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I agree with all of your points. Maybe the figure was greater than 8% for the price drop -- there is some percentage that represents the worst case that was ty
by grandalf 15y ago
I agree with all of your points. Maybe the figure was greater than 8% for the price drop -- there is some percentage that represents the worst case that was typically considered in all the contracts.
I realize many foresaw the crisis. My main point is that we had a government program to keep housing prices high/rising, which led to much of the perception that the risk of a housing price drop was low. When considering who is to blame, we should blame our government at least as much as the financial executives.
- ajkessler 15y agoMinor correction: it's not that we "had" a government program... we "have": FHA is still handing out 3.5% down loans to people with 580 FICO scores. It's like 2008 never even happened. People actually sued about this last year: http://www.washingtonpost.com/wp-dyn/content/article/2010/12/03/AR2010120302784.html http://www.washingtonpost.com/wp-dyn/content/article/2010/12...
- grandalf 15y agoQuite true. Arguably though, the programs are part of the overall short/medium term "solution" for the crash. Yet nobody seems concerned that the same thing could happen again.