the grave's been dug already on this, ever since Gramm Leach-Bliley and the first mega-mergers really, but things have gotten so much worse during 2008, and after. To the point of breaking up the big systematic banks---I would like to think it was possible, but given the circumstances---huge banks created to stave off crisis, a bank-friendly Fed, a president who seems reluctant to spend more political capital, and such an exhaustive lobbying effort by Wall Street---I don't think it is realistic. To hope for regulation, perhaps drastic reform such as changing the tri-party repo system structure that as you alluded to,which gives so much power to banks such as JP Morgan, that much, I think, on the best of days, can be hoped for. Whole-scale structural change---we missed the boat on, I think, unless there is another crisis soon.
so I was watching Melissa harris Perry who is pretty liberal and her liberal panel discuss this issue. I think the first mistake that americans need to break out of when discussing home ownership is that home ownership is almost vital to the American dream. that somehow homeownership needs to be available to everyone who can "afford" a home. one thing they are harping on is the down payment now required as has been brought up in the thread. how most people can't afford these down payments. that is true, if you live in a city with a medium home price of $200k you need $40k. that's a lot, but consider a couple being married five years, they both make $90k combined, they can save up that money. home ownership should go to responsible people with the capital. the equity requirement is their to protect both lender and borrower. we are less than 5 years from the height of a crisis that was illustrated by people upside down in their homes. well part of the issue is only putting 5% to start. now losing value is losing value, if you put a good equity amt it still gets lost but you aren't upside down which is als less risk for the bank, less downgraded loans more solid system to endure economic downturn. secondly the govt intentionally revved up the home lending market to stave off recession in early nineties. well the easy credit that flooded other markets was also a problem. banks gave home loans that weren't fundamental, and the bonds backed by those mortgages helped take the economy down
FWIW people get a little over excited about being upside down on homes. Loans are commonly given out for things that will depreciate in value and be worth significantly less than the original loan. Many of the markets where people were upside down have recovered. The main problem wasn't excessive lending. The main problem was there was a bubble. People were expecting home prices to increase forever and they created crazy forms of financing and ridiculous investments based off the false assumption of continual price appreciation. Banks and investment banks would have been fine if there wasn't excessive leverage in the system.....but there was excessive leverage in the system due to false assumptions and changes in the regulation of leverage.
I dont disagree witth the post robbie . i guess all im saying is a return to fundamentals is needed and i feel it would condition the overall population to more of a saving mentallity. one thing i will say is the lack of income growth has limited home purchasing power. There are less people who have the ability to save.
