Who to blame for sub-prime
I was sent this by a friend who was an undecided voter. As I am not american, my vote doesn't count either, but with the press coverage this election is getting it's hard not to have an opinion (i probably wouldn't care so muc if it was two middle aged white guys). It is biased, but I did some checking of the facts presented and the ones I checked passed. Although I lay blame on idiots who took out loans that they couldn't afford, there is also an aspect where the government is to blame for letting it happen.
Anyway, it seems like the democrats were the ones who introduced the communities reinvestment act which promoted homeownership for low income people...how stupid is that. Further, under clinton, he allowed the securitization of these sub-prime loans to occur.
Anyway, just watch the video and let me know what you think.
- Login or register to post comments
- Email this Forum topic
Poll
WSO Employment Rate: for those of you searching for a job, have you received an offer yet?
Yes
55%
No
45%
Total votes: 76
New groups
- University of California, Berkeley
- University Hawaii, Manoa - Shidler College of Business
- Penn State Finance Group
- Kogod Finance Group
- UT Freshman Business Association Members & Alumni
- Indiana University
- University of Texas at Austin
- Pittsburgh Marketers
- The Restructuring Group
- National Organization for Business and Engineering - Illinois Chapter
That's absolutely
That's absolutely correct....there was a good article on CNN the other day from that Harvard economist. If it hadn't been for bad government policy, then this whole mess would never have happened. But it is just so much more convenient to now blame it all on greedy capitalists....communism is lurking just around the corner!!!
There is a whole string of
There is a whole string of people to blame for this mess. The borrowers who lied about their income or knowingly took on too much debt, the mortgage brokers who aggressively and dishonestly pushed loans, the regulators who looked the other way instead of discouraging the "originate to distribute" mentality, the investment banks who drank the securitization kool aid and believed they could diffuse and concentrate risk as they please, the investors for buying risky assets at ever-decreasing spreads to Treasuries while levering up to juice returns, the ratings agencies for weak diligence and overconfidence in the assets they rated, and the government for pushing homeownership for low-income families. Everybody is to blame, and at any point along the chain someone could have pulled out and slowed this down. It's not just the government, it's everybody.
Capitalist: Consumer/Stupid
Capitalist: Consumer/Stupid Home Owners
Socialist: Greedy Bankers
Answer: Both
Alan Greenspan for mistaking
Alan Greenspan for mistaking a localised problem for a systemic one and still over-reacting, unregulated mortgage brokers, and this mentality (see poster):
http://4.bp.blogspot.com/_eVB4pxYKr-0/SOKnE9rAiUI/AAAAAAAAAkI/aLgRpOnviB...
I think labelling the investment banks as greedy in this whole affair is like labelling a person who stumbles over a $100 bill on the street greedy for picking it up. How many CEOs of commercial banks do you think came knocking on doors in 03, desperate because their balance sheets where getting saturated and begging for some way to get these loans off so they could make new ones? By the same logic, I wouldn't blame those who took out some of these loans when they were so temptingly dangled in front of their noses.
Disclosure: I don't work for an investment bank, nor am I a subprime borrower