- Joined
- Sep 17, 2005
- Messages
- 8,211
- Reaction score
- 4,179
- Location
- Chicago
- Gender
- Male
- Political Leaning
- Libertarian
A few months...
What a nice perfect little world you live in where people are able to find work in their field so quickly...
Again, why is this my problem? Why should your inability to find work be my concern?
Try to follow along:
- Existing loans were packaged as mortgage-backed securities.
- Credit rating agencies overvalued this paper which was sold to investors all over the world.
- The collapse of the housing bubble caused the values of securities tied to real estate pricing to plummet.
- This resulted in a liquidity shortfall in the banking system and declines in credit availability.
Now try this:
- Interest rates were too low for too long.
- The availability of cheap money accelerated malinvestment and speculation in the housing sectors.
- The government was subsidizing housing and pressuring banks to service low-income (AKA high-risk) demographics.
- Americans were taking on too much debt.
- Americans had an anemic savings rate.
Outcome: The government-created housing bubble burst and many Americans were caught with their-debt-laden pants down.
Your solution: Pretend it was all Wall Street's fault and saddle future generations with more debt.
Businesses could not make payroll, or stock their stores, or purchase equipment because the big banks stopped lending. In other words, we were all almost totally Screwed!
I've begrudgingly accepted the necessity of some of the Fed's stopgap measures, including the steps they've taken to aid defaulting home-owners. My problem is the unwillingness of many Americans to accept responsibility for their financial situation. I also have a problem with the government's repeated attempts to attribute the housing bubble to a failure of free market economics when it was really monetary and fiscal policy that is to blame.
See above -- it was a little more complicated then that.
Hey, thanks chief...:roll: