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Santorum's theory on the collapse of the housing bubble: High gas prices caused the meltdown!

You can't make this stuff up, he should stick to birth control and bombing Iran!

LANSING, Mich. - Rick Santorum said Monday that high gas prices sapped homeowners' ability to pay their mortgages and plunged the United States into recession, a far different reading of the causes of the recession than that of the economists who studied the crisis.

"We went into a recession in 2008 because of gasoline prices. The bubble burst in housing because people couldn't pay their mortgages because we're looking at $4 a gallon gasoline. And look at what happened, economic decline," Santorum said at a campaign stop.

Leading economists have said the financial crisis was caused not by the rise in gas prices in the summer of 2008, but by the collapse of the housing bubble - blamed on the proliferation of subprime mortgages - and the related meltdown of the financial market that later that fall.

http://www.cbsnews.com/8301-503544_162-57386298-503544/santo...



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He's wrong of course.

It was the price of Cashews that brought the economy to it's knees.

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another great economic mind,

another great economic mind, Santorum. Gas isn't going up Rick, the dollar is just going down.

I'd hate to see why he thinks the dow is at 13000 right now. Another bubble waiting to pop.

“Let it not be said that no one cared, that no one objected once it’s realized that our liberties and wealth are in jeopardy.”
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Santorum lost his Flavor of the Month mojo when...

... he started to open his mouth more. That kid really does say the darndest things.

What can I say?

Santorum is an idiot.

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I had some fun in their

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Santorum opens his mouth once

Santorum opens his mouth once again and immediately in goes the foot like a magnet to steel.
This guy has his foot in his mouth so often, it is no wonder he suffers from a chronic case of athletes tongue.

Gas prices? Really? Are gas prices what caused the frenzied speculative bubble in the Nasdaq and its subsequent bursting? Are gas prices what caused Greenspan and Co, and then Bernanke to repeatedly lower, and lower and lower interest rates well below market rates based on savings, or even real inflation rates, or even official inflation rates in order to “juice” the economy -- Or rather juice leveraged speculation in the economy through their lure of artificially low interest rates.

Did gas prices cause Congress to pass the Community Reinvestment Act, forcing banks to issue real estate loans to high credit risks applicants who were unlikely to afford them or pay them back?

Did gas prices cause banks and mortgage lenders to package up mortgages into securities to be unloaded onto unwitting pension and retirement funds, thereby unlawfully transferring and distributing equitable title to the mortgages without proper transfer and recordation in accordance with State laws and county recording procedures?

Did gas prices cause Freddie and Fannie to distort the market by buying up whatever mortgages banks and mortgage lenders were willing to unload on them, thereby distorting the market by relieving them of their own consequences of issuing high default risk and bad loans?

Are gas prices what caused banks to push mortgage lending with interest only loans, 3, 5 and 6 years ARMs with balloon payments, or the widespread practice of LIAR loans and NINA (no income, no asset loans), because they knew they could unload them into either MBSs or Fannie and Freddie.

Did gas prices whip up a large segment of the population into a buying frenzy such that even dentists, clerks and their assistants were seeking loans for speculative buying purposes on the false representation that “real estate prices can never fall. They can only go up.”? Are gas prices what caused people to go into speculative frenzied real estate buying binge?

Now it is one thing to miss all those factors ahead of time or even as they were happening. That is bad enough in itself. But to be completely oblivious of these factors after the fact, with all the advantage of hindsight and knowing what happened is beyond idiotic.

And so Santorum wants to pursue a foreign policy agenda that will send gas prices in the U.S. to $8/gallon, then $10/gallon and then beyond.

Santorum has no business in any political office. He is disaster in waiting.

Let it not be said that we did nothing.-Ron Paul
Stand up for what you believe in, even if you stand alone.-Sophia Magdalena Scholl

Well

I'd say the rise of gas prices was perhaps the straw that broke that camel's back. It sure was the straw that broke my financial back :-(

But no, it wasn't the chief reason for the meltdown.

Yea, rick the great economyst

LMAO what a joke. their is a large number of idiots out there who just vote for him because he's catholic. When you have the head of the democratic party in Michigan telling his democrats to go out an vote for Santorum what's that tell you.

"Give me liberty or give me death" Patrick Henry

Santorum

Such an intellectual.

Yet again, Go Home Glenn Beck you MORON

period

What the frick is he smoking?

And can I have some?

I don't know what's with all the ridicule..that point by him

makes sense to me. If a family's gasoline expenses are higher, they have less funds to spend otherwise.

Come on... Of course that

Come on...

Of course that point is valid, but it didn't cause the collapse of the housing bubble. Not by a long shot.

DONT LAUGH THIS HAPPENED TO ME

I was paying about 150 a month in gas, next month BOOM went up to 250... I had to stop paying my 2500/month mortgage!

LOLOLOL

Don't laugh...

It did make things harder, especially having money to pay the mortgage. I always had to ask, "pay all the mortgage? or drive to work?" Guess what I chose? Eventually i got in real trouble,and lost my job anyhow after a pay cut that made things even worse. I am sure there are many Americans with a similar story. It was hard not to blame the gas prices on my woes.

Read some of the comments HILARIOUS!

"No Rick, it was not the gas price. It was caused by UFO Mother ship orbiting around the dark side of Moon sending out mind altering signals to the Wall St high rollers."

"That's ridiculous!!!! Everyone knows it was the rising price of milk coupled with reduction of cell phone service in the upper mid-west because of Sprint's service restructuring."

"This just in: The recession was caused because of outbreak of zombies."

"Update: Zombies ate New York, now headed to San Francisco."

"Gee, I thought the housing bubble was caused by gay people having sex."

Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha

Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha........

How about maybe the line of credit extended to Fannie and Freddie that would allow them to attract business that they wouldn't normally be able to attract -- add to that the pressure that comes with this Fed-backed line of credit to give high risk patrons loans they should not have?? Maybe that played a role?

What an idiot.

It must be true, because

It must be true, because Ayatollah Santorum read it in his koran!

whats sad is that i think

whats sad is that i think most people reading that explanation would buy it. perhaps even eat it up with a spoon. ignorance is mankinds greatest war. so, no surprise there i suppose.

It would be a lot more comical if he wasnt this serious nominee contender... but since he is, im officially frightened.

Santorum, like Gingrich and

Santorum, like Gingrich and Perry before him, will talk himself into obscurity. Let him continue to speak. Encourage it :)

When are people going to stop voting for this guy???

I don't have a clue why people vote for this guy when his home state hates him. He lost his Senate seat by the 2nd biggest margin in the history of Pennsylvania. To top it off he lost to a Democrat, last time a Democrat won a Senate seat in Pennsylvania was 1962. That alone should be enough for people to not vote for him.

It's the Democrats who are...

crossing over and voting for Santorum because they want him to be the nominee for the GOP because he will be so easy to beat.

Minnesota Mary

Cyril's picture

Woa...

Did he ACTUALLY say that?

Seriously?

So, banks, a biaised housing market, biaised interests rates tricked with by the almighty Federal Reserve, gov subsides waste of taxpayers money and bail outs had NOTHING to do with housing crisis back then??

It was just gas prices the culprit?

Woa. So we and Ron Paul must be living in a PARALLEL universe.

Time to freak out!

We might as well just surrender on any economical argument from now on.

Or, wait...

Maybe this Mr. Santorum is not just fake but insane?

Best allies of the deceivers: distraction, confusion, non-sense, ...

All in all : PURE NOISE.

My friends, I beg you :

Mr Santorum needs help, so we really need to send him a Doctor!

"Cyril" pronounced "see real". I code stuff.

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Naaw...

That's almost a little cute... Or it would be if it was not coming out of the mouth of a guy who is at least making an honest attempt at becoming the most powerful man in the entire god damn world.

I think Santorum is full of gas..flatulence is in vogue in 2012

If we could abolish all career politicians, we could solve global warmimng, as well as rat and cockroach over populations..

.

.

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He's partly right.

The gas prices were the straw that broke the camel's back. Commodities at the time were skyrocketing. Just before the collapse were some crazy times. The euro would go up by whole penny in one day. Increasing prices and over-inflation of commodities popped the bubble. Of coarse that was an effect not a cause.

That's just silly

We did in fact have several spikes in the cost of fuel during the housing boom and those spikes, albeit not as severe, had virtually no impact on the boom because the unnaturally free credit that pushed the strong market allowed for those costs to be carried forward. My contracting business had a whole variety of operating expenses that spiked through the roof during the boom but those increases had little affect because prices more than eclipsed costs. Contractors such as myself were just raising our prices and buying bigger trucks and filling our tanks with money our clients were giving us from which they themselves were spending from home equity lines of credit based upon collateral they didn’t even actually haves.

Before the housing crash, we were building homes people really couldn’t afford and which were selling for three times what they are worth today. During that time, a whole variety of costs increased which had nothing to do with transportation costs and those costs were simply passed along. Had the price of gas then been three times what it is today, the market would not have slowed at all because the market was in an environment where people were already spending what they could not afford and increased prices seemed to be of little matter to the typical borrower.

Absurdly high costs were not at all the reason the housing market failed. It was the absurdly unsustainable credit practices which inevitably failed causing an abrupt halt to lending which is what caused the housing bubble to collapse.

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Steven, he is wrong. the

Steven, he is wrong. the housing market was turning over in 2006/2007. I know because my contracts were 2"s thick on my board in 2005. Late 2006 they started coming in slower and slower. In 2007 the housing market collapsed. Commodoties were not really running at that time.