Banks lobbied congress to loosen restrictions on taking out mortgages which many financially illiterate people took advantage of to buy houses they couldn't afford, inflating prices and fueling a real-estate bubble, leaving them on the hook for loans they could never pay back, and banks meanwhile were trading bundles of these bad loans called mortgage-backed-securities as investments by obfuscating how dangerous they really were and reaping hundreds of billions of dollars doing it.
>>64987844 Yeah the S&P and other companies that rate these banks and their bonds were also in cahoots with them. So even when the bets DubsGuy made were supposed to go the way he predicted, they still didn't.
He had to pay a premium every month from the moment he made those bets, his investors were intensely furious.
Government was asleep at the wheel, but it was the assholes in Wall Street who rigged the brakes to break. The movie makes a big point about the difference between criminal negligence and ignorance. The vast majority of Wall Street didn't know it was buying into a lie, it just went along with it because most of the people who work there are just people like you and me who don't know jack shit about how the system really works and need to be spoonfed this shit.
The financial crisis was triggered by a complex interplay of policies that encouraged home ownership, providing easier access to loans for (lending) borrowers, overvaluation of bundled subprime mortgages based on the theory that housing prices would continue to escalate, questionable trading practices on behalf of both buyers and sellers, compensation structures that prioritize short-term deal flow over long-term value creation, and a lack of adequate capital holdings from banks and insurance companies to back the financial commitments they were making.
The Financial Crisis Inquiry Commission concluded that the financial crisis was avoidable and was caused by "widespread failures in financial regulation and supervision", "dramatic failures of corporate governance and risk management at many systemically important financial institutions", "a combination of excessive borrowing, risky investments, and lack of transparency" by financial institutions, ill preparation and inconsistent action by government that "added to the uncertainty and panic", a "systemic breakdown in accountability and ethics", "collapsing mortgage-lending standards and the mortgage securitization pipeline", deregulation of over-the-counter derivatives, especially credit default swaps, and "the failures of credit rating agencies" to correctly price risk.
The 1999 repeal of the Glass-Steagall Act effectively removed the separation between investment banks and depository banks in the United States. Critics argued that credit rating agencies and investors failed to accurately price the risk involved with mortgage-related financial products, and that governments did not adjust their regulatory practices to address 21st-century financial markets.
To play devil's advocate, people who realistically have no hope of paying off a home shouldn't be allowed to buy that home. And selling people said home would be greedy and irresponsible. People should choose to invest wisely and live within their means.
Everyone stood to gain, but the laws and legal measures that aided in the economic recession were created by Congresses dominated by Republicans. They go down in history as the shepherds responsible for the herd going over a cliff.
>>64988590 The loans aren't being "repaid" the Fed is using even more money to pay the banks to not use the 3 trillion they created. http://www.npr.org/sections/money/2015/10/23/451228005/episode-659-how-to-make-3-trillion-disappear
At least the protagonists had the high ground on the banks and were prepared for the meltdown High ground is pretty important, star wars memes aside i felt that the scummiest fucker was Goslings character, the dumbest was Karen Gillen and the most autistic was Dubs mgee
>>64987664 >>64987664 It was a bit too preachy and pseudo moralistic. I find it funny that the main characters, the ones who took advantage of the situation were bankers and they didnt even try to warn common people despite knowing about the bubble two years before the incident. they are not good guys after all, they just want the monet, so why root for them? There's no point. The only character more or less good was Brad Pitt's, but he was also a vegan.
>>64989256 The mortgage insurance is called a Credit Default Swap.
The buyer of the CDS makes a series of payments (the CDS "fee" or "spread") to the seller and, in exchange, receives a payoff if the loan defaults. It was invented by Blythe Masters from JP Morgan in 1994.
In the event of default the buyer of the CDS receives compensation (usually the face value of the loan), and the seller of the CDS takes possession of the defaulted loan. However, anyone can purchase a CDS, even buyers who do not hold the loan instrument and who have no direct insurable interest in the loan (these are called "naked" CDSs).
The housing market was a bubble. Lenders were giving loans to anyone and everyone.
Banks packaged these loans together as financial products that investors could gamble on.
The main characters in the film made a bet that these loans would default (people wouldn't be able to pay back their loans). It worked like insurance - the main characters would pay a monthly premium to the banks packaging these loans and if the loans defaulted, the banks would pay insurance.
The banks were happy to make these deals because they believed the housing market wouldn't crash.
They believed the market wouldn't crash because rating agencies gave these toxic financial products AAA ratings.
These toxic financial products got AAA ratings because the rating agencies were SCARED that banks would have their financial products rated by a competitor. The rating agencies were charging fees for ratings.
And then, it turns out that there were "synthetic CDOs" which is the same insurance example above but this time you're betting on the credit default swaps which were betting on the subprime mortgages. A real shit show - the stakes were just getting higher and higher.
And then it all came tumbling down... oh but everything is okay now because Obama said we're strong.
>>64989489 >and they didnt even try to warn common people
Warn common people? Ok fine the banks did some predatory loans but people were doing shady stuff with sub-prime loans too. Buying two or three homes or buying one WAY over budget being you only need to to hang to it for a few months right? During the rise in California you could make 20% on a home before it even closed escrow.
as the market peaked people should of looked at like the POS condo near my friend's and gone "265k for that? Pass" and the market would of balanced on it's own. Oh but nooooooo sub-prime and fuck it, dump 265k being "It will go up!!".. and then of course after the crash my friend bought another condo in the same area for 85k..
greed fueled a lot of the problems and while the bankers were shitty no one was forcing people to pull equity out of a home 3 times in 4 years and buy boats and cars. Oh and then when they lost the house it's the banks fault, of course.
>>64987664 banks tried to create money by banking that house owner will pay for it somehow, but they did no quality control so that it was doomed to fail at some point. some people saw this coming and pretty much bet on that to fail, but when it finally happened the rating organizasitions, wouldnt admit that they won at first until the demand on their "betting papers" rose
All reports and numbers are pointing to a recovering economy during Obama's tenure (at cost, of course). By the numbers, the economy is getting better and we're on track to escaping the gravity of the recession barring another mass CDO shitstorm (which is forming right now). Does the physical world in which we occupy reflect the numbers being put out? Yes and no is the best answer.
>and they didnt even try to warn common people despite knowing about the bubble two years before the incident
You mean like the part where one of those guys working with Brad Pit went to the Wall Street Journal and they told him to fuck off?
And the characters in the movie are never presented as heroes, hell at the end The Goose tells people he was just in it to make money and he doesn't care what you thought of him. The closest thing to a "good" person in the story is Bale.
Thats wishful thinking being pushed by euro bankers who want to break free of the dollar's stranglehold. Its kind of sad whenever I read about how British banks are trying to start up joint monetary funds with the Chinese.
Have you ever wondered why American anti-Iran sentiment in foreign policy has scaled up sharply over the past 10, 15 years ago? Because Iran announced plans to start dealing crude on the IOB in non-dollar denominations, in defiance of the Saudis' influence over OPEC. The second that occurs one of two things happen: the Saudis find a way to price Iran out of the market, which they're unlikely to be able to do since they're already having to offload in bulk to stay afloat, or the world starts dealing in non-dollar currencies, the dollar ceases to be the reserve currency, the US forex takes a massive hit and America dies a death, because even with all its current economic advantages over the rest of the world it's still struggling to keep its head above water.
The dollar's tenure as reserve currency is not nearly as concrete as you claim it to be.
Its a rather simple relationship in this case: if the Saudis don't sell you oil, someone else will. So the Saudis made the decision to be the biggest seller at the current price point, fucking over its competitors. But it was clearly not their first choice, and the current situation is hardly ideal.
That's my point. They're taking drastic measures right now against Russia, if they don't want to end up in a pit of economic despair they're going to have to pull back and recover, they're not going to be in any fit state economically to take a dip again to work against Iran, especially since the economic sanctions Iran's been working under for the past while are about to come to an end. The Saudi populace is completely spoilt, they're already getting all buttmad because their oil at the pump is 20c a litre, they won't tolerate the kind of economic pressures the Saudis would have to put in place to bottom out Iran.
>>64990678 hmm okay I guess it's a win win for the U.S cause they get to fuck with Russia and denigrate Saudi Arabia's power which means in turn the ISIS will have less power. if the U.S is really against ISIS
>>64990806 Well recently a deal has been struck between U.S and Iran regarding their nuclear program.. I guess that's the precursor, we'll help you as long as you promise not to have nuclear weapons because then you are too dangerous to have as an ally.
The ultimate US goal is to get Iranian oil out into European and American markets (instead of Russia) and to get American corporations and investments into Iran. This relationship will strengthen Western ties and influence over Iran, weakening Russian projection in the Middle East, and hopefully stabilizing regional tensions in the long run between Sunnis and Shia led by Iran and Saudi Arabia.
Iraq was a conservative conspiracy to jumpstart contracting and to seize oil assets, and it worked for a while in the US economy's favor.
Libya was a deteriorating situation which arose during the Arab Spring, and its oil fields needed to be secured. Furthermore, it was readily apparent that the Gaddafi family were too corrupt to hold onto power and would not have been able to stabilize the situation without massive loss of life. And NATO never invaded Libya by ground, it supplied air support with mixed results. The ultimate goal of intervention in Libya was regional containment.
>>64991104 Anon you didn't argue your point at all.
Also the website I provided directly contradicts what you said about Libya, and this is from emails between Hilldog and Sarkozy.
The email identifies French President Nicholas Sarkozy as leading the attack on Libya with five specific purposes in mind: to obtain Libyan oil, ensure French influence in the region, increase Sarkozy’s reputation domestically, assert French military power, and to prevent Gaddafi’s influence in what is considered “Francophone Africa.”
Most astounding is the lengthy section delineating the huge threat that Gaddafi’s gold and silver reserves, estimated at “143 tons of gold, and a similar amount in silver,” posed to the French franc (CFA) circulating as a prime African currency.
>>64990696 And you know,...fat, useless americans who had no goals, talent or income but wanted a house and a nice car,...and then (as full grown adults mind you) through their hands in the air and said the banks tricked us, they told me I could afford this....god forbid anyone actually read or understood what they were buying
e.g. the dumb stripper slut from the movie...although she wasn't fat
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