The Big Short is coming out next week
- Thread starter Pekelo
- Start date
Of course it is total BS. That wouldn't have caused a housing bubble and crash alone. What would have happened? The Unqualified mortgage owner after a few months has to give up the house once the teaser rate ends* and he loses his home. The bank gets the house back, end of story. The crash was caused by the leveraged CDOs and other financial instruments that fraudently were marketed and sold, based on a false premise (poor people with high mortgages)
It is Business 101, really...
*was the teaser rate also government mandated?
Did you make $$ based on your proclamation in 2007?
There was a chain of causality that caused the bubble and crisis. The government mortgage program was the beginning of that chain (aka, root cause as I indicated in my post above). It forced the commercial lenders to lower their rates and underwriting to become competitive with the govt loans. The risk was then shifted to the CDO's whose risk profile was misrepresented by the rating agencies. And I haven't even mentioned the credit default swaps and phantom insurance by AIG. I didn't intend to summarize the entire chain of events and causes, but it all started with these govt programs. And this was never highlighted in the movie. This selective analysis is typical of the left.
You could also say that DUI started with the government ending prohibition...
Another thing; experts blaming the common people to take out too big mortgages. As an Average Joe I have the right to be stupid or mathematically challenged, but the mortgage companies should have known better. I read that they gave an 800K loan to a $6/hour stawberry picker. How the hell is that sound financial decision?? But sure, it is all the government's fault...
I said in 2002 when the Feds issued all these rules that it would end very badly. And it will happen again.
Just the other day, Banjo posts one of his multiple daily conspiracy threads about Clayton homes. They sell thousands of homes over some years and then someone decides to analyze the colors of the buyers. Somehow, a minority group (on average) had to pay a higher interest rate. And that's where the analysis stops, because that's all the left/gov't needs to cry foul. Never mind the credit rating of any of the buyers or their personal financial history - doesn't matter - all that matters is that some evil racist bank has disenfranchised a minority group yet again.
When this kind of stuff gets traction again, we will start the housing bubble all over from scratch. Right now, the numbers are really bad in terms of minority borrowing costs etc... It's worse than it has ever been, but the Feds are ignoring it for some reason. For now, the free market is working itself out. You have a good FICO, you get a good interest rate. The bank doesn't care what color you are. All they care about is getting their money back and a decent return on their loan.
Just the other day, Banjo posts one of his multiple daily conspiracy threads about Clayton homes. They sell thousands of homes over some years and then someone decides to analyze the colors of the buyers. Somehow, a minority group (on average) had to pay a higher interest rate. And that's where the analysis stops, because that's all the left/gov't needs to cry foul. Never mind the credit rating of any of the buyers or their personal financial history - doesn't matter - all that matters is that some evil racist bank has disenfranchised a minority group yet again.
When this kind of stuff gets traction again, we will start the housing bubble all over from scratch. Right now, the numbers are really bad in terms of minority borrowing costs etc... It's worse than it has ever been, but the Feds are ignoring it for some reason. For now, the free market is working itself out. You have a good FICO, you get a good interest rate. The bank doesn't care what color you are. All they care about is getting their money back and a decent return on their loan.
The Big Short has just won the PGA award (producers guild or what) and the last movie winning this and NOT winning the Oscars was back in 2006....
http://deadline.com/2016/01/pga-awards-2016-live-blog-producers-guild-of-america-1201689201/
http://deadline.com/2016/01/pga-awards-2016-live-blog-producers-guild-of-america-1201689201/
I've read lots of things.
They're not all true.
Unsound, clearly. Another question is "how representative is that financial decision?".
I didn't see anyone say it was "all" the government's fault. Clearly these things are mutlifactorial and complex. But your posts somehow never take that into account: when you discuss it's all totally black and white. I don't mean it rudely, but that's just plain unrealistic. You're selecting one, small, individual, specific example and basing your entire argument on it.
Apparently you didn't read a book called The Big Short, because it says on page 211:
"a strawberry picker with a single 750K home..."
My bad, I remembered 800K and no the book doesn't mention the hourly wage of a strawberry picker, but you can look it up, on page 100 it says:
"with an income of 14K..."
14000/250/8=7
...again my bad it was $7 per hour, not 6. Hey, I got the strawberry right.
Now you can go and read something what you can believe in...
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