Sunday Open

Obdicut (Now with 2% less brain)5/15/2011 4:42:47 pm PDT

re: #66 Fat Bastard Vegetarian

Unfortunately, it is on its way back. The administration is starting a push for these loans to be made again.

Nope. We’re not talking about loans to minorities and those who are systematically overlooked. This isn’t related to the bank-location push. The loans made by the banks that sunk us were not related to the government push for loans for overlooked groups; those actually had a lower default rate.

The problems were manifold, but the main one with the mortages themselves were the banks systematically betting that equity would rise to the extent that it didn’t matter if they made loans to people who couldn’t really afford the houses. It wasn’t in any way limited to one corner of the market or the other.

We got into a culture where somehow people believed that housing prices would do nothing but increase forever, everywhere. People looked on houses as an investment, not a home.

Many of the problems in this country are of a similar, magical thinking nature.