What puzzles me most about the current financial crisis is that my mom’s realtor told me this was going to happen in…2004.
In 2004, she explained how banks had let many people take out interest only loans that would balloon in five years on the theory that they could refinance, but, as she explained to me, prices were not going to keep rising forever. What she told me was so horrible–people losing their houses– that I started praying about it and kept praying since them.
But, and here is my question, if this nice lady knew about this in 2004…why didn’t the bankers and lawmakers notice?
Nor is she the only one, my economist friend from Arizona says she knew from about 2004/2005. She was part of an economic round table that John McCain sometimes visited. (She despises McCain for Arizona related scandals that don’t make it to the rest of the country.) McCain apparently listened, because he tried to introduce legislature about that time to slow down the subprime loans…it was called ‘racist’ — since subprime loans were thought to be helping the poor — and defeated.
Granted, neither of these people (the realtor or the economist) predicted the Wall Street trading on sub-prime loans and what that would do…but just the foreclosures alone would have been bad enough. This just makes it worse.
So…my mom’s realtor knew, economists knew, and some lawmakers knew…so how did things get so bad?