Originally Posted by
The Chow
Carl,
To add a little to the discussion. The Federal government had a huge hand in creating this bubble. In a previous life I used to sell identity and access management software to banks so they could meet GLBA regulations. Back then banks were threatened with FDIC audits if they didn't loan enough money to folks with poor credit scores. The banks were also told that it was in their best interest to buy stock in Fanny & Freddy. Having littlenchoice, the banks made those loans, and then sold them as fast as possible to F&F.
Goldman Sachs on the other hand should have some people sitting in jail for selling these derivatives all the while shorting the housing market.
Maybe we should go back to the old ways where you are either a bank or an investment firm, not both.
Totally agree here with every word.
But for the first 10 years after high school graduation, I was one of those poor sots that didn't even have a credit score because I was so broke. It was southern California in the late seventies when real estate was going straight up. I had buddies willing to "hook me up" and get in on it even though I couldn't afford it. I didn't do it. Why? Because I couldn't afford it unless my income never went backwards. All my old buds went broke in the 80's when socal real estate went bust.
The moral of this ever repeating story is simple. If you can't afford it, don't buy it. If you buy it anyway, it's your own damn fault. There will always be financial instruments available to give you the dreams you can't afford. If you fall for it, it's your fault.
Carl