Stefan MolyneuxVerified account

Subprime is called subprime for a reason

But the rivers & lakes were full of new jet skis. “Stated income” loans was the catalyst, & shady designed ARMS finished it.

Sub-prime was originally created to sell homes to minorities that could not qualify for homes.

Even worse here in Canada due to the onerous foreclosure process, you’ve got the banks bending over backwards to save them

It's the law of easy money. When loans are made easier to get, those who have what the loans are for will raise their prices knowing people will be able to borrow. We see this in the student debt "crisis". Tuition went up because they knew students would be able to get the loans

It started with 'red lining'...governments forced banks to increase the percentage of loans to people who couldn't qualify for loans. Banks agreed to it...so long as they could sell those loans to the government and offload the risk onto the taxpayer.

Lower middle class became poor, imo. The housing did crash and it was cheap for a little bit. But in the time frame, it didn't help anyone I knew.

I was freelancing as a paralegal & the bankruptcies were unreal. Common to have a couple who worked min wage jobs owning a 4bd 3bh house with pool worth 275k+. Adj rate for super low pymt first few years or balloon with full mtg due after 3-5 years. It was a racket.

Plus banks were not allowed to ask about income, so people who would normally qualify for a $200,000 mortgage could now get $400,000. People bought more expensive homes. “No need to buy a starter home we can afford. Let’s get that dream home now!”

But most economists know little about the way economics really works! Talk about the dismal science! Austrian School all the way, and Marty Armstrong makes some great points!

"If you don't know anything, stay clear of the subject" is a rule that doesn't apply to you, I guess.

They needed the money for war , are you for real or?

At the very least you don't know if that policiy is just a plan against the middle class (a combat being going the last 65 yrs) or just guys that never went to economy classes & made the world pay for their ignorance or the wrong understanding of this world.