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Reply #23: This is the age old argument of Government vs Private sector [View All]

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humbled_opinion Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Dec-05-11 08:24 PM
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23. This is the age old argument of Government vs Private sector
It boils down to this, the Government through agencies like Fannie Mae and Freddie Mac as well as Ginny Mae FHA and VA were backing zero down homeloans. The goverment than told the banks to make homeownership available to as many people as it could. This sparked a building boom and a homeownership record boom, it also brought out the CAPITALIST (greed) in a whole host of people. Thousands of people were making money by filing for multiple mortgages and flipping houses, others where cashing out the booming equity in refi's and spending like crazy, the banks were selling the risky loans (subprime mortgages) as CDO's etc, so everyone was taking advantage of the entire boondoggle up and down the entire chain. According to the Teaheads at my job, this is what has got them so riled up, because the government involvement in the private sector essentially caused this chaos. They point out that Historically, the banks (private Sector) always required 20 percent down that is why homeownership was never guranteed to everyone and the poorer among us could never afford to buy a home, because you had to save for a long time to meet the downpayment requirement. Once you invested the downpayement you were less likely to walk away from your mortgage when times got tough and more likely to do whatever it took to keep paying your mortgage so you didn't lose the 20 percent, additionally, when you did stop paying and got foreclosed, the bank happily took your deposit and easily unloaded the house on the market at a 20 percent reduced cost, this kept property vaulues continually moving up never down and made mortgage assets a very stable investment for the banks to use as collateral. Of cours there are degrees of seperation the people made small amounts of money or walked away from realatively small amounts of total debt, where the banks were dealing with amounts in the Trillions.

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  -The Zombie Lie About The Economy Right-Wingers Desperately Cling To - And Why It's Totally Wrong Hissyspit  Dec-05-11 04:18 AM   #0 
  - K&R, where is the global outrage?  AntiFascist   Dec-05-11 04:34 AM   #1 
  - to read later  snagglepuss   Dec-05-11 04:43 AM   #2 
  - It's very good.  Hissyspit   Dec-05-11 05:17 AM   #5 
  - complex causality!  tfsoccer   Dec-05-11 04:53 AM   #3 
  - You don't happen to have a "Prime Radiant" handy, do you?  Tesha   Dec-05-11 07:24 AM   #9 
     - Ya!  tfsoccer   Dec-05-11 05:48 PM   #16 
        - The prime radiant was the funny little cube that could project onto the walls of the room...  Tesha   Dec-05-11 06:19 PM   #19 
           - Love Asimov :) nt  abelenkpe   Dec-06-11 12:06 AM   #33 
  - Absurd Zombie Lies (R)  SpiralHawk   Dec-05-11 05:00 AM   #4 
  - Deleted message  Name removed   Dec-05-11 05:20 AM   #6 
  - Absurd  SpiralHawk   Dec-05-11 06:14 AM   #7 
  - It's hard to tell which flavor these folks are..  sendero   Dec-05-11 06:21 AM   #8 
  - "as early as 2004 or so"...  bvar22   Dec-05-11 11:48 AM   #15 
     - It was beyond obvious in LA by 2004.  JDPriestly   Dec-05-11 08:51 PM   #25 
        - Cannot tell you how many of our friends and coworkers bought between  abelenkpe   Dec-06-11 12:19 AM   #35 
           - The historical pattern is they go up. But slowly, not double in five years.  mmonk   Dec-06-11 05:41 AM   #40 
  - Counterexample ... Ireland  econoclast   Dec-05-11 08:30 AM   #10 
  - K&R...  SidDithers   Dec-05-11 08:41 AM   #11 
  - This economic crisis was the result of Greed meeting Stupidity,  MadHound   Dec-05-11 08:43 AM   #12 
  - Gramm-Leach-Bliely Act of 1999 ... its starts there.  JoePhilly   Dec-05-11 08:56 AM   #13 
  - The article cited in the OP points out that the problems started much  JDPriestly   Dec-05-11 08:52 PM   #26 
  - its impossible for left to beat the RW myths as long as it ignores RW radio  certainot   Dec-05-11 10:54 AM   #14 
  - That's why it's best to 'know thine enemy'  JuniperLea   Dec-05-11 06:00 PM   #18 
  - for instance, limbaugh spent months telling the teabaggers raising the debt ceiling was not importan  certainot   Dec-05-11 07:55 PM   #22 
  - At my age, you already know what you are up against, and you  JDPriestly   Dec-05-11 08:54 PM   #27 
  - I don't think the left ignores RW radio  nxylas   Dec-05-11 06:57 PM   #20 
  - there is no organized opposition and it's their best media tool  certainot   Dec-05-11 07:45 PM   #21 
  - bingo  oldhippydude   Dec-05-11 09:10 PM   #29 
  - I'd say it was a melange of wrong...  JuniperLea   Dec-05-11 05:58 PM   #17 
  - This is the age old argument of Government vs Private sector  humbled_opinion   Dec-05-11 08:24 PM   #23 
  - Read the article cited in the OP. If you believe what you say in your post,  JDPriestly   Dec-05-11 09:18 PM   #31 
  - I think you completely missed my point  humbled_opinion   Dec-05-11 09:57 PM   #32 
     - Did you read the article? The banks lobbied for years and years  JDPriestly   Dec-06-11 11:01 AM   #41 
  - That is not how it went down at all  abelenkpe   Dec-06-11 12:14 AM   #34 
  - Bull  Enthusiast   Dec-06-11 01:30 AM   #37 
  - You are off base with your assessment.  olegramps   Dec-07-11 08:50 AM   #43 
  - K&R  JDPriestly   Dec-05-11 08:38 PM   #24 
  - yes  oldhippydude   Dec-05-11 09:15 PM   #30 
  - easier to blame poor people than rich people  Skittles   Dec-05-11 08:59 PM   #28 
  - kr This is exactly correct.  Enthusiast   Dec-06-11 01:20 AM   #36 
  - Repeat after me-Community Reinvestment Act, Freddy Mac, Barney Frank  ErikJ   Dec-06-11 01:34 AM   #38 
  - Repeat after me, 'derivitives'. -eom  Huey P. Long   Dec-06-11 11:04 AM   #42 
  - Outside of Vegas  Gringostan   Dec-06-11 04:27 AM   #39 
  - K  G_j   Dec-07-11 10:07 AM   #44 

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