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Certainly the buyers who bought what they couldn't afford are partly to blame for the housing crisis - in many cases it was greed motivating them, but there were also many lenders preying on people who didn't have enough financial savvy to realize what they were doing.
But please, let's not let the banks off the hook on this. They started bundling these mortgages in CDO's and selling them to investors. At first, the quality of the mortgages in these bundles were not too bad, and investors loved them. As time went on, the quality of the mortgages decreased, but Wall Street kept selling them. They knew that there would be huge numbers of defaults, but greed took over. They were helped by the ratings agencies (Moody's, S & P, etc.) who kept giving these CDO's triple A ratings, even though there is a lot of evidence they knew they were junk. Anyone on Wall Street or the ratings agencies that said anything were pushed out. At some point the banks knew everything was going to fall apart, yet they still tried to sell the CDO's, even though they were buying insurance to protect themselves against the inevitable collapse (hence the problem with AIG almost going under, since they were selling insurance on many of these loans).
Loads of people got rich doing this, and we taxpayers picked up the tab. The fact that no one in this mess has been prosecuted doesn't say much about our system of justice.
greed is good. wall street is going to keep selling products as long as they are buyers. the real problem is, why were they able to sell such bad products at will? these assets must not have been priced properly and that seems to be a fault of ratings agencies and government pushing the GRE's to lend to more subrime borrowers. but maybe the ratings agencies werent so wrong, because part of the reason these assets were secure is the implied backing of the government. since the government did come in with a bailout, i guess they werent so wrong. so the root cause was government.
Certainly the buyers who bought what they couldn't afford are partly to blame for the housing crisis - in many cases it was greed motivating them, but there were also many lenders preying on people who didn't have enough financial savvy to realize what they were doing.
But please, let's not let the banks off the hook on this. They started bundling these mortgages in CDO's and selling them to investors. At first, the quality of the mortgages in these bundles were not too bad, and investors loved them. As time went on, the quality of the mortgages decreased, but Wall Street kept selling them. They knew that there would be huge numbers of defaults, but greed took over. They were helped by the ratings agencies (Moody's, S & P, etc.) who kept giving these CDO's triple A ratings, even though there is a lot of evidence they knew they were junk. Anyone on Wall Street or the ratings agencies that said anything were pushed out. At some point the banks knew everything was going to fall apart, yet they still tried to sell the CDO's, even though they were buying insurance to protect themselves against the inevitable collapse (hence the problem with AIG almost going under, since they were selling insurance on many of these loans).
Loads of people got rich doing this, and we taxpayers picked up the tab. The fact that no one in this mess has been prosecuted doesn't say much about our system of justice.
I'll agree. There were alot of people who packaged these loans knowing the buyers couldn't afford them, but didn't care because they were making money.
I'll agree. There were alot of people who packaged these loans knowing the buyers couldn't afford them, but didn't care because they were making money.
so its not their fault. if you can legally sell a product, then why shouldnt you? the people who took the loans were responsible for payment, lenders werent an issue. the real problem is how were they able to give loans to people who couldnt afford them, and still make money? someone was going to have to take on the additional risk/loss further down the line.
I've been very skeptical of this Occupy Wall Street circus from the beginning. I've been trying to keep an open mind, but this movement seems to grow more and more absurd. They keep doing things that eat away at their credibility.
First, the organizers helped to spread a rumor of an Occupy Wall Street Radiohead show, prompting thousands more "protestors" to show up, and later blamed the hoax on "miscommunication" within their group.
Then, they take over the Brooklyn Bridge by leaving the pedestrian path and walking & sitting on the roadway, causing it to be closed and resulting in massive traffic delays. Meanwhile, they are crying that the police "trapped" them on the bridge. Hello? You're walking on the damn ROADWAY...where there are CARS.
Today, I wake up to the news that the Occupy Wall Street organizers are encouraging protestors to dress as corporate zombies to taunt financial workers. No, seriously. ZOMBIES. Complete with suit & tie, white makeup, fake blood and fistfuls of Monopoly money. I am not being facetious. WHITE MAKEUP, FAKE BLOOD, FISTFULS OF MONOPOLY MONEY.
And you know something...all of these shenanigans taking place just a few blocks away from the WTC leaves a really bad taste in my mouth. Thousands of corporate financial workers died there. Thousands were injured. We were also honoring the cops that died there. Remember? Just a short month ago, we were mourning the 10th anniversary. Now we are saying that anyone working for "the man" and "the system" are corporate zombies and the NYPD are all thugs? My. What a dramatic flip flop.
And don't even get me started on the celebrities that are "lending their star power" to this movement. Susan Sarandon and Russell Simmons? Are you kidding me? Sarandon makes millions of dollars for a few weeks of "work" making her pretty little movies, and Simmons is worth hundreds of millions of dollars. He's one of the richest men in the corporation known as hip hop. Yeah. These people are the "99%" just like you and me.
I'm talking about people who over extended themselves, not banks.
If I walk into a car dealership and the salesman tries to sell me a $100,000 car I should know better knowing I can't afford it, no matter what magic he does with his numbers.
Same with houses. If my annual salary is $50,000 and the house that the realtor wants to sell me is $400,000, while I have very little to put down I better know that I can't afford it.
If you can't as a buyer figure this out, then maybe you shouldn't be looking to buy in the first place.
well, if i try to buy $100,000 car, i can't imagine getting approved for that lease deal or that auto loan. yes, it's my fault for overextending myself, but it's the financier's fault for allowing me to get the credit as well.
as far a home buyers, i recognize your point, but also recognize that, as someone with a business degree and a reasonable knowledge about how financing works, the documentation for my mortgage was mind boggline. for the most part, most americans are not well-equipped to begin with.
they never should have borrwed the money, but they never should have been allowed to borrow the money either. it's a two way street. but only one side is being blamed eh? sorry, companies that were leveraged 30:1 deserve some shame also. but no, they got taxpayer dollars. and now, they still refuse to lend. come on now, try this argument on someone else, because it's very one-sided and short-sighted.
well, if i try to buy $100,000 car, i can't imagine getting approved for that lease deal or that auto loan. yes, it's my fault for overextending myself, but it's the financier's fault for allowing me to get the credit as well.
the financier doesnt give that loan because he will take the loss if it isnt paid. the problem with the home loan situation was that the financiers were promised by the government that they wont take the hit if the borrower doesnt pay. the government came through with the bailout. this was a government doctored situation.
greed is good. wall street is going to keep selling products as long as they are buyers. the real problem is, why were they able to sell such bad products at will? these assets must not have been priced properly and that seems to be a fault of ratings agencies and government pushing the GRE's to lend to more subrime borrowers. but maybe the ratings agencies werent so wrong, because part of the reason these assets were secure is the implied backing of the government. since the government did come in with a bailout, i guess they werent so wrong. so the root cause was government.
There wasn't implied backing by the government (with the possible exception of Freddie/Fannie loans). The government stepped in when the whole fiasco fell apart, because most of the large banks were insolvent and would have gone bankrupt along with AIG. Credit had frozen and the fear was that the country was about to fall into an abyss.
There are quite a few excellent books out there about this crisis. The mis-representation by Wall Street was mind-boggling. Everyone had a role in this - buyers who couldn't afford the loans, the government for pushing home ownership too much, the banks for the CDO's they mis-represented and the ratings agencies for not rating the bundled loans properly.
There wasn't implied backing by the government (with the possible exception of Freddie/Fannie loans).
its an interesting thing to suggest considering the government did in fact step in and bail them out. so the government did hold up their end of that deal.
If they blocked traffic and became a physical obstruction, they basically initiated violence and all are guilty of a crime and should be arrested and charged accordingly.
There is nothing peaceful about intentionally blocking public space and infringing on the rights of others to move about.
The housing crisis is just one issue this group of occupiers are protesting. They are also angry at the job situation, the war, and inequality of gays.
Seems unorganzied, but they keep going and going. Are these people working or just sitting out there day and night? I read in the paper this morning, that people are donating food to them and they are using their laptops on generators.
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