>>1028418 >>1028445 2008 was caused by banker fraud. If the sub prime loans were rated properly by the ratings boards, and banks didn't mask them as prime, there would have been no collapse.
Investors and insurers of the CDOs would have rated the risk appropriately and the derivatives of those CDOs would have been priced correctly for defaults.
Everyone could have gotten a home still, the banks just wouldn't have made all the CDO derivative money they made by saying AAA CDOs (full of B and lower) had better returns than facebook.
The equity swaps and derivatives of CDOs were controlled by the banks so they could still sell the CDOs at their own prices for huge profits. It is like saying a penny stock is worth $30 and then selling calls on it for $0.50 a share. The actual value of that call should be less than a penny, but it was hidden from the public and lied about the investor value.
I am not voting in 2016, but Bernie wants to break up the system that allowed banks to control the market and the ratings system. The mortgage brokers were not at fault for issuing them, it was the banks that were willing to buy them so readily and put them into falsified CDOs.
If a car manufacturer releases a car knowing that it is faulty but doesn't tell anyone, do you blame the dealership? The auto salesman had no idea and was going off the information he was told.
But the people would have paid those mortgages if they had not been laid off. And they would not have been laid off if the people at the top of the pyramid had not fucking leveraged everything on terrible loans, and sliced and diced those loans. The people at the top are to blame, obviously. Blaming the poor is like blaming the animals for a farm going under.
>>1028467 Idk if my id is the same, however I'm the guy that said don't vote Bernie.
You clearly are very knowledgeable about this situation so I have a question: what affect did combining the investing and loan banking have on the collapse? I heard someone blaming Republicans saying that had they not pushed for that then the situation could have been avoided. I said that I don't think that would have an affect, but honestly I don't know that was just a gut feeling. What do you think?
If you can try to avoid getting to party shilling, but if it's unavoidable then whatever.
Also if you have any resources where I could read up on this that'd be great!
>>1028365 >>1028328 its all started in 1977 when the community investment act was passed, forcing banks to give loans to minorities who would never ever qualify for loans bc they had zero things to offer as securities.
>then the banks sold irradiated debt to other financial institutions they did but i almost have a feeling its worse then that, that the banks knew that they would get bailed out bc the FDIC ensures the money for the patrons checking accounts, but the banks gambled all the money so they purposely put us in between a rock and a hard place
>>1028497 Well , about the poor people paying off their loans; a big part of the issue was pushing adjustable rate loans. These loans had a very low starting %,but come 12-18 months later, the rates skyrocket,the buyer is unable to pay his mortage, and is in the shits.
These loans also generated huge profits in fees, so they were everywhere. Compounding the issue were also that they threw these loans after anybody and everybody who applied for them, it was not uncommon for some people to have 2-3 houses AND a boat, all the while making 12-14 dollars an hour.
It's like sending out timebombs in boxes from victorias secret.
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