The US Gov’t under Clinton and Bush encouraged banks to lend money to risky wanna-be home owners (read: minorities and first time buyers) under the pretense that home ownership is the gateway to nirvana. Fanny Mae and Freddy Mac start buying these NINJA loans. Houses are flipped all over to this new pool of debtors with ever increasing price tags. The whole thing collapses and everyone loses $0.40 on their pre-2008 dollar.
Now, those aforementioned minorities and first time buyers are at the same levels as when the policy started.
Is it just me, or does anyone else think if we’d not bought the loans from the banks and not forced them to make risky loans, the minorities might be better off?
The one recollection which remains about the massive money grab through mismanagement of Fannie Mae is the CEO who managed to accumulate 100 million dollars for himself by donating about $8 thousand to several influential members of Congress. The specific name mentioned in the book was Jim Jamiesen.
Mentioning the person by name may mean this won’t get through the filters, but I would like to know if anyone knows what happened to him. Cheers;
allowing the “sub-prime” buyers (low income hi risk) into the market caused a increase in demand, which caused a lot of new speculators, which in turn accelerated demand, throw in too low of interest rates with “pay as you want” clauses and presto, boom!!!!
here in kanada in the late 80T’s we had a similar bubble, I owned a couple of rentals at the time and saw sales starting to slow, so I sold quickly (under market value)and banks about 75K just before the bust. Ppl who aren’t astute realty investors should stat out of the market, or not howl and bawl when they lose money trying to play the game, just my never so humble opinion.
Let’s not forget that Obama also sued Citi Bank on behalf of Acorn to force sub prime loans for “minorities”.
There’s a local conservative radio host who has been saying for quite some time that he expects the value/cost of “hard goods” — housing chief among them — to explode in the next couple of years.
Which means, ostensibly, that the value of my modest home (we paid just over $100k) could double or triple.
This will mean that people who don’t get into the market NOW will be completely priced out in 3-5 years. On top of it, increased home values will likely also raise rents.
Which, of course, means folks like Obama will get on their soapboxes and bloviate about unfair it all is…then they’ll meddle in the markets, temporarily “correct” the problem and in a few years the cycle will repeat itself.
Progressives will, of course, blame this on capitalism and free markets and few people will acknowledge that it’s the government tampering with free markets that causes 99% of the problem.
Unintended consequences of the Clinton Regime repealing Glass-Steagall just to buy more votes.
http://www.usnews.com/opinion/blogs/economic-intelligence/2012/08/27/repeal-of-glass-steagall-caused-the-financial-crisis
Obama was one of the loan hustlers
http://dailycaller.com/2012/09/03/with-landmark-lawsuit-barack-obama-pushed-banks-to-give-subprime-loans-to-chicagos-african-americans/
and he kept most of the winnings as legal fees.
and the LIVs (and Jim Flaherty) seem to believe that Canada’s market will fall “for the same reasons as the US market”. Nothing could be further from the truth.
No NINJA loans, low interest rates, and Canadians responsible payment of their obligations shows this is not the case, despite Flaherty’s bloviating and nonsense talk.
Given everything the Tories haven’t done financially (cutting the deficit, cutting the CBC, cutting the civil service, instead of growing it 18%), he has been a thoroughly dismal failure of a finance minister.
Enemy, if you could just do a spell/syntax-check before you hit the “post” button, you may reveal your semantic abilities. As of now, I do not understand what you are trying so unsuccessfully to say.
You can blame Carter for the Community reconstruction Act and Clinton for enforcing it.
The problem Lance is that large financial interests and corporations no longer embrace the free market and its inherent dangers to the morbidly greedy and stupid and have all but abandoned capitalism in general – in favor of government fiscal alliances and public funded bailouts and supliments – the markets are Fxxked because klepto-economics abound (AKA too big (connected) to fail)
My one regret is not buying a home in Saskatchewan before the boom.
‘Is it just me, or does anyone else think if we’d not bought the loans from the banks and not forced them to make risky loans, the minorities might be better off?” – a truly conservative statement (to answer your question, of course they would be better off!). Leftists will just wonder uncomprehendingly about what happened, or blame “greed”, or “capitalism”. On the other hand, conservatives think, nearly always correctly, that prudent careful government, honest government, limited government, provides the best that can be done by any government to better the welfare of all.
Hey! You think the average Yank taxpayer got screwed by Freddie and Fanny?
Hell, they ain’t seen nothing yet!
Wait till Canada’s milk quota balloon and the farm acreage balloon burst – and you and me and all the other tax-paying suckers are left holding the Farm Credit Corporation’s debt.
That’ll make that US debacle look like a dinky little sideshow!
When the markets crash, you can be sure that someone made off with the money.
One can’t help feeling that non American banks that bought up
all this worthless paper had more going for them than everyone
lets on. Like an under the table “make whole guarantee” of
some sort which everybody keeps very quiet about.
Oh, c’mon lance, you’re making too much sense. How dare you?
“Is it just me, or does anyone else think if we’d not bought the loans from the banks and not forced them to make risky loans, the minorities might be better off?”
Redlining is and was a myth.
Irrespective of how ‘minorities’ is defined the answer is NO they wouldn’t be better off.
They either didn’t/don’t make enough money to service their mortgages or they’re just bad with money management or both.
No amount of our money would make a long term difference either way to their status quo.
Now ask if the rest of us would be better off if subprime mortgages had not been underwritten with our tax dollars, the answer is YES!
Since there has really been no recovery, the next time (soon) it crashes there will be a cascading effect that will see the free world face the reality that everything we took for granted is gone. The money presses are already running overtime with nothing to back them up except worthless paper. The Fed is private and will look after its own ass when it all comes crashing down. The high paid boys in suits have no idea how to stop this slide over the cliff and the industries that drove the GDP and middle class have been largely outsourced. We know Europe is bad , but we are worse.
http://www.weeklystandard.com/blogs/americas-debt-greater-entire-eurozones-and-uks-combined-debt_636847.html
Politicians are only concerned about the next election and will ride the gravy train until it jumps the tracks. Of course debt elimination and full employment is as simple as starting a war with your debtors. Complete reset and all positive …for the winners. Unless it goes Nuclear, then there are no winners.
The cold hard figures don’t lie and there is no easy solution. It has to collapse and the only question is how soon.
http://www.usdebtclock.org/index.html
We passed the last chance to turn it around when Obama was re-elected and his only interest is to maintain the status quo. The worst POTUS in US history will be the final nail in the economic coffin.
Funny you should say that….
Seems hereabouts, farmland is changing hands for ridiculous figures…..mostly to dairy guys who can’t buy more quota and gotta invest to avoid taxation….At least that’s the theory….
There is no crop including MJ that can justify $10,000/acre. Ya just can’t cash flow it…..It’s not like they can subdivide all that ground to house lots.
It’s a bubble that’s just gotta burst….