Oh, noeeezzz! I've been PWNED!!
The current recession goes back to the housing crisis. But, who created the housing crisis? The answer that liberals give you is the free market. The problem is, the free market was not in control of the two companies that the housing crises stems back to. Freddy Mac and Fannie Mae are GSEs, government sponsored enterprises. These two enterprises gave out thousands of mortgages to poor people who couldn't pay back their loans.
And then there's reality (emphasis leg-humpingly added):
While attention has been focused on the relatively tiny US "sub-prime" home mortgage default crisis as the center of the current financial and credit crisis impacting the Anglo-Saxon banking world, a far larger problem is now coming into focus. Sub-prime or high-risk Collateralized Mortgage Obligations, CMOs as they are called, are only the tip of a colossal iceberg of dodgy credits which are beginning to go sour. The next crisis is already beginning in the $62 TRILLION market for Credit Default Swaps.
Anyone who tries to write about the current economic crisis without mentioning credit default swaps is merely demonstrating their grotesque, hysterical ignorance.
Oh, wait, Justin's a Blogging Tory ... forgive me that last bit of unnecessary redundancy.
JUST FOR FUN, it would be amusing to watch Justin describe how the sub-prime mortgage fiasco alone is responsible for the current recession. Let's let Justin hang himself with his own words by calculating just how much (or how little) effect the sub-prime market could have on a global economy. First, here's Justin, pulling numbers out of his ass:
These two enterprises gave out thousands of mortgages to poor people who couldn't pay back their loans.
So, Justin, it's your position that "thousands" of bad mortgages to poor people who couldn't afford them are somehow responsible for the current world-wide recession? OK, let's go with that and see where it takes us.
How many "thousands" of these mortgages are we talking about, Justin? Five? Ten? Twenty? Hey, Justin, let me be generous and say, oh, half a million. Yeah, for the sake of argument, even though you claim only "thousands" of allegedly bad mortgages, I'll hypothesize that there were half a million. Does that work for you? I don't want to shortchange you, I want to give you every opportunity to make as dire a case as possible.
Movin' on, then, what was the average value of one of these mortgages? Now, given that these were sub-prime mortgages (and Justin himself claims that they were given out to "poor people"), I think it's reasonable to assume that they didn't represent stunningly expensive properties, but I'm going to give Justin plenty of leeway and assume that each of these mortgages was worth, oh, what the hell, half a million dollars and I think we can all agree that I'm bending over backwards to be generous to Justin.
And, finally, in terms of a meltdown in the sub-prime market, let's assume a totally worst-case scenario and assume that every single one of these mortgages tanked completely and lost every single penny of value of its original mortgage price. You still with me? That is, in order to be (more than) fair to Justin, I'm proposing the absolutely worst possible outcome to see just how much this would affect the global economy.
So ... half a million sub-prime mortgages, each worth half a million, and every single one of them tanking and losing its entire value, gives us a (ridiculously over-inflated) loss of ... $250 billion.
Read that again: $250 billion.
Positively worst-case with ridiculously generous numbers, Justin. And yet, here we are, watching the U.S. getting revved up with a stimulus package worth almost $800 billion. Why, Justin? Go on, explain that to me, Justin. Because, given that the entire sub-prime situation could have been (according to my out-of-thin-air numbers) resolved with a mere $250 billion, how exactly is it that were talking, literally, trillions of dollars in the long run to repair the world economy?
Let's hear it, Justin ... how exactly does that work? Oh, and Justin? It's safe to say that one of us is howlingly ignorant of the basics of what's happening here, economics wise. And I'm pretty sure it's not me.
DEAR BLOGGING TORIES: Now we'll see if Justin can walk the walk.