Deliberate Effort to Wreck the Economy, Obama wants Subprime Loans Back

[editec]

CRA didn't cause the financial crisis. That's a fairy tale.

Fannie & Freddie did cause the financial crisis!

That is true, but they were part of the problem.

Seeking ONE CAUSE of such an enormously complex event is just silly.

The RE meltdown probably would not have happened if banks held the paper they originated, either.

The RE meltdown probably would not have happened if money hadn't been so cheap, either.

I can go on and on with IF BUT ONLY SOMETHING HAD BEEN DIFFERENT examples that would have resulted in different outcomes.

This isn't the first time the price of real estate has collapsed.

This isn't the first time the Government has had to bail out the Bansters.

 

[editec]

A Renewed Crackdown on Redlining - BusinessWeek
From drudge
I keep telling the left the every man they hated for 8 years, they have elected his twing on super steroids

Sub Prime was not what caused the issue

Greed. But the left will tell you its was all Bushes fault

merged-del

I don't know who "the left" is, but clearly anybody who tries to play the partisan blame game here is either sincerely or willfully ignorant.

 

[editec]

How can you expect the right to understand what cuased the crash.
Heck about 1/3 of them still think that Iraq was somehow behind 911.
And then the birfers....

I don't know who "the right" is, but clearly anybody who tries to play the partisan blame game here is either sincerely or willfully ignorant.

 

[uscitizen]

How can you expect the right to understand what cuased the crash.
Heck about 1/3 of them still think that Iraq was somehow behind 911.
And then the birfers....

I don't know who "the right" is, but clearly anybody who tries to play the partisan blame game here is either sincerely or willfully ignorant.

Correct. The mess was caused by a large combination of situations. Subprime being only one of those. High energy costs contributed as did offshoring high debt levels, stupidity, etc.
And both parties in our govt participated in actions that led to the problem.

And we have not done anything at all to prevent it from happening again have we?

 

[mudwhistle]

How can you expect the right to understand what cuased the crash.
Heck about 1/3 of them still think that Iraq was somehow behind 911.
And then the birfers....

Obama has Truthers in his administration, so it's a trade-off.

 

[uscitizen]

How can you expect the right to understand what cuased the crash.
Heck about 1/3 of them still think that Iraq was somehow behind 911.
And then the birfers....

Obama has Truthers in his administration, so it's a trade-off.

So the old we are no worse than you are stuff?

Yep that is what I said both parties caused this mess.

 

[JRK]

CRA didn't cause the financial crisis. That's a fairy tale.

Then what did?
am serious, if the collapse of the housing market followed by the collapse of the financial institutions that invested in the housing market
what caused it?

 

[JRK]

CRA didn't cause the financial crisis. That's a fairy tale.

Fannie & Freddie did cause the financial crisis!

Bubbles are caused by the creation of excess credit. The GSEs contributed by leveraging their balance sheets 50:1 debt to equity. But this is no different than Wall Street, who also expanded their balance sheets, only to a lesser degree They also contributed by following the financial industry in loosening underwriting standards. But they weren't the genesis of the crisis.

There leveraged balance sheets where part of the problem, thats Glass Segall.
So where people borrowing money on a sub prime event
If the payments where being made the same they where in the peak
Why is there a crises?

You liberals amaze me

 

[JRK]

How can you expect the right to understand what cuased the crash.
Heck about 1/3 of them still think that Iraq was somehow behind 911.
And then the birfers....

Iraq Connection Helped U.S. Find Bin Laden
The courier: the multiple identities of the man who led U.S. to bin Laden - Yahoo! News

Captured in IRAQ

I do not think behind 9-11 was ever stated, its how that lie got started

 

[editec]

TPS

The secret to understanding is to look at what people do, rather than what they say they're doing.

That is as true with Obama as it is for every other POTUS.

When the economy went into meltdown, what class was saved on the tax payers's dime and what class was left dangling in the wind?

And which two most recent administrations BOTH did that?

Keep digging for the facts, amigo.

I have confidence that sooner or later you're going to figure out how the grand scam actually works.

Try again, and this time drop the conspiracy theory.

It doesn't take a secret conspiracy for this to happen, TPS.

Few people have time to pay attention, and what goes on is so enormously complex that even when people have time, it's difficult to fathom.

Hell I've got time to study this particular meltdown, and I bearly have a framework of it what went down, even now.

I've been formally educated in and continued my studies in the social sciences for the last 35 years, and between a lack of information, disinformation, too much information its still a challenge to get a handle on events.

Doesn't surprise me one bit that most people are confused and easily mislead.

If you 've got real facts to bring to the discussion that you think I've missed or know about, but do not understand correctly, please do feel free to tell me about it.

Dismissing all I've posted about this event as mere conspiracy theory, is rather silly.

Its NOT about me or you...it's about the event.

 

[KissMy]

CRA didn't cause the financial crisis. That's a fairy tale.

Fannie & Freddie did cause the financial crisis!

That is true, but they were part of the problem.

Seeking ONE CAUSE of such an enormously complex event is just silly.

The RE meltdown probably would not have happened if banks held the paper they originated, either.

The RE meltdown probably would not have happened if money hadn't been so cheap, either.

I can go on and on with IF BUT ONLY SOMETHING HAD BEEN DIFFERENT examples that would have resulted in different outcomes.

This isn't the first time the price of real estate has collapsed.

This isn't the first time the Government has had to bail out the Bansters.

Fannie & Freddie are the main act that caused everything else to spin out of control. Fannie & Freddie do not make loans directly, they buy them from banks who make loans for them. When Fannie & Freddie were forced to drop their lending standards, so the banks went after anything that Fannie & Freddie would buy. In many cases if banks refused to make a loan that Fannie & Freddie would buy, they could be classified or sued for being racist. But what did the banks care as long as there was a sucker buying all the crap they could make loans to homeless people that were willing to sign a few pieces of paper to get a free home for a few years before the sheriff threw them back out on to the street.

There was also the ratings companies that rated junk as AAA because the US Government was backing the junk, or was it the repeal of the Glass-Steagall Act that Bill Clinton signed into law after forcing Fannie & Freddie to lower credit standards. The professional money managers like city treasurers, pension fund managers, mutual fund managers & the like who were charged with doing their own due diligence followed Fannie, Freddie & the ratings agencies lead. Were these professional managers also paid under the table by the sellers of these investments to risk their clients money, or were they assured the government would make good on them & bail them out as they had in past lending crisis. How did so many professional money managers simply not do their job or their own due diligence?

Since no kickbacks have been discovered & money managers were not jailed it leads me to conclude that the US Government guarantee that lead them astray.

 

[JRK]

A Renewed Crackdown on Redlining - BusinessWeek
From drudge
I keep telling the left the every man they hated for 8 years, they have elected his twing on super steroids

Sub Prime was not what caused the issue

Greed. But the left will tell you its was all Bushes fault

merged-del

I don't know who "the left" is, but clearly anybody who tries to play the partisan blame game here is either sincerely or willfully ignorant.

Blame?
Never mind

 

[Mad Scientist]

Subprime loans are what Obama's all about: Underperforming.

 

[expat_panama]

...Seeking ONE CAUSE of such an enormously complex event is just silly...

Aw hell, you're ruining the party.

Seeking one cause means there's less to understand and remember, we get to blame some group we hate, and it being wrong doesn't matter if we sorround ourselves with people that all agree--

--and then you had to go and spoil everything.

 

[Toro]

Fannie & Freddie did cause the financial crisis!

Bubbles are caused by the creation of excess credit. The GSEs contributed by leveraging their balance sheets 50:1 debt to equity. But this is no different than Wall Street, who also expanded their balance sheets, only to a lesser degree They also contributed by following the financial industry in loosening underwriting standards. But they weren't the genesis of the crisis.

There leveraged balance sheets where part of the problem, thats Glass Segall.
So where people borrowing money on a sub prime event
If the payments where being made the same they where in the peak
Why is there a crises?

You liberals amaze me

First of all, I'm not a liberal. Refuting an ideological meme does not make one an ideologue, especially when it is backed up by data.

CRA didn't cause the financial crisis. That's a fairy tale.

Then what did?
am serious, if the collapse of the housing market followed by the collapse of the financial institutions that invested in the housing market
what caused it?

Bubbles are complex. This was no different. But bubbles have commonalities. The first is excess creation of credit. Excess credit creation does not mean there will be a bubble, but all bubbles are driven by excess credit. I do not know of a single bubble anywhere where credit was not loose.

So understand where credit is created. I don't want to write paragraphs and paragraphs, but the biggest influence on the creation of credit is the Federal Reserve. The Fed sets the funds target which various money markets key off of. Since the term structure of the yield curve is influenced by the short end, if the Fed takes rates down to very low levels, the back end will follow, at least to some extent. And since mortgage rates are affected by government yields, when yields head lower, so do mortgage rates, making it cheaper for people to borrow. It's simple, really. If the funds rate had been lowered to 4% instead of 1%, then there is no housing bubble. It might have been the wrong policy, but that shows the power of the Fed.

What else creates credit? I agree that the GSEs were part of the problem, but that's because they were part of the financial ecosystem, not because they were pushing housing mandates. They were trying to maximize profits, and increased their leverage and lowered underwriting standards to do so. The GSEs were losing share, so they did what all other banks do when they are losing share, they lowered standards. Since political partisans always want their pound of flesh, if you want to blame the Democrats for something, blame them for allowing Freddie and Fannie to leverage themselves 50:1 debt to equity. That's fucking insane. A 2% drop in their asset base wipes out the companies. Utterly moronic. However, Wall Street was doing the same thing, just not to the same level.

But that pales in comparison to financial "innovation" on Wall Street, which allowed shit mortgages to be passed off as AAA. Trillions of dollars of this garbage was foisted onto the market, increasing credit supply and funds available for housing. The Fed is partly responsible for this because without lowering rates so low, there would not have been as great of demand for this shit. If a 10 year govie is yielding 4.5%, then a AAA super-senior subprime mortgage CDO would yield 30 or 40 basis points above at 4.9%. That's huge in fixed income world. And it matters because assets were not growing enough for pension funds to hit their actuarial liabilities and caused insurance companies to reach for yield because they needed investment income in a soft market and couldn't raise prices. I heard from salesmen that for 18 months, all the Europeans wanted to talk about was structured products. They didn't wanted to talk about vanilla products such as corporate bonds.

Then there is deregulation. Deregulation is often a good thing, including in the financial industry, but it often leads to excess credit creation and asset bubbles. This happened in the Baltic states recently and in Latin America in the 1980s. It contributed here when the SEC allowed the big five Wall Street firms to lower their equity capital from 8%. Wall Street leveraged up big time, with Lehman and Bear going to 33:1 or 40:1 assets to equity. Of the five, only two firms exist as independent entities today - Morgan Stanley and Goldman. Merrill was sold, Bear and Lehman went tits up, Morgan was effectively insolvent as it couldn't meet some of its cash calls (I am told) and Goldman was rumoured to be days away from shutting down. Also, those overseeing federal regulation of the mortgage market effectively barred states from pursuing companies that were engaged in predatory lending practices. The Commodities Modernization Act, which explicitly barred barred regulation of derivative securities, also played a big role.

More on the CRA and the GSEs here.

http://www.usmessageboard.com/economy/70006-cra-not-to-blame-for-housing-debacle.html

 

[BlindBoo]

CRA didn't cause the financial crisis. That's a fairy tale.

Because you say so, huh?

How many times does it have to be explained to you?

It was the sub-prime market but most of the bad loans were not CRA based loans ya moroonie.

There is a lot of fault to go around however blaming the CRA isn't credible.

 

[mudwhistle]

Bubbles are caused by the creation of excess credit. The GSEs contributed by leveraging their balance sheets 50:1 debt to equity. But this is no different than Wall Street, who also expanded their balance sheets, only to a lesser degree They also contributed by following the financial industry in loosening underwriting standards. But they weren't the genesis of the crisis.

There leveraged balance sheets where part of the problem, thats Glass Segall.
So where people borrowing money on a sub prime event
If the payments where being made the same they where in the peak
Why is there a crises?

You liberals amaze me

First of all, I'm not a liberal. Refuting an ideological meme does not make one an ideologue, especially when it is backed up by data.

CRA didn't cause the financial crisis. That's a fairy tale.

Then what did?
am serious, if the collapse of the housing market followed by the collapse of the financial institutions that invested in the housing market
what caused it?

Bubbles are complex. This was no different. But bubbles have commonalities. The first is excess creation of credit. Excess credit creation does not mean there will be a bubble, but all bubbles are driven by excess credit. I do not know of a single bubble anywhere where credit was not loose.

So understand where credit is created. I don't want to write paragraphs and paragraphs, but the biggest influence on the creation of credit is the Federal Reserve. The Fed sets the funds target which various money markets key off of. Since the term structure of the yield curve is influenced by the short end, if the Fed takes rates down to very low levels, the back end will follow, at least to some extent. And since mortgage rates are affected by government yields, when yields head lower, so do mortgage rates, making it cheaper for people to borrow. It's simple, really. If the funds rate had been lowered to 4% instead of 1%, then there is no housing bubble. It might have been the wrong policy, but that shows the power of the Fed.

What else creates credit? I agree that the GSEs were part of the problem, but that's because they were part of the financial ecosystem, not because they were pushing housing mandates. They were trying to maximize profits, and increased their leverage and lowered underwriting standards to do so. The GSEs were losing share, so they did what all other banks do when they are losing share, they lowered standards. Since political partisans always want their pound of flesh, if you want to blame the Democrats for something, blame them for allowing Freddie and Fannie to leverage themselves 50:1 debt to equity. That's fucking insane. A 2% drop in their asset base wipes out the companies. Utterly moronic. However, Wall Street was doing the same thing, just not to the same level.

But that pales in comparison to financial "innovation" on Wall Street, which allowed shit mortgages to be passed off as AAA. Trillions of dollars of this garbage was foisted onto the market, increasing credit supply and funds available for housing. The Fed is partly responsible for this because without lowering rates so low, there would not have been as great of demand for this shit. If a 10 year govie is yielding 4.5%, then a AAA super-senior subprime mortgage CDO would yield 30 or 40 basis points above at 4.9%. That's huge in fixed income world. And it matters because assets were not growing enough for pension funds to hit their actuarial liabilities and caused insurance companies to reach for yield because they needed investment income in a soft market and couldn't raise prices. I heard from salesmen that for 18 months, all the Europeans wanted to talk about was structured products. They didn't wanted to talk about vanilla products such as corporate bonds.

Then there is deregulation. Deregulation is often a good thing, including in the financial industry, but it often leads to excess credit creation and asset bubbles. This happened in the Baltic states recently and in Latin America in the 1980s. It contributed here when the SEC allowed the big five Wall Street firms to lower their equity capital from 8%. Wall Street leveraged up big time, with Lehman and Bear going to 33:1 or 40:1 assets to equity. Of the five, only two firms exist as independent entities today - Morgan Stanley and Goldman. Merrill was sold, Bear and Lehman went tits up, Morgan was effectively insolvent as it couldn't meet some of its cash calls (I am told) and Goldman was rumoured to be days away from shutting down. Also, those overseeing federal regulation of the mortgage market effectively barred states from pursuing companies that were engaged in predatory lending practices. The Commodities Modernization Act, which explicitly barred barred regulation of derivative securities, also played a big role.

More on the CRA and the GSEs here.

http://www.usmessageboard.com/economy/70006-cra-not-to-blame-for-housing-debacle.html

So to someone like Obama, it's all Bush's fault.

 

[Toro]

There leveraged balance sheets where part of the problem, thats Glass Segall.
So where people borrowing money on a sub prime event
If the payments where being made the same they where in the peak
Why is there a crises?

You liberals amaze me

First of all, I'm not a liberal. Refuting an ideological meme does not make one an ideologue, especially when it is backed up by data.

Then what did?
am serious, if the collapse of the housing market followed by the collapse of the financial institutions that invested in the housing market
what caused it?

Bubbles are complex. This was no different. But bubbles have commonalities. The first is excess creation of credit. Excess credit creation does not mean there will be a bubble, but all bubbles are driven by excess credit. I do not know of a single bubble anywhere where credit was not loose.

So understand where credit is created. I don't want to write paragraphs and paragraphs, but the biggest influence on the creation of credit is the Federal Reserve. The Fed sets the funds target which various money markets key off of. Since the term structure of the yield curve is influenced by the short end, if the Fed takes rates down to very low levels, the back end will follow, at least to some extent. And since mortgage rates are affected by government yields, when yields head lower, so do mortgage rates, making it cheaper for people to borrow. It's simple, really. If the funds rate had been lowered to 4% instead of 1%, then there is no housing bubble. It might have been the wrong policy, but that shows the power of the Fed.

What else creates credit? I agree that the GSEs were part of the problem, but that's because they were part of the financial ecosystem, not because they were pushing housing mandates. They were trying to maximize profits, and increased their leverage and lowered underwriting standards to do so. The GSEs were losing share, so they did what all other banks do when they are losing share, they lowered standards. Since political partisans always want their pound of flesh, if you want to blame the Democrats for something, blame them for allowing Freddie and Fannie to leverage themselves 50:1 debt to equity. That's fucking insane. A 2% drop in their asset base wipes out the companies. Utterly moronic. However, Wall Street was doing the same thing, just not to the same level.

But that pales in comparison to financial "innovation" on Wall Street, which allowed shit mortgages to be passed off as AAA. Trillions of dollars of this garbage was foisted onto the market, increasing credit supply and funds available for housing. The Fed is partly responsible for this because without lowering rates so low, there would not have been as great of demand for this shit. If a 10 year govie is yielding 4.5%, then a AAA super-senior subprime mortgage CDO would yield 30 or 40 basis points above at 4.9%. That's huge in fixed income world. And it matters because assets were not growing enough for pension funds to hit their actuarial liabilities and caused insurance companies to reach for yield because they needed investment income in a soft market and couldn't raise prices. I heard from salesmen that for 18 months, all the Europeans wanted to talk about was structured products. They didn't wanted to talk about vanilla products such as corporate bonds.

Then there is deregulation. Deregulation is often a good thing, including in the financial industry, but it often leads to excess credit creation and asset bubbles. This happened in the Baltic states recently and in Latin America in the 1980s. It contributed here when the SEC allowed the big five Wall Street firms to lower their equity capital from 8%. Wall Street leveraged up big time, with Lehman and Bear going to 33:1 or 40:1 assets to equity. Of the five, only two firms exist as independent entities today - Morgan Stanley and Goldman. Merrill was sold, Bear and Lehman went tits up, Morgan was effectively insolvent as it couldn't meet some of its cash calls (I am told) and Goldman was rumoured to be days away from shutting down. Also, those overseeing federal regulation of the mortgage market effectively barred states from pursuing companies that were engaged in predatory lending practices. The Commodities Modernization Act, which explicitly barred barred regulation of derivative securities, also played a big role.

More on the CRA and the GSEs here.

http://www.usmessageboard.com/economy/70006-cra-not-to-blame-for-housing-debacle.html

So to someone like Obama, it's all Bush's fault.

I have no idea how you pulled out that conclusion from what I wrote.

 

[KissMy]

CRA didn't cause the financial crisis. That's a fairy tale.

Because you say so, huh?

How many times does it have to be explained to you?

It was the sub-prime market but most of the bad loans were not CRA based loans ya moroonie.

There is a lot of fault to go around however blaming the CRA isn't credible.

The Affirmative Action Lending / CRA did play a part. It may not have been the staring roll but the goal of having Fannie & Freddie drop their lending standards was to increase minority home ownership. There has to be something to it because blacks have defaulted at much higher rates than everyone else.

NY Times - "But the storm has fallen with a special ferocity on black and Latino homeowners, the analysis shows. Defaults occur three times as often in mostly minority census tracts as in mostly white ones. Eighty-five percent of the worst-hit neighborhoods — where the default rate is at least double the regional average — have a majority of black and Latino homeowners."

PEW Research Study - "From 1995 through the middle of this decade, homeownership rates rose more rapidly among all minorities than among whites. But since the start of the housing bust in 2005, rates have fallen more steeply for two of the nation's largest minority groups -- blacks and native-born Latinos -- than for the rest of the population"