In September of 1999 the New York Times ran an article predicting the collapse of the banking system 7 years before it happened: Fannie Mae Eases Credit To Aid Mortgage Lending In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's. ''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.''
since everyone but the factually challenged understands that f&f had little to do with the crash its probably not relevent.
It's very relevant. It wasn't the direct cause of the crash, but it provided the fuel -- a massive increase in mortage debt.
You want to know how it all happened, read this article. They knew, they all knew because they were told. Their decision was to fire the person doing the telling. A bit of a long read, but worth it if you want the whole truth. http://www.pbs.org/wgbh/pages/frontline/warning/interviews/born.html "I think it could include thousands of financial services industry participants and other large institutions all over the world. And I think that's what happened. As the market continued to grow, with even less oversight and regulation, until it reached more than $680 trillion in notional value, an enormous potential for disaster had grown. What happened after I left the agency in June 1999 was the President's Working Group did come out with an over-the-counter derivatives report (PDF) to Congress that strongly suggested that ... there was no need for regulation. And as a result of that report, a statute was passed in 2000 called the Commodity Futures Modernization Act [CFMA] that took away all jurisdiction over over-the-counter derivatives from the CFTC. It also took away any potential jurisdiction on the part of the SEC, and in fact, forbids state regulators from interfering with the over-the-counter derivatives markets. In other words, it exempted it from all government oversight, all oversight on behalf of the public interest. And that's been the situation since 2000."
also known as the GrammâLeachâBliley Act. Sen. Phil Gramm (R, Texas), Rep. Jim Leach (R, Iowa), and Rep. Thomas J. Bliley, Jr. (R, Virginia), the co-sponsors of the GrammâLeachâBliley Act. it is true that clinton signed the bill but was skeptical at the time and has since said it was a huge mistake. http://en.wikipedia.org/wiki/Gramm–Leach–Bliley_Act