These are tulmultous times. No more investment banks on Wall Street

Polk user

shack wrote: »

No but you should be ignored...which is easily fixable.


DONE!

Another liberal that can't handle the truth. So sad. And those loans DID happen.

ohskigod

Polk user wrote: »

Another liberal that can't handle the truth. So sad. And those loans DID happen.

I wouldnt put Shack as a liberal.......I would call him knowlegable in the banking sphere though but hey....thats just my .02


fact kiddie poos, fault lays on both sides of the aisle for this

Dems pushed low income house ownership ral early, and reinforced by 1995ish by Clinton. the govmt put heavy pressure on financial intitutions to push subprime so low income people who had "the right" to home ownership got homes (dont get me started on this). thanks to the boom housing market, subprime became insanely profitable........thus the recent subprime explosion with little to no need for prompting by the government. The private sector took the ball and ran.....hard. some on both sides saw the problem coming, neither spoke loudly enough.

however, the only side that actually tried to enact legislation that could have helped were repubs, and the one side that always shot it down = dems. hence, as pissed as I am at everyone, I know how I am voting.


hell, even the bailout vote failed becuase BOTH SIDES had alot of people vote no.

and someone here said Pelosi's rant might have had something to do with the shootdown, my response = "YA THINK?"

DollarDave

ohskigod wrote: »

I wouldnt put Shack as a liberal.......I would call him knowlegable in the banking sphere though but hey....thats just my .02

I agree. But, he is mistaken on this issue. At least in my humble opinion.

shack

If anything I'm a conservative Republican.

Dave you are looking at the micro and not the macro. My bank didn't make any of the loans in question either. But the trickle down is effecting ALL of my clients. It is the economy that needs this fix...not just the financial institutions. They are merely a conduit to get the funds back into the economy. It is not a "grant" program...it is a lifeline to keep the sinking ships and all that are attached to them (basically all of us) afloat until they can repair the holes.

DollarDave

shack wrote: »

If anything I'm a conservative Republican.

Dave you are looking at the micro and not the macro. My bank didn't make any of the loans in question either. But the trickle down is effecting ALL of my clients. It is the economy that needs this fix...not just the financial institutions. They are merely a conduit to get the funds back into the economy. It is not a "grant" program...it is a lifeline to keep the sinking ships and all that are attached to them (basically all of us) afloat until they can repair the holes.

Understood. Yes, that is my micro-view of it.

How about this? Take these portfolios that have been "marked to market" and devalued off of their operating balance sheets. Let them borrow "fed fund" type of funds to capitalize them separately and appropriately after a risk rating is established. Charge a reasonable interest rate of say, who knows, fed funds rate + 1 or 2%. Put a five year pay-back on it. Over the next several years, institute a work-out program for these loans - as much as I don't like it, just dumping these homes on the market via forclosure or walk-aways will just de-value my house and everyone else's. Through a combination of principle write-offs and interest rate subsidies, we can clean most of these up over the course of a short time. I think you would see many otherwise conservative lenders participate in these work-outs as long as their is some sort of "gaurantee" that their principle will be re-paid. Just my 2 cents and some really random ideas that I haven't completely thought through.. However, mine is probably better than putting someone like Hank Paulson in charge of fixing this.

BigMac

This is pretty easy to understand. Bailing out financial institutions "crap" will only lead to more crap. This 700 billion is no more good than monopoly money.....not even worth the paper it is printed on. Maybe, just maybe, people will wake up and live "within" their means. For those that lived like millionaires on a janitor's salary, I say," killem' all and let God sort em' out". Not literally kill them but you get the idea.

Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime

Now will somebody please pass the the tarter sauce.

ohskigod

plus, the 700 bil would be the initial outlay, not the final cost (as Shack said a bunch of times I;m sure). the actual cost will be less. how much so will depend on too many factors for me to guess

I am, on so many levels, against this buyout, except for one level.....that being that the economy will collapse hard without it, hurting everyone.

is it right, no, butsometimes the right choice isnt always the perfectly right choice....nes pas?

Jstas

DaveMuell wrote: »

Understood. Yes, that is my micro-view of it.

How about this? Take these portfolios that have been "marked to market" and devalued off of their operating balance sheets. Let them borrow "fed fund" type of funds to capitalize them separately and appropriately after a risk rating is established. Charge a reasonable interest rate of say, who knows, fed funds rate + 1 or 2%. Put a five year pay-back on it. Over the next several years, institute a work-out program for these loans - as much as I don't like it, just dumping these homes on the market via forclosure or walk-aways will just de-value my house and everyone else's. Through a combination of principle write-offs and interest rate subsidies, we can clean most of these up over the course of a short time. I think you would see many otherwise conservative lenders participate in these work-outs as long as their is some sort of "gaurantee" that their principle will be re-paid. Just my 2 cents and some really random ideas that I haven't completely thought through.. However, mine is probably better than putting someone like Hank Paulson in charge of fixing this.

Dude, hate to break it to you but your home is already over-valued. You aren't going to lose value because of a buyout and foreclosures. You are going to lose value because the market will self-adjust, bailout or not. It's not even a question of if it will lose value. It already has. The Question now, increasingly daily becomes when will it stop losing value.

This goes so much farther than little banks that managed their assets well. Of course little banks are not going to be sucked up in the whole mess but still get a hurtin'. Little banks don't have the capital and resources necessary to lend against the risk let alone the ability to absorb the risk should it mature. If you can't play the big risk in the big game, your small risk is not going to matter much at all. The reason small banks get hurt is that they can no longer run the same high interest rates because even though they did play the high-risk game, their capital is still just as devalued as everyone else.

Does it suck? YES! Without a shadow of a doubt. But honestly micro-economics just doesn't apply here anymore. This is macro stuff on a global scale.

Jstas

BigMac wrote: »

This is pretty easy to understand. Bailing out financial institutions "crap" will only lead to more crap. This 700 billion is no more good than monopoly money.....not even worth the paper it is printed on. Maybe, just maybe, people will wake up and live "within" their means. For those that lived like millionaires on a janitor's salary, I say," killem' all and let God sort em' out". Not literally kill them but you get the idea.

Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime

Now will somebody please pass the the tarter sauce.

That really didn't add anything to the discussion and is honestly not only way off base but way over simplified.

Jstas

By the way, the Dow is down 778 points now.

Polk user

BOTH sides are to blame. In other countries Bush would be run out of town or voted out on a no confidence vote. And yet these fools will be voted back in. Bush is history. Start voting out the rest of these thieves. How come the media is not putting ANY blame on the people who ran these companies into the ground or these fools that ran the over site committees?

DollarDave

Jstas wrote: »

Dude, hate to break it to you but your home is already over-valued. You aren't going to lose value because of a buyout and foreclosures. You are going to lose value because the market will self-adjust, bailout or not. It's not even a question of if it will lose value. It already has. The Question now, increasingly daily becomes when will it stop losing value.

This goes so much farther than little banks that managed their assets well. Of course little banks are not going to be sucked up in the whole mess but still get a hurtin'. Little banks don't have the capital and resources necessary to lend against the risk let alone the ability to absorb the risk should it mature. If you can't play the big risk in the big game, your small risk is not going to matter much at all. The reason small banks get hurt is that they can no longer run the same high interest rates because even though they did play the high-risk game, their capital is still just as devalued as everyone else.

Does it suck? YES! Without a shadow of a doubt. But honestly micro-economics just doesn't apply here anymore. This is macro stuff on a global scale.

My home's vlaue will be determined by supply and demand. Dump houses on the market and the supply will exceed the demand. So far, that hasn't happened at all in my area.

We aren't a small, locally owned bank. We are a fairly large publically traded bank. Not a global bank, but a pretty good sized one nonetheless.

Whether you consider my quick idea a micro or a macro solution, it makes more sense to resolve the root of the problem(s) than to just dump money into Paulson's lap and tell him to fix it.

BigMac

Jstas wrote: »

That really didn't add anything to the discussion and is honestly not only way off base but way over simplified.

Simple is good. Complex is what got us in this situation in the first place. The average American has no idea how the system works, they just know they could get alot of money NOW for almost nothing. People did not think about the effects or consequences of the long term.....kinda like people that go to payday loan offices and borrow money till payday but are forever stuck paying the money back because of the interest or the usual "something came up". Maybe now people will be "shocked" into reality and start paying attention to what is happening in this country instead of saying, "It wont happen to me". Well people it just happened to all of us.

I know if I personally gave someone $1000.00 for something and they decided to spend it on something else and they screwed themselves why should I trust their judgement with another $1000.00? It's like giving a crack addict another piece of rock and telling them to not smoke it and to hold on to it.

Jstas

DaveMuell wrote: »

My home's vlaue will be determined by supply and demand. Dump houses on the market and the supply will exceed the demand. So far, that hasn't happened at all in my area.

We aren't a small, locally owned bank. We are a fairly large publically traded bank. Not a global bank, but a pretty good sized one nonetheless.

Whether you consider my quick idea a micro or a macro solution, it makes more sense to resolve the root of the problem(s) than to just dump money into Paulson's lap and tell him to fix it.

The bailout is not a solution. It is a time buyer and a way for the banks to use what little capital they have left to fix the problems they have internally. The problem with your solution is not whether it fixes the root cause or not. It's not a scalable solution. It works in the small potatoes realm you are talking about but it doesn't blow up to the size need. How do you regulate it? On top of that, where do you get the capital to back it all? It also doesn't compensate for homes that are already in foreclosure. Even if a home is foreclosed on and not on the market, a boarded up bank held property will drop value of surrounding properties. It's something like for every foreclosed home in a 2 mile radius, your home could be devalued by up to 2%. In a 1 mile radius, as much as 5%. Granted the downward slide abates at some point and home value levels off but still well below the average market value.

The problem you are running in to is that you are equating property value to the value of your mortgage. The property value can go up and down independent of the stock market. The house is only your collateral backing. The value behind your loan. Even if the stock market was healthy and happy, your property value could still drop below what you owe and you would end up upside down on the mortgage. That doesn't need bank failures to happen. Piss-poor money management and acquiring too much debt could do it to you. I know people with 2nd and 3rd mortgages on homes that are now REALLY up the creek because they took on too much debt load well before the financial problems we are having.

Jstas

BigMac wrote: »

Simple is good. Complex is what got us in this situation in the first place. The average American has no idea how the system works, they just know they could get alot of money NOW for almost nothing. People did not think about the effects or consequences of the long term.....kinda like people that go to payday loan offices and borrow money till payday but are forever stuck paying the money back because of the interest or the usual "something came up". Maybe now people will be "shocked" into reality and start paying attention to what is happening in this country instead of saying, "It wont happen to me". Well people it just happened to all of us.

I know if I personally gave someone $1000.00 for something and they decided to spend it on something else and they screwed themselves why should I trust their judgement with another $1000.00? It's like giving a crack addict another piece of rock and telling them to not smoke it and to hold on to it.

The problem with your posts is not that they are too simple and complex is what got us here. The problem is that they are just as ill-informed as the "The average American has no idea how the system works," that you speak of.

This is not so simple as to say people borrowed beyond their means. If the lenders didn't offer it, the borrowers couldn't borrow it in the first place. The lenders wouldn't have the ability to offer the loans if they were pressed to by the government. But, this is not the time for pointing fingers and appointing blame. This is the time to fix it. Figuring out who is at fault comes later but honestly, what's it going to get us? Jailing or fining someone we think is responsible out the wazoo is not going to change the market and save our bacon. Politics is not what is driving this. Politics is what is holding it back. Just like war, politicians should stay out of wars and economics and stick to what they know which is a whole lot of nothing.

Polk user

Jstas wrote: »

The problem with your posts is not that they are too simple and complex is what got us here. The problem is that they are just as ill-informed as the "The average American has no idea how the system works," that you speak of.

This is not so simple as to say people borrowed beyond their means. If the lenders didn't offer it, the borrowers couldn't borrow it in the first place. The lenders wouldn't have the ability to offer the loans if they were pressed to by the government. But, this is not the time for pointing fingers and appointing blame. This is the time to fix it. Figuring out who is at fault comes later but honestly, what's it going to get us? Jailing or fining someone we think is responsible out the wazoo is not going to change the market and save our bacon. Politics is not what is driving this. Politics is what is holding it back. Just like war, politicians should stay out of wars and economics and stick to what they know which is a whole lot of nothing.

Well why should we look to the people who created this mess to fix it? Instead we should be putting their feet to the fire. 99.9% of the people we elect are NOT as smart as we are, AND they didn't stay at a Holiday Inn last night.:eek:

Vote em out. ALL of them

Kex

shack wrote: »

...
DAMN...it pisses me off when our so called leaders have no understanding of something of this magnitude. They say they got calls 10-1 against it by their constituents....WHO DON'T UNDERSTANDING IT EITHER. There are times when they have to do the right thing...even when it is very unpopular.

Which is why we need to elect people who are smarter than we are, otherwise they can only do worse than we would ourselves, and how much do we know (although you seem to know quite a bit shack ... maybe I'ld just vote for you if I were given the choice: "shack attack 2012!" Sounds good, does it not?!).

I was accosted this weekend by people trying to get me to sign a pettition against the $700B rescue plan. The reasoning is simply "let's not bail out fat cats on Wall Street". I don't know what to think of the plan, but I know what to think of that simplistic reasoning (and Polk User's antics FWIW).

Who knows where we go from here, but nothing looks too rosy. Maybe we should stop worrying if our politicians and leaders can "connect with the people" so much, and elect annoying pompous leaders who might actually know what they're doing. I'm not convinced Lincoln or Washington were seen as being down to earth and able to connect with the common man (can you be annoying and pompous shack?).

kgingras

Jstas wrote: »

By the way, the Dow is down 778 points now.

Look at the bright side - your rep just saved you $3500.

Jeff Beaird

bobman1235 wrote: »

Democrats outnumber the Republicans in the house by quite a few (almost 40 I think) so how exactly are they being blamed?

This is exactly what is wrong with our Government....!!!!!
Republican this,.. Democrat that...
Shouldn't they be there(in Washington) to do what is in the best interest of this Great Outstanding United States of America. Not **** and whine like a bunch of overpayed ****????!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!:eek::eek::eek:

shack

An older article from the New York Times

September 30, 1999

Fannie Mae Eases Credit To Aid Mortgage Lending
By STEVEN A. HOLMES

In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called sub prime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans.

''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called sub prime market.'' Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the sub prime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market.

In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.

''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American an Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.''

Under Fannie Mae's pilot program, consumers who qualify can secure a mortgage with an interest rate one percentage point above that of a conventional, 30-year fixed rate mortgage of less than $240,000 -- a rate that currently averages about 7.76 per cent. If the borrower makes his or her monthly payments on time for two years, the one percentage point premium is dropped.

Fannie Mae, the nation's biggest underwriter of home mortgages, does not lend money directly to consumers. Instead, it purchases loans that banks make on what is called the secondary market. By expanding the type of loans that it will buy, Fannie Mae is hoping to spur banks to make more loans to people with less-than-stellar credit ratings.

Jstas

kgingras wrote: »

Look at the bright side - your rep just saved you $3500.

What rep?

I can honestly say I am not involved in this at all. I didn't get a sub-prime loan like everyone told me to even though I was "pre-approved" and instead I rented for a few years. It was cheaper to rent than buy and I thought it stupid to get a house costing way more than it was worth with an interest rate on the financing way higher than I could sustain only to end up paying 30% more for the house than the closing price and have paid over 50% too much. THAT is a bad idea IMO.

I took my 401K which was a mess and floundering and shut it down 3 years ago and used the money to get myself into a better debt situation. When the market recovers I can make it all back. I'm only 31, I got time.

I just went through a divorce and as a result, my credit got beat up pretty bad so I shut down every card I had. I have no credit cards and I'm this >< close to being literally, debt free. I will be 95% of the way there by the end of the year.

The only thing affecting me right now is gas prices but it's not an issue anymore because I now work at a job where I get paid more than I did two months ago and I can take public transportation.

I am sooooo glad I listened and learned from people like shack rather than all the "experts" out there. I know I don't know everything but I've been following this for years and I saw this coming. I just wasn't sure when it would get here. I chose to wait for it instead of jumping in. In a year and a half I'll have enough money to buy any house I want and at a disgustingly low rate. So yeah, I can honestly say I did not participate nor did I cause this. I'm not in the greatest financial position but right now my money is tied up in stuff like savings bonds and other bank accounts with small banks that are not greatly affected by this. So honestly, I'm doing better than most.

kgingras

shack wrote: »

An older article from the New York Times

Do you not know how to read?

shack

kgingras wrote:

Do you not know how to read?

What the hell are you talking about?

unc2701

When I was in grad school, the place where I worked ran a study looking at those loans that Fannie Mae started in the late 90's and they weren't foreclosing at higher rates- they were actually doing things right back then.

The problem is the there are a few things that'll wreck your credit score, but don't actual mean that you're more likely to default on a loan. For example- a medical emergency can destroy your credit, but those people aren't really high risk loans. When this subprime thing started, they were actually looking for good borrowers with bad credit and it worked. Then they started giving money to anyone and everything went to ****.

DollarDave

shack wrote: »

What the hell are you talking about?

He is trying to tell you that back in post 37 he posted this. 2 posts after your post in 35. I quoted some pertinent parts in post 39. No harm, no foul.

I think we are all coming to recognize that 20 years of liberal lending policies designed to encourage home ownership among certain groups that might not have otherwise realized their "American Dream" have back-fired. Couple that with the corruption on the over-site committees in both houses of Congress (research who controls these yourself) and we are in this mess.

Many, many people warned of the impending problems and some of our esteemed politicians ignored taking and/or blocked action on it for years.

Then, we are told all of a sudden this is a crisis that needs to be solved in a matter of hours. A solution is certainly needed to inject capital into the financial sector to keep the markets and our economy fluid. We all get that.

However, the proposed solution to the problem is to give the folks who either ignored this or didn't recognize the problem the keys to the solution. I think millions of people (myself included) don't trust the Chairman of the SEC, the Fed Chairman, or the Secretary of the Treasury to steer us out of this mess. I have heard many analogies, but the best was "You burned the turkey on Thanksgiving and now you want to cook the Christmas meal?". No, maybe we'll let you make the nachos for the Super Bowl...

I am confident that we'll see a much better solution proposed in the next couple of days. If we don't, we can always fall back on this plan that was defeated and let Hank Paulson bail out both foreign and domestic entities that he deems a threat to our economy. To some Democrats credit, 12 Democrat members (of 30 some) on Barnie Frank's sub-committee voted against the bail-out. Hmm. 11 votes shy of passing - it must have been the Republicans that killed it...

kgingras

Well put!

DaveMuell wrote: »

Many, many people warned of the impending problems and some of our esteemed politicians ignored taking and/or blocked action on it for years. Then, we are told all of a sudden this is a crisis that needs to be solved in a matter of hours.

How is it that 6 months ago the POTUS was encouraging us on the economy, and then we are headed over the cliff of no return. It's as if the public is a child's mouth to which Bush coaxes "open wide and chew" as he feeds us another heaping spoonfull of ****. Someone get a giant cane and yank that SOB off the stage already. haven't we had enough? I'm ready for homie the clown to take Bush away.

DaveMuell wrote: »

A solution is certainly needed to inject capital into the financial sector to keep the markets and our economy fluid. We all get that.

Here is a bailout plan I might be able to live with, from Robert Reich:

Prediction: A scaled-down bill will be enacted by the end of the week. It will provide the Treasury with a first installment of $150 billion. Treasury can use it to back Wall Street’s bad debts with lend no-interest loans of up to two years, until the housing market rebounds. Or to invest in Wall Street houses directly, in exchange for stocks and stock warrants. There will be strict oversight. Congressional leaders will promise further installments, but with conditions calling for limits on salaries and relief to distressed homeowners.

mrbigbluelight

Back in 1967, Martin Luther King, Jr., gave a speech regarding certain matters that were occurring during that time. He said, and referenced Dante in doing so, "The hottest places in hell are reserved for those who, in a time of moral crisis, maintain their neutralilty. There comes a time when silence is betrayal.".


"There comes a time when silence is betrayal."

Potent words.

I mention this because I question how this particular crisis came to be.

I'm not looking for the simple answer that the media would provide, or most politicians would provide, or those who are afraid to face the reality of the situation would provide:

"It's the Republicans fault !!", "It's the Democrats fault", "It's the greedy bankers fault", "It's the unwashed masses fault", or "It's the corrupt oversight committees fault".

Nope. Too simple.

Did all/most have a part in moving the economy to this, in my words, disaster ?

Absolutely yes, in my opinion.

BUT: a disaster of this magnitude doesn't occur unless it is allowed to occur.

The greed/incompetence/ignorance/stupidity of the previously mentioned parties is used, to be sure.
They are used to accomplish some goal.

My question is: What is the goal ? What is the desired outcome ?

As I've stated before, I'm totally ignorant on these issues, so I'm fully qualified to ask these questions.

Let me make that perfectly clear (and pardon my French beforehand; I don't normally speak French on here):

I don't know **** from apple butter about this crap.

But even I can smell something rotten in Denmark.
So why not the bankers ? Or politicians ? Or "experts" in the media ?

They HAD to see this coming, didn't they ? Impossible not to.

And if they didn't see this mess coming, what hope is there for the issue of the derivatives market ?
Will they remain silent on that coming fiasco, too ?

No, in my opinion, they (all or some) must have known. And chose to remain silent.

bikezappa

mrbigbluelight wrote: »

My question is: What is the goal ? What is the desired outcome ?

As I've stated before, I'm totally ignorant on these issues, so I'm fully qualified to ask these questions.

That is a key question isn't it.

I would hope that we end up with a better finacial system that's open and clear with regulations and laws that are enforced. We went through a similar, I think, situation in the savings and loans mess 20 years ago. We didn't change anything because we now have a bigger mess. If the finacial laws are vague then people will push the limits slowly. I see no changes to the regulations that are proposed in the bailout. I could be wrong about that, if so please inform us.

There must be other sources of money besides the tax payers to bail this country out this mess. Why do we always go to the tax payers? Because they will take it. Have another **** sandwich.

bikezappa

Forgot . Excellent post mrbigbluelight.

shack

mrbigbluelight wrote:

I mention this because I question how this particular crisis came to be.

Did all/most have a part in moving the economy to this, in my words, disaster ?

Absolutely yes, in my opinion.

BUT: a disaster of this magnitude doesn't occur unless it is allowed to occur.

The greed/incompetence/ignorance/stupidity of the previously mentioned parties is used, to be sure.

They are used to accomplish some goal.

My question is: What is the goal ? What is the desired outcome ?
They HAD to see this coming, didn't they ? Impossible not to.

No, in my opinion, they (all or some) must have known. And chose to remain silent.

I've stated on several occasions that we ALL have a hand in this problem.

The issue was money. Not just the "wall street execs and bankers" but for all of us. As long as our 401Ks, IRAs and mutual funds were giving us "superior rates of return" we didn't care if the financial institutions (and other companies) were being pushed to increase profits at the expense of soundness. If you worked for a company that sold anything or provided services to the homeowner then as long as your business prospered did you really worry that the person you sold stuff to or worked for really didn't need to own a home as long as you got paid? If you bought a home and did so without putting 20% down did you worry that your lender was not following sound lending practices or were you just really glad YOU didn't have to come up with more of a downpayment. It goes on and on.

We all benefited from what was going on and people rarely complain about what "is good for them".

Now we ALL need to figure out how to fix it. Doing nothing is not an option.

That said...given what I know about the American economy and the American people as a whole...if we all put aside the petty blame/politics/class issues...WE WILL FIX IT! I truly believe that.