4 ms·

Sorry, I don't want to explain the financial crisis to you but in short it was something like this: The financial system broke down, banks either went bankrupt

Sorry, I don't want to explain the financial crisis to you but in short it was something like this: The financial system broke down, banks either went bankrupt or had to be rescued by tax payer money. As a result of the financial crisis many people lost their homes. Maybe that was too complex for you to understand the connection and you still trust your bank. That's OK for you, it's your choice. Still many people don't trust banks anymore with good reason.

deleted 17y ago
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ptomato 17y ago
How idiotic can you be? "As a result of the financial crisis many people lost their homes." People lost their homes because they couldn't pay the mortgage. They couldn't pay the mortgage because they didn't have the money to pay the mortgage. The banks went bankrupt because they gave mortgages to too many people that couldn't pay them.
- deleted 17y ago
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- electromagnetic 17y ago
  Some people did get caught in the cross-fire, but that's because they bought into variable rate mortgages, which are just stupid. I don't have a variable rate on a credit card even though I never go into debt, so why would I want it on a $200,000 up-front debt?
- anamax 17y ago
  While it's correct that a mortage note holder (bank, pension fund, etc) going bankrupt doesn't cause the folks on the other end of said note to lose their homes, renters can be forced out when the home owner defaults.
- onreact-com 17y ago
  "How idiotic can you be?" "When disagreeing, please reply to the argument instead of calling names. E.g. "That is an idiotic thing to say; 1 + 1 is 2, not 3" can be shortened to "1 + 1 is 2, not 3."" http://ycombinator.com/newsguidelines.html http://ycombinator.com/newsguidelines.html
  - tptacek 17y ago
    Let me try to respond more appropriately: "Nothing you said about mortgages appears to be true".
    - onreact-com 17y ago
      I didn't say ANYTHING about "mortgages". I was referring to the financial crisis as a whole. Please mind what I said not what you thought I have said. According to your financial crisis definition "People lost their homes because they couldn't pay the mortgage." you might as well say that it rains because water comes down from the sky.
- onreact-com 17y ago
  Please read this for some basic understanding my dear non-"idiotic" friend: "The root cause for the current crisis seems to be the excessive use of leverage. To take an example, a company with a net worth of US$ 25 billion borrowed 26 times its net worth and creates leveraged funds of US$ 650 billion to invest or lend them. When a small portion of the company's investments turns bad, as is the norm for the industry, the company's capital is under threat. To put things in perspective a 3.8 percent misjudgment in their books was enough to wipe out their shareholders' capital of $ US 25 billion." http://economictimes.indiatimes.com/Features/Financial-Times/What-caused-the-financial-crisis-/articleshow/3561424.cms http://economictimes.indiatimes.com/Features/Financial-Times...
  - jerf 17y ago
    Your attempt to look knowledgeable would be much more effective if your conversation had any sort of coherence to it. Does that link address how a bank going out of business forces you to lose your home if you have a mortgage with that bank? (Presumably not, since it's not true.) You may have forgotten the beginning here, but it looks like the rest of us haven't.
    - onreact-com 17y ago
      You, in contrast don't even "look knowledgeable". You're just rude. I've found a link for you with just one Google search, which refers to cases like that. Even worse these banks don't even need to go bust to force you out of your home. I know, it's easier to troll than to research yourself: http://www.npr.org/templates/story/story.php?storyId=112660935 http://www.npr.org/templates/story/story.php?storyId=1126609... Keep on trusting your bank if you feel like it but don't try to deny the general sentiment of large portions of the population.
FahnRobier 17y ago
You don't lose your home if the bank goes out of business. Mortgage holdings are sold off as assets as part of the bankruptcy settlement. The ownership of the underlying mortgage changes, not the ownership of the home.

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ptomato 17y ago

How idiotic can you be? "As a result of the financial crisis many people lost their homes." People lost their homes because they couldn't pay the mortgage. They couldn't pay the mortgage because they didn't have the money to pay the mortgage. The banks went bankrupt because they gave mortgages to too many people that couldn't pay them.

deleted 17y ago
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electromagnetic 17y ago
Some people did get caught in the cross-fire, but that's because they bought into variable rate mortgages, which are just stupid. I don't have a variable rate on a credit card even though I never go into debt, so why would I want it on a $200,000 up-front debt?
anamax 17y ago
While it's correct that a mortage note holder (bank, pension fund, etc) going bankrupt doesn't cause the folks on the other end of said note to lose their homes, renters can be forced out when the home owner defaults.
onreact-com 17y ago
"How idiotic can you be?" "When disagreeing, please reply to the argument instead of calling names. E.g. "That is an idiotic thing to say; 1 + 1 is 2, not 3" can be shortened to "1 + 1 is 2, not 3."" http://ycombinator.com/newsguidelines.html http://ycombinator.com/newsguidelines.html
- tptacek 17y ago
  Let me try to respond more appropriately: "Nothing you said about mortgages appears to be true".
  - onreact-com 17y ago
    I didn't say ANYTHING about "mortgages". I was referring to the financial crisis as a whole. Please mind what I said not what you thought I have said. According to your financial crisis definition "People lost their homes because they couldn't pay the mortgage." you might as well say that it rains because water comes down from the sky.
onreact-com 17y ago
Please read this for some basic understanding my dear non-"idiotic" friend: "The root cause for the current crisis seems to be the excessive use of leverage. To take an example, a company with a net worth of US$ 25 billion borrowed 26 times its net worth and creates leveraged funds of US$ 650 billion to invest or lend them. When a small portion of the company's investments turns bad, as is the norm for the industry, the company's capital is under threat. To put things in perspective a 3.8 percent misjudgment in their books was enough to wipe out their shareholders' capital of $ US 25 billion." http://economictimes.indiatimes.com/Features/Financial-Times/What-caused-the-financial-crisis-/articleshow/3561424.cms http://economictimes.indiatimes.com/Features/Financial-Times...
- jerf 17y ago
  Your attempt to look knowledgeable would be much more effective if your conversation had any sort of coherence to it. Does that link address how a bank going out of business forces you to lose your home if you have a mortgage with that bank? (Presumably not, since it's not true.) You may have forgotten the beginning here, but it looks like the rest of us haven't.
  - onreact-com 17y ago
    You, in contrast don't even "look knowledgeable". You're just rude. I've found a link for you with just one Google search, which refers to cases like that. Even worse these banks don't even need to go bust to force you out of your home. I know, it's easier to troll than to research yourself: http://www.npr.org/templates/story/story.php?storyId=112660935 http://www.npr.org/templates/story/story.php?storyId=1126609... Keep on trusting your bank if you feel like it but don't try to deny the general sentiment of large portions of the population.

FahnRobier 17y ago

You don't lose your home if the bank goes out of business. Mortgage holdings are sold off as assets as part of the bankruptcy settlement. The ownership of the underlying mortgage changes, not the ownership of the home.