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OT: American Politics

MindzEye said:
The 08 collapse , at least on the consumer side of the equation, was set off by entirely optional (and bad) mortgage choices. I wouldn't underestimate the ability of bad consumer choices to put the broader economy at structural risk, especially when the wall street guys are amplifying the impact of every dollar lost with their usual financialized fuckery.
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I don’t think that had anything to do with consumer choices. The problem there was the banks’ poor choices in lending to people whose credit was substandard and were good bets to default.
 
LeafOfFaith said:
I don’t think that had anything to do with consumer choices.
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It had a lot to do with consumer choices. Consumers chose to take mortgages that were dodgy because they felt like they could offload the properties (at a profit) when the mortgages reset. It wasn't the biggest side of the equation (that was definitely all of the CDO, synthetic CDO, etc, etc, etc bullshit that Wall Street dreamt up to do all of the side betting), but without all of the "exotic" mortgages that were taken at the time on the consumer side, none of the rest exists.

LeafOfFaith said:
The problem there was the banks’ poor choices in lending to people whose credit was substandard and were good bets to default.
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But why do you think an expansion of the mortgage market would go any different this time around? Anyone signing for a 50 yr mortgage is someone with dodgy credit, bad income, etc. Someone who otherwise can't get approved for a better (financially sane) product.
 
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StormChaserBH said:
The mortgage lenders and seller agents are all also going to start pushing it into the affordability calculations, "you can afford X much house now", "get your dream home for as little as X a month", etc... and pushing even naive buyers who can afford it into buying too much house for their income.
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Exactamundo. The industry/developers will push more and more people to the 50 year option by taking alternatives off the market. Municipalities will go along with it as long as they get their property taxes. This isn’t a competitive market on the supply side where time-stressed/limited-information consumers have a full range of choice.
 
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