467,000 more jobs lost in June.

[Avinash_Tyagi]

TheRealMafoo said:

Avinash_Tyagi said:
You're missing the point though, it wasn't until a decade later, that most of these foolish loans started getting handed out, between 1996 and 2004, only 9% of loans given were subprime, it wasn't until 2004 to 2006 that the number jumped to 21%, if it was just the government trying to mandate expanded housing, it wouldn't have taken 12 years to happen. No the reason it happened was becuase banks got greedy, they saw that the market was charging upwards and thought that they could make big bank by betting on these high risk borrowers.

The government wasn't the cause of this, it was the greedy stupidity of the banks and thinking that the market would keep going up.

What HappySqurriel said.

And not only that, when this happened, it expanded the number of people who could buy a home. When it went from 60% to 66%, you now have 10% more people look for a house then you have houses. This increased the value of homes.

Builders built to try and provide enough homes, but government kept lowering standards, to the point where people qualifying was at 75%. Once they hit around 75%, they could not go higher (the other 25% either don't want to buy, or are of such low credit standards, that nothing will make them a fair risk).

Once it stopped at 75%, builders caught up. That's a lot of building, and it took 14 years.

Once they caught up, these ARM's that people were refinancing every 3 years to stay in there homes couldn't happen, because there house didn't go up in value. So they foreclosed. This then caused the market to adjust right back to where it should have been all along. Now not only are you having people who can't afford to stay in there homes foreclosing, but you have people who are well off, but would rather take the credit hit, then pay 400K on a house worth 250. Great credit to them, is not worth paying $150,000.

All of this could have been avoided, if Clinton had not tried to get us to 66% (and all the other shit that Government did between now and then).

Clinton himself says he should not have done it, and takes ownership of it in this interview. The part about all this stuff, is at 3:20.

What happy said didn't address my point, in fact he pretty much showed that it had nothing to do with government action.  Look at the chart that happy provided, home prices adjusted for inflation didn't exceed historical norms until 2001, that means that most of the activity in Subprime leanding and in housing price bubbling didn't occur until after the last recession which followed the dot com burst and 9/11.  This shows it had very little to do with anything the government did with regards to expanding housing back in 92.