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by retr0grad3
4341 days ago
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> I also think it's comforting to think that this was the work of simply some greedy guys on wall street using strange words. Yes, actually, it was in a lot of cases. From the aggressive use of NINA loans (in some cases targeted at minorities) to selling mortgage-backed securities while betting AGAINST them, the financial industry had a much larger hand in this. Read the Levin-Coburn Report if you'd like to get better informed about what happened: http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd... > are they not equally guilty of wanting to one-up the next guy with a bigger house, a quick flip, a granite countertop, or a cash-out refi 1) The assumption you're making the insinuation that all homeowners engaged in this kind of activity which is an existential fallacy.
2) In situations like this, where one party (the financial industry) has more training, connections, influence, and knowledge and the other (homeowners) have CNBC, it's a stretch to say that the homeowners are the ones to blame. |
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Which was being done by the local banks, not the wall street guys. If anything the banks were ripping off the institutional investors they sold these bonds to, by selling mortgages that they wouldn't've taken themselves.
> selling mortgage-backed securities while betting AGAINST them
Any trade has two sides; anyone you buy a stock from is essentially betting against that stock.
> The assumption you're making the insinuation that all homeowners engaged in this kind of activity
No more than you're assuming everyone in the finance industry engaged in such activities.
> one party (the financial industry) has more training, connections, influence, and knowledge and the other (homeowners) have CNBC, it's a stretch to say that the homeowners are the ones to blame
Some of the losses were from complex products that were missold, reverse-amortization mortgages and the like, and yeah, the guys who sold those are responsible for most of the damage they caused. But a lot of the crash was simply people taking out a loan for $x/month when they couldn't afford to pay $x/month (or could until they lost their job), and that's not a complex question where training and experience make a difference.