meatcleaver
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Joined: 3/13/2006
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quote:
ORIGINAL: cyberdude611
quote:
ORIGINAL: cloudboy
You're missing mc's point, which is that proper oversight would have prevented this debacle. Having such oversight is not "socialism."
Not really...Because it was the government that told the banks to open the floodgates.
It's called "redlining." Basically the banks back in the 70s, 80s, and 90s drew red lines around neighborhoods and demographics that were considered off limits to mortgages simply because those people were at high risk to not being able to fulfill the obligations of the loan. Well the congress believed this wasnt fair and it prevented the poor from being able to get a piece of the American dream. So they pushed the banks to reverse the redlines. Suddenly everyone qualified for a mortgage. No down payment. No income verification. No documentation. And homeownership in the United States soared from 2002 to 2006. Everyone thought it was the perfect way to recover from September 11th.
Then the bottom fell out....
Suddenly these adjustable rate mortgages reset. People's mortgage payments started to rise. The buying slowed down. And now you got people stuck with horrifying mortgages, depreciating assets, and banks are going under.
Why? Because the government forced these banks to change their lending policies. And some of these brokers found ways to make money in the process of other people's misfortunes.
You're ill informed, governments didn't force banks to change their lending policies, the root in this crisis was the financial big bang, the liberalisation of the banking systems and allowing financial companies to be more and more creative in the ways they could make money earn more money. What was allowed to happen was financial alchemy, private equity, hedge funds and banking encouraged excessive risk taking and when they started to make big profits they were blinded by greed, thinking they could do no wrong but they had built a castle on sand and sand that was going to be washed away in a high tide, which is precisely what happened. Governments are culpable for allowing a liberalisation where the banks and finance houses create their own rules, police themselves and set their own salaries and bonuses. A situation which encouraged people not to consider thier exposure to bad debt. Finance companies were selling insecure loans as triple AAA debt(something only blue chip companies could normally get), which is beyond me why that isn't considered fraud and people aren't being put in jail. Hell, I bet there isn't a person in the world who wouldn't like to be allowed to write their own pay check using other people's money which is what the hedge funds were doing.
The problem is caused through unfettered capitalism in the financial markets and governments that were claiming economic success on a financial bubble. For all the US and UK (who are the most exposed) growth in their economies, most was inflated profits in the financial markets and not higher production in the real economy.
< Message edited by meatcleaver -- 4/4/2008 1:39:57 AM >
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There are fascists who consider themselves humanitarians, like cannibals on a health kick, eating only vegetarians.
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RE: "Obama Can't Win"; Hillary Clinton - 
Profile
? It's not that difficult to recognise irony, is it? So much earnestness... 
. Lighten up, man. 
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