09
Oct
08

On air: Financial crisis….who is to blame?

It goes on and on, but it’s all that you’re talking about. Money and the global financial crisis. Governments around the world are taking drastic measures to get money moving again and get banks lending, but who is to blame?

* Are we too greedy, buying home we couldn’t afford, getting loans we couldn’t repay?

* Were the bankers too greedy, playing with money and taking too many risks to try to gain personal reward?

* Was a lack of regulation to blame? Allowing people to manipulate the system?

Do we need someone to blame, to make us feel better?

Here are some views…….

The blame game begins, It’s our fault, Irresponsible bosses should face court, Who is to blame?
If you’ve been affected directly by the crisis or want to take part in the show today – post below


116 Responses to “On air: Financial crisis….who is to blame?”


  1. 1 GretchenDawntreader
    October 9, 2008 at 13:49

    Well, you have to ask yourself…which party and which associated political inclination has always favored making the rich richer so that prosperity will trickle down on the rest of us like some divine golden shower….

    And if you think long and hard, you will have your answer.

    (for those of you not in the US the operative terms are Republicans and conservatism.)

    Since the rich on Wall Street were freed from regulation so they could become as rich as possible, and the only thing that trickled down to the rest of us was a 700 Billion USD (so far) price tag. Oh, and they just about screwed up the rest of the world’s markets in the bargain.

    So….thanks, Wall Street! Looking forward to November!

  2. 2 Robert
    October 9, 2008 at 14:03

    Unlike other banking scandals of recent history there is no one group to blame for this. The average joe wanted loans to buy things now instead of saving. Banks were thoughtless in devising more and more complex arrangements for greater profits. Governments naively assumed the corporations could regulate themselves by the natural selection of the market place.

    Until last year everybody collectively shared in the profits of the bubble, whether having all the materials goods we wanted, higher profits or increased taxes. Now it is time to take the collective blame for the mess, and look at what our individual responsibility is.

  3. 3 selena in Canada
    October 9, 2008 at 14:13

    It seems to me that conservative politics is to blame. Ronald Reagan and Margaret Thatcher embraced Supply-side economics and deregulation. That lead to loss of good paying jobs because already profitable companies, lusting after more profits, shut up shop and moved production where labour was cheaper.

    They really believed and still believe (McCain, Harper) that lower taxes for the rich will produce jobs. The rich after all, are entrepreneurs. What they don’t seem to realize is the rich will do anything to become more rich and they do it by making the poor suffer. The end result is low paying jobs and less jobs in the developed countries.

    We have heard it said many times that greed is to blame but that greed is always attributed to the poor. Well, that is what the super-rich has encouraged us to believe and we are willing pupils. The truth is we are in a mess because of greed but not the greed of the poor. The greed of the rich has brought us to where we are today.

    We need change, that’s for sure. But neither McCain nor Obama nor Harper will deliver what is required. This crisis needs a complete change from the ground up.

  4. October 9, 2008 at 14:16

    Most everyone is to blame. Plain and simple… The government, the corporations, the masses. Most everyone was driven by some form of greed, and now look what we all get.

    Of course, yes we want to console the population who is living outside of their means, claiming “oh yes, you are so innocent, you were tricked into loans and mortgages by those evil, evil companies; It’s not your fault you can’t pay your own debts… Claim bankruptcy or walk away, its that easy, you poor innocent soul”

    But with so many to blame, its easy to pass it around so as to avoid blame yourself (whoever you are).

  5. 5 David Goddard
    October 9, 2008 at 14:28

    Labour came to power in 1997 and launched the Financial Services Authority to regulate the market. Gordon Brown was Chancellor for ten years during an era of cheap money and people borrowed more than they could afford creating a property boom. Bankers packed up toxic mortgage debt and sold it on. When interest rates went up people could not pay their mortgages and the property bubble burst. The housing market is now falling at its fastest rate ever and the banks are bankrupt. The FSA have fallen asleep on the job.

    Who caused the credit crunch? The government.

  6. 6 Robert
    October 9, 2008 at 14:35

    David

    Did the government force people to borrow more than they could afford?

    Were the banks that brought the sold on toxic loans held at gun point by Gordon Brown to do so?

    The government had a role, that is very true, but a lot of other people are involved in bring the system to its knees as well.

  7. October 9, 2008 at 14:38

    There is plenty of blame to go around. It has been years in the making. Some things speed it along. The posture of the bush administration has set it ablaze. The “ownership society” policies push Fanny and Freddie into more and more risky practices. Encouraging people to “spend their way out of a recession.” didn’t help. Sending people a bunch of money and telling them to spend it and not save it certainly didn’t do any good either. I fear that the bail out will send us further down the path of self destruction.

    The lenders have a hand. No matter what pressures, looking at the proven history of what kind of people don’t default on their loans and standing by those policies should have been the common practice. But everybody was getting rich off the Ponzi Scheme. Nobody claims foul when everybody is getting a piece. The credit card companies are equally to share in this portion of the blame.

    Last there was the consumers. Through ignorance or incompetence, we have become a society with a negative savings rate. No system will sustain that. not understanding the you have to make more money then you spend should be common sense.

  8. 8 Julie P
    October 9, 2008 at 14:39

    Bad, no planning, and living in the moment is to blame.

  9. 9 John in Salem
    October 9, 2008 at 14:43

    One single statistic sums up the whole story ~
    The average American family has an $8,000 credit card debt.
    We all knew better and we all did it anyway.

  10. 10 selena in Canada
    October 9, 2008 at 14:43

    @Brett

    Why do we insist on blaming people who work hard for a pittance and just want to live a reasonably good life? We only have one life to live! 🙂

    Living beyond one’s means was simply a redistribution of wealth that the rich would not allow unless they were more than fully compensated.

    The governments? Aren’t they simply pawns?

  11. October 9, 2008 at 14:48

    @ Selena:
    Why do we insist on blaming people who work hard for a pittance and just want to live a reasonably good life? We only have one life to live!

    Not everyone works hard though, or is responsible with their earnings or lacktherof.

    Living beyond one’s means was simply a redistribution of wealth that the rich would not allow unless they were more than fully compensated.

    Agreed 🙂

  12. 12 Roy, Washington DC
    October 9, 2008 at 14:51

    Both banks and borrowers are responsible for this. Banks should have realized that lending a large amount of money to someone without a good credit history isn’t the smartest thing to do, and borrowers should have realized that buying things they can’t afford is also a bad idea.

    There’s also the lack of personal responsibility that is becoming prevalent in today’s world. Government bailouts show both sides that if they act irresponsibly, it’s no big deal; the taxpayer will get them out of the mess they’re in. Perhaps if we weren’t so eager to give $700 billion in government handouts to those who have been irresponsible with credit, people would think twice about their financial actions.

    @ Gretchen

    I used to be an Obama supporter, in part because the point you mentioned is one of the things he has specifically mentioned in his campaign ads. But guess which way he voted on the bailout? (Hint: He didn’t vote against it). Actions speak louder than words, and by voting for the bailout, Obama has shown which side he truly supports.

  13. 13 Kelsie in Houston
    October 9, 2008 at 15:00

    There is a kind of synergy, I think, between borrowers who knowingly took fiscal risks they could not handle (i.e. enormous credit card debt; unrealistic real estate purchases) and the lenders who–whether through predatory lending practices or deceptive marketing–duped a sizable number of those borrowers into taking on such risks in the first place.

    At this stage, it is probably impossible to divide the interrelationships in the global financial system sufficiently to allow a “satisfying” conclusion for the ‘blame game.’

  14. 14 Peter Gizzi UK
    October 9, 2008 at 15:00

    I agree with all the above comments. Add to that most people want “everything” now and easy loans allow that to happen. Keeping up with “The Jones” instead of making do.

    When Gordon Brown was Chancellor of The Exchequer he sold our gold, but we are told we should save! What a hypocrite! What has he used as collatoral for the enormous loan he has just taken out? Who has he borrowed from? Is he just printing money?

    Finally for years I have considered the “markets” including property to be grossly overvalued. If simple old me can see that why was nothing done sooner? It was obvious the bigger the bubble got the bigger the bang when it burst. As always it is us the tax payer who have to pay. Recently low paid workers in The UK saw their taxes rise while high paid workers including MPs saw their taxes go down!

    Should there now be an upper limit on wages? I think so but our plastic puppet politicians will sit back and let these over paid thieves take tax payers money instead of setting an example by themselves taking a pay cut!

  15. 15 selena in Canada
    October 9, 2008 at 15:10

    @Brett

    Not every one works hard though, or is responsible with their earnings or lack therof.

    I saw one story on CNN about a waitress who got a loan to buy a modest trailer. She worked 10 hours a day to meet the payments and look after her children.

    The people caught up in this crisis are more likely of her ilk than the people who don’t try.

    If you work 10 hours a day, shouldn’t you reasonably expect to be able to own a house and feed your children adequately?

  16. October 9, 2008 at 15:19

    The usual liberal talk, the rich getting richer and trickle down economy and blame every one but yourself. There is nothing wrong with geting rich and getting richer. The rich people are the ones who provide jobs, who keeps the economy alive.
    I blame Barney Frank, Chris Dodd, and all other Democrats who kept defending the pratice of Fannie May and Frddie Mac in 2004 and would not let the regulatores to stop their disastrous practices that led us to this financial crisis. These two companies want to give to people who could not pay it who could not afford it and these people were greedy to accept that, all that happens with the help and encouragement of the Democrats so they can get more donations and more votes!

  17. 17 selena in Canada
    October 9, 2008 at 15:19

    Actions speak louder than words, and by voting for the bailout, Obama has shown which side he truly supports.

    There are two ways to look at Obama.

    He didn’t go back to Washington to be part of the discussions before the vote. That could signal that he knew events are out of his control so why bother to pretend?
    Looking at it that way he is honest.

    The other way to look at it is he didn’t understand the seriousness of the crisis because he knew that everything is controlled outside government. That way he is smart, or not so smart, depending on your politics.

    Either way, neither Obama nor McCain will change much!

  18. 18 selena in Canada
    October 9, 2008 at 15:23

    The rich people are the ones who provide jobs, who keeps the economy alive.

    That is the Supply-side stance alright. But who would do the jobs for the rich if the poor decided not to work for next to nothing?

    It is the poor who keep the economy spinning!

  19. 19 Venessa
    October 9, 2008 at 15:24

    Selena ~

    “If you work 10 hours a day, shouldn’t you reasonably expect to be able to own a house and feed your children adequately?”

    Sure, someone working hard should be able to feed their children and pay for housing. The reality is that everyone really can’t afford owning a home. Although someone like this waitress you describe is a hard worker she chose to take a risk financially. I did the same thing when I bought my first home. I knew that I was going to be losing my job in the next 6 months but I planned for a rainy day and certainly made sure that I would be okay if I couldn’t find a new job right away. If someone already struggles to make ends meet, considering such a risk should be seriously evaluated.

  20. 20 Taban Alfred David
    October 9, 2008 at 15:24

    We are to blame George Bush, Osama Eben Laden and their partners in Europe,
    Because they produced 9-11 which resulted to today’s economic crisis

  21. 21 robert1987
    October 9, 2008 at 15:28

    @ Taban Alfred David

    No offence but how have you worked that out

  22. 22 Roy, Washington DC
    October 9, 2008 at 15:28

    @ Peter

    Here in the USA, not only do our politicians refuse to take pay cuts, they vote themselves pay raises every chance they get.

  23. 23 Kelsie in Houston
    October 9, 2008 at 15:28

    @Taban:
    Umm…connect some dots for me here…

  24. October 9, 2008 at 15:32

    Hiam,

    Believe me, it is not the poor who are complaining about this. When you lived life with out the aid of credit cards already, it generally didn’t affect you. It, as usual is the hard working middle class who is shouldering the brunt of the criminal deeds of the top. So s it OK to demand a $700 billion bailout and then go to a half million dollar spa resort the week afterwards?

    The problem with the, “it is not bad to get rich” mentality is when that wealth occurs in the form of a game of Jenga, the whole country suffers. As a politician you are supposed to be a guardian of the system, and not the promoter of on class of people. It is a concept that the conservatives seem to have a problem comprehending.

    We are not talking about people who built a businsee from the ground up. WE are talking about people who sat across the table from the American people and said, “spending at all cost is a good thing. And infanite growth is possible.” They knew it was a lie and they are in the same camp with the crooked stock broker that swindles your grandmothers life savings.

  25. 25 robert1987
    October 9, 2008 at 15:32

    @ Roy

    The UK parliament used to do the same

  26. 26 selena in Canada
    October 9, 2008 at 15:33

    No everyone is as smart as you, Vanessa. Some people, like you, can do research without help.

    However, not all hard workers are able to understand financial matters. She trusted the people who gave her the loan. We have been told to trust advisers!

  27. October 9, 2008 at 15:38

    Sarah Palin has it about right when she says “PREDITORY LENDERS”
    All summer I was badgered by high pressure, fast talking idiots to drop my 5.75% fixed 15 year loan and convert it to a 1.5% variable loan to reduce my monthly payments, and better use my capital. This went on and on. Finally I just started hanging up on them.

    I can easily see normal people falling for these high pitched sales folks.

    The real disaster is the Carter and Clinton admins going for these below prime loans and organizations to give poor people a chance. Both admin camps the Repubs and the Dims are totally responsible and they all need to be sacked.

    All the big guys deserve to go broke. Give all the recent 700 billion to the folks who filed last years federal taxes. Give them all a $50,000 as a stimulus package and let the chips fall where they will.

    Above all do not give the rich, wall street types a penny for bailout purposes. Let the entire system crash. Then out of the ashes will come….good strong banks, and a financial system, health care system and credit card system.

    Change the dollar to a new currency make all dollars presently in circulation valueless. Start from scratch, set up food lines, and go back to the old siver and gold backed currency.

    troop

  28. 28 robert1987
    October 9, 2008 at 15:38

    Look its not the consumer who did it because it was the advisors who was after a bigger cut

  29. 29 w.stevenson
    October 9, 2008 at 15:44

    Example of who is to blame for the credit crunch.When government cannot provide rented housing for its home grown population. the independent and hard working among us. Take out a mortgage. on a basic price from a building company.The mortgage lender who gives us the LOAN say over 25years does rather well out of it lets say he makes makes something like 5 times the original value of the house. there is no way that would cause a credit crunch. because of the large profit margin involved.We should be looking who gets their sticky FINGERS on the profits. BANKERS WHO never give you an umbrella when its raining. But will give you one if you are solvent.And this is only one avenue where they are making money hand over fist. these people are only a link in the chain likened to the baker . the plumber, hopital worker.etc.etc.and are only there to move peoples money around, while they try and earn it. And are only entitled to a salery like everyone else. NOT THE MILLIONS THEY TAKE . Make them pay it back the public should never have to shoulder the financial burden for their GREED Who do they think they are.

  30. 30 Katharina in Ghent
    October 9, 2008 at 15:46

    I put quite some blame on the banks. They were not only too lenient in giving loans, they actively encouraged people to take big loans. This happened to me personally:

    About five years ago, when I still lived in Toronto, I made about 1800$ a month and on my credit card I had about 3000$ debt – something we payed off over about 6 months, nothing that I was too worried about. One day I got a call from my bank, and the woman told me that I should get a line of credit over 30,000$, because there I would pay less interest than on my credit card (I had actually quite favourable terms, so the difference was only about 1%). When I told her that I was planning to move back to Europe, that didn’t deter her, as long as I would move back to Canada eventually.

    Now I did get that line of credit, and I still have it, but I don’t use it and I’ve paid my debts a long time ago. But I could have also just maxed my credit card, line of credit and debit account and disappear – as long as I don’t come back to Canada, what do they want to do? The woman knew that there were some obvious risk factors involved with me, but she still insisted that I should take that offer… Not everyone is as honest as I am, and banks should know that!

  31. 31 Ogola Benard
    October 9, 2008 at 15:46

    Physical capital is purchased with monetary fund and the rate of interest annually is to be taken as return over money capital invested in physical capital assets.
    Cash credit by banks in a developed financial economy, credit creation systems,over investment,innovation and business pessimism is yet to be questioned?
    We are in a period of hoarding, speculation,personal benefit, with no well placed policies to counter such
    situations-A victim because it was ignored.
    The credit worthiness of banks is now at doubt, the stock market is suffering with the pricing and display of its shares and salaries are yet to tell its way!
    However, monetary control policies are also yet to be questioned?

  32. 32 John in Salem
    October 9, 2008 at 15:53

    Hiam~
    Before you start pointing fingers you should do your homework.
    On December 15, 2000, when Congress was working on an omnibus spending bill, a measure was slipped in called the Commodity Futures Modernization Act which allowed banks and financial institutions to begin using credit default swaps. These are the instruments that directly led to the meltdowns of Freddie Mac, Fannie Mae, AIG, etc.
    This measure was put in by Phil Gram, McCains economic advisor and the co-chair of his campaign.
    I’m not saying he alone was responsible for what is happening but neither is anyone else solely responsible.
    We all played the game.

  33. 33 Venessa
    October 9, 2008 at 15:57

    Selena ~

    You’re right, not everyone is financially savvy but that doesn’t mean the risky loans one decides to take out is not their responsibility. People were encouraged to take such loans and predatory lending is to blame as well but it still doesn’t change the fact that a consumer has just as much obligation to protect themselves and understand what they are getting themselves into. I don’t know about anyone else but considering borrowing the amount of money it takes to buy a home sure shouldn’t be taken lightly. Ignorance is not an excuse for poor decisions and educating oneself needs to be a personal duty. Financial advisors are in business to make money. That should always be in the back of ones mind when trusting your funds in the hands of someone else or taking their advice.

  34. 34 Anthony
    October 9, 2008 at 16:00

    1) Low interest rates (I guess we didn’t learn from the Great Depression)
    2) Crafty Banks (I worked for WAMU during the mortgage boom, and let me tell you about the B.S. coming out of the loan department)
    3) The American People (For just assuming when this is their SINGLE BIGGEST PURCHASE of their LIVES)

    -Anthony, LA, CA

  35. 35 Venessa
    October 9, 2008 at 16:09

    I think greedy people buying homes they couldn’t afford, bankers taking unintelligent risks; predatory lending and deregulation have all contributed to our current crisis. None of these people that participated are innocent in this mess. Unfortunately a message is being sent that if you play a risky game you can be saved.

    I sure wish those of us who live within our means could be rewarded like those who used shoddy judgment.

  36. 36 gary
    October 9, 2008 at 16:43

    Those who blame this mess upon a particular party are either missing the point, or they are trying to make points. It is not secret that republicans favor laissez-faire economic policies. Their McMansions lining the suburban streets around any major US city certainly indicate they were greedily in the till with both hands. Democrats favor vigorous economic growth and distribution of its benefits to the lower economic echelons, regardless of their economic contributions. There isn’t such a thing as a free lunch; some one always must pay. Anyone who merely hints either party has less a share of blame for this fiasco is in need of seriously competent medical help.
    Wealth falls from the sky, grows in the soil, is mined, is the creation of human imagination itself, or is the product of human imagination operating upon one of these former resources. If your bank account grew from some other source of money; you are a cost to the production of wealth. In the US, the total of the costs now exceeds the production of wealth. This means many people, maybe even most people, are living beyond their means of producing wealth. They may have lots of cash; but its real value is much less than they imagine (Read comments by Sir Thomas Gresham for an explanation.). This has been the case for some time. If you imagine any bailout will work; cure yourself of lunacy. The ship of state is listing badly and we’re pumping the water from one hold to another. How is it to be fixed? Courts Marshal for the captains, reduced rations for the crew, and concentration upon wealth-building jobs, not upon cost-producing jobs.
    g

  37. October 9, 2008 at 16:47

    Nasty Surprises for OPEC
    TEHRAN – Iran is feeling the crunch. Already on the verge of bankruptcy and living from hand to mouth from high oil revenues, OPEC crude dipped to 77.38 dollars per barrel on Wednesday. Amid global financial turmoil, oil prices have plummeted. Price of imports customarily surge in line with high energy costs but don’t necessarily recede when the energy boom is over.
    Iran was already reeling from four rounds of EU sanctions since June 2007, but managed with high oil revenues, but now this. Other OPEC members face the same dilemma. Saudi Arabia may be able to weather the storm with $1.3 billion hard currency reserves, but not the rest?

  38. 38 Julien
    October 9, 2008 at 16:50

    I would point the finger at 3 groups.

    1) The goverment for not keeping an eye on what banks are doing and allowing them to propose 100% loans.

    2) The bankers for giving loans to almost anyone.

    3) To irresponsible people who are living above their means.

    I have been living in Iceland for the last 3 years and I’m still amazed to see the number of expensive car on the road. When you check the second hand market, for most cars you have to take over the loan from the previous owner if you buy them.

    This is ridiculous, those people had it coming!

  39. 39 Maccus Germanis
    October 9, 2008 at 17:02

    The market was assigning its own blame upon the unwise borrowers and lenders. The speculative value assigned to the assets that they both contracted upon, has been rejected by the market at large. We shouldn’t trouble ourselves with trying to assign blame, nor have troubled ourselves with trying to correct what was itself a correction.

  40. 40 James karuga
    October 9, 2008 at 17:29

    The fact remains if banks are investing in assets that diminish in value then loss is realized.In kenya like Nairobi preferably the real estate value goes up every time never has real estate diminished in value in Kenya. So I am shocked to hear that in US of A that real estate diminishes in value. I am no finacial expert but i feel those high salaries and bonuses paid to CEO fat cats play a role. Maybe banks should “re-invest in huma organs” I dont know but maybe they should get sane valuers who do good valuations.

  41. 41 Bryan
    October 9, 2008 at 17:31

    I know a couple of people who will not get a credit card. If they want something, they save up for it and if they can’t afford it they do without it. Buying a home is of course a different matter since few people can save enough to buy a home without a loan when they are young.

  42. October 9, 2008 at 18:02

    Sarah Palin, Troop? LOL Barack was talking about that in his “terrorist” days with Bill Ayers and getting people in Chicago out of the predatory lending mentality there.

    Who is to blame? Well, according to some it’s Bill Clinton – others, and more realistically, Bush. But even more realistically it is the so called free market.

    Just a point about business – Jobs, in economic terms a job is a cost because you have to pay people. Provide all sorts of things for you to employ people – all costs. THAT is why businesses go to countries where labour costs are on the poverty line.

    Greed for profit is to blame in this crisis. The biggest greed of all has come, once again, from Wall St and then trickled to other markets. The whole market system bought into free cash in this credit crisis – if they had ‘self-regulated’ as some idiots thought they would there wouldn’t be a problem – not the case as we see.

    Regulation of the markets should now be mandatory – until the conservatives get back into office in any country on this planet! Conservatives are BAD for business and countries.

  43. 43 Soozie
    October 9, 2008 at 18:10

    We live in an instant gratification society. There will alway be those who cannot be “happy with less”. If it’s a homeower or a transnational corp who chooses to live outside their means then it is them who should suffer. Where is the common sense here, in any of this? Let them fail, let them crumble. Let’s start over with a barter system with real good or services instead of funny money.

  44. 44 Tom D Ford
    October 9, 2008 at 18:11

    This was caused by American Conservative Republicans De-Regulating the financial sector; it turns out that “Free Markets” are really “Anarchy Markets” and threaten the entire worlds economy.

    You just have to consider that the worst threat facing the USA was not Osama Bin Laden, it was and still is, American Conservative Republicans, they have done more damage to America and the rest of the world than Bin laden ever dreamed of!

    Throw the bums out!

  45. 45 Shaun in Halifax
    October 9, 2008 at 18:12

    Could it be as simple as “the math was too complex and only 1/1000000 people were actually able to understand it?”

  46. October 9, 2008 at 18:13

    A lack of regulation has contributed massively. And if you’re looking for villains, please shine a spotlight on the industry lobbyists such as the International Swaps and Derivatives Association, the Institute for International Finance, etc.

    They have played a big role in persuading governments and regulatory agencies to look the other way while an extremely risky ‘shadow banking system’ was created.

  47. October 9, 2008 at 18:18

    The dividend lovers (SS like utopians) who impose their ideologies of capitalistic, the baby-boomers are the first to come in mind…the dummies Woodstock mentalities has been implanted into every work of life now. they are the worst self-center individuals around the world (as they live & experience the peal of the Cold World) nuclear inhalation of the world was real, those type of people are not concept of what impact their behaviors & decisions have on the rest of their peers (human not cattle as they think we are… after the 9/11 their survival of the fetish at all costs

    Dividend lovers (Baby-boomers freedump 55 utopians) are the true tyrants of this New World Order

    Party on duds ….

  48. October 9, 2008 at 18:18

    I blame the financial crisis to the corruption of politicians and corrupted financial institutions. For example, corrupted politicians like Barney Frank, Maxine Waters, Christopher Dodd, Obama among others were in bed with Freddie Mac and Fannie Mae. These people are full responsible for the collapse of the financial institutions in the US.

    Finally the people that bought a house for $300,000 knowing full well that they could only afford $100.000 dollar house. Some people have to accept personal responsibility and not to expect for the taxpayer to bail them out for their own irresponsibility.

    I hope the US government launch a Federal investigation and put behind bars the corrupted politicians and the so called CEO of corrupt financial institutions.

    The US Congress knew what was going on because the got plenty of warning, but they decided to ignore it.

    Solomon
    SLC, USA

  49. 49 Anthony
    October 9, 2008 at 18:20

    I used to work for WAMU 7 years ago as a teller, and I think I have put this before, but this is how it worked. This is how it went:

    Manager and Loan Officers: “Offer everyone this home loan rate, but don’t say anything that it’s a variable”
    Me: “Hello, would you like a 6% home loan/equity line of credit”
    Customer: “Is it variable?”
    Me: “I dunno?” (even though I did know of course 😉 )
    Customer: “Heck yes”
    *customer is taken to Loan Officer
    Loan Officer: “Yes, it’s 6 %, it kinda is, and could be a variable rate, but do you really think it will change THAT MUCH in 30 years. It might go up what, a few points”.
    Customer: “Wow, that’s too great to pass up!”
    Loan Officer and Manager: “Money money money money, yum yumm num, money”

    Seriously, it was pretty much like that. Kinda sad.

    -Anthony, LA, CA

  50. 50 Maccus Germanis
    October 9, 2008 at 18:27

    “The desire to get something for nothing has been very costly to many people who have dealt with me and with other con men…” “When people learn — as I doubt they will — that they can’t get something for nothing, crime will diminish and we shall live in greater harmony.” ~Joseph Weil

  51. 51 Elizabeth - Ohio, USA
    October 9, 2008 at 18:27

    To whom it may concern,

    I don’t really blame anybody, but I do believe that everyone is responsible. Everyday people are responsible because they didn’t manage their money and lived far beyond their means. The banks are responsible because they knowingly gave out loans to people who didn’t have the income to pay and were naive. The government is responsible because they didn’t regulate the practice and has no idea how to help.

    People need to take a step back and stop living beyond their means and learn to live with less. You, people in general, need take a hard look at yourself and start saving as much money as possible because things can get much worse. There is no point in worrying about things you can’t change, but there is also no point in taking chances so save as much as possible. After all things can always get worse though I hope that they don’t.

    Thank You,

  52. 52 Tiberiu from Romania
    October 9, 2008 at 18:27

    The more I listen, the more I realize the banking system is the same everywhere in the world.

  53. 53 Jamie - Santa Cruz, California
    October 9, 2008 at 18:28

    This whole thing is a planned out asset grab by those that have a lot of cold hard cash (Warren Buffet, etc..). It’s been done through out history and it’s being done right now. There is no way in hell that nobody saw it coming, because I saw it coming 5 years ago and I’m a under educated poor person.

  54. 54 Jim Walsh in Cleveland
    October 9, 2008 at 18:29

    Community Reinvestment – Please please have one of your illustrious guests comment on “The Community Reinvestment Act” (CRA), enacted by U.S. Congress in 1977 and the ripple effect that we are now seeing …

    Systematic deconstruction of sound banking principles.

    — jimw / Cleveland, Ohio USA

  55. 55 John in Scotland
    October 9, 2008 at 18:30

    Bankers and speculators are certainly in the blame pool to a certain extent ,However if we,re to be honest this crash is organic to a capitalist economy.

    Two phrases you haven’t heard from your economists and journalists is ‘the law of diminishing return ‘and ‘ the insoluble contradiction of capital’.

    These two laws explain rather than just describe whats going on.

    you,ve asked the question ….but do we really want the answer ? or shall we just go for the easy targets.

  56. 56 Shaun in Halifax
    October 9, 2008 at 18:33

    I’m realizing there’s no learning curve with investors. How can a group of people who are so smart STILL fall victim to groupthink?

    It’s like they’re all staring at a blackboard. And on this blackboard is written ‘REDRUM.’ They muddle over it for a bit, then realize, “Hey, it must be a new recipe for a tasty beverage!” Hi-fives all around. But while they’re congratulating themselves, nobody thinks to turn around and look in the mirror on the opposite wall to get the REAL meaning of the word.

  57. 57 Harrison - USA - Oregon
    October 9, 2008 at 18:33

    Ninety plus percent of home owners in America are still paying their mortgages on time. Ten percent bad mortgages does not cause the world to crash. The problem is the Derivatives market which is a totally unregulated insurance program between banks. No rules/laws exist about how much reserve cash must be held to issue a policy and policies are traded like stock and bonds. 70 trilion dollars worth of derivatives were issued from banks that could not cover the losses. The US housing market is only 7 trillion dollars total and fewer than 10% are bad. The housing market just triggered the losses. These complex investment schemes must be outlawed. They are the problem!

    Harrison Hall – Portland Or – USA

  58. 58 Jessica in NYC
    October 9, 2008 at 18:38

    @Roy

    “Banks should have realized that lending a large amount of money to someone without a good credit history isn’t the smartest thing to do, and borrowers should have realized that buying things they can’t afford is also a bad idea.”

    This problem isn’t just the people “without good credit history”. Plenty of people with excellent credit history are living belong their means and living in homes they cannot afford.

  59. 59 Roberto
    October 9, 2008 at 18:38

    RE “” which party and which associated political inclination has always favored making the rich richer “”
    —————————————————————————————————–

    ——– Billy Slick favors making perjurers into super multimillionaires from scratch.

    It was in 1999 that Billy Slick signed the credit default swap bill into place which allowed these speculative derivatives to be sold by real estate folks without a brokerage license. Of course he was just a lacky of the rep congress as everyone knows but a few koolaide quaffing dems.

    He gutted the working class with NAFTA which has been a great assist in accelerating global warming and spiking fuel costs, no different from GW Sr, just a different stupid party mascot for the rubes.

    He files annual $100-200 mil tax returns now. Not bad for a impeached president defrocked of his law license and paying out hundreds of thousands of dollars in sexual harrassment settlements. Just a little “payback” for that credit default swap ponzi scheme he played his part in fast tracking into law.

  60. 60 devadas.v - Kerala, India by email
    October 9, 2008 at 18:39

    Hello,
    a combination of everything is to blame for this current muddling that has lead world finance to this nadir like never before.

    Lack of regulatory system, bankers greed (to come one up on another leading to unhealthy practises), huge payment for CEO’s, added to this nexus was the policy makers of the respective countries wooing them with huge funds. This deadly mix of luring economics lead the consumerist general public like flies to candlelight. The result was that all greedy hands are burnt like never before.

    Still no one is bought before the law? In a world stealing food in order to assuage the stomach is a crime. Here the banks, ceos, defaulters, and policymakers are all having a free ball.

    Added to this, the government is bailing them out with millions of dollars. What a paradoxical situation!

  61. 61 John Mulvey
    October 9, 2008 at 18:41

    Several people have mentioned that borrowers should share the blame for this crisis. What this neglects is that due to consolidation of the major lenders, there aren’t any real alternatives available.

    My bank, Washington Mutual, last week became the largest bank failure in US history. Six months ago, they were one of the few remaining “small” banks in the country, and were widely lauded for their innovative banking strategies.

    My point is this: the lenders that engaged in these practices are the ones that survived the frenzy of mergers over the past two decades. Companies that behaved in an ethical way were, until very recently, the same ones that were in danger of being taken over by new investors and management groups that would immediately impose these flawed policies. Today’s “bad apples” were exactly the people who the industry previously hailed as innovative and forward-thinking businessmen.

  62. 62 Anthony
    October 9, 2008 at 18:41

    Hehe, I just remembered something about when I worked at WAMU. Here are the new cars the Loan Officers had bought, all within a 3 month period:

    -One went from a Mini-Van to an Escalade
    -One bought a kick butt Harley!
    -One bought a new huge F-250 (whhich he didn’t need, cuz he was single and worked for a bank)
    -One bought a new sports car (pretty sure it was a Porsch)

    There were some others, but I forgot.

    They were very happy with their bonuses.

    -Anthony, LA, CA

  63. 63 Jennifer
    October 9, 2008 at 18:42

    I believe it is the home buyer’s fault as well as the mortgage companies fault. The companies lied, I agree. 5 years ago my husband and I went home shopping. I was 5 months pregnant and about to quit my job. The bank knew our situation and urged us to get the loan before I quit and we would be eligiable for twice as much money (on half as much salary). We had $250,000 in our pocket-a 100% mortgage. They told us, “no problem! Look at the wonderful interest rate at 3%. Sure, it can go up 1% a year for the next 10 years–but do you think that will really happen?”

    We saw the beautiful bubble floating in the air, we had it in our hands. But it was really just beyond our grasp and we knew it. Now, it is 5 years later. I have 2 kids and one on the way. We are renting and I am mad at the people who who reached for the beautiful bubble and has made it burst for all of us. Sure, the brokers and banks were wrong, misleading, blatant liers. The people had a choice and were greedy. We rented, saved and were waiting until our right time to purchase. Now what do we do? Maybe we should have purchased irresponsibly then and now the government (ie, taxes) would be paying for our mess.

  64. 64 Mrs V Wilson
    October 9, 2008 at 18:45

    Greed is to blame. The US is being blamed and probably rightfully so. Therefore, the research I have done lies with Fannie Mae and Freddie Mac and how they bundled up the loans and sold them to AIG, Lehman, all the other investment institutions and banks. If you view a video on YouTube called, ‘Burning Down the House: What Caused Our Economic Crisis.’ It is very telling. Unfortunately, the Republicans are getting the blame because this is an election year and things are going the Democrats way. I think the future will tell differently.

  65. October 9, 2008 at 18:46

    My question is: how will the money be made in the mortgage industry now?

    The entire message of income is missing. Although the banks are having a challenge now, the real challenge will come in the future when the revenue stream is not revived.

  66. October 9, 2008 at 18:46

    We know there’s greed on all levels… knowing that, the government should have done more to regulate. It is the governments fault.

    Remember that George Bush told us to “go shop” after 9/11… that’s what we did, huh?

  67. 67 Jessica in NYC
    October 9, 2008 at 18:47

    The problem as I see it both comes from the government, banks and borrowers.

    -Governments were too lax and did not properly regulate the financial industry when the economy began to change. The political ambitions of our countries “leaders'” were tired directly into the continued greed of financial CEOS and executives.
    -Banks encourage and take advantage of borrowers to leave beyond their means while making huge profits off of money that was not secure.
    -Borrowers are leaving beyond their means, allow themselves to be manipulated by marketing and living irresponsibility.

  68. 68 subhash,singapore
    October 9, 2008 at 18:47

    the basics of economics assumes that a consumer aims to maximize his/her welfare and the current events are proof of this and in my opinion almost all the parties are to be blamed for this,in fact most of it goes to rating agencies and governments and to a lesser extent on the banks because the banks are only the victims of the “financial genocide”
    there is also considerable blame on alan greenspan as he was too busy controlling inflation
    but in the end economics is all about cycles and this too shall pass and i bet in 2018 there would be another significant even which would change the fundamentals of finance

  69. 69 devadas.v - Kerala, India by email
    October 9, 2008 at 18:48

    In india in the 90’s, the Enron company came the same way and assured the Maharastra State government they would get electricity at a fixed rate. Later they increased the rate making the government chuck them out. But even though ENRON company was busted like pack of cards in every country (their employees – the highest paid at that time in the world – to pose nude in playboy magazine), they still sued the Indian government at the International Labour court and won! The indian government hasdto pay 232 crores (6 crores dollars)as compensation from tax paying public of india. Just like the American taxpayers are paying out now for the foolishness of their policymakers.

    It’s time to take action against the guilty whoever it is. So that in future, these speculative fools can’t take the general public for a ride.

  70. 70 John in Scotland
    October 9, 2008 at 18:48

    the regulations and practices that were allowed for a reason …to facilitate a growing world population and to buy the goods that finance was facilitating producers to make at the same time.

    It couldnt stop….and governments allowed this to go on….It crashed because the whole thing producer and consumer were existing on credit,……so blame the governments and the bankers……but you wont regulate yourselves out of this one….for reasons this programme doesnt want to know.

  71. 71 Maccus Germanis
    October 9, 2008 at 18:49

    @ John Mulvey

    “there aren’t any real alternatives available”

    Then why aren’t I exposed to such a mortgage? I’ve been to the loan officers. And, I walked away. Nevertheless, as a US taxpayer, I’m expected to bail you and your lender out. I get neither the use of your house, nor recoup the fees charged by your lender. You are both thugs.

  72. 72 John LaGrua/New York
    October 9, 2008 at 18:50

    Wall street is not a charity but a way to allocate capital:greed took over ,The US FED opened the floodgates to continue an ersatz prosperity.Congress was only too happy to share in the largesse ,vast sums of contributions.and a torpid state of indifference to the consequences obvious to any serious observer.Add to that an Administration given to deciet headed by a mental deficient and you have a lethal brew.The rapacious gluttony of the US public deluded into believing that lessons of past profligacy are irrelevant and all you need is cheap money, cheap products and you go broke buying bargains.Ironicaly the Chinese obliged,Communist s fulfilling the Marxian prophesy “We will sell the capitalist the rope to hang themselves..This is a rerun of Britains’s corruption of China in the 19 th century ,pushing opium to force the Chinese to open the country to trade.resulting in the “Opium Wars”the Chinese resisted , the Americans lay on their backs and became the”Lotus Eaters” Bitter fruit!

  73. 73 John in Cleveland
    October 9, 2008 at 18:50

    I blame these greedy corporate CEOs and CFOs and all these other figure heads of these companies. Look at what AIG did after they heard about the bailout approval. They threw a $440,000.00 retreat for their executives. I think part of this should be funded by the assets of these people with golden parachutes and the board of directors as well. Freeze their assets as part of the bailout agreement and confiscate their mega mansions. Make them live in normal homes like the rest of us. This should raise some of the billions to cover for their incompetence. They should not be allowed to profit off of this. You also need to replace all the boards of directors of these companies because AIG blamed a person in their company for their financial woes only to give him $23 million as a compensation fee package for leaving AND then turned around and hired him as a consultant for a million dollars a month!!! If this continues, I fear we will head down the road of the French revolution to where these corporate execs are going to get killed by mobs.

  74. 74 Dave
    October 9, 2008 at 18:50

    I blame Gordon Brown. After 10+ years as Chancellor of Exchequer in UK, and now PM, he should have foreseen this issue and should have acted sooner. Now to cover himself, he says ” … this problem was came from America”. What kind of rubbish is that?

    Both the UK and US (and other countries) have seen booming finance sectors in last few years built on growth in the consumer segment. Gordon Brown happily took the credit for economic growth and prosperity. Now it is clear that part of the growth was built on speculation by consumers, lenders & institutions, Gordon blames it on someone else. Pure politician!

    Gordon Brown has got to go!

  75. 75 Blake - Oregon, USA.
    October 9, 2008 at 18:50

    We found ourselves with a leaky tub and had to take out some of our equity to restore the bathroom (about 1 year ago). Once the word got out that we were shopping for a loan we had no end of calls trying to sell us a re-fi.

    Eventually a very pretty young girl with great teeth an strong perfume came to our house to sell us an ARM. It was very enticing. But after a few minutes it was clear that this broker didn’t fully understand the product that she was selling. She simply couldn’t or wouldn’t answer all of our questions. We sent her packing.

    The point is that we were faced with the decision of fixing our bath or borrowing bad money. It was a tough decision, but the loans being offered just smelled bad and we put a bucket in the basement.

    We finally called the company who carried our mortgage and asked them to
    help, and they offered a traditional, fixed rate mortgage re-fi, full of fees, and only took out the minimum amount that we needed. We have a great mortgage and are safe for the time being. We dodged the sub-prime bullet by paying attention to the offers and not our needs or wants.

  76. 76 Greg / Ohio
    October 9, 2008 at 18:51

    This is partially the government’s fault, enacting legislation that prevented banks from denying loans to certain low income applicants.

  77. 77 Ben from OHIO, USA
    October 9, 2008 at 18:51

    The bottom line here is the banks have decided that it was a good idea to loan money to people who have a considerable history of NOT paying back money borrowed. Banks were trusted with the job of loaning ONLY credit worthy people monetary amounts they could afford. The banks did not do this, and now we are in a financial mess.

    Spending money you don’t own should be studied as a potential consumer disease much like alcoholism or drug dependency. We cannot blame an alcoholic for drinking if we let them wander around, unsupervised, in liquor store; can we?

  78. 78 Rietveld
    October 9, 2008 at 18:52

    My name is Kees Rietveld, dutch, raised by parents who have lived through the depression.

    I was taught to before I buy anything, to first look into my wallet, to see what I can afford. In Dutch we call it ‘de zeilen naar de wind zetten’. So if I want a car and looking in my wallet, I see I cannot afford it, I buy a bike. I was taught to consider credit bad and expensive. I go into this crisis without debts because I never borrowed, thank God.

    I feel the people who mortgage their houses in order to buy senseless stuff with money they do not have stupid. They deserve what has come to them. It is not the fault of the banks, it is theirs.

  79. 79 Cindy in Columbia Maryland
    October 9, 2008 at 18:52

    John,

    You signed the documents, you have no one to blame but yourself. (Will we never learn from Enron????? Don’t invest in what you don’t understand, don’t commit yourself to what you don’t understand!)

    Although in your particular case I believe you may have recourse against your CPA and Lawyer friends whom you consulted. Either they didn’t understand the documents, or advised you poorly.

  80. 80 Tony P - Sofia
    October 9, 2008 at 18:54

    Dear Sirs,
    In terms of the viewer’s and listener’s opinions of the blame for the huge financial hell and crisis:
    The search for answernig that question in my opinion is the most serious challenge ever.

    To talk in philosophical terms of such problems is useless. So much has been said everywhere, so many and different opinions have been expressed. The exact reply of that question is, no doubt an enormous task for the greatest financiers – experts worldwide.

    In my limited experience, when I have to analize a phenomenon, I try to be absolutely objective which means not to allow myself to be infuenced by moods, personal views, personal reasons etc. Usually I try to find the interconnections behind what is going on. Thus it is usually a sad but realistic experience. Phenomenons have both opposite ends, sometimes in state of intense collaboration.
    Of course my limited experience cannot possibly be a scale model for analitical thinking. Yet every view probably does matter.

  81. 81 Jessica in NYC
    October 9, 2008 at 18:54

    I agree! The one thing that is certain, the financial industry should be held accountable and brought to justice. This is costing tax payers around the world trillions of dollars.

    —-
    @ Chloe
    Yes, just yesterday I got 3 credit card applications that were dated October 1 and 3! Unbelievable!

  82. 82 Isaac S
    October 9, 2008 at 18:54

    The Bankers. This crises is deliberately designed and managed. It is no accident. they have inflated prices and sold their stocks at a high price and froze credit. Now they will buy it when it is cheap.

  83. 83 Rajinder
    October 9, 2008 at 18:55

    THE CAPTAIN OF THE SHIP.
    HE WAS NEGLIGENT OR USELESS OR HE GOT HIS CHAIR THROUGH NEPOTISM OR ON “OLD BOY NET”.
    OR
    THE INCOMPETENT GENERAL OF THE ARMY WHO DID NOT PLAN AND EXECUTE HIS BATTLE WELL BUT WAS INDIRECTLY BRIBED (OR DIRECTLY DECEIVED) BY THE ENEMY.

    It is the British PEOPLE who ought to SACK the Captain or FIRE the General.

    What can a million citizens do if they advance ONE BY ONE like the HINDUS in defence of their “Akhand Bharat” (Pre-Partition UNITED India which had Lahore and Dhaka in it).

  84. 84 L Jackman, Gdansk
    October 9, 2008 at 18:55

    I absolutely believe that there is blame for those who have taken loans to live beyond their means but they are not all buying luxury cars. There are some people just not earning enough to lead a decent standard of living and when money is offered so freely, the blame must go to the bank. Moreover the financiers are acting both irresponsibly and immorally with such debts by selling them and taking on such dubious Alt-A debts. The most recent issue of Private Eye makes a good comparison between today’s crisis and Galbraith’s account of 1929. “One of the uses of depression is the exposure of what the auditors fail to find”

  85. 85 Mike
    October 9, 2008 at 18:57

    Have we got the sub-prime origin to the crisis backward? Without going into the motives and ethics of the borrowers and lenders, fundamentally, people must have seen that they could afford a house where they could not previously. The lenders in turn must have been able to finance these mortgages at rates people could initially afford because they themselves were able to get the money to lend at rates that allowed them to offer attractive rates to the house buyers. John from Texas obviously could not but could have happily continued paying at 8 – 12%

    If later, the interest rates could more than doubled, it must have been because the lenders found they were also having to pay higher rates. Otherwise, the home owner could go elsewhere, borrow cheaper money and pay off the original loan.

    So why did the ultimate sources of money start charging more? Are they to blame (whoever ‘they’ are)?

  86. 86 Jessica in NYC
    October 9, 2008 at 18:59

    @ Chloe

    RE: who should or is to blame?

    I like to blame George W Bush for everything… even when it rains and I forget my umbrella. LOL 😉

  87. 87 John in Salem
    October 9, 2008 at 19:02

    So the model consumer on air, Donna Marie, says that people have to be prevented from buying things they can’t afford…
    Given that 50 years of government oversight hasn’t been able to rein in the credit card business it would be interesting to hear how she proposes we do this.

  88. 88 viola
    October 9, 2008 at 19:03

    1. Banks for requesting (and getting) permission from the SEC to hold less cash in reserve.

    2. The SEC for agreeing to such a thing.

    3. The SEC for never once checking on the accounts of such banks, even though it was one of the justifications for unleashing the banks.

    4. The people who expected the housing bubble never to burst.

    5. The real estate industry for encouraging that expectation.

    6. The stock market investors who don’t believe they are gambling.

    7. The governments for not realizing, or not admitting, that loose credit creates inflation.

    8. People who view a home as an investment rather than a place to live.

    9. People with mortgages who believed they owned a home, when it was in fact the lenders who owned their homes.

    10. Those who don’t realize that what was meant by the term “a self-correcting market” is exactly what is happening now.

    11. Those who do realize that but don’t care because “they got theirs.”

  89. 89 M.Rose
    October 9, 2008 at 19:03

    There are many people out there given the chance to get a loan at a bargain rate would absolutely pounce on the offer.

    Do people here lack a basic understanding of human nature in the world as it currently exists???

    There have ALWAYS been people who are totally irresponsible with their finances. The difference is that the irresponsible were never allowed to bankrupt the world before.

    I had always thought that the irresponsible have a perfect right to be as naive as they wanted to be given the chance. There were rules in place that kept this in check and they didn’t really hurt anyone except themselves in the long run.

    I did not expect greedy bankers to be enabled to compound individual irresponsibility into a disastrous global financial strategy

  90. 90 Christine
    October 9, 2008 at 19:05

    A speaker just called in about irresponsible consumers sharing responsibility for the financial crisis. Like her we are live within our means, pay off our credit cards every month, etc. However we have had the means to do so, and have excellent health care. We have a child with serious health issues and I would have borrowed any amount of money to help him get care if it would have been necessary. I ‘m sure a lot of folks out there borrow as a matter of last resort, for example to put food on the table or buy medicine. It’s not always about greed.

  91. 91 Gale
    October 9, 2008 at 19:07

    I don’t understand why everyone is spending so much time pointing fingers. There is a huge problem right now that means the end of the economy as we know it. Why don’t we spend more time concentrating on what we can do to fix it NOW and worry about who is to blame later when there is more time for an investigation? Don’t get me wrong, I fully believe those who are responsible should held responsible.

  92. 92 Peter Jeenkins
    October 9, 2008 at 19:08

    Modern capitalism is to blame. The ability to repay debt is based on the assumption that economies grow, forever, this itself is predicated on an ever increasing supply of cheap fuel.

    The cheap fuel is gone. The UK North Sea oil supply went into decline at the turn of the century and the UK is about to become a net importer or oil and is going into a winter with dubious supplies of natural gas.

    Cantarell oil field in the Gulf of Mexico has gone into decline this year and Saudi Arabia has failed to increase supply even though making numerous claims that it can.

    The rate of discovery of new oil fields is lower than the rate at which fields are going into decline.

    China, Japan and other countries holding considerable amounts of USD foreign reserves are in a catch 22 situation – if they stop buying more US debt, then they risk crashing the USD and reducing their reserves to toilet paper.

  93. 93 Sulayman Dauda
    October 9, 2008 at 19:09

    World Leaders are responsible for the present Global precarious situations for lack of social justice and the pervarsed curroption which has penetrated every angle of the world like a cancer. virtually 99% of our leaders are curropt. and I’m afraid to mention that this colud be the true end of history, a situation that may be impossible to control the global insecurity.

  94. 94 Old Bear
    October 9, 2008 at 19:10

    Listening to this program on the air and reading these responses, I noticed quite a few respondents willing to blame borrowers for the housing and the follow on credit market crises.

    The fact is that these financial instruments were not created or even envisioned by, those who wished to buy a home. Instead they were created by those in financial institutions who wanted to make even more money than they were making from their already highly leveraged instruments, and then marketed to people who simply wanted to buy a home. It’s not as if as “minorities” were battering the doors of banks demanding to be given loans with outrageous terms.

    Blaming ordinary people (except of course for those who fell for the “flip this house” scheme) for falling for a con that was marketed under false pretenses is ludicrous.

  95. 95 Alexandre in Sao Paulo /Brazil
    October 9, 2008 at 19:12

    Of course, all those financial institutions are responsibles for 70% of this financial crisis, due their leverage debt level.
    For example, years ago, we had this problem in Brazil, after this hard lesson, all brazilian banks are following the Basileia II regulation, fiscalized by Brazil Central Bank.
    Avoiding a high risk in this kind of situation. Risk is part of the financial system, but you can manage it with regulation tools, and fiscal system. But it is important to have an independent Central Bank or regulatory agency in this process, avoiding any political trend in any decision.

  96. 96 L Jackman, Gdansk
    October 9, 2008 at 19:19

    I had just read something about the Icelandic banking system being much larger than the capacity of the State, therefore it will not be able to back it. Am I understanding this correctly or will this also effect those other European enclaves like Switzerland and Lichtenstein? How much regulation would be necessary to ensure the guarantees for banking systems? Should they be guaranteed by the tax payer?

  97. 97 John in Scotland
    October 9, 2008 at 19:41

    So Itake ithe person who wanted a house shouldnt have had a house . That the guy who wanted a anew telly shouldnt have had a new telly..

    .well tell that to the banker who bank rolled the builder and the manufacturer who made the telly. ..to the furniture manufacturers and interior designers …..the list goes on and on …and at some point it comes right back to you..

    so perhaps you ‘shouldn’t’ either ….In which case forget a large chunk of what you hold to be neccesities …..not luxuries.

    one thing that is interesting is the cordinated re supplying of money into the system…..sort of a bit like socialism in the making wouldnt you say..

    lets just go the whole hogg ….kick out the chancers…and the scroungers ( ie politicians and bankers et al) and get on with exchanging our energy between each other without these characters setting us one against another so they can make their greedy profit.

  98. 98 gary
    October 9, 2008 at 20:06

    There are simple truths about this crisis most wish not to hear or read: Elections make the electorate responsible. Thrift and hard work do not fail; the evident failure must therefore be credited to sloth, greed and stupidity. If one must borrow to purchase an item; they can’t afford it. Receiving a paycheck does not correlate with earning money. Riding the gravy train is always enjoyable ’til it runs out of steam. Bailouts tranfer debt; they do not discharge debt. Get use to this; it’s going to get a lot worse before (and if) it gets better.
    g

  99. 99 Malcolm
    October 9, 2008 at 20:07

    Who is to blame?

    It is those cheesy adverts for loans that target the weak minded and vulnerable people with ‘easy terms’ that end up extorting high interest rates. It is positively evil the way TV adverts featuring people like Carol Vodermann??? completely take advantage of such easy targets. The Christians identified this evil practice as ‘usery’ and people who practiced it were despised and traeted as social outcasts. I wish the same could be said for Carol whateverhernameis. As for the lenders they should simply be knocked for the debt. If you are in debt don’t bother paying them, walk away from it..without regret.

  100. 100 Dictatore Generale Max Maximilian Maximus I
    October 9, 2008 at 20:10

    WHO is to blame?

    The answer is ‘As Easy As Pie’!

    Liars, Lawyers & Lawmakers!

    Oh!

    I forgot the Bankers OR should I say BankRUPTERS AND hopefully BankRUPTED Bankers!

    PS: I do have a few chests full of tar, feathers, keelhauling and ‘walking the plank’ paraphernalia. Where did I keep them? I need them in a hurry! Bye! I gotta find that stuff!

    Sorry guys! I HAVE to find that stuff! Though I’d love to write a LOT more!

  101. 101 Maccus Germanis
    October 9, 2008 at 20:43

    @ Thug #1

    How are you defining poverty? I don’t care to be in the position of deciding whose lifestyle is extranagant or not. Whatever you can compensate another for, you should be able to freely buy. I object to the insistence that you keep a house that you couldn’t afford, because I am robbed in order to underwrite your banks mistake. Find the money, or let it foreclose, but let me be.

    Sincerely,
    The asshole that hasn’t a house
    nor new tely…
    no just the bill

  102. 102 Brian
    October 9, 2008 at 23:21

    It is said that power corrupts and absolute power corrupts absolutely. I think the same can be said of greed.

    The US home owners were told that they could have huge houses at impossibly low mortgage repayments and deposits, so they are guilty of greed.

    The bankers who sold the loans are rewarded for selling the mortgages, so they are guilty of greed

    The institutional financiers who dreamed up the very complex methods for distributing the risk of the house mortgages, became unbelievably rich, so they are guilty of greed.

    No one is without blame.

    As the lady from Switzerland said, if you live within your means (including budgeted mortgage repayments) then you will not have a problem.

    Unfortunately, our western society says that we should have what we want, not just what we need. Marketing departments and the media have successfully sold this concept to the masses, to the point that a whole generation now believes it is their right to have what they want even if they can’t afford it.

  103. 103 Dictatore Generale Max Maximilian Maximus I
    October 9, 2008 at 23:29

    @ Brian

    Excellente! Par Excellence!

    Maslow’s hierarchy of needs & so on………….!

    Needs versus Wants!

    Much as I Hate to admit it (Shut Up Max!). I ALWAYS admire an Astute, Analytical and Admirable mind!

    God Bless You! A very GOOD comment.

  104. 104 Anthony
    October 9, 2008 at 23:47

    @ war on drugs

    Here’s what we should do. MAKE WEED LEGAL. That is all.

    -Anthony, LA, CA

    p.s. I don’t smoke.

  105. 105 Dennis@OCC
    October 10, 2008 at 01:25

    There are many people to blame for the financial crisis….

    Dennis

  106. October 10, 2008 at 02:00

    who is to blame?
    it is satan’s job to blame and all who are blaming are doing satan’s job.
    therefore: blaming does not help anyone
    when you save money and borrow money in addition, buy or build a house and pay every month the money as arranged with your bank and suddenly one day get a letter from someone: your house will be sold at their amount, because they have bought your credit and the rest of your debt you have to pay the next years – that is loosing your prior saved money, the house and to continue to pay for nothing – what is that??
    bribery??
    Some people in our country lost everything in spite of paying regularly!!!
    There is no trust in the well reputed banks of former years.

    And what is the BBC doing?
    Full in the grip of fear since 3 weeks, asking people round the world for comments, but obviously unable to hear the truth where it is said.
    What a pity. Impartiality? Independent?
    Since 7 years everything was to be seen but nearly nobody did act wisely but tried to ignore the warnings – as always happened.
    The fear of the LORD is the beginning of wisdom.
    This world is tumbling to its end and security is only in Jesus Christ, says the Bible. But who read the warnings and believed, believes?

  107. 108 Tom (of Melbourne)
    October 10, 2008 at 04:46

    A materialistic culture of greed, excess, and waste at all levels is to blame.

  108. 109 Pangolin-California
    October 10, 2008 at 06:02

    Well it wasn’t the people working hourly wages that should be to blame in this disaster. It was the well off, the very well off and the super-wealthy leveraging their wealth to run up housing prices and create bizarre loan structures to facilitate the purchase of those houses.

    If your stock broker advises you to repeatedly buy and sell stocks in order to maximize his commissions they call that “churning” and he can lose his license due to that sort of activity. What banks and real-estate agencies did over the last ten years was create and promote vehicles that would encourage people to jump into a housing bubble so that they could collect fees on mortgages and property transfers. Both were allowed to collect large sums of money on transfers while accepting little or no risk themselves.

    As long as the banks could sell risky mortgages on and real estate agents ignored their fiduciary duty to represent their clients these crazy loans were going to keep being written. Price increases were driven not by actual demand for real estate but by house flippers selling houses among themselves and raising the prices each time. As long as some houses were going up in price they could ignore the fact that the prices were actually more than the local wages scales could maintain.

    The people who made and encouraged these bogus transactions are still in charge and demanding that we bail them out and leave the rest of us at the mercy of the elements. It’s time for some virtual torches and pitchforks marches on the the banking industry. Until we yank the degree con artists who gave us this mess out of their velvet lined offices this mess isn’t getting any better.

  109. October 10, 2008 at 09:11

    Financial crisis….who is the blame? Those whom own the control of the worlds banks. A world of allied thieves control the banks in every country, keeping the governments choice of who is rich and who is the poor. The transfer of wealth is given to the military and their police forces, empowering them above their citizens and control their government.

    A equal share of the worlds wealth would come about if a pure capitalist society existed. But the world doesn’t exist like that. A abusive accepted agenda of not paying the full worth of a individual is used to prod the worker to achieve more. It is power, the ability to justify crimes against humanity these actions are behind the worlds financial burdens.

    Humanity, it’s self is being destroyed. Survival of the fittest is being applauded. The priority of caring for the aged and disabled, that humanity is being destroyed. They are being treated as if the enemy and forced to suffering indignities for existing.

    Truth doesn’t mean anything because information today is controlled. A preconception about the world is programmed the citizens of every country. The public are fearfully blinded to the reality that exist. Dictated through the worlds mass media is what to think and what to do. It bombards humankind on all frequencies of dictation. The human being can not think nor react for their selves any more but only along the lines of given agendas given them.

  110. 111 Vernon
    October 10, 2008 at 12:31

    I think that the real culprit in this current financial crisis is that old human failing “greed” underlying all the role players in the affair. Unfortunately too, when things go wrong, the innocent suffer – those who realise they cannot afford big houses but have prudently been trying to pay off their bonds with perhaps limited resources which now has become harder due to increased taxation needed to bail out banks.

  111. 112 Angela in Florida
    October 10, 2008 at 15:03

    In my opinion, there’s plenty of blame to go around. But the point I wanted to make: if you’re not from America, don’t be so quick to judge the people losing their homes. Life is quite different here than in many other industrial countries. Many of us expect to be transferred by our employer every few years, resulting in long-range moves. We move an average of every 5 years, and not just around the corner or across town — across the country in many cases. Adjustable-rate mortgages make a great deal of sense in that situation. In 2003 it would have been insane to plan on the world’s financial situation becoming this bad by 2008.

    And not everyone who borrowed against the equity in their homes used the money for frivolous things. A college education is very expensive here — 4 years at an excellent school can run well over $100,000. Many parents I know got that money from their home’s equity and now are in trouble.

    Finally, the number one reason for American bankruptcy, responsible for more than half of all annual filings, has consistently been illness. Most Americans have little or no health insurance, and one serious illness can take down a whole family. At the height of the housing boom, people could borrow against their house instead of just going bankrupt outright.

    So it seems to me that the root cause is once again the failure of America to use its once formidable might to invest in the health and education of its people. I wish I could really believe that this election will make a difference.

  112. 113 selena in Canada
    October 10, 2008 at 15:14

    @Angela

    Well said!

    It is the system, not the people.

  113. 114 Shakhoor Rehman
    October 11, 2008 at 10:57

    A childish belief called living on the never never.

  114. 115 Dennis@OCC
    October 12, 2008 at 19:29

    There are many people to blame on this situation…And Yes, I have a list of people for blame…

    From, the common citizens–to the government and the private sector and everyone else in between….

    Dennis

  115. 116 pendkar
    October 13, 2008 at 12:49

    so many of the bloggers here are willing to split the blame equally among the borrowers and the lenders. But dont you people see the basic asymmetry between their responsibilities. A BANK is sanctioned by the society as an institution capable of taking care of the depositors money. It is inherent in the nature of the institution that it apply its expertise and limit the risk to the depositors’ money. People have a right to expect some responsibility and competence from these institutions. And it is the role of the governments to keep and eye on them and make sure that there is a difference between banks and gambling houses.


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