It’s hard to believe people bought homes and also were able to take more money out and buy new cars, boats, and shop for furniture. Are you seeing the costs in your life still? That gives us hope because we learned more about how the economy works and became smarter about managing it. Home prices fell at the same time interest rates reset. Dow Jones Industrials fell as much as 700 points in midday trading.U.S. Have a read at my site. Poor use of credit, however, can be catastrophic, which is what we are on the verge of seeing now. Japan is being harder hit by the recession than the U.S. but Japan's decline in real GDP started before the U.S. economy entered the recession. And I think we see this rebounded in all aspects of our life, not just with credit.The teaser rates and HELOC really impacted some of our friends and made it easy to buy a large house with no money down. Without that knowledge, we would be in much worse shape today. Now, dispite the cost of the cure, government will be unable to fix the problem otherwise. Banks therefore have to limit what they give out and this would lead to stability. These interest-only loans were offered to subprime, high-risk borrowers who were most likely to default on a loan. It will weaken citizens’ balance sheets by $700B, and will put this money in places where it actually has no benefit.Regardless of the heresy involved, the unsuccessful banks need to die. the truth is globalization hasn’t caused any havoc in USA as it has in many countries particularly African countries. Because the gov’t should control this economy issue AND the banks should not be lending out money when they see that people are not going to be able to pay them back.Listen in their own words……..Youtube “How the Democrats caused the Financial Crisis”……and yes, Republicans too, Phil Graham was a Republican who helped Lawrence Summers (Clinton Treasury Secretary–Obama Financial advisor) overturn parts of the Glass Steagall Act which kept parts of financial sectors from commingling…..which if the mortgage sector failed, at least the insurance and securities would be safe…if the insurance sector went, at least the mortgage and securities would be safe..if the securities sector went bad, at least the mortgage and insurance would be safe….but all the walls were torn down..parts of the Glass Steagall act that kept financial sectors apart were repealed, passing Congress with a Republican majority and signed into law by Clinton (google New York Times Clinton Signs Legislation Overhauling Banking Laws–New York). Average home sizes have nearly doubled in thirty years. Thinking a company is “US” gives it some quality of patriotism that companies do not have. The Fed is doing it by spending money to purchase mortgage backed securities and bonds. We do not need them, they could not manage themselves, and they will not help us to recover from this.Thanks for the comment, my final year project is on “THE ECONOMIC EFFECTS OF THE RECENT FINANCIAL CRISIS: A CASE STUDY OF THE USA” I will like to know your view on that. Although a stock market crash can cause a recession, in this case, it had already begun. U.S. Department of Housing and Urban Development Office of Policy Development and Research. " By August, foreclosures kept mounting, dimming hopes of an economic recovery. The bottom line? (It did not account for the inflation in housing (15-20% per year), fuels (30-50% per year), and used distorted measures for other inflation rates.Second, this made bankers wildly successful, as banks could take Fed loans at 1% interest and loan those funds to mortgagors at 6%; promptly thereafter selling the loans, and lend to credit card debtors at up to 18% interest (that’s why there was a new credit card in the mail every week).Third, it created the hedge fund industry, where 10:1 borrowed leveraged was used for commodity investments. 2773. Hopefully the markets will stabilize soon.What’s coming is that FDIC is broke and as more foreclosures happen (going way up) banks will default and what will the FDIC do?I made some poor financial decisions in the past why isn’t the government bailing out the little guy and not corporate America.When the little investor finally figures it out that the government will choose the “too big to fail” over the small investor (look at Corzine and MF global–they took the smaller investors money to pay off the big investors)….if they can do that with the help of the FED, your money is not safe in the market…and when more people figure this out….things will get dicey.Too many people got sucked in by the promise of an easy life built on rising home values and easy access to credit.

The number of home owners who suddenly found themselves Another consideration is the drop in wage income. This article may contain links from our advertisers. Posted by Ryan Guina Last updated on April 4, 2019 | Money Management Advertiser Disclosure: Opinions, reviews, analyses & recommendations are the author’s alone. These problems have been well over a decade in the making.Ron from The Wisdom Journal recently wrote about the legislators were bought and sold by money from Fannie Mae and Freddie Mac. Capitalism takes care of itself, and those who act criminally within our system need to be brought to justice.Let us not forget alot of lenders/banks did not want to work out negotiations with the borrows, the manipulated situations and banking documents to make some home owners get evicted, so the bank owned homes could be sold immediately so the investors could make what ever money they could immediately.

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