It\’s a predictable whingefest.
Everything is to do with deregulation and the neoliberal bastards. However, let us take one declamatory statement, at near random, and examine how well he knows his stuff.
Unregulated lenders, we now know, pushed millions of Americans into home loans they could not afford. Much-deregulated investment banks packaged those lousy loans up into investments that the nation\’s ratings agencies promptly declared to be of the first quality.
Err, no, they didn\’t. The ratings agencies that is.
What was done was securitisation, something that Fannie and Fredie were also doing, indeed, what they were set up to do. And Sallie Mae (?) has been doing it with student loabns since forever, credit card receivables are treated the same way etc etc etc.
There\’s nothing new or strange about securitisation at all. To be against securitisation is to be against the 30 year fixed rate mortgage for example, and that\’s really not a position I would expect Frank to adopt.
But more than this, the ratings agencies did not declare these securitisations to be \”investments….of the first quality\”. In fact, they did exactly the opposite. They rated different tranches of the securitisations differently: here\’s some stuff which is AAA, yes indeed. But also here\’s some AA, some A and by the way, this stuff over here is pure dreck, equity option type stuff, really not a bond at all.
It simply isn\’t true that all those mortgages wrapped up into bonds were declared AAA.
At which point we could conclude one of two things: Frank has let his rhetoric get away with him which would be the polite thing to say or Frank is clueless on what really happened which is probably closer to reality.