You know things are going bad when things you say aren't accurate 1 minute later...

OMG....Someone DO Something!!

FishyJoe just buy AMazon or something like that!!!!!

When will this stop!

according to records it wasn't lending to high risk people. It was the predatory lending after a decline in anti-usury enforcement.

Yaknow those overdraft fees from banks? that is one of the forms of predatory lending. Basically people were loaning to no-credit people and had ridiculous fees and penalties, and were more concerned with repossessing rather than actually being paid. Think about it, the bank owns a house, gives them 150k mortgage, then after 10k something happens and they take the house back. If it happens enough, after interest and such, the bank could make 250k on just a 150k house.

However, with the economy nobody was buying the houses, so all the banks had was property, not money. That is why sub-prime companies were the most troubled, because they had so much invested in the properties and no money.

Not to mention that 61% of subprime borrowers actually had good enough credit to borrow from prime lenders. That means people were being tricked and schemed into contracts with typical high-risk penalties/interest rate.

can you believe that? 61% of borrowers had good credit that banks were ready to destroy.

hmmm. One of my companies fell 24% today. Awesome.

These are good times to buy. Alot of good companies are pretty cheap right now.

By all means, put the blame solely on Republicans. Because they're the root of all evil, right? While JHawkNH has expressed my sentiments on the issue, I think this video shows how there's always more than one side to an issue:

http://www.youtube.com/watch?v=exxVZTKq1vA

Now, this isn't to say that it's solely the Democrats' fault, either. I believe both parties are at fault. Allow me to ellaborate:

1. Republicans are big on the deregulation. They love themselves some deregulation, because it brings us one step closer to a more capitalistic society.

2. Democrats are sympathetic to minorities, poor people, and others who in general are incapable of getting off to their own feet. Unfotunately, this is incredibly naive and idealistic when it doesn't take into account human nature. They were for deregulation of Fannie and Freddie in the late 90's/early 00's (or at least, so I'm told. Feel free to correct me if I'm wrong) so that the poor could buy a house without much of anything in the way of collateral. We can take a guess where this ends up. Oops. :/

Oh, and I'm pretty sure some Europeans aren't saying all Americans deserve this/are to blame. They're shaking their heads at the few who were irresponsible and who caused all this mess. I mean, how depraved would you have to be to wish some people to live in poverty?

EDIT: Beaten to the punch by schattenwolf86? Doh!

@vertigo
it wasn't that people couldn't afford their mortgages.
It was a 1-5.25% leap on interest rates coupled with predatory lending that in some cases had 10-15% interest for a property.
The idea was to have a home and instead of paying it off, pay the interest each month sort of like rent, but for a nice home rather than an apartment.
However, then you couldn't get out of the agreement like an apartment, and people divorce each other and for whatever reason, defaults skyrocketed.
This was not because of sub-prime mortgages, but because of predatory using sub-prime lending as the vehicle, an avenue allowed to them by deregulation.
BTW: at first, everyone backed sub-prime mortgages. It was the banks who abused the situation and were given the power to do so by the republicans.

the idea was as follows.
let the lenders eat these pathetic poor people who can't own a house. They didn't deserve it in the first place. Meanwhile the investors (middle and upper class) benefit.
the economy basically cannibalized the low class. The rich did it for the sake of making money, and the republicans defended the right to do so by citing trikle-down economy.
What is really too bad is that the really rich don't buy american.
As a ratio, the american company product is almost 100%endorsed by the poor, as wealth increases it shows an inverse relationship.
Basically they thought wealthy people would put money into buying ford or other american stuff even though they were investing in euros and other world products.

Ah, it also shows that I don't even understand the full picture. Well played, theprof00. :)

I don't think europeans tend to buy smaller luxuries such as video games on credit , I don't think the gaming industry will be as adversley affected here as it will in other parts of the world.

you are pretty close though. I've been doing a lot of in depth reading, mostly in world news because we get a lot of filtered information. BBC has some good info btw

Also, I think it makes a difference that we've had one of the worst presidents in history sit on for two-terms. In this scenario, it is definitely the democrats fault for not giving us a better alternative than Kerry. T_T

What really sucks for us Americans though is that the world is going to look at us and say, why didn't they try to stop this, why did they vote for Bush, why can't they pay their damn bills, why are they so greedy.... and draw some really bad conclusions to those.

I am really afraid for Japan's sake. They have so much invested in us, and they are going to lose so much because some people wanted to have 12 cars in their driveways.