My in depth series continues with what some consider the cause of the recession. Although the downturn is not as severe in the ArkLaTex, the effects are all around us. To find out more I spoke in at lenth with local experts to find out their take on what started the recession.
NATS - Home construction
0:00 [SUPER] Cody Jennings - Videographer cjenning@ksla.com
"There was an interest to increase home ownership in the U.S."
"The idea of making it so easy to buy a home, that..."
0:16 [SUPER] Brad Gosslee - Coldwell Banker - Chief Operating Officer
"anyone can buy one isn't good for the market because you end up with too much demand for homes"
0:23 [SUPER] Chris Combs - Professor of Economics - Louisiana State University
"For those who initially wouldn't be able to meet those requirements now met those requirements so it increased home ownership.
"A lot of the credit was easy to come by there was easy going around a lot of people werent being fully checked out, they were getting loans based on..."
0:38 [SUPER] Rocky Rocket - Director Bossier Economic Foundation
"minimum incomes. People werent too concerned at the higher levels of whether or not they could pay back the loans and sure enough that caught up with us"
NATS - more construction
":An extended period of time going back over perhaps fifteen, twenty years, of extraordinary debt creation. Both in the...
0:53 [SUPER] David Joy - Chief Market Strategist - Ameriprise
"private sector as well as in the public sector and we simply got to a point where we could no longer sustain economic activity that was fueled by ever increasing amounts of debt.
"and right now what's going on is that people said that enough is enough. I've got the stuff that I want on loan basically, and now I've got to go out and pay for it".
"I think at its heart that was the real reason for the crisis. We were collectively living beyond our means and the day of reckoning arrived".
"And it was such vast number of people nation wide who were doing that then it ended up being a problem both on Wall Street and within the banking industry and it affected everybody. It affected all industry right down to individual home owners".
NATS - more construction
"You had a lot more people buying homes, first time homes in markets where you really saw a bubble because you just had that many more home buyers in a market that didn't used to be there".
NATS - concrete being poured
"The coasts, east and west, had housing booms and..."
1:54 [SUPER] Tommy Williams - President - Private Wealth Management Group
"we didn't have a boom here in this part of the country and so we are not experiencing a bust. And most of the issues that created the economic calamity were housing related having to do with foreclosures, sub-prime mortgage problems and things of that nature".
"When those loans adjusted you started to see the first wave of foreclosures and if you saw a lot of them in a particular market like a Miami or Southern California or Vegas it compounded on itself.
2:23 [SUPER] Joe Salerno - Professor of Economics - Lugwig Von Mises Institute
"You realize hey I'm not as rich as I thought I was. My house isn't worth as much, my pension has taken a hit and so on".
"Now it's worth fifty thousand dollars less than what I paid for it or a hundred thousand dollars less than what I paid for it depending on what price rand you are in. And many of those have started to choose to walk away from their home. And now with the national economy falling we have seen people that are losing their homes purely because they have lost their job".
"The accumulation of debt works as long as the asset that you purchase with it rises in value. As soon as that asset starts to fall in value and you are still left with the outstanding debt, now all of a sudden you've got a big problem".
As Tommy Williams pointed out, the artificial boom wasnt experienced here in the ArkLaTex. We were spared for a multitude of reasons. The next video will cover what makes our market different and seemingly resistant to the economic downturn.
Foreclosure - TRT 3:04
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3:58
Default America: Exception Marketby ziocody1,177 views
IMPORTANT!!! Watch, A HOME FIT FOR ROYALTY!!!
ThePrezidentialbey 1 year ago