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Friday, 9 April 2010

Clinton era mandate to make mortgages cheaper for minorities to blame for global financial crisis says Greenspan

Brazil's President Luiz Inacio Lula da Silva recently said about the financial crisis: "It is a crisis caused and encouraged by the irrational behaviour of white people with blue eyes," the president said, "who before the crisis appeared to know everything, but are now showing that they know nothing."

It seems that he was actually half right. The correct statement would be (going by Alan Greenspan's account); "It is a crisis caused by irrational, self loathing, white liberals, who before the crisis said it was racist that minorities are more likely to rent, but are now showing they knew nothing".

Article from the Washington Times - hatip Amrem

Mr. Greenspan pointed to the mandates Fannie and Freddie received in 2000 from Congress and the Clinton-era Housing and Urban Development Department to make housing more affordable to minorities and disadvantaged people by using their vast resources to purchase more sub prime mortgage securities.

As the mortgage giants started to scarf up the sub prime securities, much of which had been engineered to earn AAA ratings from credit rating agencies, that caused rapid growth in the sub prime market, he said, estimating that it burgeoned from less than 2.5 percent of the mortgage market in 2000 to encompass 40 percent of Fannie's and Freddie's mortgage portfolios by 2004. Read more


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