The economy: how fucked are we?

[Toby]

Originally Posted by rhetorical

...But Putin is KGB and is a man with a plan.

Yup, a Russian doesn't take a shit without a plan.

[Hell Puppy]

You have to fix the housing market before the rest of the economy will come around. it's easy to blame Bush for all of this, but root cause really goes back to 1995.

It's called the Community Reinvestment Act. It was modified in 1995 by Clinton. Go look it up and read it. But for those with short attention spans, basically it has the fed pushing for loan approvals based more upon need and less upon sound underwriting principles.

So millions of loans were written in the coming years to people with a marginal ability to pay. Most of these were ARMs. Then the dotcom bubble bursts, 9/11 hits, jobs are lost and interest rates go up. Suddenly you have loan discounters like WaMu in a world of hurt with all of these loans not being repaid.

We all get to pay the price now.