A contribution from Chris Cook , via European Tribune : “ The Credit Crash marks the end of an era for the global financial system, and the beginning of another. Few understand our modern banking system, but in simple terms it consists of banks as “credit intermediaries” who create credit based upon an amount of capital specified by international banking regulators. This interest-bearing credit constitutes most of the money in use, the balance ( However, it was not Bank capital which u
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Wired magazine had a great article explaining the causes behind our credit problems . Unfortunately, they blamed math as the root cause of the problem, which is silly. It’s like blaming a hammer for smashing your thumb. A decade ago, most investors didn’t like to put their money into mortgage pools (unless they were backed by the US federal government) because they couldn’t quantify the risk. Then along came a clever guy named David Li who developed a formula to measure the amount of risk.
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On Friday, U.S. Attorney Rod J. Rosenstein announced a new effort to fight against mortgage fraud in the state of Maryland and beyond. The new Maryland Mortgage Task Force will go after fraud crimes that cross over city, county, and state lines, said Rosenstein. The task force will not just go after fraudulent mortgage consultants, but also after the lawyers, appraisers, and accountants who aid them in taking money from homeowners. “None of our agencies alone has the resources to be able to
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District-based Carlyle Group, a giant private-equity firm, has raised around $1 billion and hopes to add $2 billion more for investments in financial institutions that come up for sale under President Obama’s economic rescue plan, according to people familiar with the company’s plans. The buyout firm will use the money to help with the recapitalization of banks whose balance sheets have been rocked by toxic mortgage assets and are in need of cash, said the sources, who spoke on condition of an
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Earthside Comments: Well, President Obama got the trillion dollar “stimulus package” he and the Dimocrats wanted. A trillion dollars? At least … interest will have to be paid on all that borrowed money … easily a trillion dollars or more. Add this to the bank bailout borrowing the federal government is already doing — add this to the billions upon billions of dollars Obama and the Dimocrats will be proposing soon for other programs: the new mortgage bailout plan, more for the ‘new energy
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