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Jun 10, 2007 · June 10, 2007. In April 1964, when Lyndon Johnson sought to rally public support for his new War on Poverty, he did it while sitting on a pile of two-by-fours on a front porch in Inez, Ky. — an...
The 2008 presidential campaign of John Edwards, former United States Senator from North Carolina and Democratic nominee for Vice President in 2004 began on December 28, 2006 when he announced his entry into the 2008 presidential election in the city of New Orleans near sites devastated by Hurricane Katrina. On January 30, 2008, Edwards returned to New Orleans to announce that he was suspending his campaign for the Presidency.
- The Subprime Mess: An Overview
- The Great Recession
- The Biggest Culprit: The Lenders
- Partner in Crime: Homebuyers
- Investment Banks Worsen The Situation
- Rating Agencies: Possible Conflicts of Interest
- Fuel to The Fire: Investor Behavior
- Don't Forget The Hedge Funds
- The Bottom Line
Before we look at the key players and components that led to the subprime mortgage crisis, it's important to go back a little further and examine the events that led up to it. In early 2000, the economy was at risk of a deep recession after the dotcombubble burst. Before the bubble burst, tech company valuations rose dramatically, as did investment...
The subprime mortgage crisis didn't just hurt homeowners, it had a ripple effect on the global economy leading to the Great Recession which lasted between 2007 and 2009.This was the worst period of economic downturn since the Great Depression. After the housing bubble burst, many homeowners found themselves stuck with mortgage payments they just co...
Most of the blame is on the mortgage originators or the lenders. That's because they were responsible for creating these problems. After all, the lenders were the ones who advanced loans to people with poor credit and a high risk of default. Here's why that happened. When the central banks flooded the markets with capital liquidity, it not only l...
We should also mention the homebuyers who were far from innocent in their role in the subprime mortgage crisis. Many of them played an extremely risky game by buying houses they could barely afford. They were able to make these purchases with non-traditional mortgages such as 2/28 and interest-only mortgages. These products offered low introductory...
The increased use of the secondary mortgage market by lenders added to the number of subprime loans lenders could originate. Instead of holding the originated mortgages on their books, lenders were able to simply sell off the mortgages in the secondary market and collect the originating fees. This freed up more capital for even more lending, which ...
A lot of criticism has been directed at the rating agencies and underwriters of the CDOs and other mortgage-backed securities that included subprime loans in their mortgage pools. Some argue the rating agencies should have foreseen the high default rates for subprime borrowers, and they should have given these CDOs much lower ratings than the AAA-r...
Just as the homeowners are to blame for their purchases gone wrong, much of the blame must also be placed on those who invested in CDOs. Investors were the ones willing to purchase these CDOs at ridiculously low premiums instead of Treasury bonds. These enticingly low rates are what ultimately led to such a huge demand for subprime loans. In the ...
Another party added to the mess was the hedge fund industry. It aggravated the problem not only by pushing rates lower, but also by fueling market volatilitythat caused investor losses. The failures of a few investment managers also contributed to the problem. To illustrate, there is a hedge fund strategy best described as credit arbitrage. It invo...
There may have been a mix of factors and participants that precipitated the subprime mess, but it was ultimately human behavior and greed that drove the demand, supply, and investor appetite for these types of loans. Hindsight is always 20/20, and it is now obvious there was a lack of wisdomon the part of many. However, there are countless examples...
[43] [44] Fortress owned a major stake in Green Tree Servicing LLC, which rose to prominence in the 1990s selling subprime loans to mobile-home owners and now services subprime loans originated by others, but in an interview Edwards said he was unaware of this. [45]
Jun 3, 2011 · (Reuters) - Former senator and Democratic presidential candidate John Edwards was indicted on Friday on charges that he accepted more than $900,000 in illegal campaign contributions to cover up...
Jan 24, 2010 · John Edwards resolved his moral dilemma by doing the right thing by his child. He acknowledged paternity and promised to support his child financially and emotionally.
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Aug 31, 2024 · John Edwards, U.S. senator, who in 2004 was the vice presidential running mate of John Kerry, the Democratic Party’s nominee for president. His political career ended when in 2008 it was revealed that he had fathered a child with a campaign worker while his wife was fighting cancer.
