• This is a political forum that is non-biased/non-partisan and treats every person's position on topics equally. This debate forum is not aligned to any political party. In today's politics, many ideas are split between and even within all the political parties. Often we find ourselves agreeing on one platform but some topics break our mold. We are here to discuss them in a civil political debate. If this is your first visit to our political forums, be sure to check out the RULES. Registering for debate politics is necessary before posting. Register today to participate - it's free!

What Created The 2008 Financial Meltdown?

What Created The 2008 Financial Meltdown?


  • Total voters
    51

pbrauer

DP Veteran
Joined
Jun 6, 2010
Messages
25,394
Reaction score
7,208
Location
Oregon
Gender
Male
Political Leaning
Liberal
What Created The 2008 Financial Meltdown?

Greedy Wall Street Investment Bankers /Deregulation of the financial industry

Barney Frank, Chris Dodd and the CRA

Poor people buying houses they can’t afford.

Other
 
What Created The 2008 Financial Meltdown?

Greedy Wall Street Investment Bankers /Deregulation of the financial industry

Barney Frank, Chris Dodd and the CRA

Poor people buying houses they can’t afford.

Other
Try all of the above...
Well certainly the first and third, and depending how it was implemented, also the second. But I suspect that the second one resulted in at least some loans to people who didn't deserve them based on their credit.
 
What Created The 2008 Financial Meltdown?

Greedy Wall Street Investment Bankers /Deregulation of the financial industry

Barney Frank, Chris Dodd and the CRA

Poor people buying houses they can’t afford.

Other

I think it can be traced back directly to the repeal of the the Glass-Steagall Act, and helped along by lax/non regulation of our other banking-oversight laws at the time.

Not too surprising, it is at the top of the list of demands of the OWS protesters across the country, to get the Glass-Steagall Act reinstated.

"Glass-Steagall was passed under the Roosevelt administration in 1933 in direct response to the Wall Street shenanigans that ushered in the Great Depression where banks shoved their own depositors into buying the stocks the banks were dealing. The basic idea was to keep banks from speculating with the savings that American citizens were entrusting within their vaults.

Its repeal, under the Gramm-Leach-Bliley Act, drafted and passed by a Republican congress, and signed by William Jefferson Clinton, allowed commercial banks to merge with investment banks. For instance, Citigroup merged with Traveler's Insurance (although this merger was announced in 1998, before the act was passed, at the time Citigroup CEO Sanford I. Weill said that he spoke with the Feds and, "that over that time the legislation will change...we have had enough discussions to believe this will not be a problem.").

Now, on the one side they could sell mortgages to homeowners, and then invent fancy investment structures which they sold on Wall Street. Because they were "covered" on both ends, banks felt free to sell increasingly dicey mortgages, just so long as another sucker was picking up the garbage. This sucker was picking it up because he had a plan to repackage it and sell it to another sucker, and so on. Eventually we end up with no-doc stated income interest-only option-ARM no money down mortgages being repackaged as "sound investments" being sold as "stable assets" for city pension plans to park their money in. (See "Subprime Meltdown As Told By Stick Figures").

We can only imagine the level of machination exerted over those 30 years, but we do know this. Robert Rubin was Secretary of Treasury, which had oversight over Glass-Steagall regulation. Days before he resigned, Glass-Steagall was repealed. Just over a year later, he became chairman of the Citi executive committee, with an annual compensation of $40 million, a position he still holds, despite Citigroup's $24 billion in subprime-related losses."

Blame The Subprime Meltdown On The Repeal Of Glass-Steagall - The Consumerist
 
Try all of the above...
Well certainly the first and third, and depending how it was implemented, also the second. But I suspect that the second one resulted in at least some loans to people who didn't deserve them based on their credit.
Please how the second and third options has any bearing on the issue. The poor created this mess. Really?
 
The second option makes no sense, as Dodd-Frank was signed into law two years after the meltdown. Who honestly blames the financial meltdown on Dodd-Frank?
 
Mr. Pearce echoed my thoughts. Definitely #1 and #3, possibly some #2 thrown into it.

Glass-Steagall gets crucified in this because too many people want to shirk responsibility involved in this. The true crime existed when regulations allowed for high-risk ventures to essentially be compensated when they would fail. If a business tried to bust coffers with derivatives and risky money market tools, the government would just recoup losses. That never should have come to be.

I give the bulk of the blame to two parties - the dumbass who walked into the bank making $30,000 a year wanting a loan for a $250,000 house, and the dumbass bank who OK'd it. Put both of them in front of a firing squad.

The only real problem is that it happened en masse, and while we could punish handfuls of individuals who do this, when they come out in full force and exert stupidity, you can't turn your back. If a fool and his money are soon parted, government should part too.
 
Please how the second and third options has any bearing on the issue. The poor created this mess. Really?
Well, not just poor people borrowing too much. Everyone who borrowed for frivolous things that they couldn't afford is partially responsible, at least in part. What portion is the debatable part. As for the second, well encouraging home ownership isn't ALWAYS a good policy. The bigger issue is the government pushing home ownership in the first place. Look at these statistics:
Home ownership statistics - Countries Compared - NationMaster

Home ownership rate in Ireland in 2000: 83%!!! And we all know their economy is doing well. It's not a coincidence that the majority of the countries with high home ownership rates got hit by this recession. After all, the junk bonds were just a symptom caused by banks trying to hide bad assets.
 
Please how the second and third options has any bearing on the issue. The poor created this mess. Really?

A person making $2,000 a month has no business taking out a loan with a $1,000 a month note, which is what happened in many cases. At some point, the people who took out loans they knew they couldn't afford must take at least a little responsibility for their actions.
 
A person making $2,000 a month has no business taking out a loan with a $1,000 a month note, which is what happened in many cases. At some point, the people who took out loans they knew they couldn't afford must take at least a little responsibility for their actions.
.........Yes.
 
A person making $2,000 a month has no business taking out a loan with a $1,000 a month note, which is what happened in many cases. At some point, the people who took out loans they knew they couldn't afford must take at least a little responsibility for their actions.
Can you back these ridiculous claims up with any evidence? Why would a lender lend money to someone who can't pay them back?
 
Glass-Steagall gets crucified in this because too many people want to shirk responsibility involved in this. The true crime existed when regulations allowed for high-risk ventures to essentially be compensated when they would fail. If a business tried to bust coffers with derivatives and risky money market tools, the government would just recoup losses. That never should have come to be.

If the GS Act had still been in place, banks could flat out not have used people's mortgages and pensions to speculate with. It is why it was enacted in the first place following the same practices that brought about the great stock market crash in 1929.
 
If the GS Act had still been in place, banks could flat out not have used people's mortgages and pensions to speculate with. It is why it was enacted in the first place following the same practices that brought about the great stock market crash in 1929.
This reminds me of 2007 when we were talking about the great depression and my teacher predicted this whole crisis lmao.
 
The second option makes no sense, as Dodd-Frank was signed into law two years after the meltdown. Who honestly blames the financial meltdown on Dodd-Frank?
We have at least one person taking the second option and I suspect many more will emerge. I put that option there because there are phony stories out there that tries makes this case.
 
Can you back these ridiculous claims up with any evidence? Why would a lender lend money to someone who can't pay them back?

Because the government threatened them with prosecution, if they didn't! As has been presented to you numerous times.

A school bus driver has no business with a $800,000 home loan. That's just nuts!

The fault for this lies with the lady who took out this loan.

Does she accept responsibility for her bad judgement? Ohhhhhh, nooooooo, she demands that the governmetn bail her stupid ass out.

Michelle Malkin » Hey, lady, your $800,000 house is NOT my problem
 
This reminds me of 2007 when we were talking about the great depression and my teacher predicted this whole crisis lmao.

As the philosopher, George Santayana said, "Those who cannot remember the past, are condemned to repeat it."
 
Catawba said:
If the GS Act had still been in place, banks could flat out not have used people's mortgages and pensions to speculate with. It is why it was enacted in the first place following the same practices that brought about the great stock market crash in 1929.

Translation: Since some people...scratch that...since most people are stupid, we have to give overwhelming power to government to act as daddy, slapping people's hands and shouting "no!" when they do something ridiculous?

Ah hell, that's just great. Our problem isn't stupidity - it's that we subsidize it. Making an example of these fools would be a powerful learning tool for the next crop of economically ignorant folk who have dollar-green dreams and lack the education to realize them. If it wasn't for people like that, Las Vegas would be a watering hole and pass-through truck stop.

We need to tell these homeless people to put out signs saying "Will work for food because I took out a loan I knew I couldn't pay back".
 
The second option makes no sense, as Dodd-Frank was signed into law two years after the meltdown. Who honestly blames the financial meltdown on Dodd-Frank?

Actually it makes perfect sense, because Chris Dodd and Barney Frank were ram-rodding Fannie and Freddie and kept insisting that everything was just fine; that there was no impending crisis.
 
Translation: Since some people...scratch that...since most people are stupid, we have to give overwhelming power to government to act as daddy, slapping people's hands and shouting "no!" when they do something ridiculous?

Ah hell, that's just great. Our problem isn't stupidity - it's that we subsidize it. Making an example of these fools would be a powerful learning tool for the next crop of economically ignorant folk who have dollar-green dreams and lack the education to realize them. If it wasn't for people like that, Las Vegas would be a watering hole and pass-through truck stop.

We need to tell these homeless people to put out signs saying "Will work for food because I took out a loan I knew I couldn't pay back".

We have to do that, so the commies can't take over. Ohh..wait...
 
If the GS Act had still been in place, banks could flat out not have used people's mortgages and pensions to speculate with. It is why it was enacted in the first place following the same practices that brought about the great stock market crash in 1929.

And alot of poor people couldn't half-million-dollar+ homes and that's not fair. It's the reason Glass-Steagal was repealed.
 
The causes of meltdown were multifaceted, but if I had to pick one of the options, it would be the Wall St. However, the government certainly played a role by inducing moral hazard and artificially low interest rates.

Nonetheless, we were warned years ago about the danger of derivative trading without transparency.
The Warning | FRONTLINE | PBS
 
Translation: Since some people...scratch that...since most people are stupid, we have to give overwhelming power to government to act as daddy, slapping people's hands and shouting "no!" when they do something ridiculous?

Ah hell, that's just great. Our problem isn't stupidity - it's that we subsidize it. Making an example of these fools would be a powerful learning tool for the next crop of economically ignorant folk who have dollar-green dreams and lack the education to realize them. If it wasn't for people like that, Las Vegas would be a watering hole and pass-through truck stop.

We need to tell these homeless people to put out signs saying "Will work for food because I took out a loan I knew I couldn't pay back".

What overwhelming power? What were the evil consequences of the Glass-Steagall Act that you or others experienced? Did we have any major financial meltdowns brought about by wild speculation with American's life savings during the decades it was in effect?

I think it is interesting also that the protesters understand this and have put the reinstatement of the Glass Steagall Act at the top of their list of demands.
 
What overwhelming power? What were the evil consequences of the Glass-Steagall Act that you or others experienced? Did we have any major financial meltdowns brought about by wild speculation with American's life savings during the decades it was in effect?

I think it is interesting also that the protesters understand this and have put the reinstatement of the Glass Steagall Act at the top of their list of demands.

Wait until poor folks can't come up with the 20% down payment on a $50,000 home. The Libbos will take to the streets, again, to demand that Glass-Steagal be repealed.
 
And alot of poor people couldn't half-million-dollar+ homes and that's not fair. It's the reason Glass-Steagal was repealed.

Sorry, no speak jibber-jab. Please try again.
 
Back
Top Bottom