[onewhippedpuppy]

Originally Posted by the

Pretty much, although it didn't need to be called to the penny in order to avoid this disaster.

It was called in 2006 that RE in the bubble areas would go down in value at least 50%. Charts were posted, showing almost exactly how much this would fall (it is reverting to the mean, i.e., correcting back to where real estate appreciation tracks the general rate of inflation), and when it would fall. They turned out to be almost exactly correct.

Also, you don't need to know the value for any real estate. Only the bubble areas. The other stuff doesn't matter much. I read yesterday that this whole crisis was caused by the bubble in only 40 counties throughout the US - those bubbly ones we all talked about in 2006-07.

If the banks would have seen that information, and opened their eyes, all of this would have been averted. It really didn't take a genius to figure it out. What the banks did was a massive failure, based mostly on short term greed, which clouds judgment.

I will concede that the banks could have better done their due dilligence in regards to property values and better covered their asses by requiring larger amounts down.

However, I still think that the ultimate burden falls on the individual. We used to be a nation of independent folks that watched out for ourselves. Today we sit back and expect others to watch out for us, to save us from ourselves. Personal responsibility has totally gone out the window, and the reaction to this crisis is a microcosm of a larger issue. The emphasis isn't on the individual that made a stupid or irresponsible choice, it's on the "big bad" banks that "lured in" unsuspecting homeowners. Everyone's a victim. By not punishing these individuals for their mistakes, we are essentially rewarding their bad behavior. This entire bailout is positive reinforcement for stupidity.

By the way, does anyone really expect a bank to look out for their best interests? My policy is to not trust anyone that's making money off of me, and that certainly includes banks.