What is Digg?254 Comments
- AmyVernon, on 09/16/2008, -4/+181This is the best explanation I've seen yet on this whole mess.
- edstate, on 09/17/2008, -9/+134This is very, very accurate. But do NOT forget what allowed this to happen in the first place: Government RELAXATION of lending standards under Clinton (twice) and again under Bush in order to let minorities, and other low-income groups have their "American Dream".
Sounds nice, but it backfired. Big time.
Subprime, and these other "exotic" techniques were mere market adaptions, with government approval, in order to meet increasingly stricter requirements for offering "affordable housing" (they couldn't force the prices down, so they tweaked the mortgages). The predatory douchebags depicted in this cartoon merely came in, and took advantage of the new lending standards. - GhandicapXRS, on 09/17/2008, -2/+75You're only using 73 cents worth of MS Paint!
- MCA2142, on 09/16/2008, -6/+71buy ***** with our ***** credit as the ***** mortgage companies push their ***** around so they can get more ***** out of the ***** housing industry before there ain't any ***** left to ***** out.
*****. - Bayan44, on 09/17/2008, -0/+64They are called NINJA loans. Not becuase they sneak up on you and kill you.
No
Income
No
Job or
Assets - bicyclethief, on 09/17/2008, -2/+48These stick figures make xkcd look artistic.
- inactive, on 09/17/2008, -5/+48You can tell a lot of efforts was put in drawing this comic.
- jeffvvisoft, on 09/17/2008, -1/+32Flip This House!*
Bought: $200,000
Renovation: $50,000
Sold: $500,000
PROFIT: $250,000
WOO-HOO!!!!
* Repeat with another perfectly fine home until the cost of average three bedroom ranch built in the 60's requires two incomes to pay the mortgage - spaceshipsix, on 09/17/2008, -1/+27Amazing how he spent so much time redrawing consectuive frames pixel by pixel to look exactly the same. That is dedication.
- sockpuppets, on 09/17/2008, -0/+24I'm sorry you feel that way.
- spacerobot, on 09/17/2008, -0/+20I was only able to see the first slide, but I think it's the same as this one: http://docs.google.com/TeamPresent?docid=ddp4zq7n_ ... So I guess that's a mirror for you.
- n1eb, on 09/17/2008, -11/+31Fannie/Freddie: "Here's your loan. Democrats don't want us to turn down people who can't afford homes, in fact, if we don't approve your loan we'll lose our Government support. We don't have to make calculated decisions like other privately-run lenders - if we go under, the American people are obligated to bail us out."
And they say we need more Government regulation to fix the problem. It's like giving car keys to a drunk. - dshPls, on 09/17/2008, -3/+22The worst thing is that in a truely free market the people who caused this would be SOL, the companies wouldn't be bailed out, and there would be real consequences.
- edstate, on 09/17/2008, -0/+19I think that's actually a law of Economics.
- thetanman, on 09/17/2008, -0/+18Check out episode 355 of "This American Life" when you get the time. It was so interesting I actually started reading the transcript as I listened. It's crazy how money was being made hand over fist there for a while. Obviously it didn't last, and this whole mess came to be. If it seems too good to be true, it probably is.
http://www.thisamericanlife.org/Radio_Episode.aspx ... - pintomp3, on 09/17/2008, -0/+17you mean corporate socialism. they aren't bailing out the people losing their houses, they are bailing out the people who lobbied for deregulation which created the problem while they gave themselves huge bonuses.
- i4ybrid, on 09/17/2008, -1/+16How about when AIG lent money to THEMSELVES?
AIG: Oh, I need a dollar, can I borrow one?
AIG: Sure, here's a buck
AIG: Yay, now I'm a dollar richer!
Me: *facepalm* - bovester, on 09/17/2008, -0/+13Wow, didn't even realize there was another page... and another...
- lazn, on 09/17/2008, -0/+12Here is a better explanation: http://www.break.com/index/how-we-got-into-the-sub ...
- Michas, on 09/17/2008, -3/+15I like the graphics.
- TheFuzzyOne, on 09/17/2008, -2/+13I suppose you'd prefer a purely capitalist system that has no taxation, and thus no spending on roads, medicare, military, or other important government funded projects.
All economies are socialist, the only question is how much. - stillasleep00, on 09/17/2008, -0/+11SCARY because it's true...
- kazoomaloo, on 09/17/2008, -0/+10You mean the site is going to get an $85 billion dollar bailout?
- krag, on 09/17/2008, -0/+10http://docs.google.com/TeamPresent?revision=_lates ...
- twoyups, on 09/17/2008, -3/+12I seriously digg this comment. Some people choose not to see the fact that the effect a President has on the economy is revealed over the course of the next decade after he (or she, heh) leaves office.
Edit: I just googled "Haliburton helps taxpayers". Oy, this isn't looking good. - gotrootdude, on 09/17/2008, -2/+11"critics are pointing to a 1999 law co-sponsored by then-Sen. Phil Gramm (R-Texas) and that paved the way for consolidation between commercial and investment banks":
"The system of regulation of these integrated banks has failed, and it is clear that much stronger firewalls are needed," AFL-CIO President John Sweeney said of the so-called Gramm-Leach-Bliley Act."
Who voted for that BILL? McCAIN-YEA , BIDEN-NAY, REID-NAY
http://www.senate.gov/legislative/LIS/roll_call_li ... - thespiff, on 09/17/2008, -3/+12Ummmm relaxing regulations is not socialist, it is capitalist.
The bailouts are the socialist part.
And nobody is bailing out the person who never should have received the mortgage. Those people have fled their houses, probably renting now.
We're bailing out the lenders that made loans which are not going to be paid back. The lenders are stuck with the collateral (houses) that aren't worth the amount still owed on the loan.
Awspire, you've been posting a ton lately and I've come to discover you really have no idea how this works. - gwyrth, on 09/17/2008, -0/+8DONNIE!
- Sherman901, on 09/17/2008, -2/+10balls
- kazoomaloo, on 09/17/2008, -3/+11Here's an easier one: People are really ***** greedy and the government ignored their corruption.
- Taiyoryu, on 09/17/2008, -1/+8It's missing a slide or two at the beginning explaining how financial institutions were enabled to do this:
Gramm-Leach-Bliley Act of 1999, which repealed the Glass-Stegall Act of 1933, allowed various financial institutions to consolidate. The bills were passed by a 54-44 vote along party lines with Republican support in the Senate (McCain voted for it / Biden voted against) and by a 343-86 vote with in the House of Representatives. This consolidation removed the checks and balances inherent to the system when the financial institutions were separate.
http://www.prospect.org/cs/articles?article=the_bu ...
http://mises.org/story/3098
Phil Gramm authored McCain's economic plan and is retained as an (unofficial) economic adviser for the campaign. He was originally the campaign co-chair and senior economic adviser, but stepped down after his "whiner" comment became a liability, so he's now in the background pulling strings rather than front and center. - inactive, on 09/17/2008, -7/+14Greed.
- inactive, on 09/17/2008, -4/+11Theres only one way things could have gone wrong, if housing prices went down. Can anyone say Murphey's Law?
- Skywise, on 09/17/2008, -7/+14And yet people think socialized systems... "work"...
- Jeeum, on 09/16/2008, -2/+9Did you actually read it?
"good", "not-so-good", and "ugly"
What do you think the "good" represents? - THASUGAHRAIN, on 09/17/2008, -2/+8Financial firms are not failing just because of bad mortgages. I feel like the compounding effect of Credit Default Swaps is overlooked.
- johndavidjack, on 09/17/2008, -1/+7I'm waiting for the article from 2003 where Bush and the Republican Congress purposed a bill that would give a government program the power to regulate and determine how Freddie Mac/etc were managing their business correctly, and keep it from spiraling out of control.
Best part is, it was shot down by the democrats, and now look where we are.
Hell, here's a quote about why it was shot down:
''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''
Here's the link (opens to a New York Times archived article):
http://tinyurl.com/6lp5qu - SpeedSteamBoat, on 09/17/2008, -1/+7Eh, he could have tightened them up a bit.
- iamnotcreative, on 09/17/2008, -1/+7I don't really get why you're being dugg down because that's exactly it. The name of the game was make as much money as possible. If things go south who cares, I (the CEO) have a sweet golden parachute for when I step down.
- inactive, on 09/17/2008, -0/+6This is how it happens, imo
"Plus five percent"
http://www.relfe.com/plus_5_.html - minoss, on 09/17/2008, -0/+6Government was PUSHING these companies to give out these loans by artificially lowering the rates at which they can borrow money. They wanted people to be able to live the "American dream." This of course increases both demand and prices for houses. Hence the absolutely huge run up on house prices preceding this crash. This is entirely socialist. I do agree, bailing these companies out is more socialism, but that's how government works. They fix problems created by the government with more government.
- kolyana, on 09/17/2008, -1/+7If this happened under a Democratic president, the Republicans - who love to point fingers and judge people - would be shouting "Hey, it happened under YOUR watch!!!!"
Well, guess what, this happened under the Republican watch. - WarPirate, on 09/17/2008, -2/+7This is accurate but how is this all the republican party's fault again? How is George Bush responsible for the idiots at the mortgage companies practices?
How about we just enforce a little personal responsibility! - jbmcb, on 09/17/2008, -1/+6"The predatory douchebags depicted in this cartoon merely came in, and took advantage of the new lending standards."
I think the "predatory" bit implies that the applicants had no choice in the matter. The applicants came in looking for too much cash, or were sold too much cash. I put the blame 50/50 on lendees, lenders. - thespiff, on 09/17/2008, -1/+6Could you quit blaming this problem on socialism? It's the result of LACK OF REGULATION. Sure, it might be that we reduced regulation to benefit the little guy, but it's a pro-capitalist action. The fact that a government action is taken for the benefit of people does not make it socialist. If that were the definition of socialism, everyone would think socialism was great.
- inactive, on 09/17/2008, -1/+6Post is an oldie but a goodie.
- vbullinger, on 09/17/2008, -3/+8More like it came to a head under the Republican watch. The bubbles were being created during Clinton's watch.
They are both to blame.
I saw this coming back in the 90's so... since I was a teenager at the time... I'd assume that the people at the top saw this coming, too.
Which leads me to believe... that this is exactly what they wanted to have happen.
More government control in fewer hands, more wealth consolidated into fewer hands. Hmmm...
"Under the Federal Reserve Act, panics are scientifically created. The present panic is the first scientifically created one, worked out as we figure a mathematical equation." –Charles Lindbergh
http://www.bigeye.com/mcfadden.htm - MrAwesomeMan, on 09/17/2008, -2/+7Can anyone spell Murphy's Law?
- falstaff, on 09/17/2008, -1/+6And Rep Frank for opposing Bush's recommendations for additional regulations in 2003. Just for the record.
- Spor, on 09/17/2008, -0/+5I loved this episode. Not only did it explain the whole subprime crisis really well, the stories of people involved were really interesting.
That damn bartender who got a job making 100K a MONTH as a loan officer and is now living in his parents basement, broke as *****. -
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