Three years ago, I remember wondering the following out loud -- to my wife, friends, a few co-workers --> How could mortgage brokers/lenders actually believe that Americans who took out a home loan/mortgage at, say 3-6% interest for the first 3 to 5 years, would, in year 6, be able to pay 10, 12, 15 percent interest, or that they would be able to afford monthly house payments that doubled over night?!
It doesn't take an economist -- and I'm surely not one -- to see that this was a disaster waiting to happen. I also couldn't figure out, at first, how the lenders thought they were going to make money, when they knew that many people that they lent the money to, wouldn't be able to make the payments in year 6. Then, I was told that the mortgages/loans are packaged and re-sold -- at a profit to the original "owners" of the loans -- to other companies/financial speculators etc.
In other words, it was all about short term -- very, very short term -- profit.
Anyone with half a brain must have known that when the loans came due, that many, many homeowners would default, and that this, of course, would spell economic disaster for the housing industry, and the U.S. economy. But, apparently, many of those in power don't have half a brain. Either that, or they've been blinded completely and totally by free-market economics, which holds, essentially, at its core, that we ought to let the folks with the money do whatever they want, even, if it's shortsighted, greedy, and -- as anyone with a half a brain can see in the case of the morgage crisis -- just plain dumb and stupid.
I only hope that we learn from our mistakes, change our ways, and do not let short-sighted profiteers hijack our economy, and the world's economy, again
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