As you are saying

I’m sure it’s infinitely more complicated

, but that is about the best summary I have read to date.

http://proteinwisdom.com/wp-trackback.php?p=13337

See the 2nd update, bailout would make things worse?

First I’ve read this side of things.

I think the blame here mostly rests with two groups of people. First, The lawmakers that pushed to have the restrictions on loan-granting lowered, and Second and far more responsible: The assholes that took out the loans.

I mean, Yeah. I want to own a house. That’d be pretty fucking sweet. I’d have all kinds of crazy parties and my band wouldn’t need to pay $300/month for a practice space and I could have a grill. BUT, There’s no way my non-college-educated and somewhat lazy ass would be able to keep up the maintenance on a house. And I don’t mean cutting the grass. I mean mortgage, insurance, taxes, regular structural maintenance and improvements like replacing appliances, fixtures, plumbing, electrical, etc…

And the thing is, most of the people that took out all these adjustable mortgages NEVER INTENDED to do any of those things. If there’s one word that’s become a thousand times more popular in the last 5 years it’s the word “Flip”.

As in Flip This House. In the last 5 years I’ve seen more people get realtor’s or broker’s licenses than fishing licenses. Why? Cause people can’t pass up an opportunity to make a quick buck. They all knew they were buying a 250000 house that they couldn’t afford because they were just planning on sitting on it for a year and selling for 350000. Hell, Even I can see the draw in that.

I live in FL and we had one of the biggest housing booms in the country. Neighborhoods and condominiums going up faster than people could move into them. Not faster than they could sell them though. So there’s literally tens of thousands of homes in my area just sitting empty but that can’t be sold because all of the other empty houses created an artificial demand that sent prices sky-high. Which translates into money lost when the prices come down to a normal level as decided by ACTUAL demand and supply.

Oh yeah, And rent prices on apartments are higher than normal too because guess where all the people that aren’t living in those houses are? Yup. So I’m fucked anyways. And I could’ve had a grill…

Jim: I found this This American Life episode on the subprime helpful
http://www.thislife.org/Radio_Episode.aspx?sched=1242

Totally off-topic but had to post a link to this story:

http://www.chicagotribune.com/entertainment/chi-roadie-fatal-accidentsep30,0,6708063.story

Ding Ding Ding, we have a winner. Yeah, that’s probably the best simplified explanation I’ve seen.

I know this will probably cause a flame war on me, but I’ll say it anyway…

Due to lessened regulations and requirements

Exactly. A lack of government regulation is one of the key causes of this. A Democratic motto? No. A Republican motto? Yes. I’ve been sayin it for years, a strong central government of the people is the way to go. Socialism? Mhmm. What’s wrong with Socialism? Can anyone give me a valid point? No. There would never be a recession (or “crisis” as the politicians like to say) under a Socialist government. Socialism is all about what’s best for the people.

I’ll cut my rant short and get off my soapbox now… sorry about that.

Jim, excellent explanation.

Except - The flood gates weren’t opened up to allow for less regulation. The regulations were changed to put pressure on lenders to lend to those less qualified.

Here’s the part that sucks (for me) I bought about a year before the peak so prices were high but not quite topped out. I thought my property value would go up and I could upgrade in 10 years or so. Approximately one year after buying the town I live in doubled their valuations. They say it was adjusted for actual value but they doubled it. Now, I had just had it appraised a year before so doubling that amount was far different than doubling the amount of a house appraised 9 years earlier. In the not so distant future, this problem is going to have a serious impact on property values. So, very soon I am looking at owing more than my home is worth, and paying taxes on the overinflated value.

All this being said, I worked my ass off to get out of debt so I could buy a home, and I bought a modest home I could afford.

No one bailed me out of anything to get there.

The financial institutions are in a business full of risk, that’s why the rewards can be so great when they succeed. This time they took too much risk and failed. That’s part of doing that type of business.

I say let the chips fall where they may and let the government and financial institutions brown bag it for a while, I already paid my dues.

I say let the chips fall where they may and let the government and financial institutions brown bag it for a while, I already paid my dues.

I’d usually agree and would love to see the corrupt people in power suffer, but if we don’t do something, this will affect the whole world economy. And that’s not quite fair is it? The world suffers because a few corrupt laissez-faire capitalists get what they deserve? I’m a humanitarian first and foremost. A Utilitarian if you will. “The greatest good for the greatest number” If that means we have to let them get off with no more than a slap on the wrist, so be it.

The world suffers because a few corrupt laissez-faire capitalists get what they deserve? I’m a humanitarian first and foremost. A Utilitarian if you will. “The greatest good for the greatest number” If that means we have to let them get off with no more than a slap on the wrist, so be it.

Yes the world suffers because of a few, screw the slap on the wrist, these people gambled with funds they shouldn’t have and lost. Now it is time to pay back that which is owed. The bailout would have let these few off with a slap on the wrist and would have punished the taxpayer for the few’s stupidity. On top of that, the bailout would just prolong the problem and further damage the economy. It is the liberal concept of “the greatest good for the greatest number” that got us in this mess in the first place.

It is the liberal concept of “the greatest good for the greatest number” that got us in this mess in the first place.

1: That’s not a “liberal concept”
2: How could you see that as the cause? It’s the “small government, no regulation” conservatives that let those few run wild. If the liberals had their way, there would’ve been more regulation/oversight and this would’ve never happened.

Regardless of how we reached this situation (there is enough finger pointing to go around) the situation is here and not going away.

Let’s say we have a bailout. That would turn this situation into the beginning of a much larger burden down the road. What’s next? The loans are still out there and people are still not paying them. Do we allow the original mortgage holders to keep the loans? Of course not, that would be irresponsible. Does the government take over the loan, in essence, buying all the houses that are just waiting to be foreclosed on? That would place the impending debt in the taxpayers hands and possibly propel the country into revolt.

No, none of this would work. The best we can hope for is to first remove the requirements for lenders to take unnecessary risks. Second, require lenders to hold loans for a minimum amount of years, thus forcing them to insure their investment is a good one. Third, allow the failed companies to go bankrupt and allow the sale at auction of their assets (by this I mean mortgages) to qualified companies. Will the companies buying the mortgages have to assume what is probably some heavy risk? Yes. Is it worth it? They’ll have to do their research to find out. As long as they have to hold the mortgage for a predefined period to make sure they don’t just buy and sell. Ultimately, some companies will make a lot of money buying discounted mortgages but that’s how the free market works. It happens all the time on a smaller scale (Ocean State Job lot is in business because other companies make bad decisions).

In the end there may be mortgages that are too risky to be bought at auction, but it will be a far smaller number than we started out with. At that point, we can start talking about what the government can do.

This is the best explanation of the mortgage crisis I have found. I work in finance and this is pretty spot on from my experience: http://docs.google.com/TeamPresent?docid=ddp4zq7n_0cdjsr4fn&skipauth=true&pli=1

If the liberals had their way, there would’ve been more regulation/oversight and this would’ve never happened.

I guess you missed the reports of the liberals telling the OFHEO, “Nothing Wrong here, move along.” That was over 4 years ago. Now tell me if something was done back then we would still be in this deep. The real fact is some republicans have been trying to do something about Freedy and Fanie for the last 10 years. But thanks to the work of Frank and Dodd, any change was blocked time and time again. Go on play the blame game, you can win that fight with this one.
(linky) http://hotair.com/archives/2008/09/29/video-democrats-insist-nothing-wrong-at-fannie-mae-freddie-mac-in-2004/

http://www.youtube.com/watch?v=NU6fuFrdCJY

I think this vid does a good job walking us thur the fine print of this.

If the liberals had their way, there would’ve been more regulation/oversight and this would’ve never happened.

Wow Nancy Pelosi comments here! FUCKING LIBITARDS!

Wow Nancy Pelosi comments here! FUCKING LIBITARDS!

1: Don’t lump us all together.
2: Pelosi is a sorry excuse for… well, something. Or everything. I just despise her in general.

Well Hippies, you were speaking for them. Come on stand up for youself. Do you believe what you said? Or is it just you regurgitating what you hear? Is there any orginal thinking going on? Givein the facts do you still believe the libiral talking points?

you were speaking for them.

I wasn’t speaking for anyone, I was speaking from a theoretical point of view. I’m an intellectual, I study the intricacies of political science purely for the sake of knowledge. That said, I play the “devil’s advocate” any time there’s an argument. The only thing I’ve said that is my own opinion is this:

I’m a humanitarian first and foremost. A Utilitarian if you will. “The greatest good for the greatest number” If that means we have to let them get off with no more than a slap on the wrist, so be it.

That and the fact that I believe in Socialism.

I’m strictly non-partisan. Both parties are to blame. Hell, the Capitalist system is to blame. I believe in Democratic Socialism, a return to the Democracy that our country (among others) has spurned.

Is that “standing up for myself” enough for you?

Good for you.

2: Pelosi is a sorry excuse for… well, something. Or everything. I just despise her in general.

I couldn’t agree more. The day she took over the gavel and flexed her bicep is the day she proved to America she did not understand responsibilities of her job or position in American society. Don’t get me wrong, there are many more on both sides of the aisle that don’t get it, but she is the first who has stood up there and visibly demonstrated that she believes her position one of power, rather than one of responsiblity

she believes her position one of power, rather than one of responsiblity

Exactly. I live just a few miles outside of San Francisco and have joined numerous groups in staging protests outside her office and her home. Haven’t been arrested yet, but I have been threatened by her staff. If anyone has needed to be impeached over the last few years, I’d say it’s her.

It is the liberal concept of “the greatest good for the greatest number”

I don’t know about a liberal concept but it sure sounds a bit Vulcan to me :)

2: How could you see that as the cause? It’s the “small government, no regulation” conservatives that let those few run wild. If the liberals had their way, there would’ve been more regulation/oversight and this would’ve never happened

Yeah god dammit how dare that evil Conservative Barney Frank get in the way of the liberal George Bush and John McCain trying to fix the problems at Fannie Mae and Freddie Mac while they proceeded to line the pockets of Conservative Chris Dodd and Barack Obama, who then has an Executive of them work on his vice presidential selection group.  All so Barney Frank’s bf working for Fannie could bilk a few more dollars.

Pull your head out of your ass Hippie.

Yeah god dammit how dare that evil Conservative Barney Frank get in the way of the liberal George Bush and John McCain trying to fix the problems at Fannie Mae and Freddie Mac while they proceeded to line the pockets of Conservative Chris Dodd and Barack Obama, who then has an Executive of them work on his vice presidential selection group.  All so Barney Frank’s bf working for Fannie could bilk a few more dollars.

Pull your head out of your ass Hippie.

McCain will be glad to hear that his propaganda machine worked on SOMEBODY. Maybe if you were open-minded/motivated enough to research things for yourself instead of getting all your beliefs from the TV, you’d actually come up with an intelligent argument rather than spew propaganda everywhere.

OK, how about the recording of the actual October 6, 2004 investigation hearing that was on C-span2 taken from www.c-spanarchives.org archives. Here is the link (http://www.c-spanarchives.org/library/index.php?main_page=product_video_info&products_id=183818-1&showVid=true)It is only 7 hours and 35 minutes, where the demoncraps were showing their true colors in regards to the investigation that was being conducted by the OHFEO.  The results were then confirmed by the SEC after the Dems asked the SEC to investigate the OHFEO claims to exhonorate the then director Franklin Raines. Who also resigned from his position, in embarrassment, as a result of the SEC investigation. This is the same dolt that is advising Barack Obama on finances for this presidential campaign.

What was the result of this investigation Hearing? nothing every attempt of the republicans to bring some form of regulation Fannie Mae and Freddie Mac was blocked by those very democrats that were involved in that hearing. I sat through this and learned about this and now want those very people held accountable for their democratic socialist ideals. Why not watch it and learn something political for a change Hippie.

Hippie doesn’t want to hear anything that states facts. And Hippie surely will never answer a direct question about this. Hippie believes what Hippie wants to, facts just get in the way of it’s Bush’s fault.

McCain will be glad to hear that his propaganda machine worked on SOMEBODY. Maybe if you were open-minded/motivated enough to research things for yourself instead of getting all your beliefs from the TV, you’d actually come up with an intelligent argument rather than spew propaganda everywhere.

Says the guy that blindly believes that it the Conservatives at fault for the problems because it involves big businesses.  Nevermind that some of the people running the companies were democrat shill, one being Frank’s partner, others working on Obama’s campaign, and another one being the woman responsible for the wall between intelligence agencies.

Please Hippie, I realize you living in san francisco you probably think MSNBC is a right wing hit machine but we’re living in actual reality here.  And the facts are that Republicans tried to put regulations on Fannie and Freddie.

Note to you all: I am NOT a Dem, I HATE all those fucking morons in DC. They’re all at fault, so don’t think that I side with any party. All I’m saying is that traditionally conservatives favour small government/less regulations and liberals favour big government/more regulations.

I sat through this and learned about this and now want those very people held accountable for their democratic socialist ideals. Why not watch it and learn something political for a change Hippie.

We D.S.’s believe in more regulation. They are NOT D.S.’s. I am highly offended that you would associate them with me. That little blunder aside, I want to re-state that I don’t believe in politicians. You shouldn’t make a broad statement ("where the demoncraps were showing their true colors") based off of a few individuals, it just shows how closed-minded you are.

Hippie doesn’t want to hear anything that states facts. And Hippie surely will never answer a direct question about this. Hippie believes what Hippie wants to, facts just get in the way of it’s Bush’s fault.

1: Ask me a direct question then, you haven’t tried…
2: Don’t presume to understand me. You don’t know me.
3: I DON’T think it’s Bush’s fault, I blame every politician who votes for decreased regulations no matter what party they belong to.

Says the guy that blindly believes that it the Conservatives at fault for the problems because it involves big businesses.  Nevermind that some of the people running the companies were democrat shill, one being Frank’s partner, others working on Obama’s campaign, and another one being the woman responsible for the wall between intelligence agencies.

Please Hippie, I realize you living in san francisco you probably think MSNBC is a right wing hit machine but we’re living in actual reality here.  And the facts are that Republicans tried to put regulations on Fannie and Freddie.

I don’t blame a single group, and I never believe anything blindly (that’s why I left the Christian faith). I’ve said it quite a few times, I’M NOT A DEMOCRAT. I’m non-partisan. Please refrain from childish assumptions about me based on my geographical location. I may be from the SF Bay area, but I think for myself. MSNBC is just another news corp. They all put a spin on information, that’s why I don’t listen to anyone blindly. As for certain Republicans trying to put regulations on them? Good. I don’t care what party they’re associated with, those individuals gained some respect in my book.

You shouldn’t make a broad statement ("where the demoncraps were showing their true colors") based off of a few individuals, it just shows how closed-minded you are.

You mean like saying something like:

It’s the “small government, no regulation” conservatives that let those few run wild. If the liberals had their way, there would’ve been more regulation/oversight and this would’ve never happened.

Which is a broad stroke of statement which in this case is not true, also making you a liar after you decided to make this statement:

All I’m saying is that traditionally conservatives favour small government/less regulations and liberals favour big government/more regulations.

You were saying its the fault of the small government conservatives and the big government liberals would have fixed this crap.  The reality is the opposite and you were making no such statement about what is traditionally favored by groups.  You were assigning blame for the problem.

And just because you’re not a democrat or a republican doesn’t make you non-partisan.

Then Hippie, you can agree, that in this case, (Fannie and Freddy being what they were), that more regs should have been happening? And it was those who were getting money from F and F fighting against more regs. Which party it was that’s just a minor thing. In the end government was in this case the fire the lite the fuse to this whole mess. Without the changes that the government made over the last 20 years we would have never gotten in this.

Mhmm. What’s wrong with Socialism? Can anyone give me a valid point?

um how about the article The Socialist Myth I can’t post the url as it is blacklisted on this site. just google it.

(1) Both communism and socialism have an end utopian goal of complete equality in their ideal state.

(2) Both communism and socialism employ the practice of centralized economic managing and income redistribution as their primary means of working toward this so called “equality.”

(3) Both communism and socialism experience the same types of problems in accomplishing this economic managing - the unintended side effect.

(4) Both socialism and communism are structured in such a way that an inherent inequality develops from the administrative top of the power structure for such is necessary to enforce compliance. Such compliance must be mandated in a socialist system due to the fact that human nature creates skepticism, opposition to the control of others, and a desire for free will.

(5) In both systems when this unequal elite inevitably emerges, the concentration of widespread power in a single space must intensify. This naturally attracts individuals seeking widespread power, or it corrupts individuals already in power with the lure of the same widespread power.

(6) As a result of the government structures found in both systems, the intensification of power and control on the upper level necessarily translates into the usurpation of remaining personal freedoms during its expansion.
(The Socialist Myth)

Both Communism and Socialism end up as dismal failures. The Socialist Myth is a good article about the dismal failures of communism and socialism.

After reading several sites on the democratic socialist movements, I came to the conclusion that Democratic Socialists are all idiots; no different than the liberal Democrats that currently sit in office. Democratic Socialists all fit within the the socialist myth.

As the fact that we are about to elect a Socialist President shows, our government is too big and way too corrupt. It is time for the “little people” to run for office and take back our government.

We became a country because we wanted to get rid of a King and now we have a new King. It’s not a single person but a monarchy none the less.