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Originally Posted by Doctor Who
Goober, you really don't believe this do you? And do you have any idea how mortgage interest rates are derived?
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Yes I know how rates are set, it's based on the demand for mortgages in the secondary market. When Wall Street needs mortgages to turn into derivatives they pay a premium for the product, and they ignore the details about the actual product because they only need it to hold up for a few days while they transform that turd into a gold plated derivative.
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Racist mind? Really Goob? Who said anything about race except you? So low income/sub prime means race to you? Who's being racist or, at the very least, stereotyping? BTW, Obama has said in his speeches and every economist agrees that this started with the sub prime market.
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started with the sub prime market, but the canary in the coal mine, the first thing that collapsed, the main problem was and still is the massive losses caused from writing Credit Default Swaps.
Now trying to blame an economic crisis on people who don't actually control very much in the way of money is a very appealing story to the racist wing of the GOP base. If you can't see that, it's not because it isn't there.
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Nothing has "gone missing". It's called a loss. When the bank loans $200,000 and has to sell the house for $100,000, they take the loss. And after the sub prime market collapsed, it fed into the conventional market because everyones house values declined. Many people who defaulted on their mortgage did so at their own choosing, not because they couldn't afford it. They saw no reason to pay a $350,000 loan on a house they bought for $500,000 that is now worth $200,000. Of course, in my mind that makes them complete assholes but that's JMO.
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If it was just mortgages it would be a much smaller problem, it was Credit Default Swaps, an unregulated "insurance like" instrument that concentrated huge amounts of risk and promised huge rewards.
That risk factor was not understood by some, and understood too well by others, it was a scam, wrapping turds in gold foil and selling them as bullion.
What happened to Bear Stearns, AIG, Citi, etc.
They got wiped out by Credit Default Swaps.
That's what sucked all the liquidity out of the economy, that's what stalled the economy.