...and I felt totally alone. I felt as if I knew that there was a bomb headed toward our country--and
that I was the only one who knew about it. As I'm sure you remember--there was hardly ANYONE
who was discussing this. The prevalent attitude was--Happy Days Are Here Again and we were all
supposed to go shopping and spend our money.
I remember six years ago, when we were shopping for a home. We drove around, looking at the signs
in front of the 400,000k houses "Get in this house for $900 a month!". That alarmed me and my husband
and I discussed how this was not sustainable. Also, the banker who tried to sell us our mortgage tried
to convince me to roll my 50k student loan into the mortgage. That would have extrapolated my student
loan out to another 30 years. That was her answer to my concern about wanting to buy less house because
we were paying $1,000 monthly in student loan. She wanted me to be irresponsible, I guess. Also, the
woman who finally did our financing could not believe that we wanted a conventional, fixed-rate mortgage.
She treated us like we were ignorant fools for not getting an ARM or an interest-only loan or as she said, "taking
advantage of these modern finance opportunities" that would drastically lower our monthly payment.
When we insisted on the conventional, fixed--she was literally flustered. She had no idea how to process a loan
like that and had to search for paperwork. I'm not kidding. From the bankers, to the realtors to the mortgage
brokers--they were professionals whom we trusted and they were selling this garbage.
I felt the broker's office as white as a sheet. I knew then--in 2005, that the entire thing would come crashing down.
I didn't even get how bad it was. My main concern was how people were spending with credit cards and also
using their homes as ATMs. I felt that this behavior wasn't sustainable and that the cards would soon be maxxed, which
would drastically decrease consumer spending and cause aggregate demand for everything to decrease. The
housing situation seemed to be just one more thing to be concerned about.
Now we know--it was a huge bubble. I saw it--somewhat. You definitely saw it. I get irritated when people act
as if the bankers are just silly idiots who accidentally destroyed the housing market. They knew damn well that
all of those mortgages and the financing--were bunk and would not pass the test of time. They NEEDED those
mortgages to create bundles of mortgage-backed securities that were sold on the secondary markets--and made
them trillions. Those mortgages were their golden ticket. It was all orchestrated and they obviously worked
it out with our politicians--that bailouts would happen.
I wonder what they're planning now?
= new reply since forum marked as read