LogFAQs > #881003742

Darkman124 posted...

QuantumScript posted...

It happened because of, not even f***ing kidding, leftist policies - specifically ones centered around "helping" people to get into a home. Home ownership became so hyped up and everyone had access to easy money regardless of bank reserves or stable income. This became a bubble and once it started popping, it popped hard.

The housing market can still crash if unreliable people are given massive loans under the pretense of "wanting to help the poor" like how the left is bound to think. Notice how leftist policies that are supposed to "help the poor" end up just hurting everyone especially the poor?

you are very poorly versed on this subject

that was one of the, not the only, cause of the problem. the kinds of mortgages available to those buyers through such programs were extremely undesirable. the marketing process used to sell them to these people was dishonest and questionable at best and predatory at worst.

equally significant was the removal of barriers between commercial banks (who can give loans by selling them packaged as MBS) and investment banks (who can take out leveraged positions against those very same MBS once they've been sold)

equally significant was the utter failure of credit rating agencies to properly rate junk bonds, instead rating them as AAA investment grade, allowing the buyers of the MBS market--pension funds, mostly--to be misled.

> says i'm poorly versed

> literally agrees with me that there was too much easy access to money

Yeah, the mortgage conditions were really shitty and predatory. No one disputed that. But at the end of the day, it was caused by access to easy money without care to lend only to people who have a good chance of paying it back on time. Take away the predatory nature of those mortgages and you'd still have had a crash once enough people start foreclosing.