HousingPANIC calls for a Congressional investigation of Alan Greenspan and the US Federal Reserve Bank and their role in the subprime mess

Nice to see the MSM doing their job, evidenced by this amazing expose in the New York Times. Now I wonder if Congress will start doing theirs.

This is serious stuff HP'ers. Banks and lenders will fail, the US economy will be decimated, millions will lose their homes and our entire financial system will fall into disrepute. All because Alan Greenspan was either too incompetent or too corrupt to do anything about the out-of-control REIC that he was supposed to be regulating, while at the same time keeping interest rates too low for too long.

HousingPANIC again calls on our corrupt Congress to open an investigation into the housing bubble and crash, with a particular focus on Alan Greenspan and the US Federal Reserve Bank. I don't know what the f*ck Schumer, Frank and Dodd are waiting for - more money or direction from Goldman Sachs perhaps? Let's get it on boys - I want subpoenas flying NOW! And the first one should be to Greenspan - the #1 cause of the Great Housing Bubble & Crash.

Fed Shrugged as Subprime Crisis Spread

WASHINGTON — Until the boom in subprime mortgages turned into a national nightmare this summer, the few people who tried to warn federal banking officials might as well have been talking to themselves.

Edward M. Gramlich, a Federal Reserve governor who died in September, warned nearly seven years ago that a fast-growing new breed of lenders was luring many people into risky mortgages they could not afford.

But when Mr. Gramlich privately urged Fed examiners to investigate mortgage lenders affiliated with national banks, he was rebuffed by Alan Greenspan, the Fed chairman.

Today, as the mortgage crisis of 2007 worsens and threatens to tip the economy into a recession, many are asking: where was Washington?

An examination of regulatory decisions shows that the Federal Reserve and other agencies waited until it was too late before trying to tame the industry’s excesses. Both the Fed and the Bush administration placed a higher priority on promoting “financial innovation” and what President Bush has called the “ownership society.”

Wexler calls for Cheney impeachment hearings. Add your signature to the petition

It's probably too late to impeach Cheney (and Bush). But I do hope to see war crimes tribunals in their future, as well as Congressional hearings long after they're gone investigating their misdeeds and law breaking.

My only question will be - same as for the Housing Bubble hearings and investigations - what the f*ck took so long?

The charges are too serious to ignore. There is credible evidence that the Vice President abused the power of his office, and not only brought us into an unnecessary war but violated the civil liberties and privacy of American citizens. It is the constitutional duty of Congress to hold impeachment hearings.

FLASH: The center no longer holds, and today was the day when it all fell apart. S&P admits to the biggest financial con game of all time.

In order for the Great Housing Con Game to work, the bagholders (the buyers of the toxic subprime and liar's loan crap) had to believe that one day they'd get paid back. Even though this garbage was being lent out to people who lied about their jobs, their income and their ability to pay. Or worse yet to people with no jobs, no credit, no income, no honesty, no problem gaming the system themselves and absolutely positively no possible way to make good on the loans once the Ponzi Scheme ended.

Yes, think Casey Serin. Think David Crisp. Think of all the get-rich-quick failed flippers, think the $30,000 income families buying $800,000 homes, think Phoenix, think Miami, think all the sheeple who thought real estate could only go up and up.

So why did the bagholders of these mortgages (China, hedge funds, pension funds, overseas investors), which were so nicely bundled up into neat little CDO's, think they'd get paid back? Why did they think that obvious hilarious loan garbage was worth the price they were paying?

Because the "unbiased ratings agencies" told them so.

Well, not anymore. S&P, one of the three major CDO ratings agencies, now staring lawsuits, jail sentences and the collapse of their game straight in the face, bitchslapped the housing and mortgage market today and simply came clean, in one of the ugliest financial mea-culpas I've ever seen. Simply put, the charade is over. And hundreds of billions, more likley trillions, will now be lost.

So now, the housing collapse goes into overdrive. The Subprime and Alt-A industries die. Hedge funds worldwide fail. Pension funds screw their retirees. Markets crash. China gets pissed. Lending tightens even more. Demand plummets even more. And home prices crash even faster.

It's all over folks. Now we just count up the damage and look for someone to blame.

S&P finally says subprime is mostly junk - New methodology is death knell for the troubled industry

WASHINGTON (MarketWatch) - Standard & Poor's just drove a huge harpoon into the heart of the mortgage credit bubble and it's going to take a long time to clean up the mess once the beast finally dies.

S&P, one of the three main credit-rating agencies that served as enablers of the subprime mortgage boom, announced Tuesday that it would lower its ratings on 612 bonds, a small portion of the mortgage-backed securities it had given its seal of approval to.

But the bigger news is that S&P isn't going along with the charade any more. S&P said it would change its methodology for ratings hundreds of billions of dollars in residential mortgage-backed securities.

And it would review its ratings on hundreds of billions of dollars in the more complex collateralized debt obligations based on those subprime loans.

A lot of debt will be downgraded to junk status. A lot of that debt will have to be sold at fire-sale prices. A lot of pension funds and hedge funds that once thrived on the high returns they could get from investing in subprime junk will now lose a lot of money.

S&P's announcement is a death warrant for the subprime industry. No longer will mortgage brokers be able to help buyers lie their way into a home. Fewer stressed homeowners will be able to refinance their mortgage, thus extending and exacerbating the housing bust.

"We do not foresee the poor performance abating," S&P said. Prices will fall, and foreclosures will rise. More mortgage fraud will be uncovered as the tide goes out.

For true HP wonks, you can read the whole nasty report here.