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  #1  
Old 07-15-2010, 08:15 PM
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Question Who caused the global financial crisis ???

Sometime people send me funny stuff.......

*Finance 101: Blame the Poor***** : Information Clearing House -* ICH

Did you know that the poor (and mostly black) people in the US caused the global financial crisis that threw the world economy into its worst slump since the Great Depression of the 1930’s?

I didn’t know that either, until I heard this news from the US media and popular broadcasters like Glenn Beck, Sean Hannity and Rush Limbaugh.

This is how it all happened: Special interest groups representing poor people, minorities, and “socialist” elements in the US government “pressured banks to make loans to people who could not afford them, and then the whole thing melted down…” explains Beck, who has a radio and TV audience of several million viewers and listeners.

Thomas Sowell, a right-wing economist for the Hoover Institution and a writer for the Wall Street Journal and Forbes magazine, says that anti-poverty activists “blocked drive-up lanes and made business impossible for banks until they surrendered to demands that they make billions in loans that they wouldn’t otherwise have made.”
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Old 07-18-2010, 11:23 PM
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That's good stuff, fox is making a noteworthy push to surpass comedy central in the "make me laugh" department. Either the poor obtained their first successful special interest movement thingy or......bankers got greedy when the realized they could sell off bundled mortgage securities for substantial profits labeled low risk. One of those two
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Old 07-19-2010, 10:16 AM
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Im not naive enough to think that this is the only cause of the crisis, but these are valid points in their own way. Just like the banks (in order to turn a profit and protect themselves) took advantage of a federal mandate to hand out money, the people involved took advantage of cheap money to make a buck on resale and live beyond their means. The fact that people making $30,000 a year are losing their $500,000 homes has yet to cause me to shed a tear. They should have never lived in them to begin with.

The housing market has not yet reached the bottom. The 5 yr ARM's that were issued at the peak of the boom are going to be coming due for resets over the next couple years. It wont be a problem as long as rates stay where they are(0%), but as soon as the Fed moves, another wave of foreclosures is sure to break.
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Old 07-19-2010, 11:32 AM
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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"?
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Old 07-19-2010, 01:01 PM
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Quote:
Originally Posted by Quicksilver View Post
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.
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Old 07-19-2010, 03:19 PM
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I thought is was $5 per gallon gasoline and diesel fuel that caused the meltdown.
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Old 07-19-2010, 04:36 PM
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Fannie & Freddie caused a good portion of it, who runs them again?
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Old 07-19-2010, 11:41 PM
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Quote:
Originally Posted by GoVols! View Post
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.
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