Real Estate Investor · Portland, OR · Member since 2009 · 660 posts · 244 votes
Interesting TIME article about root cause of the US financial crisis .... not sure I agree but put a different spin on what I've read and believed before:
"There is no doubt that the pressure on the U.S. financial system [that led to the financial crisis] came from abroad," says Caballero, who is the head of MIT's economics department. "Foreign investors created a demand for assets that was difficult for the U.S. financial sector to produce. All they wanted were safe assets, and [their ensuing purchases] made the U.S. unsafe."
Attorney · Raleigh, NC · Member since 2008 · 4k+ posts · 1k+ votes
16y
Originally posted by James Harkness:
I was a loan officer for two years for the leader in the industry originating stated income, stated asset, small commercial mortgages. As I say this, I cringe and prepare for the responses. However, I can tell you one thing. About 75 percent of the loans went to foreigners (or so it seemed) and it was prolly an even larger percentage that applied for the loans. Not sure what that means, but I found it alarming at the time.
Who's more at fault? The foreigners who took those loans (or "seemed" foreign to you) or you for selling those loans? Who was the licensed professional here?
People, the age of blame is over. I went into foreclosure on the first property I bought because I made decisions that put me in a bad financial position and I am responsible for the end result. I took responsibility for my actions and changed my ways. I am positioned just fine for this "crisis" because I know who is responsible my financial situation - me. The buck needs to stop or we'll never turn this crisis around.
Real Estate Investor · Carlsbad, CA · Member since 2009 · 151 posts · 17 votes
16y
Well, Caballero did a good job at getting his name out there, but in my opinion it is ridiculous. 40 to 1 leverage and the Moody's triple A stamp is what did it with the "everyone should own a home" baloney. When people buy homes that they cannot afford, just to flip to make a quick buck with the CDOs and triple A stamp of approval, you have the housing market on steroids... a crime! And if we do not learn from this crash, we are DOOMED! -- Dawn
Residential Lender · Lakewood, CO · Member since 2008 · 12 posts · 2 votes
16y
It could also be argued that US investment firms made the investments appear safe to foreign and domestic investors. This led to increased appetite for these securities and availability of risky products to consumers.
Attorney · Raleigh, NC · Member since 2008 · 4k+ posts · 1k+ votes
16y
Thank you for posting this Ted. I can't believe the Times actually printed this though. I'm sure all those foreigners that came here and made us run up huge personal debt and not pay our bills.
Please... Callabero is basically doing a Mel Gibson drunk rant here. For anyone who've truly lived a responsible life the past 8 years, this "crisis" is really not that bad.
Can you imagine if Rush Limbaugh said this how the media would react?
Real Estate Investor · Sentenhart, Wald · Member since 2009 · 110 posts · 75 votes
16y
What a load of tripe..
The rating agencies were consulted by the banks issuing the paper, they worked with the issuers to craft the paper and and then gave them the "AAA" ratings, and were paid for their "services".
The foreigners were foolish not to do due diligence, but they did not cause the meltdown, they were just lazy.
"Uncontrolled" SEC, absurd leverage level raising decisions, rating agencies ratings for sale, bankers looking for bonuses rather than being responsible, and consumption irresponsibility at all levels of our society caused this and nearly put the world into a depression.
I watch the upcoming lawsuits versus the rating agencies with interest, but why do I feel they will walk with a symbolic slap?
Real Estate Investor · Carlsbad, CA · Member since 2009 · 151 posts · 17 votes
16y
From an indiviual standpoint, perhaps the current national crisis does not appear to be that bad; but the ripple effect is yet to be felt and when people you know such as neighbors, relatives and friends begin to suffer the effects whether 3 to 7 years from now, surely you will know that you misunderstand/misstate the depth and magnitude that the greedy majority of ill-advised, under-educated irresponsible persons ; their ignorant and careless spending fueled on by the equally careless greedy, ill-advised, over-educated majority of government and corporate management. We cannot afford to ignore that what anyone else does in this world, will sooner or later affect us or someone close to us whether in this lifetime/generation or the next. And until we learn to avoid previous mistakes, we will undoubtedly repeat them. No more sleeping lions, wake up America! The homeowners in default for the most part are hoodlums, the tax payers will be basically subsidizing the defaulted homeowners as the 2nds go bankrupt, our banks collapse as FDIC (taxpayers) pick up the tab.. where do you think the money is coming from to pay our collapsed banking system? It will be the near future generation... inflation is on our doorstep. It is a crisis... the poor will get poorer and as food gets more expensive, the American taxpayer (Only the working, earning Americans by the way, the majority that abused the "everyone should own a home policy" by using their home as a ATM card will get welfare and foodstamps and guess how the gov't will pay for that? HIGHER TAXES. What happens when income taxes go up? People lose the incentive to make more money, "no not everyone" but enough for the "creative Americans" to retire. Meanwhile the Americans or immigrants who decide to have a "free lunch" are able to watch propaganda all day for the better way of life of free handouts if they will just cast the right vote, the vote for taxpayer paid for medical care. The housing crisis is not left or right, it is government and corporate corruption at its finest. We need a tea-party to demand accountability. The foreign investors if anything only gave us more rope to hang ourselves. -- Dawn
unedited
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Real Estate Lender · Philadelphia, PA · Member since 2009 · 216 posts · 112 votes
16y
I was a loan officer for two years for the leader in the industry originating stated income, stated asset, small commercial mortgages. As I say this, I cringe and prepare for the responses. However, I can tell you one thing. About 75 percent of the loans went to foreigners (or so it seemed) and it was prolly an even larger percentage that applied for the loans. Not sure what that means, but I found it alarming at the time.
Real Estate Investor · Carlsbad, CA · Member since 2009 · 151 posts · 17 votes
16y
I believe we as a nation are bankrupt when it comes to our housing crisis; according to Webster's New World dictionary, bankruptcy is (2.) complete failure, ruin. I do not know how you could or would be able to define what the American housing industry is going through right now as anything other than a complete failure and soon enough it will engulf our commercial real estate. There is plenty of money to be made by investors, but the great divide will widen and it is those at the top of the pyramid who will be taxed handsomely to pay for the bankrupt actions of the self-appointed "gods" of distribution. The vote dollars wil be hand delivered to the masses at the bottom... or will they? It will be interesting to see how Brown fares in Massachusettes. Only registered foreigners can vote, unless of course there is corruption? -- Dawn
Real Estate Investor · ten mile, TN · Member since 2009 · 1k+ posts · 374 votes
16y
In all reality, I did a blog post about this. It seems to me that those that are being blamed for the crisis were actually led down the road (where they could be blamed) by those who would desire power and control over our actions.
Supply and Demand will always determine price, but there are things that affect supply and demand. Such as the easing of credit policies produced more demand for the supply of available homes, thus the prices began to rise quickly creating the bubble.
These policies were passed through the government by the special interest groups with their power and control over our governmental officials.
The "fundamental change" that needs to occur is to put an end to all special interest groups. Everyone should be represented equally in government, not just this or that group that screams the loudest at this or that time.
Real Estate Lender · Philadelphia, PA · Member since 2009 · 216 posts · 112 votes
16y
Ultimately, it is the all-mighty dollar that causes the problems and corruption in politics. It has been the same throughout all of history. It is really no surprise that policy makers ignored the signs that the economy was heading towards a crash. As long as there is still money to be made, there will be people trying to milk the system for all it is worth.
Real Estate Investor · ten mile, TN · Member since 2009 · 1k+ posts · 374 votes
16y
It is one thing to use the system to your advantage, but to change the system so that basically only you or your group can have all the power (or money) is what is wrong.
"My group gets special consideration, before any other group and I was the person that helped provide that to them so I can control how they think and what they do."
No it is not about the money in and of itself, but the desire to control whole group(s) of people. Money does help in this regard, but is a tool to the end results of power and control.
Real Estate Investor · ten mile, TN · Member since 2009 · 1k+ posts · 374 votes
16y
And that is the reason that government throws around so much money to so many special projects. They gain power and control over those people by the money they throw around. They are not interested in the money itself but the power and control that it provides.
Attorney · Raleigh, NC · Member since 2008 · 4k+ posts · 1k+ votes
16y
Originally posted by James Harkness:
I was a loan officer for two years for the leader in the industry originating stated income, stated asset, small commercial mortgages. As I say this, I cringe and prepare for the responses. However, I can tell you one thing. About 75 percent of the loans went to foreigners (or so it seemed) and it was prolly an even larger percentage that applied for the loans. Not sure what that means, but I found it alarming at the time.
Who's more at fault? The foreigners who took those loans (or "seemed" foreign to you) or you for selling those loans? Who was the licensed professional here?
People, the age of blame is over. I went into foreclosure on the first property I bought because I made decisions that put me in a bad financial position and I am responsible for the end result. I took responsibility for my actions and changed my ways. I am positioned just fine for this "crisis" because I know who is responsible my financial situation - me. The buck needs to stop or we'll never turn this crisis around.
Total nonsense! Here is a rebuttal article from zero hedge:
Foreigners Caused America’s Financial Crisis? A Closer Look
http://www.zerohedge.com/article/foreigners-caused-america%E2%80%99s-financial-crisis-closer-look
Real Estate Investor · ten mile, TN · Member since 2009 · 1k+ posts · 374 votes
16y
Static it is total chaos to think that any foreigner can purchase anything without the approval of laws and or seller.
Therefore the foreigners can not do anything without our approval by allowing laws passed or underhandly allowing them to purchase what they should not.
This is not the foreingers fault it is ours!!!!!!!!!!!!!!!!!
If we vote people into office that ok laws for this possibility because we do not want to dial back our lifestyle this is not the foreigners fault it is ours.
Any such article that blames the foreigners is the real nonsense and only serves to allow us to continue in our own ill-fated patern.