Did bank deregulation lead to or cause the 2007 meltdown/great recession?

Discussion in 'Politics, Religion, Social Issues' started by thermodynamic, Jul 23, 2016.

  1. Plutonius macrumors 604

    Plutonius

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    #2
    It didn't help things but I doubt it was the cause.

    The main problem was greed where the housing market was doing well. People would buy homes even though they knew they couldn't really afford them since they thought they could sell in a few years for a big profit.
     
  2. vrDrew macrumors 65816

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    #3


    You are wasting your time if you think silly things like logic; data; and facts are going to win many arguments.

    Obviously the Great Recession was caused by Hillary Clinton and the evil Federal Government forcing unregulated companies to lend money to poor black people.
     
  3. satcomer, Jul 23, 2016
    Last edited: Jul 23, 2016

    satcomer macrumors 603

    satcomer

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    #4
    When you really come up in years you have to remember that there are Financial charlatans all over the place! When you get into that game it seems financial guys/gals coming out of the woodwork and politicians saying everyone needs to be in a house!

    To see an older video of it look at this:

     
  4. Plutonius macrumors 604

    Plutonius

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    #5
    Yep, everyone was telling people that they needed a house and that it was a quick way to get rich.

    People have to take responsibility for their actions and it was primarily people's greed that caused the problem.
    --- Post Merged, Jul 23, 2016 ---
    The lending institutions wanted to give more loans and had no complaints at the time. Lending money to people who shouldn't get the loan made the problem worse but it was mostly used as a good excuse by the lending institutions after the collapse. Greed by the lending institutions and more so by the people getting the loans caused the problem.
     
  5. ibookg409 Suspended

    ibookg409

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    #6
    Oh my god.
     
  6. pdqgp macrumors 68020

    pdqgp

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    #7

    ^^ Great link. I remember that clip too. Obama needs to watch this since he thinks like Laffer.
     
  7. dukebound85 macrumors P6

    dukebound85

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  8. DearthnVader macrumors 6502a

    DearthnVader

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    #9
    Banks can not be reformed, only closed.

    That is to say, it doesn't matter how much regulation we sattle them with, they will always find some new, unregulated investment to blowup into a bubble, and that bubble will pop.
     
  9. Three141 macrumors 6502

    Three141

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    #10
    Took the words right out of my mouth, I believe de-regulation contributed but I mainly blame greed for the crash! people wanted what they could not afford and investors wanted profit everybody was happy until the bust.

    In the UK they are gradually going backup to 100% mortgages which is bonkers in my mind; they even have a more ingenious scheme called shared ownership where you partly own a property you can't afford, does it have its pros? Yes but to me I get frustrated because it is a clear indication that people can't afford these houses but people will do whatever it takes to keep the prices high.

    On a side note; I watched a documentary about the UK during the striking years and one interesting point was government wanted people to get mortgages as they knew people with mortgages don't strike!
     
  10. pdqgp, Jul 23, 2016
    Last edited: Jul 23, 2016

    pdqgp macrumors 68020

    pdqgp

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    #11

    Another great watch and inside are some of the same things Trump is talking about. Peter predicted and SAW the crash coming and he's warning EVERYONE about the next one that will be even bigger. Trump agrees and sees this and is warning everyone too. You don't have to like either of them but when they are likely correct about what's coming you best vote to put the right people in place to handle things. I believe Trump is that guy and it's so clear Hil liar y isn't and thankfully Obama is Outta here as he's only made our situation way way worse.




    Time to stop arguing about social issues folks. I'm off to buy more ammunition so we can fend off the zombie's when the dollar collapses.
     
  11. thermodynamic thread starter Suspended

    thermodynamic

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    #12
    Seems a little one-sided response.

    Nobody encouraged purchases or increased available loan amounts?

    How about ARMs? Those were popular.

    How many other facts can we think about? Or is everyone except the customer allowed to pillage and be unethical toots all they want? That's neither moral nor ethical.

    In investment, everyone is hyped when told how your house WILL go up in value and such, yet any tokenism of "maybe" is hidden in micro-print so small and never exactly discussed... seems shifty to me.

    May as well blame the rape victim for wearing a dress that shows a bit of ankle.
    --- Post Merged, Jul 23, 2016 ---
    Wow. Relatives whine about "savers being hurt" all the time.

    But whether government is to blame when it has corporate lobbyists also encouraging these bubbles and other parts of the problem...

    +1, regardless - a lot of what he said isn't exactly wrong... especially when real stimulus comes from consumers and workers who generate the money to begin with
    --- Post Merged, Jul 23, 2016 ---
    Why should a place to live in be investment fodder like poker chips in the first place?
     
  12. pdqgp macrumors 68020

    pdqgp

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    #13

    The problem is Obama and his droves of followers who live on a completely different planet and think everything is okay and that the biggest crises before us is should we let a guy with a dick who feels he's a woman on the inside should be allowed to use the woman's shower at the YMCA. I can't facepalm hard enough to understand the level of stupid in this country.
     
  13. DearthnVader macrumors 6502a

    DearthnVader

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    #14
    People's houses should be their investment, not the banks or Wall Streets investment.
     
  14. thermodynamic thread starter Suspended

    thermodynamic

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    #15
    The issue is hyped up out of proportion, I certainly agree. Especially if the issue isn't involving a DSM-V classification of mental illness.

    Why anyone thinks the economy is okay - that can't be for real, otherwise we wouldn't have seen election 2016 be as unexpected as otherwise, from both major political parties. And even Cenk Uygur of TYT is now worried Trump could actually win due to her VP pick (there are numerous ways Trump could win, or indeed lose, but Cenk seems a lot more worried now than in the past and points out Clinton might be too easily believing the race is a shoe-in.)
     
  15. Plutonius, Jul 23, 2016
    Last edited: Jul 23, 2016

    Plutonius macrumors 604

    Plutonius

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    #16
    A somewhat poor example in that the rape victim has no control in what happened to them.

    A better example would be a store selling tasty snacks to overweight people. Yes, the stores (banks) are pushing a product to overweight people (people getting a loan) but, it's the people that are responsible for purchasing the product.

    --- Post Merged, Jul 23, 2016 ---
    In investments, there are always winners and losers. It's not as much what you invest in but you that you will fall way behind if you don't invest.

    Most people are illiterate when it comes to money (budgeting, investing, etc.).
     
  16. Herdfan macrumors 6502

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    #17
    Bingo. Free money to anyone with a pulse. Some was based on greed on the bank's part packing bad loans to sell, but also there was pressure on them from the government to open up home financing to those who traditionally had been left out of the housing market. But most of the money ended up going to flippers or those who were able to buy more house than they could afford and eventually the weight just crumbled it all.
     
  17. Three141 macrumors 6502

    Three141

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    #18
    Funny you say that because indirectly it does become a bank investment, it's in the banks and buyer (future seller's)interest that the price increases.

    Person A buys for 125k applies for 100% mortgage it's approved with say 5% interest rate.
    Person A (40 years later) sells the same property for 200k and person B applies for a 100% mortgage with say a 5% interest rate.

    The bank is quid's in and the best part is if the price falls (crash comes and naturally regulates prices) in future they just make a little less money but it's a good rinse and repeat move.
     
  18. Desertrat macrumors newbie

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    #19
    I see it as a mix of causes. One item is the Community Reinvestment Act from the Carter era. Acorn used it to push banks into making home loans to people with low credit ratings.

    Another is the repeal of Glass/Steagall, where the big banks could invest with depositor's money.

    The uber-low interest rates allowed both cheap financing and an escalation in pricing. A mobile home on a 3/4-acre lot with a view of the Pacific for a "mere" $1,000,089? Get real!

    Then the aggregation of mortgages as security for bond issues which were rated far above their real status. The AAA ratings were phony. The decline of mortgage payments wiped out the ability of the issuers to make the required interest payments on the bonds. Oops!

    Loan quality: First, variable interest; then the "Ninja" loans. No income, no job, no assets --but eligible.

    Add it all up and mix in leverage, debt, greed, whatever. Homebuyers and banksters alike. Like the TV showed, many people made a ton of money flipping houses--until they couldn't.

    The bust was predicted by many, several years before 2007/2008. Soros, Schiff, Casey, Bonner, Roubini. Unseen by Greenspan, Geithner, Bernanke, Yellen et al. Austrians 1, Keynesians 0.

    And the structure of debt, worldwide, is worse today than it was then. Borrowing money to pay interest on money already borrowed is not a sign of fiscal wisdom.
     
  19. Three141 macrumors 6502

    Three141

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    #20
    That's what people have been taught plus it almost happens naturally; social housing (council housing in the UK) are often places people want to leave for numerous reasons.

    Often people with kids or planning to have kids and general agers think about their latter years and property seems like a sound investment for themselves and their offspring.

    It's a similar mind set applied to college (university) degrees, people sign up often for a course they can't afford, get in debt in hope they can get a good job at the end of it and in some it is a must, they do this as an investment in their future.

    The message seems to be get in debt to get rewards later!
     
  20. thewitt macrumors 68020

    thewitt

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    #21
    Actually it was caused by Bill and his cronyism, but you were close.

    The government coerced/forced banks to take sub-prime loans from people with no financial ability to repay them, resulting in a near collapse of the banking industry as all of those loans defaulted and the housing market crashed.

    But I know, fact and history are hard to grasp for some.
     
  21. LIVEFRMNYC macrumors 604

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    #22
    Whoever caused the 2007 recession ........THANK YOU!!!!!!

    I cleaned up on shares during that period. :D
     
  22. DearthnVader macrumors 6502a

    DearthnVader

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    #23
    Vulture Capitalism?
     
  23. LIVEFRMNYC macrumors 604

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    #24
    Not really, cause I wouldn't have bought so much if I thought the bailouts were not going happen.
     
  24. DearthnVader macrumors 6502a

    DearthnVader

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    #25
    I should have looked it up first, I didn't know that was really a thing.
     

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