Why is everyone blaming the banks for our current financial crisis?

[ebaycj]

Originally posted by: Dari

Who makes the rules in your house? The kids? This isn't rocket science.

What happens when the kids make enough money to effectively bribe the Parents? Then you're completely fucked and the whole system implodes. That's what really happened here.

 

[SP33Demon]

Originally posted by: Dari

Originally posted by: zephyrprime
Yeah but who got the government to ease up on regulations and turn a blind eye? The banks. We've got to end our legal bribery system via campaign contributions.

That's akin to a mother or father blaming their child for buying a toy for them. Pathetic. If our government is corrupt then we deserve it. Remember, we live in a republic.

You're forgetting to mention that the child in your example bought the house and groceries for the parent.

 

[SP33Demon]

Originally posted by: Robor
A friend of mine and his non-working wife were considering doing a refinance on their place to pull out some equity. His credit is poor and hers is non-existent. In order to qualify for the loan the broker was going to fabricate income for his wife. Luckily they opted to pass on the loan because they'd likely be screwed right now.

About 2 years ago, a friend of mine is a broker and said he could get me a 450K house on my less than 6 figure income (and single not married). He also said he knew that he was ripping people off with ARMs and front/end loading his comission on these mortgages, but it wasn't regulated and he justified it in that he had to somehow feed his young daughter. He acknowledged that people were getting screwed but he had to do the same thing as his competition in order to get the sale. Perfect example of why some markets absolutely need more regulation, not less.

 

[TheSlamma]

Originally posted by: SP33Demon

Originally posted by: Robor
A friend of mine and his non-working wife were considering doing a refinance on their place to pull out some equity. His credit is poor and hers is non-existent. In order to qualify for the loan the broker was going to fabricate income for his wife. Luckily they opted to pass on the loan because they'd likely be screwed right now.

About 2 years ago, a friend of mine is a broker and said he could get me a 450K house on my less than 6 figure income (and single not married). He also said he knew that he was ripping people off with ARMs and front/end loading his comission on these mortgages, but it wasn't regulated and he justified it in that he had to somehow feed his young daughter. He acknowledged that people were getting screwed but he had to do the same thing as his competition in order to get the sale. Perfect example of why some markets absolutely need more regulation, not less.

Amazing something like that never made national news. I think when something gets as popular as that bubble was everyone seems to turn and look the other way.. even the gov.

 

[GTKeeper]

I think people need to wake up to the fact that the sub-prime market losses were 600 billion.

The 'sub-prime' mess by itself would have been covered by the bailouts up to this point. What people don't realize is that the credit default swap market is what is dragging the whole f-ing system down.

Its not just 'sub-prime' market. Think of it this way. If you bought a house between 2004 and 2006 and put 20% down you are now underwater, congratulations for being responsible.

Now, the sub-prime borrowers drove housing prices up somewhat. What drove prices even more than anything was debt securitization via a AAA conduit like AIG that basically said 'get us any loans possible, we don't care who we lend the money to'.

Look at the Indy Mac report that was done to investigate its operations.

There were loans that defaulted BEFORE THE FIRST PAYMENT was even made! No checks on credit score (believe it or not) no check on appraisal, no check on income verification, no check on that you had any legal issues before, no checks on anything. Indy Mac didnt care 1 bit, Wall St. was taking any trash loan it could get its hands on.

I'm sorry to say, but if you keep lending 20 bucks to friends that never pay it back, thats your own damn fault. Yes, you are a turd if you keep borrowing without paying back, but one would assume that if you do that enough times you just don't get a loan the next time.

Borrowing behavior hasn't changed over the last 80 years.... lending behavior has, dramatically.

 

[Dari]

Originally posted by: ebaycj

Originally posted by: Dari

Who makes the rules in your house? The kids? This isn't rocket science.

What happens when the kids make enough money to effectively bribe the Parents? Then you're completely fucked and the whole system implodes. That's what really happened here.

A bribe is still a bribe, right? If people's standards are low enough, they'll take it.

 

[LegendKiller]

Originally posted by: GTKeeper
I think people need to wake up to the fact that the sub-prime market losses were 600 billion.

The 'sub-prime' mess by itself would have been covered by the bailouts up to this point. What people don't realize is that the credit default swap market is what is dragging the whole f-ing system down.

Its not just 'sub-prime' market. Think of it this way. If you bought a house between 2004 and 2006 and put 20% down you are now underwater, congratulations for being responsible.

Now, the sub-prime borrowers drove housing prices up somewhat. What drove prices even more than anything was debt securitization via a AAA conduit like AIG that basically said 'get us any loans possible, we don't care who we lend the money to'.

Look at the Indy Mac report that was done to investigate its operations.

There were loans that defaulted BEFORE THE FIRST PAYMENT was even made! No checks on credit score (believe it or not) no check on appraisal, no check on income verification, no check on that you had any legal issues before, no checks on anything. Indy Mac didnt care 1 bit, Wall St. was taking any trash loan it could get its hands on.

I'm sorry to say, but if you keep lending 20 bucks to friends that never pay it back, thats your own damn fault. Yes, you are a turd if you keep borrowing without paying back, but one would assume that if you do that enough times you just don't get a loan the next time.

Borrowing behavior hasn't changed over the last 80 years.... lending behavior has, dramatically.

Whoa there sparky. AIG wasn't a mortgage underwriter, nor a bank with a securitization program. They insured securitizations but mostly were a CDS shop.

Securitization volume was driven by subprime issuance, not the other way around.

 

[SP33Demon]

Originally posted by: Dari

Originally posted by: ebaycj

Originally posted by: Dari

Who makes the rules in your house? The kids? This isn't rocket science.

What happens when the kids make enough money to effectively bribe the Parents? Then you're completely fucked and the whole system implodes. That's what really happened here.

A bribe is still a bribe, right? If people's standards are low enough, they'll take it.

Everyone has a price, even you. If you were personally promised by the banking industry that you wouldn't have to worry about money for the rest of your life, would you enact legislation that would regulate the banking industry? Would you take steroids? People slam others for "selling out", but everyone won't publically admit that they may have done the same thing if put in the same situation.

 

[Dari]

Originally posted by: SP33Demon

Originally posted by: Dari

Originally posted by: ebaycj

Originally posted by: Dari

Who makes the rules in your house? The kids? This isn't rocket science.

What happens when the kids make enough money to effectively bribe the Parents? Then you're completely fucked and the whole system implodes. That's what really happened here.

A bribe is still a bribe, right? If people's standards are low enough, they'll take it.

Everyone has a price, even you. If you were personally promised by the banking industry that you wouldn't have to worry about money for the rest of your life, would you enact legislation that would regulate the banking industry? Would you take steroids? People slam others for "selling out", but everyone won't publically admit that they may have done the same thing if put in the same situation.

Speak for yourself. If I am running for office, I would assume the responsibility for others as my new burden. Hence, I would force myself to think of what is good for them, not me. This would force me to think long term/seek balance.

Not everyone is corrupt.

 

[MooseNSquirrel]

If you blame bad loans for this financial mess, then you really don't understand how it happened.

S&M

 

[WHAMPOM]

Originally posted by: Dari
I really don't see it as being their fault. Yes they were greedy, but being greedy isn't illegal. And the vast, vast majority of the banks did absolutely nothing illegal. They simply played in the environment that was allowed by the government. This crisis is essentially a failure of government to properly regulate financial instruments and firms properly. If the government had done its job we really wouldn't be in this crisis. This is important considering how important the financial industry is to the whole economy.

And for those upset at the banks for making the recession, I don't remember people complaining when their house values were skyrocketing. I don't remember them screaming when their stock portfolios were increasing 20%+ year on year.

Government is really to blame for letting the financial industry go out of control. What we need to do is acknowledge the problem, fix it wholesale, learn from it and move on. Judging by how long it took to forget how important the financial industry is to the whole economy, I predict another massive recession in 75 years.

Please do some reading about the "BOOM and BUST 1800s" .

Edit; Lenders did nothing illegal doctoring mortage applications??

 

[piasabird]

A lot of banks in the midwest are not having these kinds of troubles. I have not seen any real changes in the St Louis, MO Housing Market. So I dont see why we should pay for the idiots out in california and other markets who have no self control.

 

[Robor]

Originally posted by: piasabird
A lot of banks in the midwest are not having these kinds of troubles. I have not seen any real changes in the St Louis, MO Housing Market. So I dont see why we should pay for the idiots out in california and other markets who have no self control.

Sounds like you need to secede.