Posted on 12/31/2015 10:11:53 AM PST by Kaslin
I won’t watch this movie because of #6, downplaying the role of govt and politics.
Is there any mention in the movie of Clinton associate Jamie Gorelick’s $26 million bonus from Fannie Mae?
Most of those subprime mortgages that folded went to illegal aliens.
That won’t make the news, however - too many Republican elites were making big bucks on the game.
Only you sucker taxpayers ended up losing.
My take away.
The ability to profit from both the bubble itself and the collapse of any “bubble” should ALWAYS be present.
The Government creates more problems than they solve.
When Congress responds to a crisis it ALWAYS, always makes things worse. Case in point:The Patriot Act.
This should be an interesting discussion.
Almost every economic downturn looks like real estate bubble in hindsight.
Mortgages were made based on current incomes. But when oil prices started rising in 2007 it soaked up disposable income causing layoffs and marginal business failures. That in turn, caused mortgage delinquencies.
The mortgage crisis was accelerated by two things. The economy has been weakened because of decades of low trade tariffs and the resultant accelerating offshoring of our industries. The lowering of credit standards to boost the economy made it worse. And the subsequent tightening added to the economic downturn.
Almost every economic downturn looks like real estate bubble in hindsight.
Mortgages were made based on current incomes. But when oil prices started rising in 2007 it soaked up disposable income causing layoffs and marginal business failures. That in turn, caused mortgage delinquencies.
The mortgage crisis was accelerated by two things. The economy has been weakened because of decades of low trade tariffs and the resultant accelerating offshoring of our industries. The lowering of credit standards to boost the economy made it worse. And the subsequent tightening added to the economic downturn.
Correct. People will blow off a mortgage payment to get to work to earn a paycheck with which to eat.
I read the book and saw the movie. A big part of what was going on was group-think. Everyone thought that housing prices would only keep going up, that people wouldn’t dare default on their mortgages, that Wall Street institutions knew what they were doing, that their models were solid, etc, etc. Basically, the conventional wisdom was completely wrong and a few people who saw through it profited. But that is the nature of a bubble.
“Lesson 5: It is also a movie about a massive failure of government.
As the movie makes clear, government regulators had no interest prosecuting fraud, even when the protagonists put the evidence right in front of them. And the government’s indifference continued, even after the facts were made public.”
That’s because they would have had to go after Barney Frank and a ton of Democrats and their supporters at Fannie, Freddie and other institutions making a fortune off of the imprudent loans mandated by the Community Reinvestment Act.
And the irony is they still blame the situation on George W. Bush, when his administration was trying to rein in this corruption and was blocked by Barney Frank and others.
Michael Burry, one of the people profiled in the book and movie, has pretty publicly broken from the “greedy Wall Street not being regulated enough” narrative:
http://nymag.com/daily/intelligencer/2015/12/big-short-genius-says-another-crisis-is-coming.html#
https://www.youtube.com/watch?v=GkAtUq0OJ68
Here is audio from a Bush speech where Bush is demanding home loans for unqualified minorities. This was just a couple of years before the epic housing crash.
I just had an argument with someone on this. My position was that rising fuel prices and the resulting shock across the economy was the trigger that collapsed the house of cards caused by the CRA and imprudent lending standards then occurring throughout the lending markets.
https://www.youtube.com/watch?v=GkAtUq0OJ68
Here is audio from a Bush speech where Bush is demanding home loans for unqualified minorities. This was just a couple of years before the epic housing crash.
Federal laws passed between the late 1990s and mid-2000s made it almost impossible to have consumer loans and student loans discharged in bankruptcy. As a result, people who found themselves in financial distress in 2008 and 2009 figured out that a mortgage was the easiest financial obligation to walk away from.
Lesson 11: The “banks” are bigger than ever, and will need to be bailed out AGAIN during the next crisis. But, sure, sit around and wait for them to do the right thing and break themselves up into “small enough to fail” parts.
I bailed early both times, numbers were on my side.
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