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re: Would We Have Been Better Off If The Gov't Let The Banks Bottom Out, Not Bailing Em Out?
Posted on 5/16/17 at 8:51 am to Nuts4LSU
Posted on 5/16/17 at 8:51 am to Nuts4LSU
Wait, so you mean to tell me that Barney Frank wasn't a key proponent for the banks to lend money to people that could never afford to pay it back so they all defaulted?
Posted on 5/16/17 at 5:12 pm to TigerFanInSouthland
quote:
Wait, so you mean to tell me that Barney Frank wasn't a key proponent for the banks to lend money to people that could never afford to pay it back so they all defaulted?
No, that's exactly the opposite of what I said. People defaulting wasn't what caused such a huge crisis. The economy can stand a higher percentage of people defaulting on loans, within reasonable limits. The default rate really didn't even get all that crazily high, even though it was higher than normal.
What caused the crisis to be so serious was the securitization of those mortgages, crooked ratings firms giving those securities ridiculously high ratings without even looking at them closely and financial firms putting hundreds of billions of dollars of people's money into them, all while investment banks were using their own money to bet against their clients' investments.
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