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You're right. I rather meant to say "people were manipulated into buying...". It's always the same, people don't understand because they lack education and some

You're right. I rather meant to say "people were manipulated into buying...". It's always the same, people don't understand because they lack education and some rich guy will take advantage of that. The movie "The Big Short" [0] sums it all up very well. [0] http://www.imdb.com/title/tt1596363 http://www.imdb.com/title/tt1596363

valuearb 9y ago
No one was manipulated. Everyone was greedy. They read the news, they knew what the houses down the street sold for a few years before. They all thought they'd get rich flipping houses. Loan officers just facilitated what their customers already wanted.
- johnminter 9y ago
  You have missed an important point. Those loan officers were paid a fee for the service and their institution sold off the loans that were derivatized. The patsy was down the line. They all got paid... Go back and review the news that came out. "The Big Short" is a decent summary. The trading manager at Bear Stearns who bought the derivatives got to walk out and keep his big bonuses. The share holders ate it. The rating institutions were complicit too - they knew the products were crap but knew the customers (lending institutions) would go to another one and so wrote the bogus ratings. See the players in the game got paid. The snooks got screwed. Bill Black, who prosecuted the Savings and Loan Crisis, and sent many fraudsters to jail reviewed the 2008 crash and was incensed at the lack of prosecution. The consumers saw what they wanted to see. Very few consumers perfomed due diligence. The old proverb tends to be true: "If something seens to be too good to be true... It probably is." Fraudsters have taken advantage of the gullible throughout human history. Our generation has no excuse: we have unparalleled access to information and most are too lazy to put the effort in to check these things out our to hire competent counsel who work for us not the seller. How many parents and students understand the debt they take on for college and the expected ROI???
  - valuearb 9y ago
    i understand how collateralization works, i used to invest in tranches. You are confusing the fact that MBS buyers didn't do their homework, with the fact that home buyers were greedy specifically because MBS financing enabled them to be.
Trundle 9y ago
I'm surprised that you say that while referencing The Big Short because I thought it made it pretty clear that the people selling houses lacked education as well. There was the whole thing where the guy sees dudebros selling houses to strippers and was all "oh no its all true". I think one of the dudebros even said something like "I was working at the car wash two years ago and now I have a boat". Everyone else not knowing what was going on was the uniting theme of the main characters.

valuearb 9y ago

No one was manipulated. Everyone was greedy. They read the news, they knew what the houses down the street sold for a few years before. They all thought they'd get rich flipping houses. Loan officers just facilitated what their customers already wanted.

johnminter 9y ago
You have missed an important point. Those loan officers were paid a fee for the service and their institution sold off the loans that were derivatized. The patsy was down the line. They all got paid... Go back and review the news that came out. "The Big Short" is a decent summary. The trading manager at Bear Stearns who bought the derivatives got to walk out and keep his big bonuses. The share holders ate it. The rating institutions were complicit too - they knew the products were crap but knew the customers (lending institutions) would go to another one and so wrote the bogus ratings. See the players in the game got paid. The snooks got screwed. Bill Black, who prosecuted the Savings and Loan Crisis, and sent many fraudsters to jail reviewed the 2008 crash and was incensed at the lack of prosecution. The consumers saw what they wanted to see. Very few consumers perfomed due diligence. The old proverb tends to be true: "If something seens to be too good to be true... It probably is." Fraudsters have taken advantage of the gullible throughout human history. Our generation has no excuse: we have unparalleled access to information and most are too lazy to put the effort in to check these things out our to hire competent counsel who work for us not the seller. How many parents and students understand the debt they take on for college and the expected ROI???
- valuearb 9y ago
  i understand how collateralization works, i used to invest in tranches. You are confusing the fact that MBS buyers didn't do their homework, with the fact that home buyers were greedy specifically because MBS financing enabled them to be.

Trundle 9y ago

I'm surprised that you say that while referencing The Big Short because I thought it made it pretty clear that the people selling houses lacked education as well. There was the whole thing where the guy sees dudebros selling houses to strippers and was all "oh no its all true". I think one of the dudebros even said something like "I was working at the car wash two years ago and now I have a boat". Everyone else not knowing what was going on was the uniting theme of the main characters.