TruthNotBS
Gold Member
- Mar 20, 2023
- 3,370
- 1,265
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First, you keep asking for the "initial factor" as if there was one single cause for the bad loans, but that’s not how complex systems work. The push for homeownership, supported by both government policies and private sector ambitions, was one factor. However, the deregulation of the financial industry, particularly the repeal of the Glass-Steagall Act, played a critical role. This deregulation allowed banks to mix commercial and investment banking activities, leading to a culture where risky lending practices were not only allowed but encouraged. The reckless behavior here was banks pushing loans they knew were risky, bundling them into mortgage-backed securities, and selling them off as safe investments, all while knowing they were anything but. That’s where the greed comes in—banks and financial institutions were chasing profits at the expense of long-term stability.Ok, let's discuss how bad loans came to fruition.
Never said that at all. Now you're melding the crisis into the root cause.
name the initial factor
what was reckless?
name the lending practice that lead to bad loans for people who couldn't pay them back?
Had nothing to do with bad loans, or what happened afterward.
How was giving bad loans to people who couldn't repay them profitable, yet highly profitable? Explain that program for the class.
nope obammy and acorn did that.
nope, untrue and disinformation.
banks who knew they weren't getting their money back worked the system available, to sell loans. All legal.
it was the first domino.
what greed? You keep slinging around the word.
the bad loans were government forced, we know how and why. for votes.
Global? explain?
Your claim that the crisis had "nothing to do with Glass-Steagall" is just plain wrong. Without the repeal of Glass-Steagall, commercial banks wouldn’t have had the same opportunities to engage in the risky investment practices that amplified the crisis. The idea that giving bad loans to people who couldn’t repay them was somehow profitable isn’t hard to understand when you consider the short-term gains these banks made from selling those loans off as securities, making profits up front while offloading the risk onto others.
As for your dismissal of predatory practices like adjustable-rate mortgages, it shows a lack of understanding of how these financial products were designed to exploit borrowers. These loans were structured to seem affordable at first, only to become unmanageable when interest rates inevitably spiked, leading to massive defaults. The fact that banks legally worked the system doesn’t absolve them of blame—if anything, it highlights the failure of a deregulated system that allowed such reckless behavior.
Finally, your claim that the bad loans were "government-forced" for votes is nothing but conspiracy theory-level nonsense. The private sector aggressively pursued subprime lending because it was profitable in the short term, and they exploited every loophole and deregulation to maximize those profits. The global nature of the crisis is undeniable—it wasn’t just the U.S. economy that suffered, but economies around the world, as those toxic financial products were sold internationally. The crisis spread because of the interconnectedness of the global financial system, something that wouldn’t have happened if those bad loans had been contained within a regulated, responsible banking sector.
So, to sum it up: the 2008 crisis wasn’t just about bad loans—it was about a deregulated financial system that allowed greed and short-term profit motives to create a global catastrophe. That’s the full story, and it’s far more complex than just pointing fingers at government policies.