DesideriScuri
Posts: 12225
Joined: 1/18/2012 Status: offline
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quote:
ORIGINAL: Edwird quote:
ORIGINAL: DesideriScuri Billions of home equity destroyed?!? That's billions of home equity that was artificially inflated in the first place (brought to you by your friends in The Fed since at least 1987 (Greenspan))! The busts (of boom/bust cycles) suck, but are necessary. It's really the booms that should be feared. No booms, no busts. It's not rocket surgery. Here's a book for you; Chain of Blame by Paul Muolo and Mathew Padilla. It might be in your local library. If you make it through that, I've got more. Housing prices were artificially inflated, fueled by cheap credit. Mortgage lenders, banks, and Wall Street were complicit, but without the cheap money policies The Fed has had over decades, things wouldn't have gotten so bad. The Congressional Report on the recession tagged the SEC regulators for not catching the warning flags. That same report put the major onus of blame on The Fed for not doing it's job to prevent these situations. Wall Street took advantage of cheap credit, lax regulators, and government complicity to inflate and then burst a housing bubble. Fannie Mae and Freddie Mac played a role, too. Had they not bought almost any paper written, almost immediately, interest rates would have been higher on loans, and less qualified people wouldn't have been able to get a loan in the first place. But, with the ability to quickly get rid of a mortgage, lenders priced loans and qualifications according to the risk of loss to the lenders. If you have a loan on your books for only a week, what's your risk of default and loss? Damn near zero, if not zero. Write as many loans as you can, as fast as you can, shuttle the loans off to Fannie and Freddie, count your commissions and keep the ink flowing. What allowed Wall Street to take advantage of it? The Fed and other lax regulators.
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What I support: - A Conservative interpretation of the US Constitution
- Personal Responsibility
- Help for the truly needy
- Limited Government
- Consumption Tax (non-profit charities and food exempt)
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