Who caused the global financial crisis ???

[GoVols!]

Originally Posted by Quicksilver

There is one question in this article for people who believe it that needs to be answered.
"How could these poor, black and Hispanic Americans, whose combined share of the national
wealth is less than the personal fortune of a few wealthy individuals at the top of the Forbes list,
have possibly exerted such a disproportionate influence on the nation’s economy"?

I'll answer it for you. Yes, the "poor" individually own and control very little of the national wealth, however, when it came to the housing market, ownership and control were not a requirement to exert influence over the market. Also, since there are many more people on the low end than the high end, each small contribution adds up to a massive total.

Example - If you make $30,000 a year take out a 0 down, interest-only mortage on a $500,000 house, you in effect still own nothing but exert $500,000 of influence on the market. Couple that with the $500,000 house being assessed at $600,000 after 6 months and you then taking on an equity loan of $100,000 to do improvements on the house, go on vacation, pay for college, or buy a car. Now the same "poor" person that still has a net worth of zero, influences $600,000 of the market but has zero invested in it. They lose their house, declare bankruptcy, and go back to renting while really being no worse off than before. The bank takes on an expense that they didnt want and now can't sell. The house can't be unbuilt so they are stuck with it on their books.

Multiply this scenario a couple million times and you can see how the "poor" had such an effect on the market.

[JCL]

Originally Posted by GoVols!

I'll answer it for you. Yes, the "poor" individually own and control very little of the national wealth, however, when it came to the housing market, ownership and control were not a requirement to exert influence over the market. Also, since there are many more people on the low end than the high end, each small contribution adds up to a massive total.

If they didn't have equity, they couldn't exactly cause a financial collapse. So what if they all walked, there would be no loss of wealth since they didn't have equity to lose. The banks had the (fictitious and/or overstated) equity.

Greed, plain and simple, combined with a lack of effective oversight. And if there were a couple of million bad loans, then that means that every homeowner involved made one bad decision. The banks, on the other hand, made a couple of million bad decisions.