INEPTOCRACY - A system of government where the least capable to lead are elected by the least capable of producing, and where the members of society least like to sustain themselves or succeed, are rewarded with the goods and services paid for by the confiscated wealth of a diminishing number of producers.
[ame="http://www.youtube.com/watch?v=_MGT_cSi7Rs"]Shocking Video Unearthed Democrats in their own words Covering up the Fannie Mae, Freddie Mac Scam that caused our Economic Crisis - YouTube[/ame]
hey, kids.. Do you know what time it is? Its time to eat the rich. They are the problem -- not stupid politicians, not people buying homes they could not afford, but empowered by stupid laws, etc..
On the one hand, you have people demanding less government intervention.
On the other, the government is charged with regulation.
When regulators themselves are corrupted by corporate influences, then the market creates bubbles and eventually collapses.
Ideally, we would have more ethical regulators, but that requires having very strict controls on who can be a regulator and what a regulator is allowed to do.
"Chaos... isn't a pit. Chaos is a ladder. Many who try to climb it fail and never get to try again. The fall breaks them.
And some are given a chance to climb, but they refuse. They cling to the realm, or the gods, or love. Illusions.
Only the ladder is real. The climb is all there is."
It's true that there were a lot of people buying second homes and fixing them up and flipping them. But to say that was the cause of the housing bubble is a stretch. Granted it added to it, no doubt.
It's also true that the banks were not forced to make loans to the poor. But they did have pressure put on them to make more loans to the poor. Banks came out with all kinds of innovative loans. Interest only loans for 5-10 years and then a balloon payment at the end of the year. Veritable interest loans, loans with no down payment, etc. They even made loans to people who's payments would be well over the 25%-30% of their monthly income. Both hurt the economy. Banks were eager to do it. They had Fannie Mae and Freddie Mack to back up many of those loans if people defaulted.
Then the banks were also bundling these loans and selling them off, getting into all kinds of derivatives, merging with other companies that they were kept out of with an old law that protected the people ever since the Great Depression, the Glass–Steagall Act. They replaced part of it with the Gramm–Leach–Bliley Act, which open up the door for banks what was to come. It was a combination of the three that helped bring down the economy. Or should I say four, as Free Trade sure shot the biggest hole in it. These other things just finished us off.
Beam me up Scottie, no intelligent life down here.
"Arguing with a Democrat is like wrestling a pig in pig poop, after a while you realize they enjoy it"
The CRA "forced" banks to stop redlining -- i.e., it stopped banks from refusing to make loans to qualified borrowers because they lived in minority neighborhoods.
As to the refis -- the facts are the facts. Refis exploded during the 90s and 2000s. Did new home buying explode? Nope. It was pretty level.
This was a crisis caused by failure to regulate table top mortgage brokers who sold their loans almost immediately, which where then securitized as CDSs.
None of this has anything to do with the bagger meme that Fannie and Freddie were making bad loans. Indeed, Fannie and Freddie didn't even resell their loans, so they wanted good loans on the books.
And what party prevented regulation of CDSs and mortgage brokers? I'll give you three guesses.
Last edited by Landru Guide Us; Dec 14 2011 at 02:06 PM.
Last edited by Landru Guide Us; Dec 14 2011 at 02:08 PM.