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Why is it that all the financial analysis did not see that calling in all these mortgages would have a devastation effect on the economy?
Did they not consult the analysis before making this drastic step or that is just another down fall and the start of what is in store for the American people. Is this the America of the feature? Is America loosing touch with reality? What is happening in America isn’t war enough a broken economy also. By the way I am not American or anti American but I can foresee the future if the government does not step in.

2007-11-11 17:11:53 · 2 answers · asked by ecarmen2020 1 in Business & Finance Other - Business & Finance

2 answers

Interesting question. I think that the financial industry knew exactly what they were getting themself into .... but they are so greedy, they didn't care. And look at what is happening now, the U.S. govt is going to come to their resuce instead of helping people with insurance or education ..... it is pretty sick to me!

2007-11-11 17:27:29 · answer #1 · answered by jhamlin15 3 · 0 0

Are you saying that the banks foreclosing is causing the problem? It was the loan that caused the problem. The loose money encouraged speculators and inflated property values, which fueled more borrowing. What goes up must come down. Consumers overspent and just took out a new home equity loan every few years.
There are stacks of articles related to the inflated value of certain real estate markets. So many analysts including govt regulators were concerned.
As for fixing the problem, this is a classic moral hazard problem. And right now most voters are not in favor of a big bailout of borrows and lenders that took high risks. And even if they were, I am not sure that would work.
Read about the savings and loan crisis. It was many, many times worse than the subprime mortgage problem and the US economy survived.

2007-11-12 01:41:07 · answer #2 · answered by Gatsby216 7 · 0 0

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