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Thread: What caused the financial crisis?
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[quote=GEARBOX,355746]Now here is my take, it is not so bad if anyone really looked at what actually happened to these securities. As of date, there is about 5% of non performing loans identified in the pool. Most Americans are paying their mortgages. And remember, these securities are secured against real estate. So is the real estate worth 100% of the purchase price? No. 70%?, maybe, 50%? absolutely. Real estate prices outside of Florida, has only fallen 20-25% at most. So the real loss is no more than half of 5%. The securities are still paying interest to those who own them and the only problem I see is liquidity (being able to sell them). The $700 Billion dollar bail out was suppose to back these securities (I thought) and re create the market and provide liquidity which should have resolved the original problem, But for some starnge reason I can't fathom, half of the bail out money was used but not for that purpose. Instead, Bernackie bought up credit card debt with the money and then there is the bank, AIG, and auto makers bail out. Confidence is the new problem that I see and the people who caused this mess are now running the show. God help us all.[/quote]
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