It was NOT Bush's Economic Policies
It's ridiculous. People really believe that Bush economic policies are the reason this happened?
Listen guys ... here's what happened.
We expanded the demand for houses because the government mandated that banks offer loans to lower income folks who didn't normally qualify for loans. This meant literally, ANYONE, could and would qualify for a loan.
This rise in demand, caused a shortage of supply, and caused a rise in home prices. The short supply caused a building boom. So you had a home in Massachusetts that was 1000 sq ft going for something like $500 a square foot. More, in many cases. Or, if you want to take the biggest hit markets ... California. Home prices rose between 20-30%.
Then, in '97, the rules were changed in the SEC. They allowed for mortgages to be rolled up and traded as commodoties on the stock market. This was intended to allow banks to share some of the risk of offering these risky, sub-prime loans. This wasn't looked at as a problem, because they were taking a risk that home prices would always go up.
Enter short sellers. Short sellers would trade security backed mortgages and earn their quick 15% and then sell them off. What happened starting in June of 07 when home sales dropped, was the demand for houses dropped. What happens when demand drops and supply is still high? The price drops.
So you have short sellers siphoning off their inventory only recently -- NO ONE WOULD BUY IT UP. Mostly, foreign investors got scared because no one really knows how much the papers (notes) are worth.
Add into this the people that are upside down in their loans and foreclosing, banks own notes on homes in the millions that aren't worth what the original mortgage was for. So even if they sell off the property, they are going to take a hit.
I'm not a proponent of Bush's econimic policies. I don't like the way we've been running massive amounts of debt on all kinds of stupid things. But those policies did not cause this mess. What caused this was a Democratic belief that all people had a right to a home, regardless of their credit score, income, or debt level. And when those people (who aren't known for paying their bills) stop paying their bills, this is what happens.
And if you want to go look at who stopped the regulation of the marketplace please do some research on Chris Dodd (D) and Barney Frank (D). Both of whom were against any kind of regulation that would rail in giants Mae and Mac, because they thought it was more important that anyone and everyone be able to own a home.
Any Nancy Pelosi's ridiculous speach on the House floor earlier because that disasterous bill failed ... SHAME ON HER. She's a liar, a hypocrite, and a horrible excuse for a leader. In a time when we need someone saying "look, whoevers fault this was, we need to get to the bottom of what, if anything, we need to do to fix it," she's playing politics and pointing the finger at a lame duck President.
I'd just like to point out, that while the President's approval rating is in the 30s. Nancy, your Congress's ratings are in the teens. How you like 'dem apples?
Listen guys ... here's what happened.
We expanded the demand for houses because the government mandated that banks offer loans to lower income folks who didn't normally qualify for loans. This meant literally, ANYONE, could and would qualify for a loan.
This rise in demand, caused a shortage of supply, and caused a rise in home prices. The short supply caused a building boom. So you had a home in Massachusetts that was 1000 sq ft going for something like $500 a square foot. More, in many cases. Or, if you want to take the biggest hit markets ... California. Home prices rose between 20-30%.
Then, in '97, the rules were changed in the SEC. They allowed for mortgages to be rolled up and traded as commodoties on the stock market. This was intended to allow banks to share some of the risk of offering these risky, sub-prime loans. This wasn't looked at as a problem, because they were taking a risk that home prices would always go up.
Enter short sellers. Short sellers would trade security backed mortgages and earn their quick 15% and then sell them off. What happened starting in June of 07 when home sales dropped, was the demand for houses dropped. What happens when demand drops and supply is still high? The price drops.
So you have short sellers siphoning off their inventory only recently -- NO ONE WOULD BUY IT UP. Mostly, foreign investors got scared because no one really knows how much the papers (notes) are worth.
Add into this the people that are upside down in their loans and foreclosing, banks own notes on homes in the millions that aren't worth what the original mortgage was for. So even if they sell off the property, they are going to take a hit.
I'm not a proponent of Bush's econimic policies. I don't like the way we've been running massive amounts of debt on all kinds of stupid things. But those policies did not cause this mess. What caused this was a Democratic belief that all people had a right to a home, regardless of their credit score, income, or debt level. And when those people (who aren't known for paying their bills) stop paying their bills, this is what happens.
And if you want to go look at who stopped the regulation of the marketplace please do some research on Chris Dodd (D) and Barney Frank (D). Both of whom were against any kind of regulation that would rail in giants Mae and Mac, because they thought it was more important that anyone and everyone be able to own a home.
Any Nancy Pelosi's ridiculous speach on the House floor earlier because that disasterous bill failed ... SHAME ON HER. She's a liar, a hypocrite, and a horrible excuse for a leader. In a time when we need someone saying "look, whoevers fault this was, we need to get to the bottom of what, if anything, we need to do to fix it," she's playing politics and pointing the finger at a lame duck President.
I'd just like to point out, that while the President's approval rating is in the 30s. Nancy, your Congress's ratings are in the teens. How you like 'dem apples?
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