It sounded like Bush's explanation of/excuse for the bankers' bad actions could be turned around with just a few changes. I used just the midddle section here, dealing with the story of the failures. My amendments are (I hope) italicized and red. Read it once in his words and the bankers are the victims. Read it with my words and it tells a different story.


I know many Americans have questions tonight: How did we reach this point in our economy? How will the solution I propose work? And what does this mean for your financial future?
These are good questions, and they deserve clear answers.
First, how did our economy reach this point? Well, most economists agree that the problems we're witnessing today developed over a long period of time. For more than a decade, a massive amount of money flowed into the United States from investors abroad because our country is an attractive and secure place to do business. (blame foreigners!)
This large influx of money to U.S. banks and financial institutions, along with low interest rates, made it easier for Americans to get credit. These developments allowed more families to borrow money for cars, and homes, and college tuition, some for the first time. They allowed more entrepreneurs to get loans to start new businesses and create jobs.
Unfortunately, there were also some serious negative consequences, particularly in the housing market. Easy credit, combined with the faulty assumption that home values would continue to rise, led to excesses and bad decisions.
Many mortgage lenders approved loans for borrowers without carefully examining their ability to pay. Many borrowers took out loans larger than they could afford, assuming that they could sell or refinance their homes at a higher price later on.
Optimism about housing values also led to a boom in home construction. Eventually, the number of new houses exceeded the number of people willing to buy them. And with supply exceeding demand, housing prices fell, and this created a problem.
Borrowers/lenders with adjustable-rate mortgages, who had been planning to sell or refinance their homes/subprime mortgages at a higher price, were stuck with homes/subprime mortgages worth less than expected, along with mortgage payments/financial commitments they could not afford.
As a result, many mortgage-holders/lenders began to default. These widespread defaults had effects far beyond the housing market.
See, in today's mortgage industry, home loans are often packaged together and converted into financial products called mortgage-backed securities/subprime loans. These securities/mortgages were sold to investors/borrowers around the world/nation.
Many investors/borrowers assumed these securities/lenders' intentions were trustworthy and asked few questions about their actual value/cost or risk. Two of the leading purchasers of mortgage-backed securities were Fannie Mae and Freddie Mac.
Because these companies/borrowers were chartered by Congress/approved by banks, many believed they were guaranteed by the federal government/within fiscal "reason". This allowed them to borrow enormous sums of money, fuel the market for questionable investments, and put our financial system at risk.
The decline in the housing market set off a domino effect across our economy. When home values declined, borrowers defaulted on their mortgages (outside of the speech amendments now, can anybody explain this "connection"? my house may be worth 50% of what I paid, but only if I need to sell it. otherwise, it's still a home, and even only a 50% return vs a 100% loss renting seems to be a calculation worth making), and investors holding mortgage-backed securities began to incur serious losses (again, explain this. what are the expenses that create these losses...million-dollar salaries?).
Before long, these securities/ became so unreliable that they were not being bought or sold. Investment banks, such as Bear Stearns and Lehman Brothers, found themselves saddled with large amounts of assets they could not sell. They ran out of money needed to meet their immediate obligations, and they faced imminent collapse.