Much of the problem also rests with the fact that since the beginning of the new mellinium, the economic "growth" that we've experienced has been fueled primarily by easy credit and foreigh investment.

The days of "easy credit" are coming to a screeching halt, and their are more attractive investment opportunities overseas.

There will still be opportunities to invest and make money, though, but it's going to involve higher risks, and extensive research.

Depression?? I don't think so. We survived the bank collapses and the real estate meltdown of the 1980's, and we'll survive this one as well.

 

I agree, it should be a relatively mild recession. The mortgage “insurers” may see a few “downgrades” which will automatically downgrade the “bonds” (mortgage packages), CDO’s etc., held in their portfolios and they insured, making their bottom line less attractive for investors. It will also make the cost of money for public construction projects for cities, school districts, utility companies more expensive until they stabilize and begin to recoup their losses. (Higher taxes for you) But they will be “propped up” by the government, and foreign investment. But it is a huge sum of money! I have read the total “exposure” is as high as 45 TRILLION dollars. If we let the “free market” actually work, then they would go bankrupt and drag down the legitimate banks and reputable Wall Street firms also. But the “free marketers” scream loudest for a bailout when their its their house of cards (which they solely created) from collapsing. And how much more of America’s financial system will be sold to foreign Islamic and Communist countries?
Credit for the average person and business, will be tightened for awhile. Jobs will be lost to our “new” foreign partners. But 70% of our economy is based on consumer spending. So they can’t let the consumer live within their means for long. They must re-issue easy credit so they can make more money.
It is also a re-election year, and the politicians will be passing out BILLIONS of your tax dollars to the special interests and corporate America to keep their jobs. The politicians are attempting, on behalf of their corporate sponsors, to buy your vote for somewhere up to $800 and up to $1600, depending on your situation.

 

In Canada you would never see a subprime crisis because in Canada lenders wont give you money if you don't have a job and can't prove it. The crap I had to go through about a year ago trying to get my first mortgage was a big ordeal. I couldn't believe what I had to prove in order to get a mortgage and I had no money down. Now mind you having no money down kind of sucked but a high-risk loan is anything below 25%. Around here, prices for real estate just keep on going up and I made that decision to get into the market.

Now, these banks got greedy and these capitalists that love the free market where making lots of money and now their greed has got them in trouble. These guys should go bankrupt and Government should put in place lending practices to ensure this never happens again. I know some of you don't like Government but if laws had been in place it could have prevented a disaster like the one you are seeing and about to see.

 

Where does that stop? This was a gamble.. they lost! I do not think there should be a buy out! Those who made the deals ought to have to deal with it! One of the reasons I left the west coast was the ridiculous prices of housing. Rather than finance one on these farcical terms of these loans, I opted out. Those who are making $40k a year who pretend that they can afford a $300,000 house need a wake up call. We are credit rich in this country and need this "catastrophe" more than we need anything else. Maybe people will stop financing their whole damned existence for a change.

 

God, I hate it when I agree with Fozzy. Something must be wrong with the Universe. When I used to deliver building supplies I was constantly amazed at these 25-30 year olds living in a $350,000 to $400,000 home that they put no money down on, with a wife that didn't work, two kids, a riding lawn mower for their postage stamp yard, a BMW and an SUV in the garage and a boat in the driveway. All while making $50-$60,000/yr. Nobody wants to earn anything anymore. It's all about instant gratification.

 

I am in Chattanooga, MtFoxx.

 

Well ...right is right ! :wink:

My family has lived almost credit free for a long long time! I bought a house rather recently that had more things wrong with it than it had right with it.. it was pretty darned cheap. Some sweat equity and a fixed rate means that I will have a house that I do not have to work myself to death for just to live in and every year it gains in value. I have two cars.. one that is transportation to work that is old and bet to death (I got it for free if that tells you how fancy it is) and a new car for the family. This was the first new car I've had since my first new car in 1990. I'm lining myself up to by a pick up this year (soon).. its a whopping $1200.00 I live by my means and do not have a lot (any?) toys. People used to be too busy working to have toys, now they are too busy working to play with all the toys that they finance!!!!

 

Wow, I too agree with Fozzy. Crap! Both sides are to blame. People should be more responsible when borrowing and not have so much credit. The banks are even more culpable. They should have never made all of these risky loans. If someone has bad credit or can't afford the payments, then the banks should have said no.

Now these same banks are begging the goverment to bail them out and the government will. In the end the consumer loses and the banks get off scott free. The real losers will be the taxpayers who ultimately get to save banks who made terrible lending decisions. As much as it will hurt for a little while, I think that some of these banks should be allowed to go under. The strong and wise will survive while the foolish dies.

 

Time for another of what FDR did in 1933 and only let a bank who has enough in Deposits stay afloat trouble is that would wipe out 75% of the banks in this country.

 

ROFL :lol: You know nothing of history, FDR, or how the current American banking system works. Next you'll be telling us we need another "New Deal". :roll:

Where are you getting this number from? Is it yet another number you are pulling out of thin air, like that "$60,000,000 to every man, woman and child" claim you made a few days ago?