I of course, argue that government pressure to make mortgage loans caused the crisis. After all, the specific examples bad loans that Ambac lists in its lawsuit against Bear Stearns, are all loans that were made to poor people, though Ambac provides no information that would identify the race of these poor people. Ambac, however, argues that Bear Stearn made bad loans, lied that the loans were fine, and sold them on to the next sucker in order to collect fees. Ambac in its lawsuit against Bear Stearns explains the global financial crisis as caused by fraud conducted for profit, rather than caused by government policy.
It is, however, apparent that Bear Stearns kept a lot of bad loans, and took losses on them, even though it unloaded most of the bad loans onto various suckers by means of fraudulent warranties and representations. I argue therefore that Bear Stearns was under pressure to please regulators by lending to the supposedly poor and oppressed, which poor and oppressed are notoriously unable and unwilling to repay loans, and finding itself with a pile of bad loans, proceeded to unload as many of them as it could, by fair means and foul, many of them onto Ambac.
If, in the end, the government winds up compensating Ambac, and the Bear Stearns boys who made these fraudulent warranties and representations to Ambac go unpunished as individuals, we should conclude that Bear Stearns was carrying out government policy, that this fraud, like so many others, was committed out of political correctness. If, on the other hand, those who committed these massive frauds are themselves individually punished, for committing lucrative frauds that sank the world economy, then this will be evidence for the fraud was committed for profit.
Against the theory that the fraud was conducted for profit, is the fact that this is a civil lawsuit, even though fraud, and fraud that cost the taxpayer trillions, is a criminal offense. That there is not the slightest suggestion that any of these many acts of fraud will be punished criminally, suggests that these frauds were committed not for gain, but for political correctness.