experience are beyond reproach.

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