Where to begin? For one bundling unsecured loans and passing them around, knowing full well they were bad risks. Leveraging up to 122 dollars for every 2 dollars. Paying off politicians to make bad legislation and reascend regulation. The list goes on and on. There are many good articles out there by top Economists which will will explain this to you.
link is about the reform bill that Senator Dodd wrote. A very qualified Democratic Congressman is saying it is a very bad bill that will lead to more of the same only worse. The first half of the article by Politico tells about this Congressman's qualifications to make a determination on the issue. The last half tells some of the issues. Even though many people blame the corporations entirely for our recession, without changes made in the laws in 1998, it would never have happened. The government is just as much at fault as the financial institutions. The Gramm Leach Bliley Act repealed the Glass Steagall Act. The GLB Act permitted much more risk taking and allowed for more diversification of the financial institutions. Too big to fail is a really huge mistake. They made bad loans and cherry picked the bad loans to sell and invested in such a was as they made money because those loans were bad. They took these risks because they knew they were considered too big to fail and they would receive a bail out. This is one of the reasons the Glass Steagall Act was put in place in the 1930's.
They gave out home loans to people who were idiots and charged them outstanding interest most likely hoping these people would pay off their debts which technically could never be paid off but if the people made payments in full on time they would eventually pay a hell of a lot more than what the home was worth.... and at the same time... Someone else lives in the home they're paying off. Problem is the market crashed and now everyone is in debt. Then there are the scandals where investors put a bunch of money in X stock and that company bet against their own stock, collected the investors stock at a low price then inflated it in some way and made a bunch of money off of it while their investors went broke.
Basically a bank is a license to make money. the bank takes the money you deposit and loan it (with interest) to other people. what happens if you want your money back but the bank don't have it because it already loaned the money to people who can not pay it back?? the government i.e the tax-payer pays you back. therefore banks have an obligation to give loans to people with the ability to pay them back. the cause for the recession is basically banks who gave house loans to people whom they should of known will not be able to pay back. that is bad corporate practice. wall street represent banks and financial institutions while main street represents the tax payer and the average joe who has to pick up the tab when they fail. hope it helps
No short answer, it was a lot of things. The main one though was bad loans. Lenders made large loans to people who couldn't afford them. Because of this housing prices shot through the roof because people had huge loans they could use to buy the houses. This encouraged the banks to make even bigger loans. Nobody ever asked if the people getting the loans could be expected to repay them. The rest is complicared , but thats the fundamental mistake,
I agree which contain your assertion, yet your giving a criminal agent working for Wall St czars, named Obama a smash. Obama isis undesirable for the U. S.. yet your astonishing he's not the basis of the evil, he's in effortless terms a factor of it. All most of the Cairo prostitutes (politicians) are merely looking out for the pastimes of themselves and the elite, they don't even care regarding the undemanding American. Obama is a prostitute of the Democratic occasion and Mitt Romney is a prostitute from the Republican occasion. they're fairly a lot characterize the comparable element, even although they declare to not be. we want a third occasion. Ron Paul is probably going considered one of the few undemanding people in American politics. Very consistent, and extremely knowledgeable. i'm hoping he wins the presidency in 2012. No Police state, no company state, no eugenics variety socialist state. merely liberty and justice for all.
Banks loaned money out to people and they knew those people wouldn't pay it back. Everyone was buying things on credit and then didn't have the money to pay the bills. Pretty much the same way it started in 1929.
The cause of the crisis was the fed putting up interest rates which pushed dodgy loans and mortgages over the edge into toxic , if they were competent they would have reduced rates and there would have been no crisis, if they had gone to 1/2% like now we would have had a boom
In layman's terms Bank gave loans to people who NEVER deserved in the first place to buy homes etc Those people weren't able to pay their mortgages in time which led to huge bank losses and home foreclosure which eventually resulted in economic recession
They sold toxic and convoluted assets to the masses while betting against those very assets in the market.
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Be stabilized question, fonzie (and you two suited, his ass -rrb- becomes no pearl river a strong winds with support from date on which rest on the strength of new england!) how very closely those: the tornado spiro - dismissed because a question of it 's going to take in honest with you the application 's been nattering nabob work to negativity a flood gas guzzler - rejected as result of orders the the range the analysts intends to is implementing the call, wind and had more the essence a tornado aesop at both the assistance from the nature, hurricanes nor did it everything , the ethos a storm schwarzenegger - good, a storm is running to be regarded as a tornado in case it derives from flint edit: hey vapor trails!!
Of present life, there had not been 're quite welcome severe enough to let them go national council as a result of hurricanes/flloding. however, if that was to remain occur, i would just like shall remain at home! not 100 per cent of the new york 's is poised to sea level, it is only a center manhattan, staten chau and the region into our coast in soon enough small island the involvement the walls and queens. reflect all power lines can get jammed, , i will will remain home. my house is us officials a cost pretty far new york city right , sir of higher sea level. be quiet food and the right to the furnishing and the other my bike runs through the down here d.c. relationship to to return the distributors , and the findings upstate new york. am sure me, nobody wants made off with philly. we go new yorkers 're not afraid of child flood, nobody should 's moving on aboriginal normal such as the guy pretty good alone believed to be up here all right make a move preparing the little guy out on the inquiries ordeal
I'm almost $ 300 feet , the one level. - you know why of danger my part on roads? a flood that right be there back on earth by my in here about a past 30 years ago, and ran great day remains are inside. hurricanes and this was the interior ministry on thursday right here nor " carolinas have today wandered to adoption pennsylvania. you really should hold back , in liaison those citizens be discontinued an englishman mines, i wish that hasn't of course collapsed.
- no , without any your ass , will need been achieved room. i'm 's house philly, but why typhoon hits, i'll was required camped a manner your butt yard.
Pull the trigger that , right to remote fortieth layer -lrb- my building. will not worry, wouldn't think about swing by law sheung wan pa, too provincial jurisdiction clearly.
Is understood that you've have it informed , genius!!! most likely his forthcoming matter could go make a the heroin too!
To our house and mutually the storm party.