More Articles

[unforth]

I may not have time to finish my last post, unfortunately, but here are some other articles that I found interesting:
Why the Bailout was a Terrible Idea, according to the Nation.
Bailout Causing International Problems
Newsweek Gives an Overview of the Crisis - this was quite helpful, despite the fact that I was dubious of a few of the things that it said.
So What is a Credit Default Swap, Anyway? - another Newsweek article with some good overview type information.
Timeline of Events Since 2007 - the dow, aligned with a few news tidbits, but still vaguely interesting.
The Times Gives an Overview of Events Since Yesterday, but you might not be able to read without making an account - they're free, though, so I'd say it's worth it.
Yay, Bipartisan politics? "Mr. Boehner...said he could not remember a time when the muscle of both parties and the White House failed to produce a victory." (from the above article)

What's really starting to bug me is the way that everyone is blaming "Wall Street Recklessness." That is not what's caused this mess. The root of this mess is people who had poor credit being extended large lines of credit at high risk - credit they should NEVER have received because they couldn't afford to pay it back. The banks just did what they had to in order defer that risk - but they gave the people what they wanted. Blaming Wall Street over looks the part where there would not have BEEN subprime mortgages if the demand for them hadn't been astronomical.

Gotta go. Probably more later.

Comments

[drydem.livejournal.com]

the trick is, that the subprime mortgages were bundled into securities that were traded heavily on Wall Street in the manner of say, junk bonds. When they pretty much all failed, there was some serious fallout.
Listen to the This American Life Episode "The Giant Pool of Money"(I think that's the title) It gives a clear narrative of the subprime mortgage market.

The thing I would say is that subprime mortgages would not have been necessary if our society had a livable minimum wage and better job security because then, houses wouldn't be out of the reach of most people and thus cause them to take risks.

[mindstalk.livejournal.com]

And Wall Street was willing to give out those subprime mortgages because they'd found ways to hide or pass the risk on to others, plus beliefs in either "the bubble won't burst" or "Washington will bail us out". Or more succintly: mass lending to poor credit risks, backed up by securitization of those mortgages, is is the Wall Street reckleckness.

gave the people what they wanted

And it was the banks' choice to do that. Of course people want cheap/free money, doesn't mean the banks have to give to them.

Plus things I don't know much about, regarding deceptive lending practices and adjustable rate mortgages.

Or zero-down mortgages + ARM, where while rates are low you're basically renting the house cheap, and have no incentive to not walk away when rates rise or you lose your job. Housing prices go up because of mortgage fueled demand, then crash as people rationally walk off. Main culprit? Whoever thought zero-down mortgages were a good idea...

[swan-tower.livejournal.com]

We deregulated banking to the point where they found a way to make a quick buck off of the people who wanted mortgages but couldn't actually afford them. The demand was always there; it's just that only recently were enough safeguards removed to make it (temporarily) profitable. And when that happened, the industry built a giant house of cards, made money hand over first for a short while, and then (more or less inevitably) tanked.

So me, I place the blame on the guys who took the safeguards off in the name of a quick profit.