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I don’t remember the evil bankers forcing folks to sign mortgages  at gunpoint.

Money was easy to get and people who had no business borrowing money borrowed way to much.

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In order to multiply the original mortgage bond investment 20-fold, don't you need people betting against the mortgage holders at some point?  And, if they are right, where does the money come from?

I need this explained like I'm 5 years old.

Thanks.

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Honestly, the movie explains it fairly well.

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It's about to happen again and nobody seems to be at the wheel.

China manufacturing and shipping shut down entirely is going to have grave implications on the American supply chain of nearly everything you can imagine. The tidal wave has already started deep in the ocean and heading our way.

99% of Americans live way, way above their means. When business cannot business anymore and what products do still exist, including food at 100% more cost, we are in for a fucking shit storm of epic proportions.

Note this point and call me a dumbass later... or not.

The markets are all completely fake as fuck right now but logic doesn't seem to exist anymore. All people see is "Mah account gots mo money' and don't care.

Gloom and  doom out!

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Gov had everything to do with it, they were the ones who initially pushed the practices of loaning to people who couldn't pay.  Banks saw an opportunity to make money and ran with it.  They knew it wasn't gonna last.  Mortgages got packaged up and sold off and everyone was playing musical chairs and hoping they weren't holding the bag when the bottom fell out.

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Holy fuck is there a lot of dumbfuckery in this thread.

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Honestly, the movie explains it fairly well.

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I don’t remember the evil bankers forcing folks to sign mortgages  at gunpoint.

Money was easy to get and people who had no business borrowing money borrowed way to much.

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Wasn't the whole thing with shaky loans because the government started pressuring lenders to lend to people with shoddy credit with some promise of being recouped?

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Dude I worked for Chase.  The govt was not forcing us to make shit loans.  The CRA was not the reason for the housing clusterfuck.   Moody's had more to do with it than just about anyone else.  They rated MBS AAA that were absolute shit.  We sold that shit to anybody and everybody.  

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Dude I worked for Chase.  The govt was not forcing us to make shit loans.  The CRA was not the reason for the housing clusterfuck.   Moody’s had more to do with it than just about anyone else.  They rated MBS AAA that were absolute shit.  We sold that shit to anybody and everybody.  

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A fifth grader can debunk your theory.
The housing market crashed in December of 2008.
Obama was inaugurated on January 20th 2009.

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Honestly, the movie explains it fairly well.

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A fifth grader can debunk your theory.
The housing market crashed in December of 2008.
Obama was inaugurated on January 20th 2009.

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Yep, Obama and cohorts made banks issue loans to people with no credit who didn’t have a chance in hell of fulfilling their loans, saying it was racist to deny people based on their ability to pay the loan back.  On top of that, you had banks issue loans with no money down, which had variable rates, low at the onset, and would spike higher as interest rates moved, ensuring they would not be able to pay the newer higher rates and would likewise default.

On a basic level, these loans were packaged together and sold as an investment.  Different packages had different amounts of risk, based on the credit ratings of the borrowers.

They kept selling and leveraging these as assets, when they knew they were worthless.

Eventually, one company saw that they were sitting in a house of cards, and their “assets” were about to implode since they were worthless.  They dumped, and dumped hard, causing a stampede for the doors to get out as everyone else saw their balance sheet wasnt worth shit and the value of the packages tanked.  More sellers than buyers...

He was accused of defending redlining — the practice, illegal since the Fair Housing Act of 1968, of systematically denying credit to black neighborhoods. In an interview at Georgetown University in 2008, flagged this week in a story by The Associated Press, Mr. Bloomberg blamed that year’s mortgage crisis and financial crash on congressional legislation that pressured banks “to make loans to everyone.”

Community organizers and fair-housing advocates accused him this week of embracing a “myth” that blames minorities for bankers’ misdeeds. But that accusation is unfair. True, Mr. Bloomberg goes easy on bankers: Complex derivatives, swaps, “tranching” and opaque offshore deals play no role in his account. But blaming minorities is the last thing he is doing. He is blaming Congress. Certainly there were many elements that brought on the finance crisis, but Mr. Bloomberg correctly identifies the major one: a flawed attempt to use credit markets to broaden access to housing. Studies bear that out.

Bill Clinton, elected president in 1992, made this mission his own. Starting in the summer of 1994, he crusaded against the dearth of private housing credit in poor, black, urban neighborhoods. It was he who, without strong evidence, made the incendiary accusation of “redlining.”

Mr. Clinton enlisted and empowered community organizers, using the Community Reinvestment Act, a nearly forgotten piece of legislation from 1977 that gave community groups a way to stymie banks by accusing them of discrimination. He brokered deals. In the quarter-century after 1992, $850 billion in loans was steered through these community groups. The banks took the precaution of showering gifts and grants on the community groups directly, too. After 1993, the Association of Community Organizations for Reform Now, which would later attract controversy for its role in helping elect Barack Obama president, received $13.5 million from Bank of America, $9.5 million from JPMorgan Chase and $8.1 million from Citibank.

By the time Mr. Clinton left office, the Department of Housing and Urban Development required that low-income loans make up 50 percent of the G.S.E.’s portfolio. Republicans never objected. They seemed to assume that, as long as the costs of fair housing came in the form of a risk distributed across society, with no increase in any line item in the federal budget, then they must be unimportant. Jack Kemp campaigned for vice president in 1996 calling for “a new civil rights agenda based upon expanding access to credit and capital.” As part of its program of “compassionate conservatism,” George W. Bush’s administration raised the G.S.E.s’ quota for low-income loans to 56 percent.

That brought an astonishing deterioration in the quality of housing assets. By 2007, high-risk mortgages made up 22 percent of the G.S.E.s’ portfolio, up tenfold from a decade before. The economists Atif Mian and Amir Sufi discovered that, between 2002 and 2005, income and mortgage credit growth were “negatively correlated.” The less likely you were to pay off a mortgage, the more likely you were to get one.

The G.S.E.s’ underwriting standards became those of the whole industry. By 2006, 46 percent of new homeowners were making no down payment at all on their houses, and banks had trillions of dollars in loans on their books that would never have been made, absent government pressure. No well-informed accountant thought these loans could survive an economic downturn, and they did not. The politicization of poor people’s mortgages in a single country — the promise to make loans to everyone, as Mr. Bloomberg put it — brought the world to the brink of economic disaster.

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Fixed it for you: No credit AND no down payment. They had zero vested interested in the property.  Just walk away because they could without any repercussions. Gimme for free things and stuff even though I am not fiscally mature or morally sound