Really? “What’s the problem?”
Read:
https://en.wikipedia.org/wiki/Financial_crisis_of_2007%E2%80%932010#Background_and_causes
https://www.rollingstone.com/politics/story/26793903/the_big_takeover/print
https://www.rollingstone.com/politics/story/29127316/the_great_american_bubble_machine
Reading now. Thanks.
dont be fooled by the Rolling Stone links, the author writes about the financial crisis in pretty much the most easy to understand terms I’ve seen. With the Wikipedia entry, this is the relevant part:
The bolded parts are what needs to be reformed (among other things).
It would also be nice if people didn’t mortgage houses they couldn’t afford, but God forbid we blame the people.
Because blaming the victim for messing up is the American Way! swishes a little flag
The victim as often as not brings his hurt upon himself. And no, thats not the American way. The American way is blaming everyone but yourself.
“Blame America First” Someonerandom? Frankly I am dissapoint.
Sure, lots of people bought houses on credit, and that is part of what caused the housing bubble. But it’s really only of marginal relevance to the actual structural flaws in the US financial system, so it’s curious why some people want to focus on it exclusively.
“It’s not my fault that I’ve conned those stupid fools into upside-downing their house! They should’ve known better! It’s not my fault!”
People need to learn how to be fiscally responsible, otherwise they deserve what they get. It wasn’t a con, it was the user stupidity in many cases.
Hm. So what do you suppose can be done to avoid another housing bubble/crash and the subsequent crisis in financial institutions with stakes in the housing market? Ask people politely not to default on their loans?
Nope. As much as it is the peoples fault for making stupid loan decisions, banks should not have made many of the loans. The only real thing to do here is regulate. Not much, but just enough to keep people that clearly can’t afford it out.
At last, we agree on something 
Of course I think all of the systemic factors that led to the financial crisis should be addressed in addition to regulating risky subprime loans (which I believe represented 7% of the total defaults which caused the housing bubble to collapse) but at least deep down there is common ground here.
:tired:
You do know that many fiscally responsible people were hurt by this too, right? When suddenly their $1200 mortgage payment became $2200 virtually overnight, right?
The “bad loans” were a very small part of the meltdown by the way. But, evidently, in some people’s minds, it was the ONLY reason it happened. The biggest reason for it (and I’ll continue this in another thread if you’d like): Investors buying mortgage-backed securities and selling them. It wasn’t that foreclosures were happening. It’s that the investment companies relied on mortgages staying afloat to keep them in business, so they gave sweet deals to foolish buyers, then when they couldn’t follow through on these deals, raised the costs on the foolish buyers, and the buyers could no longer pay, so the investment company was forced to foreclose…hurting their business because now there are securities out there with nothing to back them up. So, now the investment company goes out of business, hurtling the economy towards the toilet.
Yes, the buyer was foolish, but that’s only one small piece of the puzzle.
This definitely deserves its own thread (see: my econ 101 thread) but probably not until after Easter Recess when there’s actually a financial reform bill to discuss.
Holy cow! A post from Danielsan that I agree with!
:faint:
sorry. I dont wanna take this off topic but Matt, where is that thread? We should link it quick before this gets goofy.
It’s in massdebating, of course! But don’t worry about it, this thread is /thread pretty much since health care is as reformed as its going to get in the near future. Although there’s talk amongst congressional liberals of a second round of reconciliation bills to create a public option. Will bump with more info as it arrives.
Oh please, they didn’t know they couldn’t afford them. If you only ever bought a house that you could afford outright, nobody would buy a house until they were 60 and would end up living in a box.
They were openly deceived by the banks trying to con them out of more money. When they defaulted, the banks repossessed their house and tried to sell it. However, because that was happening on such a massive scale, the price of houses plummeted, meaning that the house didn’t raise enough money to cover the bank’s outstanding debts. Hence, you get a simultaneous crash of both the financial and housing markets.
Good to see you back, loony.
Sigh, I already said that before. Read the whole thread next time you try to act smart.
Really? Because I just looked through the whole thread and couldn’t find where you said that federal funding for abortions was already illegal. Can you point me to it?
I try to pride myself on reading what people type and I apologize if I did miss something, but I read the entire thread to be sure and I can’t find it.
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