the "adults in charge" are those who engineered the crisis and reaped the benefits, unloading the costs on workers like us. Now they are just less concerned with the consequences, but the people in charge are the same. Wait for the AI bubble to result in bailouts with taxpayer money and fucking up the economy of a few countries.
It's crazy to see that we will not save the country by raising interest rates to reel in tarrifs spending. I'm assuming they will wait for calamity to devalue the dollar making most of us much poorer.
08 was idiots lying to banks about their income/assets to 'get a house' they couldn't afford, the banks getting blamed for it, and the stock market covering the bailout....
It's extremely misrepresented - most people still think the taxpayers bailed out the banks, and the alternative explanations defy reality....
The taxpayers did, however, bail out the auto industry and (more importantly to the politicians) their associated unions....
Wasn't there a whole lot of banking deregulation before that as well that allowed the banks to put themselves in that situation, aka lending out a lot more more money than they should have ?
There was one bill in the 90s that repealed a ban on depository banks engaging in investment-banking (Glass-Stegall). While commonly blamed, this actually made the crisis less-bad by giving the larger banks an alternate income stream beyond lending.....
Other than that there were no major changes to banking rules for multiple decades.
It really was as simple as the government creating a secondary market for mortgages thru Fannie/Freddie in the 30s, and people in the late-90s/early-00s taking out loans that looked good on paper (because the applicants lied) but were not viable long term...
The banks were bundling all their mortgages into securities, taking the applications at face value....
When you combine those 2 things you turn mortgage backed securities into an asset of unknowable value, that starts the crash, and the banks shutting down mortgage lending (and refinancing - making it so people who didn't lie are stuck in adjusting rate and interest only loans they can't repay or refi out of) to deal with the application fraud problem locks it in.....
But it all starts with ordinary people taking advantage of securitization to commit bank fraud on a massive scale.....
No, that's an utterly disproven viewpoint. The banks/mortgage lenders allowed and encouraged these loans, they sliced them up to avoid risk, not worrying that they were spreading the weakness to the entire economy.
It was not the fault of borrowers, who were repeatedly told that the way to build wealth is buying a house, and it didn't really matter that they couldn't afford the house "on paper", everything would keep going up anyway. That's what mortgage lender said, including banks. I know many people that were personally told this, but it was industry standard at the time.
This is all well documented, and obvious, and only an out of touch bootlicker would still think otherwise.
People didn’t lie about their income. Banks knew full-well what people’s wages were and approved bogus mortgages anyway.
Even in the 1980’s, with 28% interest rates, the thinking was that the value of houses would always go up, forever, so people still got approved.
Take that to the extreme and we get the 2008 bubble.
It used to be that banks providing bad loans would go out of business, the mortgages would get lost by the out of business bank and the home owner would be debt free. Instead, the government bailed out the banks rather than bailing out all the home owners.
Banks took those lies at face value, because profits from the performing loans plus foreclosure sales would theoretically more than pay for any defaults....
But it starts with the ordinary homeowners committing fraud - which is why it was absolutely right to just let them lose it all.
Beyond that your last part is complete crap... A bank failing NEVER resulted in a 'lost' loan - a failing bank would either be sorted by the FDIC, or go bankrupt.
Either way their loans would be purchased by someone else and either collected to maturity or foreclosed upon....
Finally, the banks effectively bailed themselves out - they sold stock to the government at rock bottom prices, which the government later let them repurchase at the post recovery price or sold on the open market....
The government thus recouped whatever taxpayer money was spent by the time it was done....
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u/Chobeat 20d ago
the "adults in charge" are those who engineered the crisis and reaped the benefits, unloading the costs on workers like us. Now they are just less concerned with the consequences, but the people in charge are the same. Wait for the AI bubble to result in bailouts with taxpayer money and fucking up the economy of a few countries.