Papa bull
DP Veteran
- Joined
- Jun 20, 2013
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OK, the financial institutions made loans, charged a bunch of fees, sold them off at a profit almost immediately, those buyers bundled them into securities, charged more fees, sold off those securities at a profit, so all along the way the players are keeping slices of this new debt. And when the shiate hit the fan, the homeowners were mostly left with a mortgage debt in excess of the value of the property, many bankrupted, lost their houses and savings, but we covered the losses of the lenders instead of bailing out the borrowers. So after all the dust settles, which group benefited from the boom and the bust? It's not homeowners.... Follow the money as they say.
And the bigger point is the purpose of all the changes were NEVER to 'redistribute' downward. The banking and lending environment we had in the bubble was nearly exactly what the biggest lenders and the most powerful institutions in the U.S. paid good money - $billions over time - to get. Look at the results during the bubble - everyone in the process was shoveling in profits, pay, bonuses and stock appreciation gains as fast as they could work the shovels.
The lenders didn't get any of their losses covered. Over 500 banks went out of business and the "bailouts" weren't gifts. They were loans designed to keep the key players from defaulting on their obligations. Basically, we loaned them the money to keep them afloat long enough to pay for their mistakes.
The people that got over on us all were the individuals that decided not to make payments on their zero-down payment loans when it turned out their "investment" didn't turn out to be as profitable as they thought it would be. The same thing happened in Ireland. It should have been something to take a lesson from but so many people have the same skewed perspective you have that I wonder how long it's going to be before we do it all over again. My wife (Irish) still believes that land is a foolproof investment. Fact is, we may not ever again in our lives see land values like those stupidly high inflated bubble values that made homeowners and prospective homeowners giddy with delight. It was an orgy of financial excess for all involved; not just the lenders. The lenders were the ones left holding the bag.