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Originally Posted by Sea Demon
I would only like to add that we do need to search for the cause only to learn from it. People need to take responsibility for themselves, and push for accountability for all.
And it looks like you may be on your way to Skybird's sh**list as well.
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Definitely agree there. We need to get to the root cause and prevent it from happening again. If we find any scapegoats, we'll send them to a country club prison for white collar crime. The real people responsible are too smart to get caught anyway.
I'm not an expert, but from my chair it looks fairly simple.
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Joe the worker buys a house for $400,000.
Bank loans Joe $400,000.
Bank now reports asset of $400,000.
Housing bubble pops.
House is now worth $200,000.
Joe the worker stops making payments.
Even after the foreclosure, bank now only has $200,000 asset to cover $400,000 loss in loan.
Multiply that by a few million times......
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Of course it's more complicated than that. That $400,000 asset in a fractional reserve system created more
money out of thin air. So when Joe defaulted, it wasn't only the $200,000 loss, but everything else that it created. Start factoring in credit swaps, derivatives, etc...
= chit sandwich. Of course you know in America, we had to supersize it then add bacon and cheese. Go ahead, take a bite. All of us will eventually.
I don't mind being on Skybird's chitlist. I bet at one point in time, all of us are members. Healthy debate is good, sometimes even fun. It's even more fun when you ask him a question he can't answer.
