90% of homeowners take out subprime from ’98 to ’06

[gdcox]

EconProf. You undermine your name. Economics 101 tells you that the market only works well if all have full information. Pres Bush’ veto of Federal legislation controlling mortgage brokers about 6 years ago guaranteed that people like this would get misleading hard to understand papers.

[EconProf]

gdcox: I agree with your slam on President Bush to not put reins on mortgage brokers some years back. Might have avoided some, but not all, of our current problems.
But note that for economic principles (and capitalism) to work, we don’t need perfect information. We act with what we know, we seek better info, and we USUALLY avoid doing stupid things that hurt us. The sad thing about the bailout is that it would remove market incentives to do the right thing in the future.

[EconProf]

gdcox: I agree with your slam on President Bush to not put reins on mortgage brokers some years back. Might have avoided some, but not all, of our current problems.
But note that for economic principles (and capitalism) to work, we don’t need perfect information. We act with what we know, we seek better info, and we USUALLY avoid doing stupid things that hurt us. The sad thing about the bailout is that it would remove market incentives to do the right thing in the future.

[EconProf]

gdcox: I agree with your slam on President Bush to not put reins on mortgage brokers some years back. Might have avoided some, but not all, of our current problems.
But note that for economic principles (and capitalism) to work, we don’t need perfect information. We act with what we know, we seek better info, and we USUALLY avoid doing stupid things that hurt us. The sad thing about the bailout is that it would remove market incentives to do the right thing in the future.

[EconProf]

gdcox: I agree with your slam on President Bush to not put reins on mortgage brokers some years back. Might have avoided some, but not all, of our current problems.
But note that for economic principles (and capitalism) to work, we don’t need perfect information. We act with what we know, we seek better info, and we USUALLY avoid doing stupid things that hurt us. The sad thing about the bailout is that it would remove market incentives to do the right thing in the future.

[EconProf]

gdcox: I agree with your slam on President Bush to not put reins on mortgage brokers some years back. Might have avoided some, but not all, of our current problems.
But note that for economic principles (and capitalism) to work, we don’t need perfect information. We act with what we know, we seek better info, and we USUALLY avoid doing stupid things that hurt us. The sad thing about the bailout is that it would remove market incentives to do the right thing in the future.

[Noob]

[quote=gdcox] EconProf. You undermine your name. Economics 101 tells you that the market only works well if all have full information. Pres Bush’ veto of Federal legislation controlling mortgage brokers about 6 years ago guaranteed that people like this would get misleading hard to understand papers.[/quote]
You don’t need complete market information to know that you shouldn’t get involved in something if you don’t know what you’re doing. The sad fact of the matter is that regardless of your politics, you can’t fix stupid.

[Noob]

[quote=gdcox] EconProf. You undermine your name. Economics 101 tells you that the market only works well if all have full information. Pres Bush’ veto of Federal legislation controlling mortgage brokers about 6 years ago guaranteed that people like this would get misleading hard to understand papers.[/quote]
You don’t need complete market information to know that you shouldn’t get involved in something if you don’t know what you’re doing. The sad fact of the matter is that regardless of your politics, you can’t fix stupid.

[Noob]

[quote=gdcox] EconProf. You undermine your name. Economics 101 tells you that the market only works well if all have full information. Pres Bush’ veto of Federal legislation controlling mortgage brokers about 6 years ago guaranteed that people like this would get misleading hard to understand papers.[/quote]
You don’t need complete market information to know that you shouldn’t get involved in something if you don’t know what you’re doing. The sad fact of the matter is that regardless of your politics, you can’t fix stupid.

[Noob]

[quote=gdcox] EconProf. You undermine your name. Economics 101 tells you that the market only works well if all have full information. Pres Bush’ veto of Federal legislation controlling mortgage brokers about 6 years ago guaranteed that people like this would get misleading hard to understand papers.[/quote]
You don’t need complete market information to know that you shouldn’t get involved in something if you don’t know what you’re doing. The sad fact of the matter is that regardless of your politics, you can’t fix stupid.

[Noob]

[quote=gdcox] EconProf. You undermine your name. Economics 101 tells you that the market only works well if all have full information. Pres Bush’ veto of Federal legislation controlling mortgage brokers about 6 years ago guaranteed that people like this would get misleading hard to understand papers.[/quote]
You don’t need complete market information to know that you shouldn’t get involved in something if you don’t know what you’re doing. The sad fact of the matter is that regardless of your politics, you can’t fix stupid.

[cooperthedog]

90% of homeowners take out subprime from ’98 to ’06.

This really got my attention, as that number seems exceedingly high. This would mean that 9 out of every 10 homes were refinanced/purchased with a subprime loan…

To clarify, what the article actually states is that the number of subprime loans made during that period (which is a fraction of all mortgages), 90% were refi’s.

[quote]Discussion of the problem often focuses on first-time home buyers who stretched to buy homes they couldn’t afford. But experts who’ve crunched the numbers say 90% of people who took out sub-prime loans from 1998 to 2006 were already homeowners.[/quote]

This would tend to support the predatory lending thesis (in addition to the lack of due diligence by the homeowner).

[cooperthedog]

90% of homeowners take out subprime from ’98 to ’06.

This really got my attention, as that number seems exceedingly high. This would mean that 9 out of every 10 homes were refinanced/purchased with a subprime loan…

To clarify, what the article actually states is that the number of subprime loans made during that period (which is a fraction of all mortgages), 90% were refi’s.

[quote]Discussion of the problem often focuses on first-time home buyers who stretched to buy homes they couldn’t afford. But experts who’ve crunched the numbers say 90% of people who took out sub-prime loans from 1998 to 2006 were already homeowners.[/quote]

This would tend to support the predatory lending thesis (in addition to the lack of due diligence by the homeowner).

[cooperthedog]

90% of homeowners take out subprime from ’98 to ’06.

This really got my attention, as that number seems exceedingly high. This would mean that 9 out of every 10 homes were refinanced/purchased with a subprime loan…

To clarify, what the article actually states is that the number of subprime loans made during that period (which is a fraction of all mortgages), 90% were refi’s.

[quote]Discussion of the problem often focuses on first-time home buyers who stretched to buy homes they couldn’t afford. But experts who’ve crunched the numbers say 90% of people who took out sub-prime loans from 1998 to 2006 were already homeowners.[/quote]

This would tend to support the predatory lending thesis (in addition to the lack of due diligence by the homeowner).

[cooperthedog]

90% of homeowners take out subprime from ’98 to ’06.

This really got my attention, as that number seems exceedingly high. This would mean that 9 out of every 10 homes were refinanced/purchased with a subprime loan…

To clarify, what the article actually states is that the number of subprime loans made during that period (which is a fraction of all mortgages), 90% were refi’s.

[quote]Discussion of the problem often focuses on first-time home buyers who stretched to buy homes they couldn’t afford. But experts who’ve crunched the numbers say 90% of people who took out sub-prime loans from 1998 to 2006 were already homeowners.[/quote]

This would tend to support the predatory lending thesis (in addition to the lack of due diligence by the homeowner).

[Author]

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