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I had a really good roast beef sandwich today. I enjoyed it very much. I noticed some crumbs fell and there were many ants getting those crumbs.
Good, because a crumb is a lot for an ant. Likewise, 10K or 50K which is a crumb for a rich person is a lot for the ordinary people. People need to get over the envy of seeing others make more money than themselves. If I land 50K profit, why should I care is someone else landed a million?
especially the smart ones that doubled down investments when the stock market fell down to 6000....any one who had some capitol, or who increased their 401k contribution at 6k has tripled that investment with the dow being nearly 18k.....
but again it takes smart moves and the ability to have (even if its just pennies) capitol to invest
I watched it fall from 14k to 6k...I doubled my 401k contribution...why because I knew it would rise again.....I was lucky enough to have a good job , and to be able to change my contribution from 10% to 20% (but only 5% is matched by my employer (the us government))
It fell from 11K, not 14K, but a lot of people did what you did and were able to benefit from the situation. It boils down to personal responsibility. Some people did not make these moves, and instead of investing in the market, they invested on pessimism and spent their money on guns, ammo and canned food in preparation for food riots and other "end of civilization" silliness. They are the ones who complain the loudest today.
It fell from 11K, not 14K, but a lot of people did what you did and were able to benefit from the situation. It boils down to personal responsibility. Some people did not make these moves, and instead of investing in the market, they invested on pessimism and spent their money on guns, ammo and canned food in preparation for food riots and other "end of civilization" silliness. They are the ones who complain the loudest today.
The Fed did play a big role in the housing bubble, and even Greenspan admitted it. In 2004 when the markets were heating up, the Fed should have started to cool them down, but they did the opposite keeping rates artificially low, and Greenspan even went in front of the TV cameras to encourage people to take advantage of sub-prime variable rate mortgages, although he knew the rates had nowhere to go but up. But then again, it was election year, and they wanted things to look good......
You're talking about a symptom. The Fed didnt pass a rule telling lenders to make little to no down payment loans to people who didn't qualify.
The housing crash was brought about by the subprime loan portion of the mortgage market. It had little to do with the rates - since THAT portion of the mortgage market was not seeing the LOWEST rates (the
folks with BETTER credit go those ultra-low rates). The problem was people were given loans there was NO WAY they could afford. This was a situation guarenteed to cause collapse. Had the people been able to AFFORD the loans it wouldn't have matter HOW LOW the rates were because they would have been able to PAY their mortgages - but when you cannot PAY the mortgage to begin with you have NO BUSINESS getting such a loan.
Ken
Always looking at symptoms instead of the cause. No wonder you miss the point so much. The crash came about because little to no down payment loans were made to those who didn't qualify. Lenders rarely made these type of loans. Three percent down or less loans went from 1 in 243 in 1990 to 1 in 3 by 2006. Don't make payments, don't keep up the house. The lenders have a 300k house they'll need to put ~25k at a minimum into in order to get it up to standards for a house that saw its market value drop to 260k. All the while not receiving the 3k payments for a minimum of 6 months.
You're talking about a symptom. The Fed didnt pass a rule telling lenders to make little to no down payment loans to people who didn't qualify.
The Fed is not a symptom. I told you what they did, they kept the rates artificially low, and Greenspan even went in front of the TV cameras to encourage people to take advantage of sub-prime variable rate mortgages, although he knew the rates had nowhere to go but up. The Fed threw more fuel into the fire when it was time to put the flames out.
It is actually supposed to be one of their primary duties to cool down overheating markets, but they did the opposite. Bush had a goal to get 5.5 million low income Hispanics loans they did not qualify for, and more and more de-regulation (40 under Bush) was passed to allow banks to give out loans left and right, and that leads to the obvious question about the Fed. Why do we have the Fed who fails at their primary duties? If I had to pick the #1 entity to blame for the housing crash, I would pick the Fed.
Last edited by Finn_Jarber; 10-20-2014 at 08:56 AM..
The Fed is not a symptom. I told you what they did, they kept the rates artificially low, and Greenspan even went in front of the TV cameras to encourage people to take advantage of sub-prime variable rate mortgages, although he knew the rates had nowhere to go but up. The Fed threw more fuel into the fire.
Bernanke knew the same and did nothing to change it. He actually ran with it.
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