PDA

View Full Version : Crisis of Credit....visualized


PisnNapalm
03-01-2009, 12:40 PM
This has to be one of the easiest to understand explanations for the root cause of our economic problem.

http://crisisofcredit.com/

Godfather
03-01-2009, 12:51 PM
The best one was the series of crudely drawn characters, starting with the irresponsible borrower in the irresponsible lender's office and ending with the irresponsible investment manager explaining over the phone why he lost all the money.

Can't find it but does anyone remember the one I'm talking about? About 5 or 6 different times along the way someone said, "Yeah, but as long as housing prices keep going up it'll be OK."

Preacher
03-01-2009, 01:28 PM
not bad at all.

Though I notice they don't mention CRA which has a BIG effect on it, instead blaming wallstreet completely.

hindes204
03-01-2009, 02:06 PM
not bad at all.

Though I notice they don't mention CRA which has a BIG effect on it, instead blaming wallstreet completely.

Your thinking too logically again Preach....The Dems control everything now, why would they ever admit that their beloved reinvestment act is mostly to blame for the situation we are in now

Godfather
03-01-2009, 02:13 PM
not bad at all.

Though I notice they don't mention CRA which has a BIG effect on it, instead blaming wallstreet completely.

CRA is a factor but not as much as the right wing would have you believe. There were still people of both races who had deals fall through on financing, and 24 of the top 25 subprime lenders weren't subject to the CRA.

beSteelmyheart
03-02-2009, 07:01 PM
Was anything said about irresposible realtors? (sorry, too impatient to watch the whole movie) I might be going off on a tangent here about it but I think that they have done their part to contribute to the whole housing mess by having the ability to play on a homebuyer's emotions during the whole search process, just so that they can get a bigger paycheck as well. Our home inspector has also told me of instances of overhearing realtors "reassuring" prospective buyers by telling them basically not to worry about something ( a potential problem with the home), that 'oh, next year it'll double it's value". Riiiiight...He told me this after inspecting a small home that sold in "05 for 168,000 dollars!!!!! I couldn't imagine this place selling for that kind of money, it was absolutely insane. Last year our offer on this little foreclosure was 65,000. We backed out of the deal because the bank didn't want to fix anything & they ended up going for a cash deal on it, I have yet to find out how much it sold for.
Also it blows my mind how we are encouraged as consumers to get into debt! For a home it's understandable, as long as you know your limits & keep the emotion out of it but if you listen to some of these ads on TV, it's insane.
For a rough example, lets go with "buy this whole room of furniture & you have no payments for two years!!!" Of course people are going to want that whole room full of beautiful furniture for their instant gratification fix & what happens 2 years down the road? You're stuck with thousands of dollars to pay for used furniture, long after the fix has worn off.
The whole credit mentality IMO is like a sick, dependent relationship, a symptom of the disposable society that we are.
As consumers maybe we should start to change our thinking because in essence, isn't it the power of our purchasing dollars that generates this type of thing? Aren't we the ones that have been living beyond our means for the bigger, brighter, better stuff now now NOW? And then when we get sick of that, it's more more more? Aren't we the ones who spend the money & generate the trends?
Forgive me if I sound ignorant about it, these are just a few of my rambling thoughts.

Preacher
03-02-2009, 07:04 PM
CRA is a factor but not as much as the right wing would have you believe. There were still people of both races who had deals fall through on financing, and 24 of the top 25 subprime lenders weren't subject to the CRA.

No.. it was definitely a factor. The culture that went with it, which was pushed by BOTH parties, is absolutely a factor. Get as many people into a home as possible. Then when they can't pay, we point fingers at each other and blame "the other guy.:

revefsreleets
03-02-2009, 08:02 PM
Piggybacking on what "besteel" said, but a BIG part of the problem was the mentality shift of the American dream changing from "I can own my own home so it's mine" to "I can own my own home as an investment".

Everyone who benefited from the housing bubble played a part in that shift...

xfl2001fan
03-03-2009, 06:59 AM
And to biggy pack off of Rev:

The American Dream went a step further going from, "I can own my own home as an investment," to, "I can own multiple homes as an investment."

Now, the people who make a living buying foreclosed homes are doing fairly well for themselves...while a much larger portion of society is scrambling (even harder) to make ends meet.

Of course, seeing Wall Street and the Auto Makers get a fat check because of their bad investment is leaving a very bitter taste in the mouth's of many who (albeit on a smaller scale individually) also made bad investments...but have to pay the price themselves.

stlrtruck
03-03-2009, 08:09 AM
Just when you think you understand the way the system screws you, you find out it's worse than you thought.

xfl2001fan
03-03-2009, 11:28 AM
Just when you think you understand the way the system screws you, you find out it's worse than you thought.

Yeah, what I thought was 90-Grit Sandpaper condom...was actually a rougher 60-grit.