Economics and Finance News - Dec 1, 2008
Did the 2005 Bankruptcy “Reform” cause the world financial collapse?
Remember the Bankruptcy Abuse [sic] Reform act of 2005? Yeah, the one that the credit card companies and bank got passed by buying the very best Congress money can buy. Turns out, according to the New York Fed's research, that since people going bankrupt after the BAR found it more difficult to stop paying their unsecured debts - i.e. credit cards - they were forced to stop paying their mortgages instead. Over 120,000 of them a year, according to the NY Fed researchers.
Hmm, Citibank: that is one of the biggest credit card issuers around, right? So, lezzee here. Citi went and bought itself a new bankruptcy bill in 2005. One result was that, (let’s give ‘em a break and multiply two years instead of three) a quarter of a million people had to default on their mortgages. That in turn caused a crisis in U.S. sub-prime mortgages. That in turn blew up the whole damn world financial system. And now, Citi is getting $308 billion in our money to save its sorry ass?!?
This would be effing hilarious if it weren't destroying so many peoples' lives at this point.