Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
the public was demanding higher yields and wall street complied.
the financial industry had to satisfy that greed with products paying higher rates that never existed before.
cdo's ,credit default swaps and cmo's were all products either created or used out of context and offered to the public feeding their demand for higher yield.
the public was ignorant and many folks bought more and more of a home thinking they would flip it at even higher prices.
suddenly the thinking was buy a house and let the wealth pour in.
it wasnt the few morons who got loans by banks and should not have gotten them that collapsed us.
they were paying those loans right from day 1. it was only after the perfect storm of all these things and products meshed that things started to collapse.
credit default swaps were supposed to let banks hedge risky loans.
if you loaned john 1,000 bucks and thought you may not get payed and told a mutual friend that friend may say ,nah i think john will pay you..
so you say want to bet?
so your friend bets you that john will pay you.
that bet will offest some of the loss if you dont get paid .
now your hedged.
but now imagine other friends want in on the action.
suppose you now have 1 million dollars in bets on the fact you may or may not get paid back that measly 1000 bucks.
credit default swaps turned into a vegas style betting parlor.
trillions of dollars were bet as to whether loans a fraction of that size would get repayed.
when those long shots started to pay off institutions and banks on that side of the bet lost huge sums of money. some lost more then they could even spare.
the biggest brokerages were hurt big time by the loss of huge amounts .
other products like cdo's were created.
imagine taking a bundle of mortgages and selling it to investors . that paid 4%.
then you sell an identical package to another group at 6% . only difference is they dont get paid until all of group 1 gets paid.
they then sold it to another group and paid 8%. same deal , you only get paid after group 1 and 2 do.
well when things started to look a little shakey and even though each group got their payments those in groups 2 and 3 wanted out.
well that froze the credit markets as no one wanted to buy them.
there was so much involved on all fronts as to what caused the collapse that we still dont even know what happened.
those that point the finger are usually just ignorant of all the factors that caused it and the reasons. most of which the public generated by their own greed.
how many here were even aware of thse products?
but if blaming the banks ,the political parties, wall street or even your 401k adminstrator makes you feel better then by golly blame someone but all parties were just as guilty..
I'm angry at the ruling classes for cockamamie social policy, in part expressed through credit and housing policy, but also the breakneck speed of globalization, illegal immigration, etc.
The Main Street and Wall Street banks executed the credit and housing policy order, though to a significant extent there is a revolving door between the moneymen and the politicians, and in such a way as to profit from it, causing the entire real economy on US soil to teeter, and it is still wobbling.
Nonetheless, it has not fallen and collapsed, and though almost every asset lost in price during the peak months of the downturn, there have been safe havens, the real economy is slowly recovering, and there have been and still are opportunities to get by, even prosper, both nationally and globally.
Never was mad at wall street.I have always known that there is balme from main steet to washington to wall street.I still think fannie and freddie will linger on taxpayer bailouts for some years.
the public was demanding higher yields and wall street complied.
the financial industry had to satisfy that greed with products paying higher rates that never existed before.
then how did only the top 10% or so end up with most of the money before and after the crisis. Did the rest of the 90% or so not demand high enough of a yield? I am not being sarcastic, am I curious.
then how did only the top 10% or so end up with most of the money before and after the crisis. Did the rest of the 90% or so not demand high enough of a yield? I am not being sarcastic, am I curious.
besides things like inside info the top 10 pct tend to be a lot smarter than the bottom 90%
look what happens when you give the average person a huge lottery prize or when brain dead athletes make tens of millions of dollars and are bankrupt a few years later
give a smart person tens of millions and they turn it into hundreds of millions
You make it sound like the public should get a free pass for being ignorant.
How about personal responsibility?
Did buyers have a gun to their head to buy more house than they could afford?
Advertising is a powerful thing.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
