The financial meltdown that was caused by the banks in 2008 has been thrust upon the shoulders of American citizens to bail them out. The reasoning was they are "Too big To Fail" The
repercussions of this are still being felt. today Iceland said otherwise,placed blame where it belongs and they are now recovering.
http://articles.businessinsider.com/201 … ial-crisis
http://www.veteranstoday.com/2013/01/29 … nd-speaks/
http://www.greenewave.com/other-countri … ails-them/
http://www.dailykos.com/story/2012/02/2 … ge-Relief#
The fact that Wall St and Washington are linked by a revolving door is no secret and is the absolute reason no one has been punished to date.. The question is?,,,, Why do we put up with it?
We, the average American, puts up with it, because we are no better than these irresponsible businesses. We spend money we don't have. We live beyond our means. We save too little. When the economy goes south, we blame big business as if it is less financially responsible than we are. "It was that bank's fault I'm in so much debt. It should have never offered this kind of loan." Don't we own part of the blame too?
Well, the difference is that the average American doesn't make shady deals to get those loans.
But yeah, when news of HSBC's (or whatever it's called) higher-ups avoiding jail-time because they're "too important" reached my ears, I nearly projectile vomited right there. That's bullshcrap of the highest caliber.
The first bailout was AIG so TBTF's Goldman Sachs primarily, could get paid 100 cents on the dollar for the mortgages they repackaged. The banks knew they were going to fail and then took out ins.on them. During this period these mortgages were repackaged and sold to municipalities, private investors and pension funds. Exotic Financial Instruments? What? Derivatives, Credit Default swaps ? They are more like bookies taking bets on the super bowl coin toss than "Banks" People lost their jobs and then their homes and cars because of this.
Yes. . .the government has been promoting home ownership for years. Everybody knows that banks were lending money to people who would have never gotten a loan thirty years ago. Is it the banks who are at fault when the government offers secured loans for these people and then promotes home ownership as if the economy is strong? Part of that blame has to fall on the government and the people who signed those mortgages.
There were many stories written back when this happened about the crooked mortgage brokers, but there is indeed a problem when someone can't figure out on their own (or admit) that they can't pay a $4,000 a month loan on a $2,000 monthly income. That's an extreme example, but I remember reading a few anecdotes that were about that bad. Brokers told people not to worry, that they could refinance right away, or other stories that allowed them to believe they could have the dream of home ownership.
Banks (and finance companies) didn't properly monitor the paperwork, and there were numerous cases of bad brokers submitting fraudulent income amounts (they didn't even have to document income in many cases).
We are not bailing out the homeowners (as was the spin put on it by government) we are bailing out the finance industry. They just masked it by saying they wanted to help the 'poor homeowners' caught in the mix. I agree, it is sad for people who wanted badly to believe they could own a home, and found out it didn't add up financially (despite the lies they were told). But they should bear some responsibility for not recognizing they were trying to spend more per month than they were making.
People didn't repackage the mortgages as investments they knew would fail. What ever happened to getting "Approved" for a mortgage? I don't remember it being "Self Serve" When I bought my house.In the late 80's I put 20% and they put me through the ringer. The bankers never saw a fee they didn't like. So all those mortgage applications and approvals were a gold mine.
I don't mean to sound heartless but an ADULT can figure out if they can afford it or not. I've purchased at least five homes in 30 years and EVERYTIME everything was disclosed. I was offered financing far above the value of the home I purchased (meaning I could have bought a larger home) but I knew my income levels and my budget. I didn't consider the mortgage company to be evil or the bad guy. I just found homes that were in a certain price range based upon my income and ability to make a certain downpayment. I have ALWAYS made money on the sale of the homes except for my first purchase (a condo in Dallas in 1983) and NEVER missed a payment. Sorry if that sounds braggadocious but you have to know what your doing. Or else just rent.
You make good points. The problem here is that so many people want to put all of the blame on banks or George Bush. Yes, they should own part of the blame. Shouldn't the people who spent more than they could afford also own part of the responsibility?
If you go to a car lot, ask to drive a fancy car, and then qualify for a car that you can't really afford, is that really the car lot's fault? Houses aren't a whole lot different. Blame Bush and banks for their fair share, but they are only responsible for part of the problem.
So much for the "Financial Planners" that reside behind the desks in the bank branches. Are there financially ignorant people out there ,yeah but I'm sure they weren't getting talked out of these loans. Nobody remembers the Countrywide commercials? There are other factors that made people who were paying their loans lose their jobs which in turn caused them to lose their home.
The Fed also has it's role in creating "Bubbles"
We really need to smarten up about them also.
http://www.veteranstoday.com/2013/01/30 … debt-trap/
If you were around in the fifties ,sixties and seventies , and you were trying to get a loan . You would remember how hard it used to be to get , build or borrow good credit ! Co- signers , denials and difficulties . In the last thirty years corporate America has utilized the " buy here pay here " used car lot mentality !
Want a home , a car , a credit card ? Just sign here , give me ten dollars , every dime you have and ever will have and your first born son !
"Don't woory about fine print ! I 'm getting paid by the amount of loans I make in one today ! Oh , you only make $ 6oo dollars a month ! I'm just going to put that in the weekly column ! That makes in $2400 a month ....see there you are .....a new house ".
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