Changes

The [[NYTimes]] says Senator [[Charles Schumer]] D-NY, is the most responsible for Wall Street's collapse. <ref>[http://www.nytimes.com/2008/12/14/business/14schumer.html A Champion of Wall Street Reaps Benefits] NYTimes, December 13, 2008</ref> Schumer as a member of the Banking and Finance Committees, led efforts to regulate credit-rating agencies, shield financial institutions from government oversight and tougher regulations, and saved key industry players billions of dollars in taxes and fees.

The [[NYTimes]] says Senator [[Charles Schumer]] D-NY, is the most responsible for Wall Street's collapse. <ref>[http://www.nytimes.com/2008/12/14/business/14schumer.html A Champion of Wall Street Reaps Benefits] NYTimes, December 13, 2008</ref> Schumer as a member of the Banking and Finance Committees, led efforts to regulate credit-rating agencies, shield financial institutions from government oversight and tougher regulations, and saved key industry players billions of dollars in taxes and fees.

===Selling mortgage packages to big investors===

===Selling Fannie Mae-backed mortgage bundles to pension funds and institutional investors===

Americans owed some $10 trillion on their mortgages, most of which were sound with payments made on time. However financiers bundled the mortgages into very complicated packages called "'''collateralized debt obligations''''<ref> That is, homeowners were obligated to pay the debts and the collateral behind them was the physical house.</ref> or CDOs. Hundreds of billions of dollars worth of CDO's were sold to banks, pension funds and financiers in the U.S. and Europe. Generally they borrowed cash to buy the CDOs.  The risk was that if the CDO's declined in value, they would not be able to repay those loans.  The CDOs were especially attractive because they were not regulated by the government; experts are not sure how many trillions of dollars are involved.

Americans owed some $10 trillion on their mortgages, most of which were sound with payments made on time. However financiers bundled the mortgages into very complicated packages called "'''collateralized debt obligations''''<ref> That is, homeowners were obligated to pay the debts and the collateral behind them was the physical house.</ref> or CDOs. Hundreds of billions of dollars worth of CDO's were sold to banks, pension funds and financiers in the U.S. and Europe. Generally they borrowed cash to buy the CDOs.  The risk was that if the CDO's declined in value, they would not be able to repay those loans.  The CDOs were especially attractive because they were not regulated by the government; experts are not sure how many trillions of dollars are involved.

Many mortgages were held by mortgage companies like [[Countrywide]] and [[Washington Mutual]], as well as investment banks such as [[Bear Stearns]], [[Merrill Lynch]], [[Lehman Brothers]], [[Morgan Stanley]] and [[Goldman Sachs]], as well as commercial banking chains like [[Wachovia]] and [[Bank of America]], which have thousands of local offices.

Many mortgages were held by mortgage companies like [[Countrywide]] and [[Washington Mutual]], as well as investment banks such as [[Bear Stearns]], [[Merrill Lynch]], [[Lehman Brothers]], [[Morgan Stanley]] and [[Goldman Sachs]], as well as commercial banking chains like [[Wachovia]] and [[Bank of America]], which have thousands of local offices.

===Commercial real estate===

===Commercial real estate===

The speculative [[housing bubble|real-estate bubble]] went far beyond individual homes, it infected as well as  kinds of commercial real estate, such as office buildings, shopping centers, apartment complexes, hotels, casinos and even and empty lots. People bought high expecting to  sell higher, and were stunned when the market collapsed. People who loaned money to real estate firms were confident of a 20% return, but more likely lost 25%. The value of office buildings plunged 43% after the peak in Nov. 2007.  Most investors who bought in 2007 probably lost all their investment.

The speculative [[housing bubble|real-estate bubble]] went far beyond individual homes, it infected as well as  kinds of commercial real estate, such as office buildings, shopping centers, apartment complexes, hotels, casinos and even and empty lots. People bought high expecting to  sell higher, and were stunned when the market collapsed. People who loaned money to real estate firms were confident of a 20% return, but more likely lost 25%. The value of office buildings plunged 43% after the peak in Nov. 2007.  Most investors who bought in 2007 probably lost all their investment.