So let me get this straight.
Banks gave money to people that they shouldn't give money to. People that are a risk to loan money to and never had the means or intention to pay back the bank. In some causes the bank didnt have any money in the vault to give to these people they just wanted to jump on the housing boom bandwagon. Than the banks because they don't know how to run a business go belly up. The government goes in, the government trillions of dollars in debt mind you goes in and buys them out.
Can I get the government to pay my student loads? Since I dont feel like paying them.
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That is why the this "bailout" is taking longer then they would like. The Democrats have added in some stipulations to the bill that if the taxpayers on going to fund keeping CEOs in there high rise corner offices, then they should also help keep the middle and lower class people who are struggling to live in their homes.
The democrats caused this problem by forcing banks to lend to those who weren't credit worthy. That's the liberal way, let everyone have a slice of the American Dream! And if you don't , we will come down on you with the full weight of the US Gov't.
Bill Clinton has majorly fucked us.
Yes, blame Bill Clinton, who hasn't been in office for 8 years. It must be his fault for creating a surplus for our government that is now a deficit created by Bush and his administration. But its ok, Clinton got a blow job in office, so everything must be his fault.
Listen retard. This shit has happened because Bush has loosened so many of the restrictions and regulations that govern the banking industry that they were doing whatever they pleased. They got drunk off of greed and offered anybody that wanted one a loan. Clinton had nothing to do with this. The economy was in the strongest shape that it has been in since WWII when Clinton left office. Now we are fucked. All of this is on Bush's hands.
This bailout is a bad idea. It sets the wrong precedent for future business practices. I like the alternatives I've heard. Alternatives like: the government lending the money with the bad default loans as collateral. Or buying stock in the failing companies.
I'm in favor of congress discussing the next plan of action for a SHORT time. CEOs should suffer. They were not forced to make bad loans. They did it for profit. I did hear that Clinton relaxed lending laws to make it easier for more people to buy houses, but I've spoken with loan agents who have admitted to telemarketing to high-risk/low-income households in order to solicit a hard sale.
He and others did this for eight hours a day pulling in butt-loads of loans that they knew would not be paid back. I think the intend was to take advantage of the relaxed economic state of the time and collect on the collateral- to make some cash.
Homeowners are not completely innocent either. People who already had a home bought second houses to be flipped. Now they can't sell the houses and the loans they took out default.
I am sympathetic toward the American dreamer. People who own one home and are facing forclosure are the one who need and deserve the most help.
jason, perhaps you need to stop reading left wing propaganda. Perhaps you need to think instead of stomping your feet and blaming Bush. Why on Earth would any business loan money to people who could not pay the loans back? Greed has nothing to do with it. In fact, the banks never wanted to make those loans. Go do some research.
jenna,
Grow up.
Yeah I am sure that you are reading nothing but balanced opinions. I am sure that you are not getting all your information from Fox News and Rush Limbaugh. The facts are Clinton left office with a billion dollar surplus. Bush will leave office with a trillion dollar deficit. Those are facts not propaganda.
jason,
Instead of Fox and Bush bashing like the rest of your ilk, why not respond to my question? Why would any bank lend money to people who are high risk? Why would any bank lend to those who they know will not be able to pay them back? These banks had the data and metrics to know going in what the end result was going to be, but they did it anyway.
Now, why might something like that happen?
They are called 'predatory loans'. Those with spotty credit history were reeled in with the up front low interest rates, otherwise known as a 'teaser rate'. After a couple of years, the interest rates would rise increasing the borrowers mortgage payments, sometimes by twice the original payment.
But not only were the subprime mortgages given to those with bad credit, the low interest rates also looped in those who were eligible for a conventional mortgage. Some brokers steered them into to the subprime mortgages in order to create higher commissions. They would prey on these people to make more money off of them.
By the way, if you're going to tell me to grow up, please tell me who you are first. Don't fucking insult and not be man enough to own up to who said it.
Yeah, what she said. They got drunk off of greed that was given to them by Bush's deregulation of the banking industry. This shit did not happen under Clinton. It happened under Bush. He let these banks do this. He signed those bills. He did it, not Clinton. Fucktard.
Go read about the Community Reinvestment Act. It was started in the 70s and expanded by Bill Clinton. That's the root of our problem, whether you like it or not.
From Wikipedia:
" In early 1993 President Bill Clinton ordered new regulations for the CRA which would increase access to mortgage credit for inner city and distressed rural communities. The new rules went into effect on January 31, 1995 and featured: requiring numerical assessments to get a satisfactory CRA rating; using federal home-loan data broken down by neighborhood, income group, and race; encouraging community groups to complain when banks were not loaning enough to specified neighborhood, income group, and race; allowing community groups that marketed loans to targeted groups to collect a fee from the banks."
So what your saying is that Bill Clinton expanded the CRA to allow minorities access to getting a mortgage and that is why it failed. Again, you are wrong. The predatory lending practices of greedy mortgage brokers have caused this problem. Their shady business practices have included failing to disclose the fact that loan rates are negotiable as well as not completely letting the borrower know about terms and conditions of the loan.
Bill Clinton wanted to give the people living in the inner cities the ability to purchase a home just like us suburban white people. These institutions took advantage of that and fraudulently flashed low interest rates and affordable monthly payments in their faces. Yet because they don't disclose the fine print up front, these poor people just trying to make it have had their lives turned upside down trying to save these home when their interest rates went through the roof. The predatory loan practices have caused these people to be unable to pay their mortgages, in turn causing the banks and brokers to go belly up.
Greed came back and bit the mortgage industry in the ass and now the American people have to bail the CEOs and multi-million dollar corporate assholes out. It is unfair that these greedy bastards will get to stay in their shiny corner offices while Joe Blow in center city has to get another job to try and make ends meet.
CORPORATE GREED, NOT BILL CLINTON. Get that into your head and maybe you will realize that these rich, Ivy League educated, white collars are the real evil, and not the poor minorities that are just trying to get by.
Here is a quote for you from Tyler Cowne, an Economics Professor at George Mason University:
"As much as 70 percent of recent early payment defaults had fraudulent misrepresentations on their original loan applications, according to one recent study. The research was done by BasePoint Analytics, which helps banks and lenders identify fraudulent transactions; the study looked at more than three million loans from 1997 to 2006, with a majority from 2005 to 2006. Applications with misrepresentations were also five times as likely to go into default. Many of the frauds were simple rather than ingenious. In some cases, borrowers who were asked to state their incomes just lied, sometimes reporting five times actual income; other borrowers falsified income documents by using computers."
Ladies and Gentlemen, let your education begin:
The CRA is not the cause of this crisis. The real target of the CRA was lending by commercial banks (e.g. Bank of America, Commerce), where most of us keep our money. These are heavily regulated and have made reasonably good loans. They are not the ones with the problem.
The problem was with mortgage lenders like Countrywide, who took mortgages believing that they could package them as securities and sell them to financial institutions before the underlying mortgages went bad.
The investment banks and other financial institutions believed that, while mortgages to these people were risky, they could manage the risk. They believed that by packaging groups of mortgages with particular risk characteristics together, they could predict the risk associated with the security, even if they couldn't predict the risk of any particular mortgage. They started creating all sorts of esoteric financial instruments and trading them believing they had figured out how to manage any risk.
That's why these mortgages were made. Because the people with money to lend believed that even though they were risky, they could manage the risk through securitization. It wasn't commercial banks that did this. There are a few outliers in the commercial banking world, but they are for the most part regulated. The investment banking world isn't. That's why today Bear and Lehman are Toast and Bank of America is a net buyer in the marketplace. The problem with the bailout is that Paulson et. al. have been looking for a "clean" bailout, which means he only wants to target the financial institutions with problems and the marketplace - and no one else. But if you want taxpayer dollars, you should have to accept regulation. And if you can't sympathize with people who made bad mortgages, why is the government so ready to sympathize with the financial institutions who made the loans and sold the securities?
We can't do nothing or we'll end up in the financial dark ages and the Euro Union, China, and Russia will be in the driver's seat. But the bailout only will work as the first step in a long-term plan. We need to get more money in the hands of the middle class. How about a "bailout" for student loan debt? Imagine the immediate buying power that would create for the middle class. Then increase auto emissions standards and use mild incentives to get people to buy american cars? Then people would have money in their pockets, they'd have to go out and buy, and they'd be likely to buy from american automakers.
This isn't left wing propaganda. It's common sense.
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