Quote:
Originally Posted by David70
If the government doesn't allow me to waste my money on things I shouldn't buy then I will be better off for it? Some group in the government decides what the people can afford and tells BMW when to give loans and when not to? That's pretty much it?
The U.S. subprime loan problem happened because companies could lend money to people that couldn't afford the loans and then sell them to other companies claiming they were good loans. If they had been required to hold the loans they wouldn't have made the bad loans in the first place. It's self regulating if you have to hold the loans and won't be bailed out.
|
Exactly. BAD LOANS. Regardless of whether they are being bundled with good loans and sold as such, they are still bad loans and it was still the predatory nature of such loans that downed the global economy. Regardless of whether the bad loans were sold off as good loans or not, they were still bad loans that should never have been approved.
The US doesn't have laws to prevent such loans from being approved. Australia does. BMW Australia breached those laws and they got sprung.