Anyone see that CNBC production last night? "House of Cards." Very interesting. Blame all around. If you didn't see it you should tivo it...I'm sure it'll be on again soon.
It eventually fell back to the mortragage originators. Once their loans started to blow up then guys like the OP were outta business. At Wall Streets and the Governments urging they wrote everybody and everything. Once those loans went non-performing they got charged back on the originators. When the originators were outta business the banks were forced to put the loans packages on the balance sheet as assets. Nasty vicious cycle.
And while everyone watches various execs getting grilled by the politicians on t.v. - - - notice who Doesn't get grilled ? The very Fed central bankers and politicians who are actually the source of the mess to begin with. If Greenspan didn't turn on the money valve after the dot.com bust and inflate the housing bubble none of this would have happened. If Congress didn't set up Fannie & Freddie to 'encourgage afforable housing' & write laws that required lending to people who wouldn't have qualified otherwise, this wouldn't have happened. - - There are Wall Street types (some of whom also rotate in and out of Washington D.C.) who are part of the blame - - - but they don't get the same treatment as the others.
Ralph Nader made an interesting point on election cycle....If you are not into politics, then politics will be into you! Joe and Jane Middle are in a tough spot, but that is because they don't pay attention long enough. This stimulus bill is a fine example. People should be in the streets over this, but I believe the government has satisfactorily given the public sensory overload with all the reality tv, Wiis and web surfing. It's just too much drugdery to be politically aware. So, now, we are France. Soon, we will be Sweden.
The people who took a loan they could not afford, and the lender who give the loan to someone who is subprime is very, very small compare to the swaps that were created to bet on those bundles. This is where the big loss came from. The big bets of the credit default swaps that were (unregulated) so they did not have to have the cash to cover the bet because no one was looking at them. This is what created billions of dollars that did not exist, and not the morgages that have default. It was the big bets on insurance. (Commoditites futures Modernization act)
If a consumer comes to me and asks for a loan, and I have a mandate to give it to him, then that is my job. ------------------------------------- It is an interesting mandate. (Community reinvestment act) Oth, when the customer asks for another drink and the bartender refuses because of liability. They might hurt themselves or others but when it comes to money, there is no moral obligation?
I know this stuff about the CRA will just keep getting repeated & repeated with no factual evidence to back it up, and so this is like spitting into the wind; however, just because I'm tired & and don't really care how hopeless introducing facts to folks who care only about myths is, I present an actual study on the CRA with actual facts about how CRA loans actually performed in the real world: Community Reinvestment Act May Have Deterred Risky Mortgage Lending Out in the real world, the problem had to do with lots of things, none of them having anything to do with the CRA. Like, for instance, folks refinancing their homes like, as Ed Hart once observed, they were afraid their neighbors were going to do a leveraged buyout of their homes and kick 'em out. Crazy shit like that. CRA, on the other hand, was actually an island of sanity in this sea of unbelievable greed & stupidity.
Finally saw house of cards today, and I have to say that it was a good show. Second best documentary about the finacial hubris I have seen. I still think that borrowers and investors should have some responsibility. If the public really wants someones head on a pike, they should go after the rating agencies. Without their input none of this could have gone down.
The gentleman has a point. No one here can deny that there was a ton of irresponsibility on the part of those taking out loans and such. There was strong demand for what he may have been supplying. Query: If we know that we are perpetuating financial destruction (or planting the seeds of financial wipe outs) with the products we are selling or methods we are using, are we absolved, on a moral/ethical basis, under the mantra 'I was only providing what the market demanded?' Discuss.