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- argoff, on 10/18/2008, -1/+31"If the American People allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the People of all their Property until their Children will wake up homeless on the continent their Fathers conquered."
Thomas Jefferson.
It that doesn't tell you what's going on, I don't know what will. The system was literally set up to reward ez credit and fraud, and now people are shocked that it worked so well. People try to blame greedy capitalists and the free market, but it wasn't the free market at work when we centralized credit under the Federal Reserve, it was not the free market at work when we taxed income, and collected only in dollar notes - propping up a fiat note. It wasn't the free market at work when we went off gold allowing for the unlimited issuance of currency. It wasn't the free market at work when Fannie and Freddie were created, and neither were the government regulations requiring banks to lend to low income lenders. It wasn't the free market at work when the Federal Reserve set interest rates way below the market rate. And it wasn't the free market at work when the Federal Reserve bailed out LTCM, from that day on anybody who bothered to hold back, or check counter party risk of derivatives contracts was at a competitive disadvantage. - rand0mm0nkey, on 10/18/2008, -4/+19Did you buy a car with cash? Your house? All those neat electronics in your home? If you use credit, you are part of the problem. We borrow from a bank, who borrows from the fed, who borrows from other countries. Spend YOUR OWN MONEY!
- socialexpert, on 10/18/2008, -0/+14From my point of view the real blame should be focused on the breakdown in the credit rating function. The mass media need to show some spine and start naming names.
- inactive, on 10/19/2008, -0/+13Success has a thousand fathers; failure is an orphan.
- jggube, on 10/18/2008, -1/+14No one is responsible unless it's a good thing, then in that case, it was all their doing.
- inactive, on 10/18/2008, -1/+14Of course nobody is willing to take any responsibility; what do you expect from these guys, honesty?
- divinediva, on 10/18/2008, -7/+19There was a push to try to put homes within reach of everyone.
- inactive, on 10/19/2008, -1/+12It's not as simple as people bought houses they couldn't afford. If that were the case the mortgage companies could negotiate interest rates, principal, and repayment schedules. The securitization of mortgage backed loans, speculative derivatives, and leveraging assets 30:1 are just as much, if not more to blame.
- houndeyex, on 10/19/2008, -0/+9The problem isn't borrowing, it's defaulting. Start thinking about what would happen if you lost your job next month and you'll start making smarter loan decisions. No one ever has the cash to smack down to go straight to college or right into a home. You need time to build up the funds, but you have to get on with your life before you're 35.
- digitronix, on 10/19/2008, -3/+11Let's put the blame where it's due. THE FEDERAL RESERVE SYSTEM!!!
- rmscomm, on 10/19/2008, -0/+7You know who I blame? Everyone who says you can't do anything or change anything. Everyone who sits back and knows there is something wrong and keeps going like business is usual. I blame everyone who sits next to a person who is woefully underqualified or a person who does'nt do anything for the company but still makes a lot of money. I blame everyone who let the salaries for everything from professional sports to believe it or not investment banking climb to outrageous sums but did'nt see anything wrong with it until it finally came down to this. I blame the sheep that we call a society now. Revolutions are'nt cheap nor are they common with the castration of rebellion that is in place.
- DaveAtDigital, on 10/19/2008, -2/+9Yeah, the banking was deregulated, but does anyone else think that some of the actual people on “MainStreet” need to take a little responsibility ?
I live in Vegas, and I can name at least 6 people I know that have purchased multiple homes during this frenzy. A friend’s father makes 45k a year working in a casino. A nice guy, but where does he get off buying three, 500k, homes? Many people, who lived in a normal house, took out an equaloan that was greater than the original value of their mortgages.
Greed is everywhere. - inactive, on 10/19/2008, -0/+7University of Michigan law professor Michael Barr testified back in February before the House Committee on Financial Services that 50% of subprime loans were made by mortgage service companies not subject comprehensive federal supervision and another 30% were made by affiliates of banks or thrifts which are not subject to routine supervision or examinations. As former Fed Governor Ned Gramlich said in an August, 2007, speech shortly before he passed away: “In the subprime market where we badly need supervision, a majority of loans are made with very little supervision. It is like a city with a murder law, but no cops on the beat.”
http://www.businessweek.com/investing/insights/blo ...
Nobody forced FI's to speculate, trust me. - duggynyc, on 10/19/2008, -0/+6For a ***** up this immense, the blame goes all around.
- IMTruckingUSA, on 10/19/2008, -0/+6You left off #3 Congress. Blame Congress for being the jerks they are.
- Trekhawk, on 10/18/2008, -0/+6Might be good to understand and identify the source of the problem before acting.
- akchrs, on 10/19/2008, -8/+13Barney Frank and Chris Dodd.
- jaguaracer, on 10/19/2008, -0/+5Wow BusinessWeek misses the main culprit. Why did the banks want to issue so many mortgages? Because they could bundle them up and sell to investors. Why did the investors want they securities so bad? BECAUSE THE RATINGS AGENCIES RATED THEM AAA. How can you say this stuff is as safe as government bonds? Well maybe because its because the banks paid S&P, Moody's, etc billions over the past couple years. Didn't any bells go off when investors were making 10%+ on these things while government bonds we are 4%. Well, I guess this did eventually in August 2007 when everybody stopped buying them and the pyramid-scheme that is the debt system went to hell.
- inactive, on 10/19/2008, -2/+6poor people. White people. Black people. Humans. Life on earth. Solar system. Big Bang.
Go big or go home. - flamesoftheend, on 10/19/2008, -2/+6I thought this was going to be about no one having enough finances to build a computer that could run crysis...
- moses141, on 10/19/2008, -0/+4And there was also a push to make ungodly profits by buying paper at 30 to 1 leverage. And there was a push to limit the powers of the SEC and CFTC (as well as the states') so that megacorporations could make more money on margin. And there was a push to create unsustainable short-term profits in order to get million dollar bonuses. And there was a push to get the most lobbying money possible by pleasing the billionaire base.
- psyclonic, on 10/18/2008, -3/+7Jefferson Davis was loathe to raise taxes to fight the War of Northern Aggression. That's one reason Confederate dollars became worthless. And now another dolt takes his country to war on credit.
The history we ignore... - habenneas, on 10/19/2008, -0/+4WHAT financial crisis? I'm just as poor now at 37 as I was at 19. Seems like Wall St. is having the crisis, not us.
- Crimsoneer, on 10/19/2008, -2/+6You gotta love how incredibly nonsensical your point 1 was...DAMN THEM FOR OFFERING US MONEY WHEN WE ASKED FOR IT! Surely they should have known we wouldn't pay it back!
- inactive, on 10/19/2008, -0/+3Some people are greedy, and some people are just ignorant of how finance works. Mortgage lenders wanted huge commissions (and I know many, and who are out of jobs now!) and they marketed 150% equity loans and trumpeted that with the housing boom, home prices would appreciate to cover the gap. Everybody would be happy right?
If you told many of these people that they would lose their homes and they would be unable to refinance because of negative equity, they never would have been gotten into this mess. There's plenty of blame to share, but putting it solely on the consumers would require that they were fully knowledgeable of what they were going into or speculative. I do volunteer time to go through struggling families finances, any many of them had no clue, they just took what the "expert" loan originators told them and took it for a good deal. - Qposter, on 10/19/2008, -1/+4It is time for the American people to sue the government for violating their constitutional rights, a class action lawsuit should work.
- inactive, on 10/19/2008, -0/+3The blame game is just a side show of the real Monopoly game that has become our financial system ... complete with Monopoly money. I think the mortgage crisis is only a symptom of a larger problem, that the banking industry has taken over our financial system and our economy. It seems like everything the government does is wrong and backwards ... the regulate what they shouldn't, and don't regulate what they should. This from people who are not uneducated, who are not stupid, whose missteps and mistakes are coincidentally leading America away from a free people governing themselves, and towards an elite few governing the powerless masses. So the blame goes not to the people who took out mortgages they couldn't afford, or even the bankers who peddled them, or Wall Street's fraudulent marketing of them, but to a people who surrendered their right, their duty and their obligation to govern themselves.
We The People MUST end the Fed, and demand our government obey it's own laws.
Legally, Constitutionally, and Physically, What is a dollar? Watch and learn!
http://www.youtube.com/watch?v=1FiaUpeJxcA
http://www.youtube.com/watch?v=FbyQB8e-rQg - Frankyfan3, on 10/19/2008, -3/+6Two trains of thought seem to be the most prevalent, with some people melding the two together.
1.Blame the wallstreet & mortgage securities traders for taking advantage of the American citizenry by offering loans they couldn't possibly pay and asking for no proof of income because there were so many investors wanting these securities all rationalities went out the window.
or
2.Blame the poor for wanting houses and accepting loans they didn't understand and couldn't afford. - SwordofKahless, on 10/19/2008, -0/+3If you or "insert company" are the recipient of a bailout you are to blame.
- scoottie, on 10/19/2008, -1/+4these guys? its every ones fault not just wall street, not just the government but regular citizens of the world also
- RipleyIsDead, on 10/19/2008, -0/+3Something tells me divinediva didn't read the article.
- scoottie, on 10/19/2008, -0/+3is that why the EU and England is kissing the Americans ass to help rebuild the finance system. If you can do it yourself then get your representatives out of our country and stop having meetings with our leaders to figure out what you need to do
- inactive, on 10/19/2008, -0/+3this was the answer palin and biden should've given in their debates...they instead skirted the correct answer and avoided telling the potential voters they were to blame (in whatever capacity they participated in the mess) to sound politically correct. I hate that!!!
- 5xSTUN, on 10/19/2008, -1/+3These financial firms were handing out credit default swaps that they couldn't cover, something an insurance company wouldn't be allowed to do. They lobbied Congress good and hard to keep credit default swaps from ever being regulated, and now they've sunk the world's economy by seizing up the credit markets. I blame the banks for selling bum mortgages, and for overextending themselves into the credit market while simultaneously working to ensure that the consequences of their actions would destroy civilization by blocking any attempt by the government to reign in the insanity.
- akchrs, on 10/19/2008, -5/+7I also blame the Community Reinvestment Act
Congress passed the Community Reinvestment Act, empowering regulators to punish banks that failed to "meet the credit needs" of "low-income, minority, and distressed neighborhoods."
http://www.boston.com/bostonglobe/editorial_opinio ... - scamper22, on 10/19/2008, -0/+2I'll apply a general rule I have. Learned this after years in industry.
Mentality before process.
Process/regulation will not work without people having the right mentality. Process only captures the exceptions.
No amount of security/process can prevent terrorism if the mentality of people is so crazy they want to kill random people.
No process is going to produce quality software if the menality is always to rush products.
Everyone had the mentality to make a quick buck.
Everyone had the mentality to pass risk and responsiblity to someone else.
Maybe this crises will change the mentality of people. Then with proper process/regulation we can make sure the exceptions are caught before they become the norm.
Limiting leverage.
Holding the rating agencies accountable.
...
Whatever the regs are... mentality has to change. - fuzzymuzzy, on 10/19/2008, -0/+2I just lost the game
- cquinnd, on 10/21/2008, -0/+2"The bankers knew Freddie and Fannie would back thier worthless loans"... because the Republicans voted out the regulations that were keeping the banks under control long before the Democrats got control of congress again.
Both sides made stupid decisions, and the process of creating the problem goes a lot further back than people like you seem willing to go in placing blame. - twomeyw23334, on 10/19/2008, -0/+2You obviously don't watch the news enough to recognize how much your life sucks.
- biogears, on 10/19/2008, -0/+2I'm all for prosecuting any lending officer who peddled a loan fraudulently,
and for prosecuting any borrower that took a loan with false documentation,
and any regulator that skipped their duties,
and every government official who encouraged loans to be made to those who couldn't afford them - odigity, on 10/19/2008, -0/+2There are many evil people who have more than their fare share of culpability in this, but ultimately... you're right. Ultimately, the reason evil people can do evil is because the good people are too ignorant or apathetic to prevent it - or in many cases as in with government, allow themselves to be used to support that evil, through voting for evil or paying taxes or through acceptance of a fiat currency controlled by evil people.
It's our fault. If we as a society did not morally sanction the violence of government - and you must understand that government is by definition violence - then evil would not happen in this organized, grand scale. If 90% of us recognized that violence is immoral, even if the person has a title or a uniform, the government would disappear overnight. - jinsundo, on 10/19/2008, -1/+3Who is to blame for the financial crisis and the destruction of the dollar?
Hmmm, take a look at the front of the federal reserve notes and then ask Joe Pesci.
"It's a mystery wrapped in a riddle inside an enigma". - inactive, on 10/19/2008, -0/+2I seriously doubt that as many people's homes, such as mine, are under a fixed rate mortgage which has been, and continues to be, paid on time.
- cquinnd, on 10/21/2008, -0/+2#2 is less than 5% of the overall market, where did the rest of teh failure come from?
- r00vi, on 10/18/2008, -4/+6Why do I have to blame someone? Better to find the resources and methods to get out of the crisis.
- akchrs, on 10/19/2008, -0/+2Thanks!
- soulkitchen, on 10/19/2008, -0/+2The more time you spend assigning blame, the less time you will have to make an effective hobo bindle. Time to get a rail map.
- Corrosionx, on 10/19/2008, -0/+2For decades, Austrian School economists have warned against the dire consequences of having a central banking system based on fiat money, money that is not grounded on any commodity like gold and can easily be manipulated. In addition to its obvious disadvantages (price inflation, debasement of the currency, etc.), easy credit and artificially low interest rates send wrong signals to investors and exacerbate business cycles.
Not only is the central bank constantly creating money out of thin air, but the fractional reserve system allows financial institutions to increase credit many times over. When money creation is sustained, a financial bubble begins to feed on itself, higher prices allowing the owners of inflated titles to spend and borrow more, leading to more credit creation and to even higher prices.
As prices get distorted, malinvestments, or investments that should not have been made under normal market conditions, accumulate. Despite this, financial institutions have an incentive to join this frenzy of irresponsible lending, or else they will lose market shares to competitors. With "liquidities" in overabundance, more and more risky decisions are made to increase yields and leveraging reaches dangerous levels.
During that mania phase, everybody seems to believe that the boom will go on. Only the Austrians warn that it cannot last forever, as Friedrich Hayek and Ludwig von Mises did before the 1929 crash, and as their followers have done for the past several years.
As Friedrich Hayek wrote in 1932, "Instead of furthering the inevitable liquidation of the maladjustments brought about by the boom during the last three years, all conceivable means have been used to prevent that readjustment from taking place; and one of these means, which has been repeatedly tried though without success, from the earliest to the most recent stages of depression, has been this deliberate policy of credit expansion. ... To combat the depression by a forced credit expansion is to attempt to cure the evil by the very means which brought it about..."
http://www.leblogueduql.org/2008/09/financial-cris ... - akhomestead, on 10/19/2008, -0/+2Because so far we're asking the ones who caused this to fix it. That's like hiring an arsonist to come solve a fire he started.
- digitronix, on 10/19/2008, -4/+6You're retarded. Universal health care in America is impossible and nonviable.
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