Really??

I thought it was caused by idiots borrowing more money than they could possibly pay back. . .

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'06 E320 CDI
'17 Corvette Stingray Vert

That, and ruthless lenders who wanted to lend that money. Then turn around and package these shaky loans in securities. Then actively bet against those very securities.

With that combination, there are no winners other than those getting the bonuses while it lasts.

Remember in a proper free market system there is the risk/ reward balance. There seems to have been precious little risk in these schemes. That's like removing foxes from the forest and wondering why the rabbit population exploded.

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1982 300SD " Wotan" ..On the road as of Jan 8, 2007 with Historic Tags

That's one point the film brings up. Not only was there no risk for the managers making the deals, but the rewards were enormous. The film looks at the history of investment banks and points out that the ones that failed were initially funded by the personal $$ of the owners so risk/reward was closely analyzed. Then with the growth of the capitalist managerial class, the risks are no longer born by the people making the decisions and the rewards in bonuses were/are tremendous. The Europeans argued for a banning of bonus driven salaries.
That is a serious flaw in the Randian driven ideology of people like Greenspan. The 'rational choices' of invester/owners are very different from the choices of manager/investor/bonus receivers.

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1977 300d 70k--sold 08
1985 300TD 185k+
1984 307d 126k--sold 8/03
1985 409d 65k--sold 06
1984 300SD 315k--daughter's car
1979 300SD 122k--sold 2/11
1999 Fuso FG Expedition Camper
1993 GMC Sierra 6.5 TD 4x4
1982 Bluebird Wanderlodge CAT 3208--Sold 2/13

Its actually very rational, the managers are thinking about their own self interests. Problem is their self interests cause problems for other people.

If they were investing there own capital their self interests would align better with others.

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2006 CL500
1969 280SE
2023 Ram 1500
2026 Genesis GV70
2007 Tiara 3200

Would you loan your own money to unqualified folks?

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[SIGPIC] Diesel loving autocrossing grandpa Architect. 08 Dodge 3/4 ton with Cummins & six speed; I have had about 35 benzes. I have a 39 Studebaker Coupe Express pickup in which I have had installed a 617 turbo and a five speed manual.[SIGPIC]

..I also have a 427 Cobra replica with an aluminum chassis.

Definitely, if it was insured and I was guaranteed a full return if the lender defaulted. One of the most absurd components of these credit default swaps is that anyone could take out insurance on them. In other words, in addition to me buying an insurance policy on my unqualified lender, so could you. So when that lender defaulted, we would both get paid off. I wonder why AIG went under?

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1977 300d 70k--sold 08
1985 300TD 185k+
1984 307d 126k--sold 8/03
1985 409d 65k--sold 06
1984 300SD 315k--daughter's car
1979 300SD 122k--sold 2/11
1999 Fuso FG Expedition Camper
1993 GMC Sierra 6.5 TD 4x4
1982 Bluebird Wanderlodge CAT 3208--Sold 2/13

i think the AIG people were... drinking their own kool-aid?

(how could you not know that real estate could not go up 10% in value a year forever? )

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"The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread."

They didn't care. They had devised a rigged game. They had no risk so it did not matter to them.

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[SIGPIC] Diesel loving autocrossing grandpa Architect. 08 Dodge 3/4 ton with Cummins & six speed; I have had about 35 benzes. I have a 39 Studebaker Coupe Express pickup in which I have had installed a 617 turbo and a five speed manual.[SIGPIC]

..I also have a 427 Cobra replica with an aluminum chassis.

No unqualified folks were ever lent to - just qualified folks borrowing more money than they could possibly pay back. . . .

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'06 E320 CDI
'17 Corvette Stingray Vert

semantics can be fun! (and pointless!)

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"The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread."

The question was would you have lent money to folks you knew had little chance of paying it back? For some reason you seem to not want to answer this question.

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[SIGPIC] Diesel loving autocrossing grandpa Architect. 08 Dodge 3/4 ton with Cummins & six speed; I have had about 35 benzes. I have a 39 Studebaker Coupe Express pickup in which I have had installed a 617 turbo and a five speed manual.[SIGPIC]

..I also have a 427 Cobra replica with an aluminum chassis.

I think to a large extend, most of the people could pay back the loans at the time. But, many were on the edge. When gas prices went to over $4/gal., that tipped many over the edge. I came down for many, get to work or pay bills. So that tettered the housing market on the downward slide. The economy came crashing, oil went down.
Gas was down to $1.50/gal. I think at that point, the economy would just need about 6 months to recover, or show signs. OPEC etal. chopped production. Gas went up. The economy struggled.
Yes, many were upside down in their loans, before they paid the first payment. Some got loans, they could only pay with future equity of projected value. Sort of to big to fail. I would have been happy to see some of those idiots, both corperations and individuals, have a rude awakening. Unfortunately, the idiots would have drug us down to their level.
Tom