Reply #26: This bill alone couldn't have done it

[jmowreader]

The FCIC report was WAY off, because it didn't mention the role of derivatives in the crisis.

The Utne Reader Condensed Version: In 2005, mortgage-backed securities written against subprime loans, and hedged with credit default swaps, became extremely popular. This speculation plan RELIED on massive levels of foreclosure. The only way to ensure foreclosures would occur is to intentionally make loans to people who can't afford the houses, and using very high-pressure sales tactics to get people to sign up for them.

Until we have complete derivatives reform, any "mortgage crisis study" is nothing more than giving the governor a harrumph.