Matt Taibbi - What Led to the 2008 Economic Collapse
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- Опубликовано: 8 июл 2024
- Matt Taibbi explains the factors in the financial market that led to the 2008 economic collapse.
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Should more heads have rolled over the 2008 economic collapse?
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There is one more layer. The US government basically mandated banks to give mortgages to risky credit customers. This led to the "innovations" discussed in this video as a solution. The problem was that the solution was based on historical data of good customers and not the future risky customers.
they did that because of "Racsim" because low income neighbourhoods were adversely affected and bla bla bla
Absolutely! Maxine Watters and Barney Frank threatened Fannie Mae and Freddy Mac with governmental action if they wouldn't lend to high-risk borrowers.
100% correct.
Not only that but the ones with good credit could afford more than one mortgage which made them home flippers for more income.
Please, someone remind me of the law that forced lending institutions to lend money to people that couldn't pay it back.
Let not forget, they offered mortgage rebates the first year in order to sell homes to people who couldn't afford them. Everybody made money until reality caught up.
This goes back to dismantling of the Glass- Steagall Act..........
People keep bringing up this canard without actually understanding the simple fact that if the Glass-Steagall Act did not exist in the first place (along with the other altruistic laws governing banking and trade) the incentive to shuffle risk to the taxpayers would not exist. Laws governing trade elevates economic trade to equal status with political power. Stopping this is simple: separate government from commerce...make it illegal for Congress to make laws that abridge *_YOUR RIGHT TO TRADE._*
Can't forget about the implicit guarantee by Fannie and Freddie.
This was the taxpayer backstop that allowed risk to be ignored. Banks that loan money do not want to lose it, so the guarantees provided by Fannie and Freddie produced the wrong incentives. Without these two "too big to fail" Government Sponsored Enterprises, the market for the risky assets would not have existed.
This is how government distorts trade, and why it should be banned from regulating or attempting to govern it.
No mention of _why_ lenders were writing so many "junk mortgages". Why would they lend so much money to people who obviously wouldn't be able to pay it back? It's the piece of the puzzle that almost never gets mentioned.
I come from the financial investigation side and the bottom line is everyone was making money. Every mortgage that is funded is money in the pocket of the mortgage broker, the real estate agent, the appraiser and in my area there were buys who only held the property for six months or so and then sold and with the bubble, they may tens of thousands,if not more. One mortgage broker admitted, “There wasn’t a legitimate mortgage written in our city.” And we’re in the top ten cities in the US. Now, I’m sure she was being hyperbolic, but there were entire mortgage offices where everyone knew fraud was rampant and we closed the entire office down and prosecuted about a third of the employees.
Fraud, but no one goes to prison.
None of it would have collapsed without large numbers of people defaulting on home loans. THAT was the core of why the collapse happened. There was enormous pressure on the banks to get more people into homes, which led to no income verification loans. Gee, what could go wrong there? Absolutely there was abuse of what to do with loans the banks KNEW were high risk, but the core issue remains that defaults on home loans was at the heart of the collapse. It's similar to loaning hundreds of thousands of dollars to 18 year olds to go to school and they graduate still not knowing what they want to do or with worthless degrees. The odds of default are pretty high. Hence the papering over of the problem by grand scale forgiveness.
the 2008 collapse was a coordinated effort that also involved something that I rarely hear people talk about; the "adjustable rate" mortgage.... in the late 1990s, my wife and I were buying our second home. we did a fsbo (for sale by owner) on our first home and bought our send the same way. the issue that arose was that NO ONE wanted to sell a fixed rate mortgage. we made it to our 33 lender before we got a fixed rate on our new home. new flash, "adjustable rate" mortgages NEVER adjust DOWN, they only adjust UP. this guarantees that people would default on their mortgage obligation when you add in the "tax break" for buying SUVs (garnering payments of $750/month + $350 insurance + increase on $$ for fuel) and the amount of debt that people were facing would create an inevitable collapse.... this was a crime against the american people.......
Kennedy 2024, he asks the right questions.
Haha making my job easier.
RFK 2024!
Would love that to be reality. He has no shot though.
@@christiansanchez4943only if you make that true by knowingly voting for the same corporate interest.
We used to be capable of doing extraordinary things. Now you expect me to bieve that we can't do a simple thing like seek truth and honesty? I dont buy that.
Bobby will be on all 50 and we will win.
The effects of the housing collapse really hasnt been felt yet. A lot of the pain was kicked down the road with government bail outs leading to exploding debt.
Chickens will come home to roost with the Coof Chickens.
It will be ugly.
All started by the Democrats!
What that is good is ever started by Democrats?
The GOP was up to their neck in this too, after they saw Reagan could run big deficits and not pay a political price for it. HIS deficits, though, won us final victory in the Cold War over Soviet Communism, as opposed to Bush's expansion of the Deep State in the name of 'fighting terrorism', and pushing a gusher of funny money into Wall St. and the housing market. (Biden's spending, though, makes Bush look like a skinflint.)
Who benefited from this anyway
NINJ loans = no income, no job.
What could go wrong, Barney Frank.....Bill Clinton....?
Next big thing: reality catches up to the U.S. dollar.
It’s not tranching, it’s traunching.
Community reinvestment act
Don't forget Goldman Sachs the offucial king maker bank of DC made a schwak of money and eliminated some old competitors in one neat bundle . Kinda funny huh ?
Wealth transfer 101
Fiat currency. Should be on the Gold Standard or The Bitcoin Standard to prevent 2008 crises again. One is realistically feasible....
You should warn us before you post a video with Canadian Kermit the Frog.
Not even going to watch. My answer is, the Obama presidency.
2008 crash catalysts: out of control oil consumption and prices, the rise of Barack Obama.
As if we are frugal oil consumers now? Obama became president after.