So how did we get here?
2008: the year the U.S. (global?) financial system collapsed. How on earth did we get here?
This simple slide show explains it nicely. This has been circulating the interwebs for awhile (hat tip to TWG for sharing it with me) but it’s still brutally funny. Funny but true.
You will probably have to view in full screen mode to read it. Or click through and download as a PDF. Enjoy!
Sub Prime Explanation
View SlideShare presentation or Upload your own.
Filed under economics : Comments (4) : Sep 24th, 2008 by tadfad
September 28th, 2008 at 8:52 pm
And it all started when Clinton wanted everyone to be able to afford a house, therefore encouraged risky loans to people who couldn’t afford them, even providing incentives to the lenders for accepting these high risk individuals, the first domino
September 28th, 2008 at 8:54 pm
and yes, its misspelled on purpose
October 8th, 2008 at 12:29 pm
I think we also have to look at the Greenspan policy to create cheap money…and now with today’s prime rate cut we seem to be going back there again.
We do have to be careful about plans and policies that create home ownership for people that are not ready for ownership. While ownership is great for people in established jobs and locations, it is not for everyone, especially when you are not prepared to deal with maintenance and all the issues related to home ownership.
Then of course we have the ‘no doc’ loans that were given out without verifying any of the information on the applications….completly non-sensical. That cannot be done again.
Finally, we need people to stop looking at homes as some type of investment vehicle. They generally are a good investment in the long haul, but they cannot be viewed as ‘quick profit’ items.
October 8th, 2008 at 6:17 pm
I agree with what Uncle Ray added above. Especially the part about home ownership. For too long, it’s been an accepted truism that home ownership is “good” and we should shape public policy to encourage people to buy homes. If nothing else, I hope that the events of 2008 teaches us that maybe home ownership isn’t such a great idea for most people.
I’m a renter and I plan to rent for the foreseeable future. Could I buy a home? Sure. Would that be a good financial decision for me? No.