dconjar (November 30, 1999 at 12:00 am)

Are you slow? There was no point in this clip where Kudlow said anything like that. He said that policies like the Community Reinvestment Act were major causes of the crisis, which they were. That was a major cause of the bad debt and the malinvestment. If government policies force banks to make loans that would be impossible in a free market, a bubble will form and the market will work to correct the imbalances. Government policies caused this problem, and Kudlow's right for once.

crchrdsn (November 30, 1999 at 12:00 am)

Another thing, regardless of where you stand on this issue, there is a great article on this by the New York Times. Very prophetic if I might add. Google: "Fannie Mae Eases Credit To Aid Mortgage Lending" by the NYT published September 30, 1999.

crchrdsn (November 30, 1999 at 12:00 am)

Yes, most of the mortgages were offered by private firms. Fannie Mae and Freddie Mac are GSEs that were created to INSURE subprime loans offered by private firms. Not necessarily to offer it themselves. Also, nobody is putting a gun to your head making you take out a "predatory" subprime loan. If you think your loan is predatory, why take it out in the first place? Read the fine print. If someone can't read the fine print, they have no business taking on a mortgage in the first place.

automatt12 (November 30, 1999 at 12:00 am)

His words may make you feel good that "its the poors fault". But, is that really what happened?

automatt12 (November 30, 1999 at 12:00 am)

80% of those mortgages were handled by private firms. Most of these were predatory lenders, who used teaser rates and other tricks to get people to sign up for mortgages. Bush aggressively stepped in and prevented a massive nationwide effort by elliot spitzer to go after these predatory lenders. The three hardest hit counties in the US are 90% white.

automatt12 (November 30, 1999 at 12:00 am)

LARRY KUDLOW QUOTE TIME!!! July 2006: The bottom line here is that Bushs pro-growth tax cuts worked. After all the dust settled, the supply-side was right. January 2007: The budget deficit has plunged while the economy has soared. Think of it as the Bush Boom January 2008: I'm a guy who looks at the basic fundamentals of the economy. And I see good things happening Larry Kudlow Fans exclusive: Historic Bridge for sale in Manhattan, 1 owner. Must sell now!

specultr (November 30, 1999 at 12:00 am)

The poor are responsible for all of the derivatives (the side bets) worth trillions of dollars where we don't even know who owes whom the money? Kudlow is a disgusting figure. I'm glad that the people who listen to him and Cramer kept buying stock at the top of the cycle. They deserve to be humbled.

BustMyCh0ps (November 30, 1999 at 12:00 am)

crchrdsn is at it again. Since you obviously voted for Bush Twice and are pro deregulation don't get offended if no one believes a word you say. Ok genius.

jncohen (November 30, 1999 at 12:00 am)

In fact, a good deal of these loans were "insured" by credit swaps. Deregulated banks were selling insurance on these markets, but, because markets were deregulated, they never put aside the money to secure these insurances. That's a big part of the Lehman Bros. problem. You are drinking up too many Republican talking points. Republicans blame Franny and Freddie because it is an indirect way of blaming the poor and the govt, and not those who made the loans, made the profits, and got bailed

crchrdsn (November 30, 1999 at 12:00 am)

Of course the banks were making tons of money writing bad loans because these loans were insured by Fannie Mae and Freddie Mac. The U.S. govt. was directly subsidizing this bad debt. In a free market these banks on their own would NEVER have made these loans in the first place because they are a substantial credit risk. But when the govt. intervened and decided to subsidize bad debt.. well the rest is history.