"Government politicians and bureaucrats forced lending institutions to make un-creditworthy loans and helped create unnatural demand in the housing market by priming the pump on bad loans. This created an unnatural price bubble in real estate, which was securing these ill-advised loans. When the bubble inevitably burst, the mortgages secured by the artificially inflated real estate plummeted in value, which left us with an epidemic of grossly under-secured loans."
That's some deep thinking for you.
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4 comments:
I've heard two other talking repubes mention how this was caused by the fair housing act which FORCED lenders to make high risk loans to people too poor to pay them back.
Umm, no.
This is obviously part of their latest talking points to deflect responsibility away from those responsible.
Even McCain is back-tracking away from his deregulation position.
I just read the entire piece. Wow.
"When liberalism causes a problem, by all means, don't allow the natural equalizer of the free market to cure it."
Yeah, ok. So free markets cure problems. I guess I'll be putting that $700billion back in my pocket and sit back to watch the healing.
Government never forced lenders to make ANY uncreditworthy loans. Lenders could not discriminate based on the usual factors, neighborhoods, etc. but borrowers still had to qualify.
The junk loans came in large part from securitization, which effectively divorced the making of the loan from its repayment. Why do I care who I lend to if I'm going to sell the paper tomorrow to an aggegator, who is in turn, blessed with a favorable rating from the S&Ps of the world, securitizes the pool and sells it off? And don't even get me started on credit default swaps.
Sorry, Dumber Brother. Wrong again. Into Big Brother's stash?
NotNed - right on the ball. I'm totally fine with letting these guys pay the consequences unless someone can prove to me that not paying is worse than paying.
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