I am sorry, but this has been going on a lot longer than that.
I was building homes in 1985. You could get a 0 down payment, 3-1, 5-1 buydown loan, with a 30K income.
Those homes had market entry values of 250k to 500k.
The reasoning behind all these loans was quite simple: Your wages will go up, and so will the property values, allowing you to refinance 2 years out in the loan, allowing the buyer to take advantage of the increased equity.
In the early 90's this expanded thru most classes of residential property, taking advantage of emerging tech boom. Thats also when the real estate industry started to use shock marketing, telling prospective buyers that these deals and finance schemes wouldnt last, and that you had to buy NOW. This is also when corporate builders captured the market. They were able to make deals with lenders, insurers and speculators, giving them an edge in financing. This allowed them to absorb, and in many instances run out of business the community builders. It is also during this time that wall st. was figuring out a way to make even more money, and you started to see these exotic, unattached securities coming on line.
As we went through the 90's, again in order to increase profits for investors, whom wanted more from the investment, wall st. started pushing hard for the companies that they underwrote to find ways to increase the return for investors, to match the performance of the home building industry. Many started to use 3rd party employment(keeps wages low and gives 3rd party a cut in that wage) contract employment, offshoring of service obligations and a whole host of other moves that harmed the prosperity for the average person.
The last home I built is sitting empty, and even after the price cuts, there is some 50% of the price is profit needed to pay the investors. By the time we closed up, builders were cutting the pay for the contractors, many using undocumented workers to put pressure on the contracts, all of it downward, to keep pace with investor demands for more, more, more.
In the end, statrting roughly 10 years ago, the wall st. firms invented new securities, based on the residential mortgages, but wholey unattached to said mortgage. At this time, virtually every piece of residential property in this COUNTRY, is over-valued by 50%, and in some markets, far more than that.
Now the ponzi scheme is collapsing, and the people whom have bankrupted this nation want bailed out.
Of all the money made on wall st., through all the trades, a scant 2% has flowed through to the average citizen, whether by 401k, sponsered pention plans and the various other so called retirement savings ( which is what anything over your paid wage is considered), while a minority of people have taken 98% of all money on the table at any given point in time. They take theirs before anyone else.
And now they want more, so they dont have to live like everyone else. So they dont lose their hundreds of millions in profits, profits that have cost jobs and prosperity for the masses, because they've convinced virtually everybody, that their efforts are worth more than the combined efforts of the majority of citizens.
Those whom wish to own everything and everybody, have brought this nation to the brink. They say they have a plan to cure the problem, yet the cure is more of the same, consolidation of the vast majority of wealth into fewer and fewer hands.
And just so everybody knows, Paulson was at the helm of goldman when they invented these toxic securities, fraud paper, to put it simply, he profited from them, and then as he was leaving goldman, invented new toxic paper that bet against the very derivitives they were selling as solid investments to everyone.
Its all fraud, all the time. And the masses get the shit covered johnson.
