Friday, February 27, 2009
Posted by:
John & Cisco
at
7:00 AM
CNBC had an interesting report on the origins of the global economic crisis, including the assertion that it was also caused by subprime loans in California.
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I watched this show. It's two hours long. If you pay close attention, it tells the story of a few people who they considered "victims" of the housing situation. One was a poor woman living in Watts in the LA area, who got a hugh loan to buy an upscale house in Yorba Linda, but at no time does the story touch on exactly how much money she made to afford a four hundred thousand dollar house. One guy they have on there is described as a "recent mexican immigrant". Again, they don't go into detain as to what he does for a living or how much money he was making when he bought a real nice pricey townhouse. This show has some real good insight into the dirty dealing side of the loan officers and bankers, but at no time does it address the fact that you had poor people with scarce income and poor or no credit history buying homes that people normally worked hard and saved their whole life for. Ironically, that is as much the cause of the housing meltdown as anyting else and CNBC turned a blind eye to it. |
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some dopey liberals thought the poor should be allowed to live in nice houses to. Will they ever be made to pay for their foolishness? |
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Your a pathetic misinformed delusional fool....
Barney Frank (D) Massachusetts and Christ Dodd (D) Ct were the two chairmen in the house and senate overseeing fanny and freddy. Barney told the American public at the beginning of last year that freddie and fanny were in great shape. All the while requiring them to makle loans to looser liberals who can't afford a home and had no down payment nor income substantial enough to justify the loans. But as the libs say "it is the right of every American to own a home" which if you read the constitution no where in there does it state that. I hope you can read. |
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If you dont have a clue about the community re-investment act then that would be reason enough for you to pull your head out of what orafice it is stuck in, look up the CRA and who promoted it for yourself. people like to blame the banks but the government had their hand in forcing banks to give loans or face retribution through false accusations of racial dicrimination and scare tactics. why else would Acorn be protesting banks and lenders for not giving loans to people that couldn't afford them. |
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"But as the libs say 'it is the right of every American to own a home'"
Can you name a single "lib" who has said this?
1. W constantly bragged about his Ownership Society.
2. The system worked OK until banks were allowed to overleverage.
This "lib" is willing to admit that there were other "libs" who were dumb enough listen to conservative's appeals to deregulate. The lesson here is that we should rarely trust the advice of conservatives. |
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as you call others names you may want to take into account that dodd and franks were in the minority until 2007 and the charimen of the committes were all republicans.
second, no bank or mortgage company had a gun to their head to make these loans.
third, only 30% of defaulted loans were subprimes.
fourth, it was the unregulated selling of "bundled" mortgages as securities investments that caused this crisis.
fifth, credit default swaps, again unregulated, contributed to the crisis by allowing lenders to borrow 30 times above their assets.
aig and bear stearns would have crashed regardless of the 30 year old cra or anything fannie or freddie did.
here are some links--educate yourself before you insult others. of course like many conservatives you will not look at them because facts don't fit well in your ideology---- only feelings.
http://www.newsweek.com/id/161199
http://www.businessweek.com/investing/insights/blog/archive s/2008/09/fannie_mae_and.ht |
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Your (sic) a pathetic misinformed delusional fool....
OK Tony. Pop quiz. In the first six years of the reign of Bush, what percentage of money from Fanny & Freddy went to Reps vs Dems? How does the money effect decisions? Does it matter that more money in terms of amount of percentage (hint) went to Reps? Did that percentage change when the Dems were in power, and how?
If gifts from F&F matter, then maybe you want to rethink your stance on blaming only one party or person. There is enough blame to go around, and I blame both parties while you seek to blame one -- dull, boring, childish, Conservative-like.
English lesson for Cons: why do ALL Cons (see my use of Con black/white logic here) insist on using "your" when they mean "you're"? It is always amusing to read insults that contain errors that should have been corrected by the fifth grade. |
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Alan Greenspan is asked about the Fed's complicity in the crisis and by extension that of other full-on government and quasi-governmental regulatory agencies. He wisely points out that you cannot legislate against human nature.
This bubble, like all that preceded it, is the result of greed, and though it the blood sport of TH to weaponize every topic and launch it against the enemy, the financial meltdown we are experiencing is not partisan. Everybody bought tulips in this idiocy, and everybody is going to suffer for it. If you didn't yourself buy an overpriced home on stated income, your persion fund or your hedge portfolio, your company's profit sharing plan, did. Nobody will escape the consequences.
The only idiocy is for the politicians of D.C. to think they can hyperinflate the currency with "stimulus" and therefore keep us from having to take the medicine we must ingest before economic health returns. The inviolate consequence of boom is bust and this thing will bust no matter how much phony baloney money Obama and congress prints. |
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“I want to give you my verdict on CRA: NOT guilty,” said FDIC Chairman Sheila Bair, according to a press release by the Federal Deposit Insurance Corporation. Before the Consumer Federation of America, Bair said Thursday she wanted to clear up the “myth” that the Community Reinvestment Act caused the financial crisis — and she set out to do so with vigor.
http://www.housingwire.com/2008/12/05/fdics-bair-sets-to-sh atter-cra-myth/ |
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way to prosperity. The epitome of a moron. |
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no that was bush's plan, remember.he borrowed billions from the chinese and japanese.
at least get your facts right.
obama wants to tax the wealthy at the same rate clinton did and that brought us a surplus.
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"They knew that if the market continued to climb that even those in trouble could at least sell the house for a profit."
The thing is, if you make the assumption that house prices will continue to rise faster than inflation, then those people WEREN'T in trouble. They'd made a good decision about investing. They could afford the low initial payments for the first few years and, when their ARM adjusted to the higher level, they'd be able to refinance at a lower rate because they'd have a lot more equity. They would have invested wisely and made a healthy profit.
Likewise, banks were making good decisions if you make that one assumption. Even if their mortgagees defaulted, the bank would then own a house that was now much more valuable than it had been when they issued the mortgage. They would have invested wisely and made a healthy profit.
Of course, the basic assumption eventually became false, but it had been true for many years. And everybody, including the wise old men who ran the economy, was saying that it would continue to be true. |
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I have lived in large cities, small towns and everything in between. In every case the people who already live there do not want more people moving in.
This selfish "I like my town the way it is" mentality led to these individuals and groups to seek whatever means necessary (including environmental and endangered species legislation) to curtail development in their communities.
Letting environmentalists get their "nose in the tent" in the 70's led to the severe restriction of housing development. This restriction on supply coupled with the technology boom in California led to increasing housing prices.
Democrats, realizing that their pro-environmentalist agenda conflicted with their responsibility to assist the less wealthy tried to solve the problem by encouraging banks to lower lending requirements.
The resulting flood of credit and money into the market created enormous upward pressure at the bottom end of the market where truly qualified buyers were forced into competition with unqualified, government backed buyers.
With the collapse of the bubble, legitimate homeowners are caught underwater while the Democrats try to bail out the same constituency that got us here in the first place. |
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Nearly all of my friends have commented that the stories on the financial crash are all over the place, and it's too difficult to know whom to believe. I'm talking about lawyers, teachers, professors, businessmen, sales execs - we all read the stories and think, "Who can make sense of the whole thing?"
It's nice to know that a few people at Town Hall have a quick, easy explanation that just coincidentally matches all their previous assumptions. |
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However, as the video makes clear, the assumption that fueled the bubble and let once responsible firms like Moody's rate junk CDO's as AAA was the assumption built into the modeling that house prices would continue to rise at between 6-8% a year in perpetuity, and THAT any idiot should have seen was an unsustainable and patently ridiculous assumption. However, nobody wanted to challenge the assumption cuz there was just so much damned money to be made by believing the lie! |
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Taxing the rich didnt bring a surplus, controlling spending and ratcheting back entitlements brought surpluses....I give Clinton credit for going along with the republican congress...Bubba was a true bipartisan in the end... |
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OK all you sh!tsilly libs. Think of it this way.
You have $100K to lend to people.
Who would you lend it to?
A. Someone with verifiable income, credit, a good downpayment, and a history of paying things off.
B. Someone with non verifiable income, poor credit, and nothing in writing that indicates whether or not they have an ability to repay the debt.
Who would YOU lend it to????
The banks would lend it to "A". They would not lend it to "B". They would only lend to B if there was a way to offload the loan.........enter fannstupid and fredstupid.
Banks are in the business of making money by lending money. Banks are not in the business of community activism.
Who began investigating banks back in the late 90's??? Look up your buddy billy and see what he began doing......all under the guise of fairness. Look at the lobbying done to the GOP congress...by lobbyists paid by Fannie and Freddie......hmm wonder why.
Having been involved with a credit union for several years, I see first hand what happens when lending qualifications are loosened. Bad debt skyrocketed, collections skyrocketed.
In short, money lent out for a car was recouped in the form of a used auto, that we paid someone to reposess for us. In turn we had to sell the auto at a significant discount to move it.....or get maybe trade in value at a dealership. This after allowing for 3-4 months of attempts to get the owner to pay. Thousands of dollars....not recouped.
Any wonder why lending qualifications are tight?? Any wonder why bad credit risks are charged a higher interest rate? Self preservation.
Chew on that for a while.......doubt if it sinks in though....... |
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i thought that too until i looked at the numbers.
the revenue increased with the clinton tax cuts.
i know that goes against the republican dogma but i can produce statistical proof.
here are the links.
http://www.taxfoundation.org/taxdata/show/2089.html
In 1981, Congress approved very large supply-side tax cuts, dramatically lowering marginal income-tax rates. In 1990 and 1993, by contrast, Congress raised marginal income-tax rates on the well off. Despite the very different tax policies followed during these two decades, there was virtually no difference in real per-person economic growth in the 1980s and 1990s. Real per-person revenues, however, grew about twice as quickly in the 1990s, when taxes were increased, as in the 1980s, when taxes were cut. (See Figure 1.)
http://www.cbpp.org/3-8-06tax.htm |
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http://mises.org/story/3330
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again i will remind you that republicans controlled congress from 1994 until 2007.
secondly, if you read the links i provided earlier you will see the problem had nothing to do with lending poor people money.
it had to do with the inventing of whole new investing markets which were unregulated.
i concede that there wasn't enough oversight on freddie and fannie but they were latecomers to the bundling of mortgages that are at the root of this.
i doubt this will sink in though because you only want to see one side.
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http://mises.org/story/3295
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Shaun Donovan, sec housing & urban dev
ALL Cons (again, I'm applying Con black/white logic here) seem to also want the value of their own property to plummet as their Con neighbors move away. Does that make sense to you, even if you are a Con?
1:44 start
6:00 end
http://www.youtube.com/watch?v=pIRJ7njRL30
Maybe if more Cons read the actual plan or listened to those who understand the plan, they would be less likely to want their Con neighbors who recently lost their jobs to also lose their house.
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Don't waste your breath...debating with liberals is a waste of time and only causes headaches. Their brains are not programmed to understand facts and rational, logical thought. They cannot grasp the concept of truth, fact or reality.
They continually re-write history to serve their agenda. I would love to read a high school level history text book today...I can't imagine the lies being pushed to further the liberal agenda. Female war heroes, black presidents pre-Obama, all the bad things that have happened in this country created by Republican administrations and all the good things created by Dem Administrations, etc. |
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That was satire, right?
"Their brains are not programmed to understand facts and rational, logical thought. They cannot grasp the concept of truth, fact or reality."
Now make up your mind. According to all good Cons reading from the O'Hannitybaugh playbook, colleges and universities are full of Liberals. Cities are fill of them there darn Liberals. Seems to me that the people with the facts are the Liberals. (note: I'm still applying the Con tactic of black/white to combat someone who thinks only in those terms).
Was Philip Cooney full of facts? Was anyone appointed by Bush full of facts. I bet you still deny the Earth is warming. |
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When the subject of why this crisis comes up all the comments tend to be conservatives blaming liberal policies (as well they should) and liberals blaming conservative policies (as well they should). But no one stops to think about the system. Is there something about how things are setup that leads to crises?
Anytime I make this comment people assume that I'm talking about 'capitalism'. I'm talking about looking at what really is happening, how it's really set up.
The foundation of the economy today is the Federal reserve. The 'lender of last resort'. The reason for having this institution is because of the belief that it (the Fed) can create economic stability by manipulating the supply of money. In other words they know that if there is more money then prices go up. So, if a recession hits then, based on that economic principle, add cash to the money supply and the recession should be lessened if not ended all together.
So, ask yourself, in the almost 100 years of Fed action in the economy has it succeeded in producing stability? I'm not impressed.
The cause of this crisis is people have gotten used to the idea that prices always rise. Barney Frank actually thinks that he can get poor people into houses that they can't afford because they can just sell and make a profit. Acorn actually thinks that they're helping the poor by getting them into the housing market because prices always rise.
Yes there's greed and fraud from business and politics and you'll usually find it where both are mixed (i.e. the banking world).
But lets blame the right thing, the governments attempt to produce a stable economy by manipulating it (see republicans and liberals equally guilty). |
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I am a conservative but not necessarily a Republican. I truly think there is not one person or party to blame, all are GUILTY.
There is enought blame to go around for all of the government and private sector. I think it is callled GREED. We need statesmen not politicians. It was never meant to be a career path! Anywho, watch this CSPAN video. Or maybe it is all a conspiracy? : )
But for those of you libs who blame it all on cons, take a look.
http://www.youtube.com/watch?v=_MGT_cSi7Rs |
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asks an interesting question: Do we still deny the Earth is warming?
Warming from what, exactly? From a couple of decades ago? From a century ago? From the middle of the last ice age? From yesterday? From the Cretaceous?
Better to ask him back, what is the proper temperature of the Earth and where are we in regard to that? Perhaps we are SUPPOSED to be warming up and we've been downright chilly for too long! He doesn't seem to know that an ice age is coming very soon and we'll all cool down nicely then. I think such fools as this member of the majority imagine that mankind controls the temperature of the earth, and Palm Beach in 1957 was the best of times. Or was it Kiev in 937? Or maybe it was that balmy but chilly summer in Byzantium back when the whore Theodora ruled the city. So difficult to decide what temperature we should be aiming for, isn't it?
Anway, based on how you ask the question and what your frame of reference, here is the truth: The Earth is warming from one marker and cooling from another! It's TWO, TWO, TWO CLIMATE CHANGES IN ONE!
Give libs enough time and they'll figure out how to tax and regulate both of them! |
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you make a valid argument for both being conservatives and liberals being to blame, although i think greed was the underlying problem.
greenspan said this, "i assumed ceo's would be more concerned with the bottom line of their company than their own, i was mistaken."
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When is the world going to end, when will the oceans rise and swallow all the land, when will I not be able to breathe anymore, please tell.
When Obama and Al Gore stop flying around, or turning up their thermo-stats, maybe then i will believe the hype, until then I don't by it.
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Also called Credit Default Swaps was a type of insurance that banks took out on mortgage bundles and less than perfect loans. It gave the appearance of a fully protected asset. Unfortunately Sen. Graham led the charge to deregulate this tiny industry. What happened was that companies where NOT required to have that capitol to back up these policies. Resulting is a massive selling spree of insurances and the false impression of AAA investments. An epic Ponzi scheme.
This has been the strongest area of blame I have been able to find. |
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Hey T,
Here is the kicker. The global average is rising. By tenths of a percent each year.. at about 3 degrees the areas formerly know as the Arctic, the Antarctic and permafrost will recede. The expected outcome will be higher ocean level and changing weather patterns. But the funny part is that with all this low temperature water flowing into the oceans the oceanic currents will change course causing a new ice age:) |
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There are two schools of though about greed in the economy; one school wants to eliminate the possibility of greed by controlling people and the economy and the other wants to make greed less important by creating incentive to play by the rules of sound business. If this were the case today and we were using sound business many of the greedy would be out of business right now. Not all, but many. In the controlled society we would just be exchanging greedy business with greedy politics. I'd rather live in a system were at least some of the greed is punished and everyone has the incentive to be successful without it. So, yes the problem is greed, but only as much as is rewarded by the system we're currently under.
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Studying economic philosophy creates a problem (at least for me) because you become more attuned to the past and how things came to be like it is and yet you still have to deal with how it is in the present. So, if you don't like how it is because you believe it should be different, you still can't act as if it was different.
I think that most people are only dealing with how things are at the present and not thinking about how it should be. This is Alan Greenspan. He's not going to tell us that the Fed system is the problem even if he believed it; he represents the system. He's just going to act as if he's only in the present and assign blame based on his philosophy as an agent of the Fed.
I wonder if he'd give an honest answer to the question, "Is the current structure of the economy, where the government uses the Fed to control money, the best way to execute a capitalist system?" |
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Are you old enough to remember the S&L Crisis? Reagan was blamed for the lowering of regulations. One peice of legislation prior to the crisis was called Garn-St Germain. It lowered mortgage requirements (sound familiar). The Co-sponsors of that legislation were Reagan's good buddies Steny Hoyer and Charles Shumer.
How many peices of legislation followed in responce to the S&L Crisis? How many Democrats were elected and a part of getting the legislation passed? Where were Chris Dodd, Barney Frank and Nancy Pelosi? |
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"OK all you sh!tsilly libs. Think of it this way.
You have $100K to lend to people.
Who would you lend it to?
A. Someone with verifiable income, credit, a good downpayment, and a history of paying things off.
B. Someone with non verifiable income, poor credit, and nothing in writing that indicates whether or not they have an ability to repay the debt.
Who would YOU lend it to???? The banks would lend it to "A". They would not lend it to "B"."
Totally wrong. The banks not only DID lend it to "B," they ENTHUSIASTICALLY lent it to "B." And they pressed banks and brokers lower down to come up with even more "B"-type customers. Not because the liberals forced them to, but because they had magic tricks that made those mortgages worth 20 times more when they were sold to the Chinese. It was free money! What's not to like? |
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If the banks and wall street get bailed out of the bad loans does that mean that they will allow us to go back to our original loans? We started out around 96k and are up to 175k.
Or are the banks just going to keep making money on our many other people's loans?
Hey, Mr. President who are you helping? |
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wow you live up to your nickname.
i appreciate your civil and reasoned response.
lets start with the statement that economics is not a science and can not really be quantified in a rational way except for general principles.
for example, how do you really measure consumer confidence.
even how gdp is measured can be statistically manipulated.
now i believe that capitalism is the best system ever developed but....
it lends itself to greed and monopoly if there is not enough oversight or controls.
it takes a subtle approach to do it right and bush was on the extreme side of little regulation or oversight. as of yet we don't know where obama is going but we know that larry summers is generally a de-regulation guy.
to be honest i think phil gramm is at the bottom of most of our problems right now, because he encouraged irresponsible de-regulation just for the ideological sake of de-regulation.
which is my general conclusion.
when economics is run from an idealogical point of view it will fail.
thanks again for actually debating and engaging.
i run a small business and must leave my office every day after lunch to check on job sites.
so if i don't respond it is because of that.
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Allen,
You say your orig loan was 96k, your new loan is 175k.
I'm confused about why the bank would let you go back to 96k? I surmise your initial purchase was financed for 96k and that somewhere along the way you are now financing 175k?
Yes, I'm guessing here, but the question I, and I think your bank, is asking: "what did you do with the additional 80k?"
Please elaborate, as it sounds like you're asking for the banks/gov/tax payers to simply forget about that 80k you must have done something with??? |
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Regulation is a vexing topic because when the 'pure' capitalists talk it seems like they're saying you wouldn't need or want any regulation if we were operating under that system. But I can't help thinking that we'd still need some way to say that you shouldn't dump lead in to rivers, etc.
On the other hand, the power to regulate turns into something else too. Like this new regulation about proving lead content in plastic. My wife teaches private music lessons to small children and she often uses puppets in her class. Naturally some parents want to buy those puppets to so she's been selling them. When you add it all up her profit is maybe $500 dollars a year. Do you know that she's required to prove that the toys don't have lead (and some other obscure chemical). So, we just had a conversation that she just won't sell anymore, it's just a hassle (not to mention the fine is $100,000 per violation). This is essentially going to destroy many small businesses.
I think the question should be how to we control the power to regulate. It seems that for every good regulation there are 100 silly or dangerous regulations. Like you said, it's all ideologically driven. Once again though, all the regulating and de-regulating is within a system that is already flawed. Perhaps we need a revival to return the economy to a time where it was more closely capitalistic. |
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Watch the video. Banks wanted us to take money out of the home to make improvements pay off credit cards etc.. They wanted to show wall street they were making loans. Now improvemnets do not make the home worth what the home can sell for now. |
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Allen,
Sure - home improvement shows wanted you to learn all about the latest trends, and how to add equity to your home. They wanted this so that they could get more advertisement revenue from the building industry and the big box stores.
The big box stores and building industry wanted you improve your home using their products/services to increase their profit.
Yep, the mortgage brokers wanted you to get that home equity loan so they could profit from the fees, and sure - the banks wanted you to have that loan so you could profit from the interest.
I also suspect that you wanted all those things so that you could profit from your investment, or at least have that new remodel you always wanted.
Still, in each one of those scenarios, those were "wants" not "requirements". You, and so many of the rest of us, "chose" to enter a contract to purchase something at a price both parties thought to be fair.
That contract included the inherent risk associated with all investments. Yep - it sucks when it goes down, but it's not the government's responsibility to salvage your loss from my wallet. |
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You've got me wrong. I am not going to ask you to do anything. I do not want the government to bail me or anyone out.
Doesn't it seem to you though that the banks are going to get bailed out regardless of what I do? They are not going to take a loss. But my loan and the millions of loans like mine will still be there and be added to the profit side of the banks ledger once things turn around. WE as taxpayers are paying for this. Doesn't that mean people like myself will be paying the same bill twice?
Also consider the amount that has been put into this stimulus and the banks could have paid the house payment for over 60 million people for a year if the payment were $1500 per month. |
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Those who thought that mortgage brokers, real estate brokers, bankers, financial whiz kid paper shufflers, financial advisors and those who regulated them were all a bunch of crooks and "Fast Eddy" con men or conned men have been proven to be correct. |
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I was stationed at the Pentagon back during the boom. My wife was upset that we couldn't afford a house then. We could afford the actual payments, but couldn't afford the downpayment and certainly couldn't afford to get into a bidding war with another prospective buyer.
But, friends were buying in the greater DC area and using "mortgage yoga" to do so. We had friends out west who were buying million-dollar-plus homes (crackerboxes mind you) in the Bay Area, and doing so with economic roulette such as "interest only."
My wife was upset that we were somehow being "left out." So I told her point blank, "Sweetie, if we want to gamble we'll fly to Vegas. I'm not gambling with our mortgage."
We soon were reassigned to another city and finally bought in that city. Simple house, 50 years old, fixer upper, in our price range, we could afford to make the payments on one salary and still exist within a relative definition of "comfort." Simple loan, 30 years, fixed 5.5% interest rate. Not a mansion, but a place we could call home and never be put in the poor house for it.
In the old days, this was called, "living within your means."
I don't feel a damned bit sorry for any of these people who lost their homes. If you have to resort to economic yoga to get into a house, maybe renting is a good option for you. |
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Some time ago, a friend bought a nice house well within his means. He and his family were happy to land a great deal on a large house for his family of five. Prices in this area are low, so $100,000 gets you a lot of house.
The Bush economy occurs, the friend loses his job, and he may not be able to make payments.
Poor Conservative friend. I wonder what he thinks of all of the posters who believe he deserves what he got. Good thing the bill provides for help first-and-foremost to those who didn't spend beyond their means... but you Cons knew that anyway, right?
Poor Con. As a Liberal I'll most likely open up my house to him and his family. I'll be sure to block Fox News channel to preserve my sanity. |
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Well, it's been a work in progress for decades, but the ones responsible for accelerating the decline are Bush/Congress/Greenspan. They burdened the economy with the expense of war and dramatic increases in welfare and earmarks, not to mention regulatory burdens such as Sarbanes/Oxley. It was all financed by inflation(Greenspan's part), which caused prices, particularly for gasoline to rise as much as they did. That squeezed lower and middle income people's budgets, so that they could not pay bills and had to cut back on spending. Now many of them are losing their jobs. With Obama, we're getting more of the same. This economy will not recover for perhaps a decade or more. Government must be cut, and cut severely and that's not being discussed by anyone. |
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Are you old enough to remember that they were warning at the end of the S&L Crisis that we hadn't seen anything until we see the banking bailout?
Yet many of the democrats who got in on reforming Reagan were there to pass they banking reform necessary and are there now.
Look up Garn-St Germain and the two co-sponsors were------Charles Shumer and Steny Hoyer. Now where are they. |
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The extreme inflation of housing prices did not occur in all locations. California led the way, and places like Arizona, Nevada and Southern Florida followed. In my opinion, the extreme demand in California was inflamed by the Realtor, Broker and Banker crowd who led rather foolish people by the millions to housing nirvana by showing how it could all be possible financially. Crooked wheelers and dealers then bundled the shaky mortgages, had them declared to be rated AAA and sold them. Buyers of the shaky and bundled mortgages (CDOs) were located throughout the world. Once again, California led the way. |
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Can you name a single "lib" who has said this?
I can name several. One of the national reps for acorn said these exact words this week on Stuart Varney. Barney Frank has said it repeatedly. Christopher Dodd (D) said it several times over the past few months. Pelosi has stated it. So has Reid. The MSM has echoed these claims for the last year. Remember back during the campaign to the woman who wailed that NOBAMA is going to buy her gas and pay her mortgage. NOBAMA promised it during his campaign at several stump stops. Check it out at politifact.com
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1. W constantly bragged about his Ownership Society.
Show me a link that shows Bush bragging about his “Ownership Society”. Politifact.com is a non partisan site and I did not see any reference to this.
2. The system worked OK until banks were allowed to overleverage.
Actually they were mandated by congress with Barney Frank and Chris Dodd in the lead demanding that the banks are obliged by law have to give the less fortunate a better chance at home ownership.
This "lib" is willing to admit that there were other "libs" who were dumb enough listen to conservative's appeals to deregulate. The lesson here is that we should rarely trust the advice of conservatives.
Libs/DEMs were right there asking for deregulation. Try looking at history on a non partisan viewpoint.
I don’t care if you are dem or repub or libertarian or non partisan or whatever. If what you say and do makes sense to me and does good by this nation I agree. If it does not I will call you on it. Right now this administration has scared the American sheeple into believing that he is the only person that can fix this. The economy is in a constricting state. This constriction will be painful but because we have become a society of sniveling dimwits, we want it to be painless. We teach our children not to keep score because there are no winners and losers. We don’t play dodgeball in school because it is too competitive. The majority of college students I speak to on a daily basis all expect a higher grade because they showed up. They deserve an A because they were there most of the time. Most adults who get a ticket for what ever reason, their first response is “Why me? Why not him?”
Were you around in the seventies and Eighties? Do you remember what it was like in your community? How about back in the 50’s and 60’s? We may have come a long way in some thing’s but we sold our soles to do it. |
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Thank you for your service to our country. |
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The collapse of the investment banking system can be linked to two key occurrences and the lack of regulation of the banking industry by the Federal government. The first occurrence is the 1999 Congressional law (signed by President Clinton) which created the class of investment now known as derivatives. This law (and those that followed) also allowed companies such as AIG to insure these derivatives without any oversight of the US government. The second major occurance took place in 2004 and 2005 when the SEC gave permission to the investment banks to increase their investment liquidity ratio from 12 to 1 (already to high) to 40 to 1. This resulted in the mess we have now as the paper value of the derivatives soared to approximately 531 Trillion dollars. Now the entire mortgage portfolio of Fannie Mae and Freddie Mac is only 5 $trillion. In fact the entire value of mortgages in the US is around 10 $trillion. As AIG was insuring the derivatives (aka credit default swaps), when the housing prices started to collapse and homes when into foreclosure, they were on the hook for the overly leveraged derivatives, which in some cases were a hundred times the value of the house. Disaster. Investment banks could not handle the fallout either as they had no reserve capital (40 to 1 liquidity). Google the figure 531 trillion and derivatives and you will like find discussions on this. The fact is that the toxic derivatives paper value are many times the annual GDP of the world. There is no easy solution to this mess. The housing foreclosures are simply not the real culprit, it is the highly leveraged derivatives. Assuming even 10% of the building in the US went into foreclosure this would only amount to 1 trillion. What the media is not telling the people is that the real number is 500 times this figure. That is why the Bush Administration bailed out AIG to the tune of 150 billion. But it is a drop in the proverbial bucket. |
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"Totally wrong. The banks not only DID lend it to "B," they ENTHUSIASTICALLY lent it to "B." And they pressed banks and brokers lower down to come up with even more "B"-type customers. Not because the liberals forced them to, but because they had magic tricks that made those mortgages worth 20 times more when they were sold to the Chinese. It was free money! What's not to like?"
So your theory says that the subprime mess was caused by very weak lenders pushed by misguided bureaucrats into making loans to poor people and minorities who can't repay them. WRONG.
First, subprime mortgages that defaulted in droves were made mostly by unregulated mortgage bankers with no CRA obligations or oversight. Second, the majority of mortgages that are a major part of the crisis were made mostly to middle-and upper-income white borrowers who didn't want to verify income or wanted a bigger loan than a prime lender would offer. Third, loans made by banks to fulfill CRA obligations, even those to very low-income home buyers, perform quite well. Fourth, the only category of mortgages in which the foreclosure and default rates are not going up is the FHA program, a program that makes loans almost exclusively to low- and moderate-income Americans, many of them African-American and Latino.
The bottom line is that it was the very design of subprime mortgages, not the of borrowers, that caused them to default in massive numbers.
Lenders can make sound loans to underserved groups, or they can make overpriced dangerously risky loans.
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June 1995
Republicans had won control of Congress and planned CRA reforms. The Clinton Administration, however, allied with Rep. Frank, Sen. Kennedy (D-Massachusetts) and Rep. Waters (D-California), did an end-around by directing HUD Secretary Andrew Cuomo to inject GSEs into the subprime mortgage market.
The administration announced the bold new homeownership strategy which included monumental loosening of credit standards and imposition of subprime lending quotas. HUD reported that President Clinton had committed "to increasing the homeownership rate to 67.5 percent by the year 2000." The plan was "to reduce the financial, information, and systemic barriers to homeownership" which was "amplified by local partnerships at work in over 100 cities."
Attorney General Janet Reno, with a number of bank lending discrimination settlements already, sternly announces, "We will tackle lending discrimination wherever it appears." With the new policy in full force, "No loan is exempt; no bank is immune." "For those who thumb their nose at us, I promise vigorous enforcement," reiterated Reno
http://www.americanthinker.com/2008/10/what_really_happened _in_the_mo.html |
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Myth: The CRA could not have led to financial Armageddon, because the overwhelming share of subprime mortgages came from lenders that were not banks and not regulated by the CRA.
Fact: Nearly 4 in 10 subprime loans between 2004 and 2007 were made by CRA-covered banks such as Washington Mutual and IndyMac. And that doesn't include loans made by subprime lenders owned by banks, which were in effect covered by the CRA.
Last year, when the bubble burst, bank subprime loans totaled $142 billion, dwarfing those made by lenders.
What's more, the biggest subprime lender, Countrywide, while not subject to the law, still came under federal pressure to make risky loans in minority communities.
Clinton created a separate department at HUD to police "fair lending" at Fannie and Freddie and also at lenders like Countrywide, which became Fannie's biggest client. In 1994, Countrywide became the nation's first mortgage lender to sign with HUD a "Declaration of Fair Lending Principles and Practices."
As a result, Countrywide made more loans to minorities than any other lender — and not surprisingly, was one of the first lenders swamped by loan defaults.
Other lenders felt the heat from Reno's Justice Department, which prosecuted them for failing to operate enough branches in black neighborhoods. Reno put the entire banking industry on notice about the CRA and her enforcement program. |
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Myth: The CRA did not force anyone to do subprime loans or take excessive risks.
Fact: Subprime loans were the vehicle banks used to satisfy CRA compliance, and Clinton and his regulators encouraged their use. Before Clinton took office, subprimes were virtually unheard of. By the time he left, they made up more than 9% of the market for mortgage originations. Today they're 20%.
"It's instructive to go back to the early stages of the subprime market, which has essentially emerged out of the CRA," ex-Fed chief Alan Greenspan said in recent testimony on the roots of the crisis.
Clinton pushed banks to grant mortgages to minorities with poor credit by using "flexible" underwriting standards — or risk being branded racist. Rules were weakened to the point where welfare and unemployment checks were accepted as qualifying income. |
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Myth: Greedy investment bankers, who securitized and sold subprime mortgages, drove us to the credit crisis, not government.
Fact: Clinton's regulatory policies led to the creation of this new risk on Wall Street. His CRA amendments created the subprime market, and only after he pressured Fannie and Freddie to socialize the risk and guarantee the profit from the subprime loans did Wall Street get involved in a big way.
The exotic securitizations that have gotten so much of the blame were a symptom, not the cause, of the crisis.
The architects of the crisis want to divert attention from their own culpability by blaming the markets rather than their own regulations mandating that banks make high-risk loans based on race.
In fact, regulations had almost everything to do with this mess. And instead of strengthening them to atone for the alleged "sins of capitalism," we should be abolishing them.
http://www.ibdeditorials.com/IBDArticles.aspx?id=3127667817 16725 |
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To all those who read right-wing kool aid and say CRA instituted by Jimmy Carter in the late 70s is the cause of today's problems - remove your blinkers and consider this.
The loans that are going into default today were originated in (gasp) 2005 and 2006. 30 year mortgages (that constitute the majority of the different mortgages taken out by home buyers)originated under the CRA program in the 70s and the 80s have probably completely paid off by now.
Why blame the CRA program that functioned ok for nearly 3 decades?
So, go bark up on some other tree please and save internet bandwidth by not posting such drivel. |
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in 2005 Alan Greenspan told Congress how urgent it was for it to act in the clearest possible terms
What happened next was extraordinary. For the first time in history, a serious Fannie and Freddie reform bill was passed by the Senate Banking Committee. The bill gave a regulator power to crack down, and would have required the companies to eliminate their investments in risky assets.
But the bill didn't become law, for a simple reason: Democrats opposed it on a party-line vote in the committee, signaling that this would be a partisan issue. Republicans, tied in knots by the tight Democratic opposition, couldn't even get the Senate to vote on the matter.
Now that the collapse has occurred, the roadblock built by Senate Democrats in 2005 is unforgivable.
But we now know that many of the senators who protected Fannie and Freddie, including Barack Obama, Hillary Clinton and Christopher Dodd, have received mind-boggling levels of financial support from them over the years.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aSKS oiNbnQY0 |
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I am laughing because I noticed how quickly the supporters of the Great Oz tried to shut down the truth of the situation. They know that if the truth gets out then the Great Oz is doomed. Truth and reality are the two things they are deathly afraid of, just like their "messiah" the Great Oz. Like cockroaches they scatter and run in a frenzy when the lights of truth and reality are turned on. |
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RECESSIONS followed each time Reagan (yeah he did have tax increases early on in his administration), Bush1 (read my lips, no new taxes), and Clinton RAISED taxes. Each time the taxes were lowered, the Recession ended. Pretty plain, pretty simple.
Saying Newt/Clinton and the boys pushing through welfare reform, controlling government spending, (including refinancing debt to lower interest rates) didnt lead to balancing the budget and creating a surplus, but tax increases were responsible is just plain wrong. |
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Thanks for posting that info. Everytime one of the libtards start ranting about the current situation being a Bush problem, we should point to this info.
Interesting thing is, the leftwingnuts want to point to George W's deficit spending over the last 8 years as to the cause of the current situation yet do not criticize the annointed one when he QUADRUPLES DOWN on deficit spending to get us out of it. If the top floor of the house is on fire do firefighters set the bottom floor on fire to put it out? That is exactly what we are doing and all it is going to do is burn the economy down at an even faster rate....
Welcome to Hope and Change... |
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I think that is a more proper name for it. |
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The cause seems to have been non-partisan. The repair is highly partisan; that is, based on philosophic differences in political party. If there is a silver lining for Republicans, it is the consolidation and articulation of strong conservative views, undiluted by Bushite principles. |
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I agree with many that Phil Gramm and the law that expressly forbid regulation of CDO's and CDS's has a lot to do with the crisis.
Bush also had a lot to do with the crisis.
In 2002 he issued his "America's Home Ownership Challenge". In June, President Bush announced the national goal of increasing the number of minority homeowners by at least 5.5 million by the end of this decade. In June, President Bush announced an aggressive homeownership agenda to dismantle barriers to homeownership by providing down payment assistance, increasing the supply of affordable homes, increasing support for self-help homeownership programs, and simplifying the homebuying process and increasing education. The President also issued "America's Homeownership Challenge" to the real estate and mortgage finance industries to join in his effort to increase the number of minority homeowners by taking concrete steps to tear down the barriers to homeownership that face minority families.
http://www.policyalmanac.org/social_welfare/archive/wh_mino rity_housing.shtml
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I should have also included some information from the Bush home ownership policy book here:
http://georgewbush-whitehouse.archives.gov/infocus/homeowne rship/homeownership-policy-book-background.pdf
In order to expand homeownership opportunities to all Americans, the Administration’s agenda includes the following key elements:
? Innovative financing measures designed to expand opportunity, including (1) a single-family affordable tax credit to encourage the production of affordable homes for sale to low- and moderate-income families; (2) a program to assist families with downpayment needs; and (3) increased support for self-help homeownership programs such as Habitat for Humanity;
? Mobilizing the private real estate and mortgage-finance sector, along with the non-profit sector involved in community development and low-income homeownership, to undertake a concerted, collaborative effort – “America’s Homeownership Challenge” --to eliminate barriers to homeownership and increase minority homeownership by at least 5.5 million families by the end of the decade, through increased financial and organizational commitments; and
? Modernizing, clarifying, and streamlining the homebuying process, so consumers benefit from cost savings and receive timely, accurate information that is reflected at closing, and expanding financial education efforts that can help put families on the pathway to homeownership.
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From Increasing Affordable Housing and Expanding Homeownership
Downpayment Assistance and Homebuying Education:
American Dream Downpayment Initiative. To help low-income families overcome the hurdle of a downpayment, the President proposed the American Dream Downpayment Initiative in June 2002 and signed the American Dream Downpayment Act into law on December 16, 2003. In June 2004, HUD announced $160 million in funding for this initiative to 400 local and state governments across the country to assist low-income families with down payment funds. The President requested $200 million for the American Dream Downpayment Initiative in his FY 2005 budget, which will assist an estimated 40,000 families.
Zero-Downpayment Initiative. In his FY 2005 budget, the President proposed the Zero-Downpayment Initiative. Preliminary projections indicate this Initiative would help about 150,000 homebuyers in the first year alone. This proposal would eliminate the statutory requirement of a minimum three percent down payment for FHA-insured single-family mortgages for first-time homebuyers.
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I forgot about the "American Dream Downpayment Act"
Through the Republican Congress in 2003 and the Bush Administration's work through HUD and the FHA, the Bush Administration forced Fannie Mae and Freddie Mac to, for the first time, make available riskier loan products to minority and low income buyers.
http://www.hud.gov/news/release.cfm?content=pr03-140.cfm
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"the Bush Administration forced Fannie Mae and Freddie Mac to, for the first time, make available riskier loan products to minority and low income buyers."
where's your support for this claim?
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Hey Sol,
Checkout these links or my previous ones. The Bush administration berated Fannie and Freddie about not "Keeping up with the private Lenders"
Yet the Federal government and the American taxpayer should not undertake this effort alone. The real estate and mortgage finance industries have benefited greatly from government policies that supported greater homeownership. They share an interest in ensuring that all families have access to the American Dream. The government-sponsored corporations created to increase the liquidity of mortgage markets, so more capital would be available for mortgage loans, are supposed to lead the market in reaching underserved populations. While these corporations have increased their commitments to these efforts, they lag behind private lenders in this regard, according to government studies. The Administration will revisit the regulatory goals for these corporations’ purchases of affordable housing loans, which are set to expire in 2003. The federal government should demand more and should hold such publicly-chartered corporations accountable for better performance. Similarly, many realtors and homebuilders have undertaken outreach efforts geared to increasing access to minority families. We applaud these efforts, but more needs to be done.
http://georgewbush-whitehouse.archives.gov/infocus/homeowne rship/homeownership-policy-book-background.pdf
http://www.hud.gov/news/release.cfm?content=pr03-022.cfm
http://www.hud.gov/news/release.cfm?content=pr03-028.cfm
http://www.hud.gov/news/release.cfm?content=pr04-006.cfm&CF ID=16687351&CFTOKEN=63939057 |
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President Clinton imposed even tougher regulations that forced banks to make dramatically more subprime loans to previously unqualified people with lower credit scores in higher-risk areas.
Big Government forced the lowering of long-proven safe-lending standards. Most of the more than $1 trillion of new subprime CRA loans had adjustable rates. Many required no documentation of the borrower's income and little or no down payment.
For the first time, the Clinton regulatory rules allowed and encouraged lenders to bundle the new, riskier subprime loans with prime loans and sell these packages to other institutions. The first one hit the market in 1997. That tragic blunder let loan originators make their profits faster and eliminate any future risk for those lower-quality loans. It let them turn around and make even more CRA-type loans and sell them off in packages again, with little future risk.
Ironically, the Bush administration repeatedly went to Congress in 2004, 2005 and 2006 to obtain stronger oversight and some limits on Freddie and Fannie's reckless subprime lending. And each time, it was voted down by Democrats in Congress, led by Frank, now chairman of the Financial Services Committee.
Bottom line: This whole mess was another Big Government program created, designed and run by Democrats. It started with great intentions but resulted in typically awful unintended consequences that materially hurt the very people they were supposed to help.
http://ibdeditorial.com/IBDArticles.aspx?id=308186097284712 |
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Sol,
You quote from an editorial, where is the proof?
Fannie and Freddie had no adjustable rate exposure prior to the Bush administration.
I am not saying the Bush admin. was responsible for the entire mess, but they were certainly big cheerleaders for the new and innovative ARM's, no-downpayment, etc.
This crisis occured under the Republican Leadership of the House, Senate, and the Presidency.
Saying that the CRA was the cause of this crisis is like blaming the War in Iraq on Henry Ford. |
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" The Bush administration berated Fannie and Freddie about not "Keeping up with the private Lenders""
"the Bush Administration forced Fannie Mae and Freddie Mac to, for the first time, make available riskier loan products to minority and low income buyers."
There's nothing in the links you posted that support your claims.
It appears that you are fabricating stories.
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Check out the information quoted below. It is on page 3 of the document here:
http://georgewbush-whitehouse.archives.gov/infocus/homeowne rship/homeownership-policy-book-background.pdf
Yet the Federal government and the American taxpayer should not undertake this effort alone. The real estate and mortgage finance industries have benefited greatly from government policies that supported greater homeownership. They share an interest in ensuring that all families have access to the American Dream. The government-sponsored corporations created to increase the liquidity of mortgage markets, so more capital would be available for mortgage loans, are supposed to lead the market in reaching underserved populations. While these corporations have increased their commitments to these efforts, they lag behind private lenders in this regard, according to government studies. The Administration will revisit the regulatory goals for these corporations’ purchases of affordable housing loans, which are set to expire in 2003. The federal government should demand more and should hold such publicly-chartered corporations accountable for better performance. Similarly, many realtors and homebuilders have undertaken outreach efforts geared to increasing access to minority families. We applaud these efforts, but more needs to be done. |
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William J. Clinton
Statement on Signing Legislation To Reform the Financial System
November 12, 1999
Both the Vice President and I have insisted that any financial services modernization legislation must benefit American communities by preserving and strengthening community reinvestment.
Thus, the law will for the first time prohibit expansion into activities such as securities and insurance underwriting unless all of the organization's banks and thrifts maintain a "satisfactory" or better rating under the Community Reinvestment Act (CRA). The CRA will continue to apply to all banks and thrifts, and any application to acquire or merge with a bank or thrift will continue to be reviewed under CRA, with full opportunity for public comment.
http://www.presidency.ucsb.edu/ws/index.php?pid=56922
Mr. Greenspan testified last October at a hearing of the House Committee on Oversight and Government Reform, "It's instructive to go back to the early stages of the subprime market, which has essentially emerged out of CRA."
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Chris Cuomo, ABC News: A little surprising for you to hear the Democrats saying, "This came out of nowhere, this is all about the Republicans. We had nothing to do with this." Nancy Pelosi saying it. She signed the '99 Gramm Bill. She knew what was going on with the SEC. They're all sophisticated people. Is that playing politics in this situation?
Bill Clinton: Well, maybe everybody does that a little bit. I think the responsibility the Democrats have may rest more in resisting any efforts by Republicans in the Congress or by me when I was President to put some standards and tighten up a little on Fannie Mae and Freddie Mac.
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The Administration’s Unheeded Warnings About the Systemic Risk Posed by the GSEs
For many years the President and his Administration have not only warned of the systemic consequences of financial turmoil at a housing government-sponsored enterprise (GSE) but also put forward thoughtful plans to reduce the risk that either Fannie Mae or Freddie Mac would encounter such difficulties.
President Bush publicly called for GSE reform 17 times in 2008 alone before Congress acted. Unfortunately, these warnings went unheeded, as the President’s repeated attempts to reform the supervision of these entities were thwarted by the legislative maneuvering of those who emphatically denied there were problems.
http://sweetness-light.com/archive/bush-called-for-reform-1 7-times-in-2008 |
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As the Clinton administration’s top housing official in the mid-1990s, Mr. Cisneros loosened mortgage restrictions so first-time buyers could qualify for loans they could never get before.
http://www.nytimes.com/2008/10/19/business/19cisneros.html? _r=2&ref=business&oref=slogin
To encourage broader homeownership, did not Congress amend the Community Reinvestment Act in 1995 to require commercial and mortgage banks to lend to high-risk borrowers? Banks that failed to comply were hit with fines and faced rejection when they requested mergers and branch expansions. Suddenly the subprime mortgage business boomed, and Countrywide Financial became its poster child.
Furthermore, to encourage homeownership, did not the federal government offer an implicit guarantee to cover the performance of mortgage-securities giants Fannie Mae and Freddie Mac? The result was corporate abuse and a systematic easy-money policy that lasted for more than a decade in real estate.
http://www.csmonitor.com/2008/0917/p09s01-coop.html
In fact the Bush administration warned as early as April 2001 that Fannie and Freddie were over leveraged and that their failure "could cause strong repercussions in financial markets, affecting federally insured entities and economic activity" well beyond housing.
Efforts to control GSE were thwarted by intense lobbying by Fannie Mae and Freddie Mac.
http://en.wikipedia.org/wiki/Government_policies_and_the_su bprime_mortgage_crisis#cite_note-60
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As the Clinton administration’s top housing official in the mid-1990s, Mr. Cisneros loosened mortgage restrictions so first-time buyers could qualify for loans they could never get before.
http://www.nytimes.com/2008/10/19/business/19cisneros.html? _r=2&ref=business&oref=slogin
To encourage broader homeownership, did not Congress amend the Community Reinvestment Act in 1995 to require commercial and mortgage banks to lend to high-risk borrowers? Banks that failed to comply were hit with fines and faced rejection when they requested mergers and branch expansions. Suddenly the subprime mortgage business boomed, and Countrywide Financial became its poster child.
Furthermore, to encourage homeownership, did not the federal government offer an implicit guarantee to cover the performance of mortgage-securities giants Fannie Mae and Freddie Mac? The result was corporate abuse and a systematic easy-money policy that lasted for more than a decade in real estate.
http://www.csmonitor.com/2008/0917/p09s01-coop.html
In fact the Bush administration warned as early as April 2001 that Fannie and Freddie were over leveraged and that their failure "could cause strong repercussions in financial markets, affecting federally insured entities and economic activity" well beyond housing.
Efforts to control GSE were thwarted by intense lobbying by Fannie Mae and Freddie Mac.
http://en.wikipedia.org/wiki/Government_policies_and_the_su bprime_mortgage_crisis#cite_note-60
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As the Clinton administration’s top housing official in the mid-1990s, Mr. Cisneros loosened mortgage restrictions so first-time buyers could qualify for loans they could never get before.
http://www.nytimes.com/2008/10/19/business/19cisneros.html? _r=2&ref=business&oref=slogin
To encourage broader homeownership, did not Congress amend the Community Reinvestment Act in 1995 to require commercial and mortgage banks to lend to high-risk borrowers? Banks that failed to comply were hit with fines and faced rejection when they requested mergers and branch expansions. Suddenly the subprime mortgage business boomed, and Countrywide Financial became its poster child.
Furthermore, to encourage homeownership, did not the federal government offer an implicit guarantee to cover the performance of mortgage-securities giants Fannie Mae and Freddie Mac? The result was corporate abuse and a systematic easy-money policy that lasted for more than a decade in real estate.
http://www.csmonitor.com/2008/0917/p09s01-coop.html
In fact the Bush administration warned as early as April 2001 that Fannie and Freddie were over leveraged and that their failure "could cause strong repercussions in financial markets, affecting federally insured entities and economic activity" well beyond housing.
Efforts to control GSE were thwarted by intense lobbying by Fannie Mae and Freddie Mac.
http://en.wikipedia.org/wiki/Government_policies_and_the_su bprime_mortgage_crisis#cite_note-60
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being in the majority in this country just means you are slimy and dishonest. thats all it means. it doesnt mean you are right. you keep bragging about the criminal malvoters you agree with. you are known by the company you keep. |
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As the Clinton administration’s top housing official in the mid-1990s, Mr. Cisneros loosened mortgage restrictions so first-time buyers could qualify for loans they could never get before.
http://www.nytimes.com/2008/10/19/business/19cisneros.html? _r=2&ref=business&oref=slogin
To encourage broader homeownership, did not Congress amend the Community Reinvestment Act in 1995 to require commercial and mortgage banks to lend to high-risk borrowers? Banks that failed to comply were hit with fines and faced rejection when they requested mergers and branch expansions. Suddenly the subprime mortgage business boomed, and Countrywide Financial became its poster child.
Furthermore, to encourage homeownership, did not the federal government offer an implicit guarantee to cover the performance of mortgage-securities giants Fannie Mae and Freddie Mac? The result was corporate abuse and a systematic easy-money policy that lasted for more than a decade in real estate.
http://www.csmonitor.com/2008/0917/p09s01-coop.html
In fact the Bush administration warned as early as April 2001 that Fannie and Freddie were over leveraged and that their failure "could cause strong repercussions in financial markets, affecting federally insured entities and economic activity" well beyond housing.
Efforts to control GSE were thwarted by intense lobbying by Fannie Mae and Freddie Mac.
http://en.wikipedia.org/wiki/Government_policies_and_the_su bprime_mortgage_crisis#cite_note-60
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you bleat"Taxing the rich didnt bring a surplus, controlling spending and ratcheting back entitlements brought surpluses....I give Clinton credit for going along with the republican congress...Bubba was a true bipartisan in the end".........................................
a sure sigh of insanity is blather about the clinton "surpluses." the only reason the clinton deficits werent even larger was that the republicans to some degree curbed his propensity to overspend, and the end of the cold war enabled him to gut the military and security. still, he rang up hugh deficits. the liars that credit him with a "surplus" do not account for the absolutely ruinous debt owed to current workers due to social security. the liars ignore pensions owed to government workers then they calculate a "surplus", whose only objective is to cover up democratic party excesses. the liars that claim a clinton "surplus" ignore the fact that the majority of babies born in this country are parented by welfare recipients, and are very unlikely to ever pay taxes, preferring to enter their parents trade, welfare. liars prattle about the clinton "surplus" there was no such thing. |
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One thing that my parents taught me was there was no such thing as a free lunch. If something looks too good to be true then is probably is.
I did not see anything about the problems with inherent in Fannie Mae and Freddie Mac. I do recall Geo. Bush stating in his first term that these quasi-government agencies should be monitored (echoed later by John McCain) and both times the warning was squashed.
Someone made a pile of money on these phony bundled 'securities'. We just don't know who. Could it be Geo. Soros? Could it be a Democrat? Could it be a Republican? Does it matter?
Everyone involved was greedy. Everyone considered himself a shark in the water - but always forgetting that there was a bigger shark somewhere. Everyone was willing to take a bite out of the poisoned appled thinking he could drop the apple before it affected himself. But no one was immuned.
So, the question is, have we learned something from this mess? Can everyone own a house? Do we have a right to equal outcomes? I think not. I believe that we all are guaranteed an equal opportunity but not an equal ourcome. |
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I have lived in the same house for 25 years. I 'own' it outright. All I have to do is pay the property taxes. I used 'own' with emphasis because, with the economy the way it is I could very well lose my job and even though I did partake of this particular fom of greed, if I do not pay those taxes, the friendly government will take if over for those taxes owed. So, none of us ever really own our homes do we?
Alan Greenspan stated that he could not figure out those bailed securities. If the former chairman of the Fed does not comprehend the economics of these things can we rely with confidence that our government officals (who have NO economic training) can do better?
Well, our Muslim enemies sought this outcome when they attacked on 9/11. It finally happened. I fear that America will cease to exist.
The Chinese have a saying, "May you live in teresting times". This time qualifies as "interesting". Welcome to the future. |
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This account by an economist fills in some of the gaps:
{How Government Stoked the Mania
Housing prices would never have risen so high without multiple Washington mistakes.
Fannie and Freddie played a significant role in the explosion of subprime mortgages and subprime mortgage-backed securities. Without Fannie and Freddie's implicit guarantee of government support (which turned out to be all too real), would the mortgage-backed securities market and the subprime part of it have expanded the way they did?
Perhaps. But before we conclude that markets failed, we need a careful analysis of public policy's role in creating this mess. Greedy investors obviously played a part, but investors have always been greedy, and some inevitably overreach and destroy themselves. Why did they take so many down with them this time?}
http://online.wsj.com/article/SB122298982558700341.html
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{The Government Did It
Yaron Brook 07.18.08, 11:30 AM ET
The government has promoted bad loans not just through the stick of the CRA but through the carrot of Fannie Mae and Freddie Mac, which purchase, securitize and guarantee loans made by lenders and whose debt is itself implicitly guaranteed by the federal government. This setup created an easy, artificial profit opportunity for lenders to wrap up bundles of subprime loans and sell them to a government-backed buyer whose primary mandate was to "promote homeownership," not to apply sound lending standards.}
http://www.forbes.com/2008/07/18/fannie-freddie-regulation- oped-cx_yb_0718brook.html |
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A recurring theme is that the crisis was brought on by the bumbling incompetence of democratic lawmakers (Barney the Frank comes to mind). I think we are giving them too much credit. I think they have been attacking the economy for decades, with the express intent of bringing it to its knees, if not totally devastating it. These people (the Gang of Three especially) are not incompetent. They are EVIL. They hate capitalism and business so totally that they will happily reduce the U.S. to economic rubble to achieve their goal of equality (for all except them - they are always MORE equal than others - grunt, grunt squeal). Most or all of their actions starting with FDR were INTENDED to bring this about. They long for a socialist state like a dedicated Islamic terrorist longs for the return of the Caliphate. With about the same results. Both are insane and should be fought tooth and nail, with all available means. The liberals are our REAL enemy. Recognize them for what they are, and what they are really doing. Look past the drunken homosexual facade of Barney Frank and see pure concentrated hatred of all that is good. Obama is a flat out communist. Hope you enjoy the change. Those who voted for him took their ballot, placed it against their temple and pulled the trigger. Unfortunately, they are taking the rest of us with them. |
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It's so easy to "witness" with some emotional rhetoric, but the reality is that the American Dream is FREEDOM and FREE CHOICE, not the marketing of homes, cars, material items.
NO PERSON IS WHERE THEY ARE IN LIFE THAT WAS NOT FORGED BY A SERIES OF CHOICES THEY INDIVIDUALLY MADE
No one will absolve you of your choices nor ought anyone feel sorry for you for your choices
if you were unable to respond to a choice, you ought not to have made it to begin with
an individual who would sign a loan for something he or she could not afford and then decry victim is a person who sought their version of "greed" for they were unable to respond to the choice before them and they knew it as they picked up the pen and moved their hand across the contract obligating them to the loan and responsibility |
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The only reason a great many American families don’t own an elephant is that they have never been offered an elephant for a dollar down and easy weekly payments. - Mad Magazine
Sometimes, I wonder what exactly is the American dream. Is it the extraordinarily fancy house or the unnecessarily large luxury car or the mortgage or the credit card debt? or is it just the thrill of paying for elephants through easy installment plans? |
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You claim that the Clinton Administration acted to reduce the mortgage requirements and that the Bush Administration warned that these lowering of requirements would have dire consequences, but why then the the Bush Administration with a Republican controlled congress not change the rules? I will answer this for you: they saw nothing wrong with the rules at the time. Indeed they actively pushed the lenders to loosen the requirements even further. There was some Republicans and Democrats in Congress who warned against this policy but they were in a small minority. The fact remains that the sub-prime lending practice would not have crippled this economy if it were not for the unregulated credit default swaps which are many 100s of times larger dollars than the sub-prime mortgages. Also as I said in an earlier post AIG has been bailed out because they insured (without regulation) the derivatives. If this company collapses the entire financial banking system will likely collapse (aside from banks and financial institutions that don't hold much of the toxic derivatives). It was interesting to hear the CEO of AIG on the CNBC this morning evade answering the question on what is happening with the AIG insured derivatives. He simply would not answer the question. This is truly worrying. And the questions still remain: who benefited from the derivative pyramid scheme and why does no one in the media seem to able to tell us anything about it that makes sense. Who would be foolish enough to hold paper that has a so-called value 50 to 100 times the value of the mortgages it is based on? It is really no different IMO that the Ponzi of Madoff. But instead of ripping off "the people" to the tune of 50 Billion $ the rip-off is over 500 trillion. One must clearly blame the US government, President Bush and his appointees (especially SEC), the Federal Reserve (especially Greenspan) for this calamity. |
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