Burning Down The House: What Caused Our Economic Crisis?

[Care4all]

Don't put words in my mouth---I have only asked questions and have placed the blame on no man or no party. Are you claiming the Fed created cheap money to make a profit ? The fed can't make a profit--by law.

the federal reserve banks can't make a profit? really?

 

[dilloduck]

if the tax payer was set up to ASSUME ALL of the risk, then why did the system crash and they need the $700 billion bail out everyone....why not just let the federal insurance cover all of it? why did the credit market freeze, come to a halt?

The system won't crash if the taxpayer assumes the $700 billion dollar risk. Everything is just hunky dory. The banks didn't give a shit about issuing the high risks loans---it wasn't their responsibility.

 

[WillowTree]

I agree with the title of this thread.. Burn that sucker down! NO bailout. Never.

 

[Care4all]

The system won't crash if the taxpayer assumes the $700 billion dollar risk. Everything is just hunky dory. The banks didn't give a shit about issuing the high risks loans---it wasn't their responsibility.

more than 50% of the financial institutions in trouble with their subprimes were not covered by any federal acts or laws....why'd they do it, take the unresponsible risks?

btw....exactly how did our gvt back all of these mortgages that you say...dillo?

 

[Care4all]

The system won't crash if the taxpayer assumes the $700 billion dollar risk. Everything is just hunky dory. The banks didn't give a shit about issuing the high risks loans---it wasn't their responsibility.

then why are they falling like flies if it wasn't?

 

[dilloduck]

then why are they falling like flies if it wasn't?

Only the ones who didn't sell off their debt like hot potatoes. No doubt there were some dumbshit bankers who got caught with their pants down.

There was a policy that made money cheap and there were policies that made it easy to manipulate but there was apparently no exit strategy other than to pass the debt off to the taxpayer.

 

[editec]

Freddie & Fannie started during the Carter Administration. In an effort for lower income people to obtain home mortgages. It worked O.K. in the first years.

YOu so don't know what the fuck you're talking about.

Fannie Mae was founded in the 1938

Fannie Mae was founded as a government agency in 1938 as part of Franklin Delano Roosevelt's New Deal to provide liquidity to the mortgage market. For the next thirty years, Fannie Mae held a virtual monopoly on the secondary mortgage market in the United States.
In 1968, to remove the activity of Fannie Mae from the annual balance sheet of the federal budget, it was converted into a private corporation.[6] Fannie Mae ceased to be the guarantor of government-issued mortgages, and that responsibility was transferred to the new Government National Mortgage Association (Ginnie Mae).
Fannie Mae was put under a conservatorship of the U.S. Federal government on September 7, 2008.[7].

 

[editec]

wrong, it was the push to give loans to people with poor credit that caused this
the government exerting pressure on the private sector

You're grasping at straws.

YOu ALSO don't know what the fuck you're talking about.

 

[editec]

They don't....but the banks thought they did, that's for certain...

no bank was required to devise these risky loans or to loan to the risky, they were under an act that required them to NOT REDLINE people in the poorer communities that the banks service who did not have bad credit...which they were doing....

Exactly.

These partisan notwits would rather make shit up than face the harsh reality that deregulation of the banking industry, coupled with greed of the ratings companies who LIED about risks associated with these financial instruments, on top of the insane business of insuring those dereivatives, set us up for this big fall the moment the real estate bubble burst.

They're ether very stupid, or simply so fucking partisan that they'd rather let the same nitwits who caused this problem to begin with do it again.


Hence they spew childish (and crypto-racist) nonsense like the problem was caused because banks haven't been allowed to REDLINE \Black neighborhoods for the last thirty years.

This is a real economic situation that is not subject to debate, kids

Facts are facts.

But these true believers like Oreo and DiveCon are not fact-based believers, they are idealogues and worse, they are followers of a false prophet.

And worse, their idiotic ideology is SO flawed that it's threatening to break our economy.

But they cannot admit that because if they do then they'd have to acknowledge (at least to themselves) that the people they trusted are crooks and fools.

And of course, the even worse horror, one that they they really cannot face, is that the people they've been calling liberals and communists on boards likes these were RIGHT as rain about how the economy works, or rather does NOT work when it is foolishly deregulated by idealogues who worship the virtue of SELFISHNESS.

NONE of this COULD have happened if we hadn't been systematically deregulating the banking and finance laws.

BOTH parties have a hand in allowing this to happen, because BOTH parties have been accepting enormous amount of money from that industry.

 

[DiveCon]

You're grasping at straws.

YOu ALSO don't know what the fuck you're talking about.

you are woefully uninformed
but i've come to expect that of most of the libs on this forum

 

[Navy1960]

While the lending institutions, OUR government , and investment/insurance houses hold blame for this failure, it would be a complete nonsense to suggest that the borrowers did not have at least some responsibility in this as well. When a borrower signs a mortgage be a 3 year ARM or 30 year Fixed or whatever it is, the borrower has at least some responsibility to know what they are signing and KNOW they have the ability to PAY for it. To completely suggest that the lenders were holding a gun to peoples head while they purchased homes, cars, and ran up debt on credit cards without the ability to pay it back is to leave out the ENTIRE picture for this crisis. If for example, the number of people that committed to these loans has not defaulted on them in the first place and the number of foreclosures has not skyrocketed , leaving a massive amount of inventory on the market causing a dramatic fall in home values, then guess what? Do you think we would be lending these "irresponsible" lenders 700 billion dollars right now? It's a real shame we have to legitimize "irresponsibility" in business and personal finance by coming to the rescue of this.

 

[oreo]

It started with government intervention. Freddie Mac & Fannie Mae & a very LIBERAL agenda that everyone deserves homeownership.

Government leaned on banks to loan out money to lower income people. It went from there to sub-prime mortgages "during the Clinton administration" who praised that these lower income people no longer needed to come up with a down payment or closing costs.
From there it went to not having to prove income, or even if someone had a job. Everyone was getting home loan mortages.

Wall street was buying these toxic mortgages to hedge their investment funds.

What really ticks me off: The congress was warned time & time again--as early as 2001 by the Bush administration. Democrat house finance director (Barney Franks) is on video stating that there was nothing wrong with these agencies. Then fed chairman Alan Greenspan warned congress. Then in 2005 John McCain warned congress.

Carl Rove stated that each & every time some legislation was brought to the house or senate to reign these agencies in, there were at least 40 democrats on the hill blocking each & every effort to do so.

That's why we're here today.

 

[oreo]

While the lending institutions, OUR government , and investment/insurance houses hold blame for this failure, it would be a complete nonsense to suggest that the borrowers did not have at least some responsibility in this as well. When a borrower signs a mortgage be a 3 year ARM or 30 year Fixed or whatever it is, the borrower has at least some responsibility to know what they are signing and KNOW they have the ability to PAY for it. To completely suggest that the lenders were holding a gun to peoples head while they purchased homes, cars, and ran up debt on credit cards without the ability to pay it back is to leave out the ENTIRE picture for this crisis. If for example, the number of people that committed to these loans has not defaulted on them in the first place and the number of foreclosures has not skyrocketed , leaving a massive amount of inventory on the market causing a dramatic fall in home values, then guess what? Do you think we would be lending these "irresponsible" lenders 700 billion dollars right now? It's a real shame we have to legitimize "irresponsibility" in business and personal finance by coming to the rescue of this.

AGREED 100%. Take a look at California. We had investors buying several homes at one time, in order to do a paint job & sell them for huge profits the next month! They got caught up in the downturn on home prices & we get to pay it back for them. Personally, I have never been able to get a mortgage loan without having to show two years income tax returns, job comfirmation, a down payment & an excellent credit history. BTW--I understood completely the risks of my mortgage loan. I knew if I didn't pay, I didn't stay.

The federal government did not bail out those employees that worked at Enron & lost everything over "real" fraud & corruption. The federal government did not bail out employees of Worldcom & other corporations that collaped & defrauded employees & investors out of hundreds of millions of dollars. The federal government did not bail out investors in the tech crash of 2000.

Yet, we are bailing out irresponsible homeowners & home investors to the tune of 700 billion dollars. UN FREAKING BELIEVABLE!

 

[Care4all]

AGREED 100%. Take a look at California. We had investors buying several homes at one time, in order to do a paint job & sell them for huge profits the next month! They got caught up in the downturn on home prices & we get to pay it back for them. Personally, I have never been able to get a mortgage loan without having to show two years income tax returns, job comfirmation, a down payment & an excellent credit history. BTW--I understood completely the risks of my mortgage loan. I knew if I didn't pay, I didn't stay.

The federal government did not bail out those employees that worked at Enron & lost everything over "real" fraud & corruption. The federal government did not bail out employees of Worldcom & other corporations that collaped & defrauded employees & investors out of hundreds of millions of dollars. The federal government did not bail out investors in the tech crash of 2000.

Yet, we are bailing out irresponsible homeowners & home investors to the tune of 700 billion dollars. UN FREAKING BELIEVABLE!

we are not bailing the home owners....they lost their homes...they got no bail out so far... if we had bailed the homeowners the whole world of wall street would not be begging for our tax money now...we are bailing out wall street for their irresponsible business decisions and bad financial moves....and their gambling and bubble creations....

care

 

[DiveCon]

we are not bailing the home owners....they lost their homes...they got no bail out so far... if we had bailed the homeowners the whole world of wall street would not be begging for our tax money now...we are bailing out wall street for their irresponsible business decisions and bad financial moves....and their gambling and bubble creations....

care

its a mess, and the bailout will be a mess also
kneejerk reactions usually are

 

[dilloduck]

we are not bailing the home owners....they lost their homes...they got no bail out so far... if we had bailed the homeowners the whole world of wall street would not be begging for our tax money now...we are bailing out wall street for their irresponsible business decisions and bad financial moves....and their gambling and bubble creations....

care

Thank congress.

 

[Care4all]

Thank congress.

there are many to thank for this mess...and every one of them, made bad decisions out of greed....or their own self indulgence....or in order to cover up their greed.... etc etc etc

 

[dilloduck]

there are many to thank for this mess...and every one of them, made bad decisions out of greed....or their own self indulgence....or in order to cover up their greed.... etc etc etc

Yes there are--many. Lots even. Too bad huh?

 

[DiveCon]

there are many to thank for this mess...and every one of them, made bad decisions out of greed....or their own self indulgence....or in order to cover up their greed.... etc etc etc

can't argue with that


the biggest problem is we will never really find all those that are to blame
and they will keep getting re-elected

 

[dilloduck]

can't argue with that


the biggest problem is we will never really find all those that are to blame
and they will keep getting re-elected

We know who the money changers are and we can't afford to do anything about them.