I have nothing to do with this

[cema]

As I am not an expert in finances or economics, I defer any judgment on the bailout and its failure.

But we are all experts in politics, aren't we. Do I understand it correctly that the basic driving force behind the current financial troubles is a failure of a socialist experiment in the housing market? Or is it only part of the problem?

And the politicians, as usual, will blame someone else. (And everybody else will blame politicians.)

It is interesting to note, too, that more Americans are reported to trust Obama's team on economics than McCains' team. Whereas one would think that it would be the other way.

Update. A bit heated in the comments. Chill out, the world is not going to end right now.

Comments

[gera.livejournal.com]

Now, I think you are missing two points as to how I see the role of this document.
First, it's not so much about the minorities. If you look at the actual recommendations, you'll see that they apply to all poor people, to the higher risks that the banks are encouraged to take. They are not saying accept a higher debt ratio pretending that it does not involve a greater risk if the applicant is black/hispanic, but if he is poor. Heck, when talking about downpayment they actually use the word "barrier" - as in "barrier to homeownership by lower–income applicants". Note that is has nothing to do with race, but has everything to do with the social stratum and the risk of insolvency. What's really striking about this document is that it's recommendation read exactly like the list of bad lender practices blamed for the current crisis - this is the widely accepted fact that I alluded to .
Second, I am not trying to present this document as the ultimate culprit, but merely as an indication of a particular trend.
As to the actual regulations based on such views and approaches I commend this article to your attention. Note, by the way, that the push has started in 1992, the year that the Member of Board of Governors of the Federal Reserve System made his prediction.
In short, as you can see, the government actually forced and cajoled the industry into giving more and more riskier loans, widening the home-buyer stratum and causing the prices to keep rising. This is what created the bubble that burst so loudly. Make no mistake, other participants share the blame, starting with homeowners and speculators, mortgage brokers etc and ending with Wall Street. But none of that would have happened if there wasn't a bubble.
In fact, I argued that ALL this mess could have prevented by a strict and stiff downpayment requirement.

I believe, I've shared with you my views as to reasons of this crisis in great detail now. I would appreciate if you share yours with me, even if in a far more concise manner.