What a weekend

Well Hello.

This weekend was pretty fun. I went to Kansas City with my girlfriend, and went to one of her best friends weddings. It was a good time- it had an open bar. It was nice to not do much, and just hang out with her family.

Earlier in the morning we went on a walk in a local nature park with my girlfriend, her little sister Hallie, and her mom; as we were walking, the topic of the housing sub-prime mortgage crisis came up, as did Sarah Palins' performance in the Vice Presidential debate.

First a foremost my girlfriend and her mom both agree that the sub-prime mortgage crisis was caused by the American people; those who wanted to live in houses that they could not afford. To a certain extent I agree, but not entirely. I think this type of person was just a drop in the bucket as compared to the number of banks and wall street financiers who wanted to make some big bucks.

I firmly believe that it is because of the greed of Wall Street, and the lack of governmental enforcement of already in-place regulations, that we are in this current mess. It was the government, who lowered interest rates to an all time low, who allowed the banks to give mortgages to Americans with no form of collateral or credit (because the banks wanted to charge them an arm and a leg) that caused this mess.

Unworthy homeowners were amuck, and Wall Street was creating new forms of financial packages to sell this debt as assets to other companies across the world (Collateralized Debt Obligations). When the housing bubble burst, caused by too many people in too many homes too fast, houses suddenly were worth less than the inhabitants owed on the mortgage. This is an obvious problem, especially since a lot of these people were locked into ARM's (Adjustable Rate Mortgages), which meant that they now had to pay sometimes double their usual monthly mortgage payment. So with a house that was worth a fraction of what you owed, people stopped paying. This meant that the banks started to run out of money, and was now stuck with a ton of what should have been assets, but now is considered debt.

Since the banks don't know how much money will be losts with these transactions, they are refusing to lend money, even to the most credit worthy of borrowers; that doesn't mean only to the American people, but also from bank to bank, and business to business. This is what is causing the entire credit crunch.

I don't know where I itnended to go with this. I guess just to try and prove my point that it isnt the average americans fault. The banks and realtors helped to persuade and make the purchasers of these homes believe that they could afford it. It was cruel and malicious.

The only thing I can be sure about is that the government is going to have to pay more attention to what the free-market is doing; because ultimately, the free-market is ruled by one thing- greed.

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