Who is more to blame for the Late Great Housing Bubble
A) Smart People
B) Stupid People
August 09, 2007
HousingPANIC Stupid Question of the Day
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57 comments:
Smart people who reamed the stupid people. People will always be willing to do stupid stuff. Normally, people won't have enablers like the fed and non-existant lending standards to enable them to do stupid things.
Just had to get my nightly FIRST!!
I really think it was the stupid people.
Stupid people who thought they were smart aka Wall Street MBA's with their financial models
If you believe in the government. Brokers should be in jail for the slight of hand they put together.
If you believe people with money were smart investors. They wouldn't have provided the capitol.
If you believe buyers thought about long term debt management they wouldn't have purchased homes they couldn't afford.
Unfortunately everything you believe in is false.
The government could care less about putting brokers in jail.
Investors are stupid
Buyers don't think beyond next weeks electric bill.
Well, hooter, we can't sell them too short - at least they were "smart" enough to take it offshore!!
Right-wingers = stupid people, of course
Stupid people that thought a college degree was synonymous with an education.
Drink Lots of beer.
Graduate with a 2.0 GPA.
Get a 30k/year job.
Buy a 500k house.
Yup...rrrreaaaal smart.
give em all lego sets
Smart people: Wall Street hucksters who created "The Great Securitization Machine" which allowed transfer of risk to bagholders)
Stupid people: Pension funds, mutual funds, money market funds, foreign central banks who bought the MBS/CDOs from the Smart People above.
Smart People: Fannie and Freddie, who helped perpetuate the mortgage bubble using their government-implied guarantees.
Stupid People: Homedebting sheeple who thought that signing off on a suicide loan would make them rich, RICH I tell you!!!
Smart People: Mortgage brokers who made billions of dollars piling sheeple into suicide loans.
Stupid People: Regulators who were asleep at the wheel and not watching the Smart (but corrupt) people.
Smart People: Keith and HP posters who were watching all this happen, but were basically powerless to stop it.
bush
Is Greenspan smart or stupid?
Even the Titanic had lifeboats...
In this mess, there's the familiar refrain "We've halted redemptions from our funds because they have no value."
Who says the rich have nothing to worry about????????????????
3 more funds blowed up!
lay the blame on both the stupid people who just don't know any better and the smart people who do know better but took the quick money instead.
these groups needed each other (as they always do) to do something catastrophically dumb. this is right up there with let's go to war in 1914.
my concern now is that we will have excessively strict rules because of the stupid and corrupt.
2 sets of stupid people:
1. Anyone who bought in 2005,2006 or 2007.
2. Anyone who rented 2001-2005
I owned 2001-2006. I sold in Jan '06 and have been renting since with an astronomical amount of house profit sitting in the bank ever since. That was the smart thing to do.
Those of you who fall into #2, stop patting yourselves on the back. You missed out on a once in a lifetime opportunity to make money. You are as stupid as those in #1.
Fund-implode-o-meter is going on TILT today.
I'm sick and tired of hearing about "people who didn't know any better". You are perpetuating the victim mentality here. When I started looking around for a home to buy I didn't know anything about mortgages, LTVs, ARMs, etc. I knew vaguely about a tax deduction and aside from that had no clue.
You know what I did? I did some research. I spent a few hours reading up online about how a mortgage works. How much should I borrow given my income. Should I pay points or not? What is the difference between the interest rate and APR? I'm no financial genius, I have no formal training in finance. It was pretty simple once I read read up on the stuff. You don't need an MBA to be a well informed consumer. And when I did buy a house I made sure I wasn't getting ripped off. I knew exactly what I was doing and what documents I was signing. I also shopped around and didn't jump at the first swindler I met who tried to get me into a 6 month ARM.
95% of people who "didn't know what they were doing" could have spent a Saturday online learning what do do like I did. I have no sympathy for them whatsoever. .
People will spend weeks and months researching a car they want. They will go to 5 dealers and negotiate for a week to save $250 off the price of a car. Yet these same people will pay $7500 in closing costs for a mortgage without blinking an eye and sign papers for a $500,000 loan without asking any questions. I'm not going to feel sorry for them.
It wasn't stupidity it was laziness.
Smart people who gave stupid people money.
"there's a sucker born every minute" and organizations like NAR know it and have fun playing their games so I'd say "neither," everyone is just part of a game.
Stupidity is the quality or condition of being stupid, or lacking intelligence, as opposed to being merely ignorant or uneducated. This quality can be attributed to both an individual or a person's actions, words or beliefs. The term can thus also refer to poor use of judgment, or insensitivity to nuances in a person who is otherwise intelligent. The determination of who is stupid is relatively difficult, despite attempts to measure intelligence (and thus stupidity) such as IQ tests.
----
Pretty much describes Americans to the "T".
Greedy people!
greedy people
For the person who answered "Bush".
I assume that's a vote for the stupid people?
Ya have to blame the smart people. I mean how can you blame sheeple? It's like blaming sheep for grazing or cows for farting.
I blame women. We give 'em the right to vote, to work, (and abandon their kids) and even run this country, and what do we get, the biggest nesting mania/ponzi scheme ever created!
How many of you men-sheeple out there said Stop! we don't need to double the size of our debt 'cuz Martha's got a whole new line of houses based on her blah,blah, blah..... and lost. Face it, we did what the bitches told us and here we are.
Women smart.
Men stupid (and weak)
Welcome to the Hell that is American consumo-feminism.
left wingers = idiots with entitlement expectations of course
Smart people being stupid, stupid people being stupid.
That's a good question, but I don't think it has a good answer. If the problem is defined as people poorly valuing assets, a common reason is greed or a tendency towards gambling addictions. This is the situation I would expect for people who have overpaid on investment property.
When it comes to overpaying for a personal residence, I would expect most people who overpaid were:
- Browbeat into by a spouse.
- Lazy about understanding their mortgage.
- Overly concerned about how other people perceive them.
Lazyness, greed, vanity, and cowardice are common in both the stupid and the smart.
Wall Street isn't so smart because they are taking a reaming and insiders are the biggest individual holders.
Stupid people are the ones on the West Coast, Florida and Northeast who ran up prices with suicide loans.
This is an interesting question. I say they both were equally to blame, but the stupid people will get hurt more than the smart. (Gee, that sounds a little obvious)
Stupid - People who don't know history
Smart - People who take advantage of people who don't know history
CHENEY and ROVE BUSH JUST WANTS TO PLAY COWBOY AND BE TALL WITH THE 2 INCH LIFTS IN HIS BOOTS.
Since this has an impact on a lot of people.. and there are not that many smart people left.. i would say the stupid people get the award
It's like asking "which came first the chicken or the egg?" There is no answer. It took the smart people and the stupid people. It all wouldn't have happened without either group.
It's GREEDY PEOPLE who caused this problem, with a high dose of selfishness and vanity.
dopes.
Smart or stupid is irrelevant, it was caused by many people who were too smart for their own damn good.
The cognative dissonance over on swann's blog is getting pretty intense.
There are people there saying that since loan standards are moving back to the 2002 era another big price runup is in the offing since that was a great year. Its hilarious, infuriating and sad all at once...
You blame both sets of people, but I place more blame on the smart people.
Stupid people are, well, stupid! Our system should have checks and balances residing within it to compensate for the stupidity of people. That was how the lending industry used to function. But it was the "smart" people that adjusted that function. Liar loans. Stated income. No money down. Low interest rates. Etc. They exacerbated the problem.
Now one caveat to that is that many "smart" people acted very stupidly. That is the problem with the sheeple mentality. Even the intelligent become ignorant. I have friends who are educated and allegedly intelligent, yet they are proud owners of interest only loans.
Which is why, in general, I blame the "smart". But remember, being smart does not always mean one will act intelligently.
This bubble was the war of stupid people against smart people. Smart people know you have to work and produce to create wealth, while stupid people stick their head up their ass and listen to the echoes from screaming "I DESERVE IT!"
Unfortunately some of the smart people turned traitor and decided to encourage the stupid people in their illusions of effortless wealth.
The honest smart people, now disillusioned and embittered, will lead the fleeced stupid masses out into the streets with torches and pitchforks a la 1930s Germany.
Smart people i.e. Wall Street. Stupid and poor people really have no say or control over their destiny in this society.
Having said that, the people that created this problem have already made bank. Even if Bear Stearns goes under, can you take away the employees' seven figure bonuses from the last few years? I am sure they can get another obnoxiously paying job with their Harvard MBA's. Whereas the stupid and the poor will continue to be stupid and poor. Who said life was fair?
Hey I noticed our ol' pal DOPES isn't around today.
I note also that when the market tanks he's silent... our other friend Jimmy the Cramer said on thestreet.com that these volatile jumps up in the market are short squeezes and that we should expect to see more of them before The Big Slide.
And that means we'll see DOPES a few more times, right on schedule.
My guess is that it was both. First you had the smart people moving in when things were rosy (2000-2003), than the stupid people who always get hammered when the smarties are pulling out.
Too late suckers.
Danny
http://www.housingtsunami.com
All of the above ~ The Brokers?
No No NO...we sell within the guidelines set by the Lenders........nothing happens without an Underwriter???
Failure goes back to basic mistakes......not any one sector of the 8 people that sign off on conditions required for an approval to Lend/Fund??
Again "The Brokers...No NO NO...
We will recover....we will..
Holly
TruFund
Any one with no common sence. Who out there would lend their own 500k to a 20 year old stated income borrower at 100% with no proof of income?? No one that I know.
Stupid overpaying idiots and the corrupt dicks that gave them the loans to begin with.
Thanks Butch-good to see your posts
Man, I hope Cramer's producer has the morphine and the Prozac ready...
Smart People-Men ,and Women who carry their own paper,and don't use banks except for keeping a little money in checking.
Stupid-Citizens who have been conditioned to think that brokers were their friends.
Believie it or not, the subprime problem really is contained. It is not expected to spread beyond planet Earth.
Hillary Clinton urges expansion of Fannie Mae and Freddie Mac. She also said the caps should be lifted and Dems are calling on them to stabilize the mortgage market.
WHO THE HELL CAN YOU VOTE FOR? I hate picking the least of 2 evils. They are both evil!
“It’s like popcorn in a kettle,” said James Melcher, president of Balestra Capital, a hedge fund based in New York. “First you have one or two pops, then it turns into a cacophony.”
http://www.nytimes.com/2007/08/09/business/09cnd-stox.html?_r=1&hp&oref=slogin
When the recession/ depression/ whatever is all through shaking out, their roles will appear to have reversed.
Just you watch!
Left Wingers = blame Bush for everything = idiots = stupid people = no sense of reality = DOPES = liberalism is for people with no sense of reality = left wingers
Hilary will destroy this country!!
Just like Bush/Cheney/Rove have done,we need a third party,and public fianancing of all elections.
Hey Moderate Joe
Hillary is probably too late to destroy this country. Looks like Bush & Co. will finish the job before she's even given a chance.
Vote Ron Paul!
"I see debt people"!
Ahhh, the American entrepreneurial spirit:
"US seeks culprits for subprime
(FT) At the height of the US subprime lending boom, taking out a mortgage could not have been easier. Low credit score and history of bankruptcy? No problem. Income too low to qualify for a mortgage? Inflate what you earn on a “stated income” loan. Nervous that your lender might check up on your “stated income”? Visit www.verifyemployment.net.
For a $55 fee, the operators of this small California company will help you get a loan by employing you as an “independent contractor”. They provide payslips as “proof” of income and, for an additional $25, they also man the telephones to give you a glowing reference should your lender need it."
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