The Crisis of Credit and how we got here

**CivilWars** · 03-06-09, 08:26 AM

In my opinion it was "the perfect storm". Like the video you mentioned you had home buyers living above their means, lenders, bankers, and investors selling homes to people that could not afford them, and the government buying toxic loans to prevent a recession/depression post 9/11 and dot com bust. Any one event in and of itself does not produce the results we have seen, but when you throw them all in the pot together it is a recipe for disaster. Not it appears we have over-corrected.

**Consultant** · 03-06-09, 08:36 AM

Originally Posted by MotoZ

There's no question that government policy and laws were enablers for the crisis. But it was greed that took advantage of the enablers and made a mess. IMO the government policy wasn't the core issue as much as it was the deregulation that let greed run unfettered.

Was it not the government action WHICH deregulated it?

Thats my whole point. The government fucked up by allowing/encouraging reduced lending standards.

People with low paying low skilled jobs and no ability to make a down payment SHOULD NOT OWN HOUSES but thats exactly what happened under the various revisions to the CRA.

**w4jchosen** · 03-06-09, 08:42 AM

Lending was deregulated. Equal opportunity to own a house. On the surface not a bad idea. They way they went about it though, was horrible. When I had a small business in investment properties every bank rep I talked to, right during the time this all came out, said even then how this was going to cause big problems down the road.

**Rooster050** · 03-06-09, 08:59 AM

I think this would be the proper time to introduce my song, "slave"

Try to enjoy? :3

**MotoZ** · 03-06-09, 02:57 PM

Originally Posted by w4jchosen

Lending was deregulated. Equal opportunity to own a house. On the surface not a bad idea. They way they went about it though, was horrible. When I had a small business in investment properties every bank rep I talked to, right during the time this all came out, said even then how this was going to cause big problems down the road.

Agreed.

It's funny how common sense can foresee problems while the econ PhD's think they can trick common sense.

One of the things we learned in law school was to listen to radio. As it turns out, radio stations are among the most focused of mass media when it comes to demographics. There are radio stations for white male listeners, teeny boppers, rednecks, young blacks, etc. Ever since I learned that I've made it a point to listen to various radio stations while working in my wood shop and in the garage. About year 2002 I noticed an uptick in advertisements for risky home loans on all radio stations. For months and years I listened and thought, "This isn't good." And it wasn't. :3

**JudgeMoDollas** · 03-06-09, 07:33 PM

Quick question. How much longer do y'all think this is going to last?

**MotoZ** · 03-06-09, 09:44 PM

Depends. For the leaders "this" is just another opportunity.

**BruceBloodMaster** · 03-07-09, 06:59 PM

he best guess I heard today 'could be' as long as 5 to 10 years to get back to a "respectable" market........... Don't hold your breath that long you'll be am Aweful shade of Blue !