was it just risky loans?

[wolfgang]

Was it government regulations of allowing high risk loans that brought us down? The high risk loans allowed and generated aggressive motivated lenders that go after people that have no business borrowing money in the first place out of some sort of idea of helping them or thinking borrowers have entitlement, even if they haven't paid a bill on time for their whole life? The lender broker gets a fat cut with selling loans as commissions, right?

And is this regulation some sort of law the government makes?
And which pres. candidate is going to change things in the right direction with respect to not allowing risking loans? If such power comes from the pres?

[ar81]

Trade deficit leaks currency out of US.
So the country is leaking its blood, so it was just a matter of time before there was a liquidity problem somewhere in US economy.

Subprime loans turned liquid assets into fixed assets as loans could not be recovered and people houses now belong to banks, reducing liquidity.
Mortgages backed up some investments and it made financial system not being able to assess the true value of those investments, causing panic in the stock market.

Bankruptcies of banks caused by lack of liquid assets and severe losses, caused bank executives to feel panic, so they do not lend money to other banks, so all money inside banks is not flowing, reducing liquidity of the overall economy, not letting remaining blood in economy to flow.

Then bailout comes, government gives money to banks so they lend that money. But it seems that this money is not enough. Some versions say that money from bailout is not becoming lending, so the problem remains.

So banks are the heart of economy and they are not pumping money, and US economy is bleeding money out of US with trade deficit.

What brought banks down was that they took excessive risks which resulted in losses and lack of liquidity, and government did not regulate very good, because government doesn't pay enough to have the best brains, and because ideology calls for no government intervention. But you have the added effect of trade deficit aking things worse.