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let the \"whose responsible\" discussion begin...
let the \"whose responsible\" discussion begin...
Even though I already knew about the situation, today I \"learned\" it. Thanks, Internet!
In the end Borrowers, just because there is a candy bar in the store and ou steal it doesnt mean its the stores fault for making the candy bar available for you to steal.
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Hmm... I was skeptical, but that's actually a pretty good summary.
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This really helped. Every news network talks about there being a housing crisis and it being due to \"bad lending practices\" but it seems like none of them even tried to actually explain it. (I don't follow CNBC or other financial news sources, but i guess they could have explained it before but i never heard about it). So thanks, i feel much more enlightened now.
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-59977-100x100.png\")
Consumerist is now warning people about linked content containing the words \"shitty\" and \"asshole?\"
Wow, that was excellent!
haha, hilarious!
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@joemono: And the F-bomb back and forth between the Norewegian Village Pension fund and RSG Investment bank.
As an ex securities salesperson, I can tell you that this is true to the core. What a great piece. This should be required viewing for everyone who doesn't have a clue about what is going on with lending institutions. Maybe reducing it to the simplest element of stick figures will allow those who have been \"taken\" to understand what the hell happened to them.
@ shadow735
Yes, but the lenders stole the entire way too, and instituted loans based on fraudulent data sets. They lose their asses and get bailed out. The borrowers then are held hostage.
I have said it once, twice, and three times a lady, \"BOTH PARTIES ARE RESPONSIBLE, so stop pointing fingers and work towards a solution.\" No matter what that solution is we'll all end up holding the bag if we are responsible or not- whether that be through ongoing negative property valuations, forclosed on homes creating neighborhood blight, bailout money coming from our taxes, etc, etc.
Still the bad loan, and loan officer, had to be there before a single loan was taken out. It was supposed professionals who came up with this whole Ponzi scheme, not to get people homes, but rather to find another way to exploit the system.
Oh, I enjoyed the slideshow too.
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-219805-100x100.png\")
hot damn, now it all makes sense!
@MercuryPDX: Yeah, I didn't get that far. I guess I don't understand grown people needing to be warned about \"naughty words.\" It actually makes me sad to think that enough people complained to the editors about curse words in the past that they decided to post a warning.
Unless it was just a joke, of course.
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-68654-100x100.png\")
slide 29...best.slide.ever. \"blow me\".
awesome stuff there.
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-246704-100x100.png\")
Sweet mother of Jesus, are you to say that lending money to people who could not pay it back was a bad idea?
Simple solution, why not give them another loan to make the payments?
Oops, that has already been done. I guess it is endgame for this ponzi.
@flamincheney: sad to say there is no solution other then let the market correct itself, all a bail out is going to do is bail out the banks and borrowers and increase taxes or use tax $ that could be used to fill all the pot holes we ruin our tires hitting as we go to work.
Its a bad situation all around.
The banks are not innocent nor are brokers ect, but in the end the loan requires the borrowers signature.
I feel sorry for these people, yeah is sucks that they will lose thier home but they didnt do their homework. In the end they will go back to being renters and have bad credit that they will have to work to repair. The banks and investors will lose money and eventually the market will fix itself.
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-62793-100x100.png\")
That is the best explanation I've seen yet. So often, the explanations are put in accounting speak, or even more 'Don't blame me' speak. That pretty much summed it up perfectly. Blame on all sides, but getting more and more greedy/stupid as it goes up...
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I made several comments on this when it was posted on Gawker.
Short version? Banks got screwed harder than anyone else on this, so stop blaming them.
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-74749-100x100.png\")
That's a great representation of what happened :)
That's pretty accurate as far as the no/low doc subprimes are concerned. Yes, all parties to these transactions share some of the blame but don't think for a minute that the big banks didn't know how this was going to turn out. They did. They knew all along that they are too big to fail and that there would be a bailout to whatever degree necessary to prevent them from failing. They knew that when the music stopped, if they were left standing the feds would re-start the music until they were all safely seated. Anybody remember Chrysler?
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-80336-100x100.png\")
Hey Ben! Thanks Rob? I so sent this to you guys almost a week ago.
Still funny as hell though.
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-194215-100x100.png\")
That is just incredible! Loved it.
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-88992-100x100.png\")
Finally!
wow i was just trying to explain this to my sister today. Now all i have to do is show her this
I'm sending it to my son who's majoring in public policy (don't ask me - I think it's a made-up subject). He couldn't understand the problem of the meltdown and he had a choice of using it as a paper topic. Now he'll get it. Sometimes I think students in some subjects that include the real world activities of humans can't be fully understood until they have some real life experience.
Awesome. Soooo chocked full of win that I pissed myself laughing.
does a really good explaination, i wish i could use this on my presentation on subprime mortgages in my financial theory class.
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-69858-100x100.png\")
I get thrown out of the slideshow for having an \"unsupported browser\". A nightly build of Firefox 3.0 isn't supported?!
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-26708-100x100.png\")
I guess that's a pretty cute synopsis of the subprime crisis, but I don't think that it is entirely fair.
Statistically, the higher ratings for derivatives based on a wide array of subprime mortgages are relatively sound. The creators of derivatives made an innovative product that banked on the growing housing market; highly rated real estate funds collapsed too, but because they are more straightforward people fault the derivative sellers more than the real estate fund brokers.
Certainly there are transparency issues, but that is a problem with the law, and with legislators not understanding what they are legislating about.
Still, if you buy a financial device you don't understand, you are taking a tremendous risk, and that is your responsibility.
asdf
tl;dr i am batshit insane
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It still didn't explain where the word \"subprime\" shows up in all of this.
@shadow735: Wrong.
They didn't steal the candybar, the stores shoved it in their faces saying \"here take it! You can pay for it later\" knowing that they'd get their money and then some by taking advantage of customers too naive to suspect anything. When it all blew up in their faces, they cried to the government for help. Sure the borrowers are ignorant, but why is ignorance their fault? Surely companies aren't allowed to be dishonest and cheat people are they? (sarcasm)
absolutely brilliant!
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-100888-100x100.png\")
The end is the best part.
@deadlizard: \"Subprime\" refers to (I think) the market of people with \"less-than-perfect\" credit that receive mortgages with higher interest rates just to be able to buy that McMansion they've got their eyes on. Naturally, if they have an adjustable-rate mortgage or just plain lied their asses off on their mortage application (which many mortgage brokers were practically telling people to do), they were completely unable to keep up the payments.
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-324831-100x100.png\")
Ahh, so THAT is what happened. Brilliant
Yes, you can have this Snickers when you are 2 but you start paying for it and accrued exorbanent interest levels when you are 5. Enjoy its sweet goodness.
fantastic link. thank you.
i'm buying a house soon, and worried about the \"market\" and the \"bad lending practices\" and all that are always mentioned and never explained.
i'm scared of the mess i might wade into, but i'm not going to let it stop me from finally owning my own shit.
This little slideshow has been circulating all over Wall Street and is very popular.
That actually makes a whole lot more sense than my own research did.
Thank you.
Underwhelming.
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Awesome.
Mildly amusing, but loses some credibility for repeatedly misspelling \"tranches\" as \"traunches\" - the author should've stuck to the stick-figure-equivalent word \"pieces\".
That was amazingly telling. Thanks, Consumerist.
This is the best shit ever. I wish the newspapers and television news would tell us this story.