The Economy 2008 Pt. 1

Economy | Information | History | Online | Facts | World | Global | Money

1. @JoeFelice How else are they going to make money? They lower the interest rates so low that anyone with a heartbeat can become qualified for a home loan. The bankers make two to three times on the loans if people pay them over the full term. If the people default, the bankers still win by keeping the property. The low interest rates combined with the increasing supply of money artificially drove up demand and home prices (The bubble). If money stayed constant, there would be no crisis.
2. @JoeShmoe65x2 Care to explain why?
3. The Fed is the reason we had the housing boom and bust! 
4. So then when the Fed lowers the interest rate, that's a good time to lock in a FRM? What does the Fed do besides regulating the interest rate?
5. Yeah, "Liberal" Fox News does it all the time
6. OMG!!!FOREHEAD!!! Anyway, you are mostly correct.....but..... One problem with your argument. Fannie and Freddie sued to the banks to make the loans. The banks didn't want to make the loans because they knew they were bad. Obama was the lawyer that sued them.....and he and his democratic cohorts benefited the most. And to answer the question; this is where he attained most of his wealth. They lied to the poor people when they told them that they were "rich" and made big bucks off of them.
7. It also seems like the classic problem of too many eggs in one basket (real estate).
8. If I understand you correctly, it seems that this would not have happened if the banks' standards had stayed high and the interest rates had stayed low.
9. Who's idea was it to call it "speculation?" That seems kind of dishonest. Rather like calling a high-powered assault rifle a frog and saying to parents, "What's wrong with your child owning a frog?"
10. not familiar
11. What do you have to say about the book "Good Capitalism, Bad Capitalism, and the Economics of Growth and Prosperity?" Are you familiar with it?
12. wrong
13. 2826972 is exactly right about the CRA. The repeal of the Glass-Stegell Act by Clinton started the ball rolling. The Democrats in congress support of Fannie Mae and Freddie Mac to reduce standards is key. There is no incentive for any bank to loan to previously unqualified borrowers. And loaning to people who are not poor couldn't possibly have caused the amount of trouble we see now. Thomas Sowell and Walter Williams place the blame squarely on social programs that ignore common sense.
14. Thanks. The often-deliberate error that right-wing ideologues make here is presuming that all sub-prime lending is equal. But the government has incentivized lending to the poor at lower standards for a long time. What's new is how the unregulated market incentivized banks to put blindfolds on and loan to ANYbody with NO standards (not just the poor, mind you). The gov. bears responsibility, but free-market hacks are scapegoating a social program to distract us from the bigger issue.
15. You may; I am not; Glad you liked it. Keep watching :)
16. Wow, i'm stunned! This was excellent! Your energetic gesticulations definetly made this a lot more exciting. Are you a professor? Or a public speaker? If not, then you really should be, Joe! (May I call you Joe?) Most assuredly an excellent crash course for the comman man whom suddenly finds themselves interested in the economy, such as myself.
17. That's awesome, Bri.
18. One problem: property has no intrinsic value. All value comes from people, not things. Property, such as real estate, has value only for the individual who uses it. Ask a bank whether they would rather own a bunch of empty houses or a bunch of occupied houses. Real estate has no value - it only has value if a person is using it. Another problem: Bad mortgages came from the government guarantee of mortgages that shouldn't not have been guaranteed. Get government out of business.
19. Joe, thanks for the video. You made it simple to understand without putting me to sleep. I've definitely passed it on to other people I know.
20. Oh, I'm sorry. Here I thought trying to help people understand what's going on was a good thing. I guess I was sadly mistaken.