Wow, what a brilliantly insightful analysis. You'd never guess the author has no qualifications in economics, although you might surmise that he spends an awful lot of time swallowing right wing US blogs and Malcolm Turnbull's news releases.

So the situation we are faced with - financial collapse in developed countries, wholesale bank failures, the demise of US car companies and so on - was all caused by well-intentioned but foolish housing loans to the American poor.

It's not much of an advertisement for capitalism is it? Such an enormous number of poor people living in the richest country on earth ... enough to derail the whole global economy.

Spot on.

QUOTE..the_sub_prime mortgage crisis was caused by excessive borrowing,...>>

not really it was[the default]lack of repayment,not excessive borrowing alone[or rather the inability to repay the indexed intrest rates]

[where;by colluded deceptions and selfintrest people were conned[to further over-inflate the realestate markett]to set up a future default[thus the 50 trillion[securities;SECONDARY]hole was able to be blamed on a mere 800 billion of bad loans]

LOW fixed income cant cover the INCREASE built in by the money changers[they onsold their debt into our'securities'[created off bundeling the mortgauge's,then even securitised their worthless default securities via debt swaps,PLUS,restored THEM into'AAA-rated'securities by ratings agencies collusions[they[we]insured them[thus now even insurances seek new govt bailouts]

>>2007,'they'also accounted for 43% of foreclosures over the same period.<<

this was LONG before bailouts[2008]but worth noting turn-bull cashed his in[just before rudd cut off the cash-cow]scam

>>There isno doubting the central role played by subprime loans..<<NOR THE CLEAR COLLUSIONS THAT HAVE BEEN EXPOSED[real criminal acts[while cops are kept busy busting kids for drugs]

..>>an increase in foreclosures led to a drop in the price of housing and the bursting of the “housing bubble”..>>

a money bubble further expanded by the last bail out[post 911]that bail out caused THIS bubble!

>>There is widespread agreement that relaxed'creditstandards'were primarily responsible for the excessive lending.<<

of course[the RICH blame the poor]how dare they dream the boom would contuinue[buy or get priced OUT of the market]

>>In 1999, the Clinton administration pressured Fannie Mae, an intermediary in the secondary mortgage market>>''SECONDARY get it not primary''<<into increasing its risky borrowing to lower and middle income people.>>

and bankers KNEW they would default[so got THEIR cash back by creating'mortgauge_securities'[about the same time howhard gave us compulsory super[to buy them up with our compulsory-super]the poor are screwed both ways[then again conned via another'security'insuring[UNDERWRITING]the deals[then bailing them out AGAIN Later,lol

>>If the Australian government abolished negative gearing in Australia,house prices would quickly drop>>>

then we lose the credit[+]have to pay more or lose our credit based on house prices[thats why rudd gave first_homebuyers a hand[to stop the houses prices crashing][a worse problem[again set up by greedy ursury paid on fiat_currency to criminals[for_private_proffit]

The truth is that with a bit of skill and knowledge you can construct a safe and livable dwelling for less than 20k. Housing affordability crises result from government actions (eg severe development restrictions coupled with high immigration) creating a supply shortfall. If this government interference qualifies as socialism it is ironic as it only seems to serve the interests of their friends, not the public at large.

If the Bible tells us that the final economic system is a mark on either the right hand or forehead (Revelation 13:16-18 and 14:9-11)...then the thought that comes to my mind is "was sub prime in some way engineered to bring about the fall of money etc?"

If you want to control all of the people and watch their daily transactions...or even go a bit further and watch their daily movements you might want a microchip embedded under the skin; one which has a small lithium battery.
Didnt Henry Kissinger once say "if we want to control the people, we have to know where they are all of the time".

Verichip seems to be the trend.

Ken_L

You are talking about the richest population in the history of the world. The poorest of the poor in America are richer than virtually all people in all times and all places in the history of the world. Not only that, they are in many ways richer than even kings were in many ways before capitalism relatively recently - with their access to motor transport, telecommunications, abundant foods from afar, anti-biotics, cheap pharmaceuticals, and so on.

The fact is, the financial crisis was caused by government's monopoly control of the supply of fiat money being used to pay for re-distributionist handouts on a massive scale, based on beliefs enacted in government policies of both major political parties, that everyone is entitled to real wealth for no other reason than that if they don't have it, they won't be equal to other people who have more.

People who think the problem was caused by unregulated capitalism are merely displaying their failure to understand the relevant economic cause and effect enough to make a sensible comment.

But no-one defending capitalism ever said that capitalism can produce something for nothing, or that you have a right to the work and property of other people, or that markets will balance supply and demand if you strangle the price mechanism