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Clinton's CRA and Fannie Mae caused Europe's housing bubble!

And if you believe that headline then you are a Republican.

There are several problems with the Republican stupidity surrounding the
indictment of the Clinton controlled HUD regarding the financial bubble
that engulfed the entire world.  Not the least of these problems is the
fact that HUD and Fannie Mae have absolutely nothing to do with real
estate in the UK or Germany or anywhere other than the United States.

http://upload.wikimedia.org/wikipedia/commons/b/b0/Graph-house-
prices-1975-2006.gif

You might notice right away that the x axis on this price chart is in
pounds and opposed to dollars.  And that is because it was a world wide
housing bubble and not anything limited to the United States.

So what is it that the United States could have done to cause such a
happening?  If your answer is that "by making loans to people who could
not repay the loans" then you would be right of course.  But that doesn't
tell us _WHY_ these loans were created all over the world. It doesn't
tell us why the financial people loaned money that could not be repaid.
Would _you_ lend money to people who could not repay it?

The answer to the question is that the world's currency is the dollar and
that most of the financial tap dancing was done by the United States
financial hucksters through the use of "securitization" and Credit
Default Swaps and the like. In essence, the free market was allowed to
run wild _creating_credit_ far beyond any reasonable chance of
repayment.  The character of the borrowers had little to do with the
problem.  The people making the contracts (the mortgage sector) would
have loaned money to blow up dolls if they could have gotten away with it
because they got paid and the sold the loans immediately.  To quote Anna
Schwartz (the world's authoritative freeper):

Securitization  substituted the “originate to distribute securities�
model of mortgage lending in lieu of the traditional “originate to hold
mortgages� model. Additional banking innovations, notably the practices
of the derivatives industry made mortgage lending problems worse;
shifting risk that is the basic property of derivatives in directions
that became so complex, neither the designer nor the buyer of these
instruments apparently understood the risks they imposed and implicated
derivative owners in risky contingencies they did not realize they were
assuming. Derivatives as well as mortgage backed securities were
difficult to price, an art that markets haven’t mastered. The
securitization of mortgage loans spread from the mortgage industry to
commercial paper issuance, student loans, credit card receivables, and
other loan categories. The design of mortgage-backed securities
collateralized by a pool of mortgages assumed that the pool would give
the securities value. The pool, however, was an assortment of mortgages
of varying quality. The designers gave no guidance on how to price the
pool. They claimed that rating agencies would determine the price of the
security. But the rating agencies had no formula for this task. (http://
web.gc.cuny.edu/Eusc/Schwartz08.pdf)

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No, bigots, it wasn't the CRA or ACORN or the blacks and the Mexicans
that caused the financial meltdown all over the world.  It was
deregulation of the financial sector in the nation that controls the
world's reserve currency and in all the other nations that followed suit
and marched to the drum of Allen Greenspan the Libertarian.

--
"Those are my opinions and you can't have em" -- Bart Simpson

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