"Ignoramus30183" wrote in message
...
On 2008-07-16, Hawke wrote:
Ya got that right, and it all stems from free trade and the global
economy.
What the free traders want is basically an unregulated market where all
goods, services, and capital can freely go anywhere in the world where
it is
most profitable.

Keep in mind that the two failing behemoths are "GOVERNMENT sponsored
enterprises". It is that designation that let them grow so big and
make so many risky guarantees.

It is hard to blame the "free market" for their failure.

The "free market" response to these loan guarantees was to write and
sell bogus loans that would be guaranteed by these GSAs.

I remember being astonished how I was given a "no-documentation"
mortgage where I did not even have to state or prove my income. (we
did not borrow as much as we could, our mortgage payments are
approximately 10% of our gross income, but the lender had no idea)

i


The one great thing about this whole mess is that there is just so much
blame to go around. But I put most of it on the attitude or atmosphere of
anything goes because with the republicans in charge of the government there
weren't going to be any rules, anything was okay as long as money was being
made. This covered the borrowers, the lenders, the secondary mortgage
market, and the entities buying the securitized mortgages. Everybody was
looking the other way as things experienced people knew were foolhardy were
done every day as if nothing could ever go wrong. Those of us old enough to
have seen real estate go down knew that the bottom was going to fall out
eventually, but the people and the institutions who were making money hand
over fist had blinders on. Now that the real estate market has come back
down to earth it's going to take years to bring things back in line with the
traditional guidelines for real estate. The long standing rules for lending
in mortgages were there for good reason as we can now see so clearly. The
unrestricted behavior of a free market in real estate is what caused this to
happen. The uncontrolled market came about because of the republican view
that market needs to be left alone to work it's magic. Well, the "magic" has
played it's trick on us. Now we can go back to sound financial principles
once again and try to forget the magic thinking of the republicans and their
free markets and it's "invisible hand". Of course that invisible hand is
evening things out again by pounding the crap out of the American people,
its businesses, and it's markets. Everything works out in the end. If
suffering doesn't matter then I guess the free market system has worked
again.

Hawke