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[quote user="MichaelSol"][quote user="solzrules"][quote user="jeaton"][quote user="solzrules"] Yes.  It should burst, but I don't think it will.  It is a government mandate, and that is what created the demand in the begining.  It sure wasn't the market.  This mandate is seriously screwing with our economy in all kinds of idiotic ways, and it will not go away anytime soon.  The housing market, which in the last 3 or 4 years has been completely unrealistic, finally took a dump because reality caught up with people.  You can't charge 1 million bucks for a 2 bedroom 1 bath house in CA when people are not earning the wage to pay for it.  Creative financial loans prolonged the correction, but the correction arrived all the same.  Now just imagine what would happen if big ol hill got her way and froze forclosures?  How many banks would continue to loan money when they have no hope of recouping cost if the loan defaults?  Our government is preparing to tinker with our economy in an effort to make everyone happy and the result will be mass misery.  Ethanol is a perfect example of that, and you watch-the mortgage industry will be the next disaster.  Instead of letting the market work itself out, we'll have barackohillarain solving all of our problems - by creating new ones. [/quote]Are you saying the housing thing was caused by government mandates?[/quote]Nope.  If the gov gets involved then we'll have a REAL mess.  Right now it is just a fiasco.[/quote]President Wiliam J. Clinton pushed, at the behest of his friend Sandy Weil, for the repeal of the Glass-Steagall Act -- Depression era legislation generally designed to keep speculative pressure out of things like the mortgage industry. After Clinton signed the bill, days later his Treasury Secretary Robert Rubin resigned and accepted a job as Weil's chief sidekick at Citigroup. Just a coincidence. Weil of course wanted to take Citigroup into higher risk, higher yield investments than was permitted under G-S, where banks had been restricted from such "investments".And, this was underscored by a continuing pressure that banks, under G-S, were "discriminating" against unqualified buyers and that lending policies needed to be egalitarian. Banks were hit with lawsuits citing discrimination even as their lending policies showed the prudence of the legitimate business purpose of using financial qualifications. The subprime "mess" was all politics from the start. Weil is a big contributor to a certain candidate even today. Many of the same politicians who voted for the mess have plenty of ideas of what to vote for to fix the mess, and are receiving contributions from the same folks that benefitted from the Glass-Steagall repeal .... There is an interesting overlap in that many of the same people voted for ethanol subsidies on the basis of global warming, etc. etc.... [/quote] Amazing that this Glass-Steagall Act repeal by President Clinton has not been more newsworthy. So is it possible if this had not been repealed that the financial problems would have been much more limited in scope. Well the law of unintended consequences strikes again.
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