Banks are too bureaucratic, and they fell from it. Maybe they hire investment strategists with tons of degrees, that attended fancy universities; yet they have a negative net worth, refinancing constantly, and the worst: Never had an investment account?
I hold borrowers responsible for the trouble, and bankers responsible for the increased debt on taxpayers so they can have their fun. The borrowers said they would pay back the loan, and should be the only ones forced to pay. Sure, the bankers lied and made loans outside of common sense, but it was still the borrower to sign on the dotted line. The bankers are the only ones to profit from the bailout. Taxpayers see no profit or advantage from this bailout. The catalyst to witchhunt and find suckers able and willing (by citizenship) to pay for such BS is you and me, without choice.
You can't depend on what the masses say. Masses are mostly wrong, which explains why they are poor. Markets constantly change. Bankers should analyze their market, just like any other business. Those who do survive; those who don't, dissapear.
I don't see any one group that caused this fiasco. It seems like there is plenty of blame to go around to all involved. Politicians, banks, mortgage brokers, consumers, mortgage recipients. EVERYONE was greedy and asleep at the wheel.
I never depend on the masses. It is a safe bet to go against what the masses want. Bankers do analyze their business, but only for expanding profit while lowering risk. They knew the Govt. would bail them out of this mess or they never would have increased lending leverages to nearly 100:1. The rich don't invest without knowing what will happen in the future. Oh yeah, they knew. Now they have their money, and the rest of us get to live through a depression. I much preferred Bush over either choices in 2000 and 2004, but his family has been in banking and finance since before the Great Depression.
True, but let's not forget who started this mess.. the DemoCraps in '99, with their Affirmative Action Lending program. They are the biggest at fault. Next in line is GreenScam and his proliferation of money and credit... and resisting efforts to regulate what was allowed.
That sounds pretty, but it isn't true. The bankers only offered loans at stupid criteria. The consumers were the ones that put the wheels into motion to spend the money on the house. Without the consumer action, no foolish loans would have been accepted by those consumers.
How is it not foolish for a bank to offer a loan that they know will likely default? Unless of course you know that you will be bailed out. In that case maybe it makes sense to make money on both sides of the bubble. There is a never ending amount of people that will sign onto a $600k mortgage even though they only have a $60k household income. Even with the current fiasco, if you offered that kind of loan today, there would be millions that would take it, despite the fact that half of their neighbors have been foreclosed on recently for doing the same. So at the end of the day, you have to have some accountability at all levels, including the Banks and governement.
Without BANKING action, no foolish loans COULD have been accepted by those consumers. It cuts both ways.
I am sort of amazed at the bureaucratic stupidity of all the people working in banks and trading institutions. They bought the subprime risk based on what the ratings agencies said I guess... I guess education and street smarts can't go hand in hand often. The educated person is leading a sheltered and protected life I suppose. Apparently they don't learn due diligence soon enough to protect their careers and their employers' institutions. Regarding the actual blame, it will never stick to Democrats much. It has been shown that you have to suspend reason to be liberal. They don't take the blame for the 50 or so sexually transmitted diseases, deaths from AIDS, complete wipe-out of hemopheliacs and currently the epidemic of Flesh Eating Bacteria in the Castro district of San Francisco that they caused with their sexual revolution. They are not taking the blame for the subprime mess even though the roots are traceable directly and squarely to the Clinton administration, they will not take the blame for the current deflation, they will not take the blame for the subsequent inflation that has to follow, they just are irrational and incapable of change in their thinking. No biggie to me any more really, country boys will survive