Rich S.

The Financial Crisis Explained

satguru sounds like a stereotypical angry liberal... If you paid attention, you would understand that the home buyers (poor, black, green) are not entirely responsible for this mess. It was Congress who forced banks to approve loans to people who did not deserve them. This affected every demographic, but a significantly higher percentage of low-income/minority buyers defaulted because they were barely able to make their payments from day one. In fact, most of those foreclosures happened within the first year. The Internet is full of data on this if you'd take a minute to research before lashing out.
I personally know two bank managers who predicted this mess years ago after being forced to approve loans to high-risk minority buyers simply because they were minorities (affirmative action, anyone?). Those buyers often had zero savings in addition to low incomes and/or unstable employment, so any financial hiccup would prevent them from making a payment. The banks would sell those loans as fast as they could, knowing they were too risky. Ironically, and unfortunately, those banks would invest their customers' money in the big Wall Street firms who were leveraging the same bad mortgages. These are global institutions and investment vehicles with many foreign investors, which is why it affects the entire world economy. It's a delicate house of cards.