Huh?
The problem is that largely unregulated financial institutions used sometimes shady deals to sell people mortgage products that they probably could not afford.
That’s a joke, right? I agree with the latter but to say that financial institutions are largely unregulated is like saying Pamela Anderson is largely unaltered.
September 24th, 2008 at 12:37 pm
Only the medical industry is more regulated than finance.
The only real reason most lenders booked these crappy loans is because the GSEs were absolving lenders of all the risk for them at the direction of Congress’ social experiment. (‘Affordable Housing’ is a euphamism for ‘Bad Credit Decision in pursuit of votes.’)
September 24th, 2008 at 2:02 pm
Hmmm…my mind was thinking “untalented” but I’ll give ya that one too!
September 24th, 2008 at 5:51 pm
Yeah, the perennial bitch has been that those eeeevil lending institutions were “stingy” with their money, you know, not wanting to lend it to people who had no means of paying it back. In steps Congress to fix the “problem” and here we are.
“Unregulated” business do everything they can to protect their assets.
No, people, the problem we’re having is due to an unregulated Congress. Too bad they’re the only ones we look to to solve the problem.
September 24th, 2008 at 6:28 pm
Isn’t the firearms industry also “largely unregulated,” according to Obama (and probably FactCheck.Org too).
September 24th, 2008 at 8:45 pm
Financial institutions are fairly heavily regulated, though the specific problem that has brought things crashing down (i.e. credit default swaps) were largely unregulated.
September 24th, 2008 at 11:12 pm
+1 on DirtCrashr.
That was the story, “firearms industry = largely unregulated” when the Protection of Lawful Commerce in Arms Act got passed. Some real epsilon minuses spouting that crap.
September 24th, 2008 at 11:22 pm
Fannie and Freddie were clearly prohibited from buying anything but the lowest risk paper, but that didn’t stop them.
Also, all those people who applied for the “liar’s loans”[1] and lied on the application broke laws. All the brokers that looked the other way broke laws. All the law enforcer people who were asleep at the switch acted as they did because the vast majority of people who vote, also had an interest in seeing the housing bubble continue to inflate forever without bursting.
[1] NINJA loans = No Income, No Job, (and) no Assets
September 24th, 2008 at 11:45 pm
Hey SM,
all very true. The bad loans in and of themselves didn’t seem to bring the whole house of cards crashing down though, it seems that the straw that broke the camel’s back was the leverage based on the credit default swaps.