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Posted by: 4thchance 9 months, 2 weeks ago
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4thchance9 months, 2 weeks ago
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Here's a little question for you people to ponder over.
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I'd like to see ANYONE answer this question/s, with an intelligent answer that makes good clear sense.
WHY,
Why did most all the banks in the country hand out loans (Totaling hundreds of billions of dollars) to people that could not pay the loans back? Since when does anyone in banking do such a stupid, dumb thing. Even the $8.00 an hour employee at the drive through bank window knows not to loan money to someone who can't pay it back, so why did they do it? Some claim the banks were forced to relax their standards and loan gobs of money to just about anyone and everyone who asked for a loan, if that's true, then WHO FORCED THEM to do it and WHY?
I do know one thing for sure. The CEO's and such at these banks had to have known, if they loan money to people who can not pay the loans back, then that would be the end of their banks. So, why did every bank in the country do the exact thing that they knew would destroy their own business? It was INSANE for them to do this, and they knew it would be the end of them if they did do it, so WHY DID THEY DO IT?????
I'll be waiting for someone to try to answer this....good luck!-
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Leemck029 months, 2 weeks ago
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4thchance, this is a profound question. This is like asking why can't we see the forest for the trees? I feel a little stupid for not putting this obvious inconsistency at the top of questions to ask. Did we get dumbed down to this point not to comprehend the magnitude where the current crisis was not by chance? You messed me up, I have to go out and rethink everything on the issue. Thanks!
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4thchance9 months, 2 weeks ago
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I think alot of people should start thinking about what I posted and should start to wonder just what the hell is going on. Something about all this is not adding up, is it? I TRULY doubt that (the current crisis was by chance) I say there's little chance if it all was simply by chance. NO, I beleive it has all been orchestrated. I know that sounds a bit fruity, but, could it be a HUGE Conspiracy?
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If yes, then that REALLY starts bringing up endless questions about all this doesn't?
If the banks were forced to give loans to people who could not pay the loans back, then why were they forced and by whom? What is the goal of it all, Hmmm?????
http://scottthong.wordpress.com/2008/10/10/obama-s...
Oooooppppsss... I posted that whacky link by mistake, sorry :-)
After all, that was done a few years ago, so it doesn't count now, RIGHT?-
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Will13139 months, 2 weeks ago
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ACTUALLY IT DOESN'T COUNT... the suit was never about forcing anyone to lend to anybody that could not afford to pay.. and Obama billed 2 hours 50 minutes at 165 per hour.... and was never in court....
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Obama represented Calvin Roberson in a 1994 lawsuit against Citibank, charging the bank systematically denied mortgages to African-American applicants and others from minority neighborhoods.
"I don't recall him ever standing up and giving an impassioned speech -- it was a lot of behind-the-scenes stuff," said Fay Clayton, the lead lawyer on the case.
"He was the very junior lawyer in that case," said attorney Robert Kriss. "He had just graduated from law school. I don't recall him being in court at any time I was there. I was the lead lawyer for Citibank and he was not very visible to me."
Kriss, Clayton and every other co-counsel and opposing counsel interviewed for this story praised Obama's legal ability, temperament and everything about his courtroom demeanor, even though, they agree, he didn't say much in the courtroom. Many are now donors to his campaign.
On Feb. 23, 1995, Obama billed 2 hours and 50 minutes for an appearance before Judge Ruben Castillo on behalf of his client, and also for reviewing some documents in advance of a deposition. That cost Citibank -- which ultimately had to pay the winning side's fees -- $467 at Obama's hourly rate of $165.
Miner commanded the higher rate of $285 an hour. During his appearance before the judge, Obama said he would need more time to file a response to a motion, and the judge agreed. That was all Obama said during the half-hour hearing.
His final bill on the case was 138 hours, or $23,000.
http://www.suntimes.com/news/politics/obama/700499...-
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Leemck029 months, 2 weeks ago
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Will1313, 4thchance post shows the issue is greater than a single case, no matter the attorney or the company. What policy was so shaky to a allow this cross the board debacle? Now if you can explain the legitimizing of "Gaming Laws" for banks to speculate, or insuring sure loser derivatives, or all the banks packaging loans so no one knows where the notes are, then you have something. Shame on Obama if he done all that . . . but I don't think so.
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The housing bubble certainly tipped an economy that was leaning toward collapse. Who do you know, that is credible, will say and can defend the facts that minority housing lending caused this calamity? That notion has been put out there but clearly shot down. The sub-prime is bad, but this goes to prime lending and the culture of Top-Down greed and a government that did nothing right for the middle class. -
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wtagg9 months, 2 weeks ago
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The first fact that breaks your hypothesis is that all the banks did not fail equally. In fact, only a small portion of banks and financial institutions failed. Many large banks, like Key Corp, have done just fine. So, why did they all not fail? You are pushing toward CRA here and if all banks had to comply equally, then why did all banks not fail equally?
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Because CRA is not a major factor in the failures. Could CRA have some influence on an institution that was in huge trouble to begin with? Certainly. Is it the major factor in failings? Hardly.
Now, if you want to make a case that institutions, like CountryWide, were attempting to gain market share at any cost, then I think you might be onto something. They became the favorite of many who pursued non-traditional lending, like house-flippers. House-flippers would fit perfectly into your *can't afford* category, but there certainly was no government pressure to lend to such individuals.-
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wtagg9 months, 2 weeks ago
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It is simple cause and effect. If a group of entities are faced with the same cause (CRA legislation), then the effect that cause has upon the group should be relatively uniform (typical bell curve with standard deviation).
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It demonstrates that CRA legislation's cause did not produce a uniform effect. It isn't the dominate issue with the financial/banking markets.
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spkguy9 months, 2 weeks ago
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"WHY,
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Why did most all the banks in the country hand out loans (Totaling hundreds of billions of dollars) to people that could not pay the loans back?
Because they could get insurance on that paper, from "Guess Who?"
"The contracts were flying out of AIG Financial Products. Hardly anyone outside Wall Street had ever heard of credit-default swaps, but by early 2005 investment banks were snapping them up to insure all kinds of deals in case of default, fueling one of the great financial booms in U.S. history.
During twice-monthly conference calls that originated from the company's headquarters in Wilton, Conn., President Joseph Cassano would listen as marketing executive Alan Frost listed the latest swap transactions in the firm's offices in London, Paris and Tokyo.
Once a small part of the firm's business, the increasingly popular contracts had helped boost the company's profit to record levels. But they also exposed Financial Products and its parent, American International Group, the global insurance titan, to billions of dollars in possible losses.
http://articles.latimes.com/2009/jan/02/business/f... -
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Ratskii9 months, 2 weeks ago
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This may be the wrong question, 4th.
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I would guess, though I don't have the figures at hand, that most people who received mortgages during the bubble period were able to make payments at the time they took out mortgages. A layoff here, a medical emergency there -- a lot of situations changed.
This was exacerbated by the banks and other financial institutions aggressively borrowing money to buy mortgage related securities (which looked like a good investment at the time). Unfortunately, given that these institutions were over extended, it didn't take much to make their mortgage related securities lose value.
Hence the bubble burst and created even more layoffs and individual hardships which made it impossible for even more people to pay their mortgages. Hence the cycle continued.
The question I would ask was why were the financial institutions so shortsighted as to overextend themselves. I saw the economic downturn coming back in 2004, and I'm no expert.-
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willottica9 months, 2 weeks ago
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I think the answer to your question is likely short-term vision on the part of shareholders, boards, and Executives. Executives were rewarded extravagantly for producing short-term profits, which led to many of them making decisions which would pay off immediately but would have the chance to backfire later on. Since the reward was for immediate payoff, it was safe to make these, and be out of the way, or suffering at most a job loss, if they eventually did backfire.
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It's a very close parallel to the products they were selling: cash-back mortgages, or mortgages with dirt-cheap promotional rates provided instant gratification, then a slow burn (or a rapid shock).
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lfergie8129 months, 2 weeks ago
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4thchance
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Want to watch a little video of what happened?
http://www.vimeo.com/3261363?pg=embed&sec -
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reallypsst9 months, 2 weeks ago
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The government pushed those type of loans and they backed them through fannie and freddy mac,also the bankers kept selling the notes of homes over and over.Have you ever heard of a scam were multiple deposits were taken for the same home.
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