Housing bubble 2008

[American Horse]

How was the mood before the housing bubble in 2008? Did Bush see it coming?

Did people complain about high housing prices?
Did people complain about high building costs?
Did you see the bubble coming?

Did you see it coming and did you get affected.? Did people have to much debt?

Did Bush see it coming? He saw the potential downside with the moral hazard of the govt's implied guarantee with so much of mortgages been given the Fanny May seal of approval. Bush tried several times to impose the same rules of accountability on Fanny & Freddy that applied to other private sector institutions, but ran into a veritable stone wall.

Did people complain about housing prices? Not as long as appraisals matched or exceeded the price they were paying, with the expectation that when they did need to sell they could get a good return.

Did people complain about high building costs? See above sentence; appraisals and loans matched their prices, providing a decent, but not excessive profit, and sales were robust.

Did you see the bubble coming? As a builder/developer I saw some disaster coming, because there became almost a collusion between buyers, sellers, appraisers, and lenders that said that whatever price was agreeable between a buyer and seller could get loan approval and close, almost regardless of the financial standing of the buyer. When I began to see foreclosures in cases where the owner had been able to load second mortgages on top of firsts far in excess of a home's true value I voiced a lot of concern in the public arena, because of fears that the system was no longer rational.

 

[Rshermr]

You could spend some time looking at the other issues out there that independent experts actually believe caused the crash.

our greatest newspapers and economists believe it was liberal intervention!!!! Sorry!! Really, ed. Any proof???


"First consider the once controversial view that the crisis was largely caused by the Fed's holding interest rates too low for too long after the 2001 recession. This view is now so widely held that the editorial pages of both the NY Times and the Wall Street Journal agree on its validity!"...John B. Taylor( arch conservative, author of the Taylor Rule)Wow, ed. Now there is a unbiased source. Your source, is NOT widely believed. But as taylor has a history of backing anything the repubs say, I am sure you believe it.
At any rate, I do not disbelieve that the fed had a hand in the republican housing crisis of 08. But then, the Fed is run by banks, as you know but neglect to address.


" The Federal reserve having done so much to create the problems in which the economy is now mired, having mistakenly thought that even after the housing bubble burst the problems were contained, and having underestimated the severity of the crisis, now wants to make a contribution to preventing the economy from sinking into a Japanese Style malaise....... - "Joseph Stiglitz" Taken out of context. From a well respected economist who "Argues that breaking the economic and political power that has been amassed by the financial sector in recent decades, especially in the US and the UK, is essential if we are to build a more just and prosperous society. The first step, he says, is sending some bankers to jail. " That ought to change. That means legislation. Banks and others have engaged in rent seeking, creating inequality, ripping off other people, and none of them have gone to jail." Stiglitz, from my readings, believes the major problems are with the major banking corporations.
http://www.independent.co.uk/news/b...ls-for-bankers-to-face-the-music-7902920.html
Should you actually check out this link, you would also see that Stiglitz is very much in favor of regulation of banko, ed, me boy.


If you still can't grasp what happened why not read "Reckless Endangerment" by NY Times person and see if you can say with a straight face that the crisis was not caused by liberal interference wit the free market.

Reckless Endangerment appeears to be a book you have not read, ed. While the book talks about some of the issues, they certainly do not discuss every cause of the colapse, it does discuss a good deal of the issues wherein fanny and freddy were too involved with private banking concerns. And that the regulation necessary was not done to keep things from falling off the cliff.
"All told, the nation appears to have learned remarkably little from the near meltdown. Fannie and Freddie, now wards of the state, currently back more than half of all new mortgages, and their executives are still pocketing fortunes . Wall Street’s biggest banks are a fifth larger than they were when they got into trouble, and the pay packages of their top guns as generous. Although the rest of America has paid dearly, we seem more recklessly endangered than ever."
http://www.nytimes.com/2011/05/29/b...on-and-joshua-rosner.html?_r=1&pagewanted=all

The problem I have is that cons want to tell everyone that the housing crisis was the result of fanny, freddy, the FED, and anything else except the private banks themselves. Which is anything but the truth. The problem WAS deregulation and resultant mortgage backed securities.

As Josh Clark said " But 2008 wasn't 2006; the housing market in the United States was no longer booming. And it was the mortgage-backed security that killed it."
http://money.howstuffworks.com/mortgage-backed-security.htm

 

[American Horse]

Home Ownership and President Bush - YouTube

Gets interesting about 4:30 about fannie and freddie.

USC he never said that Fannie and Freddie didn't have a positive job to do, nor did I for that matter. But when he saw the potential for problems, like the moral hazard of the implication of a government guarantee, and the fact that they were not being required to comform to ordinary institutional standards (which would aggravate those problems) he called for legislation to remedy both of those problems.

 

[Care4all]

How was the mood before the housing bubble in 2008? Did Bush see it coming?

Did people complain about high housing prices?
Did people complain about high building costs?
Did you see the bubble coming?

Did you see it coming and did you get affected.? Did people have to much debt?

The Bush administration tried to warn them back in 2004/2005 (in that area)...Congress at the time (mostly democrats and Barny Frank) refused to listen.

[ame="http://www.youtube.com/watch?v=iW5qKYfqALE"]Barney Frank in 2005: What Housing Bubble? - YouTube[/ame]

I have no idea about your other questions and what other's thought...but i know it affected me, our house appraisals fell almost by half! So you can thank the democrats in Congress at the time, they were warned and said "everything is just fine".

that is the biggest bunch of bunk I've ever read Carol and you CLEARLY HAVE NO CONCEPT of the housing Bubble and how it was formed and created, along with the FACT that it was Republicans in Congress in MAJORITY in both the house and the Senate....AND it was the Republicans that did NOT react to bush's MEEK warning and Bush didn't even pay attention to his own warning and offered all kinds of easy peasey offers to put more people in to homes...so his toungue was forked on this...and the reason those in power did nothing about it though they pretended like they were going to...is because Freddie Mac LOBBIED THE REPUBLICANS with TONS OF MONEY, to keep them from doing anything...while Bush's Fed regulators turned a BLIND EYE to the perps on Wall Street....while they stole us blind.

and that isn't even the half of it.....

I'm sorry Carol, but you need to get off your high horse and do some in depth reading to KNOW how things went down.

 

[uscitizen]

How was the mood before the housing bubble in 2008? Did Bush see it coming?

Did people complain about high housing prices?
Did people complain about high building costs?
Did you see the bubble coming?

Did you see it coming and did you get affected.? Did people have to much debt?

The Bush administration tried to warn them back in 2004/2005 (in that area)...Congress at the time (mostly democrats and Barny Frank) refused to listen.

[ame="http://www.youtube.com/watch?v=iW5qKYfqALE"]Barney Frank in 2005: What Housing Bubble? - YouTube[/ame]

I have no idea about your other questions and what other's thought...but i know it affected me, our house appraisals fell almost by half! So you can thank the democrats in Congress at the time, they were warned and said "everything is just fine".

that is the biggest bunch of bunk I've ever read Carol and you CLEARLY HAVE NO CONCEPT of the housing Bubble and how it was formed and created, along with the FACT that it was Republicans in Congress in MAJORITY in both the house and the Senate....AND it was the Republicans that did NOT react to bush's MEEK warning and Bush didn't even pay attention to his own warning and offered all kinds of easy peasey offers to put more people in to homes...so his toungue was forked on this...and the reason those in power did nothing about it though they pretended like they were going to...is because Freddie Mac LOBBIED THE REPUBLICANS with TONS OF MONEY, to keep them from doing anything...while Bush's Fed regulators turned a BLIND EYE to the perps on Wall Street....while they stole us blind.

and that isn't even the half of it.....

I'm sorry Carol, but you need to get off your high horse and do some in depth reading to KNOW how things went down.

THIS!

Care is just so much better are expressing it than I am.

 

[EdwardBaiamonte]

I'm sorry Carol, but you need to get off your high horse and do some in depth reading to KNOW how things went down.

Here's the in dept reading: our great newspapers and economists on left and right agree it was liberal government that caused the current depression.

"First consider the once controversial view that the crisis was largely caused by the Fed's holding interest rates too low for too long after the 2001 recession. This view is now so widely held that the editorial pages of both the NYTimes and the Wall Street Journal agree on its validity!"...John B. Taylor( right wing economist)


" The Federal reserve having done so much to create the problems in which the economy is now mired, having mistakenly thought that even after the housing bubble burst the problems were contained, and having underestimated the severity of the crisis, now wants to make a contribution to preventing the economy from sinking into a Japanese Style malaise....... - "Joseph Stiglitz" ( left wing economist)




You may not have heard of the Federal Reserve system but it exists to inflate and deflate the currency supply through the housing market. They inflated too much for too long. This caused what they call a housing bubble. While the bubble was inflating all the big banks and many insurance companies bought bubble mortgages thinking they were sound rather than merely purchased or made possible by newly printed funny money. When the bubble deflated they all lost money on the mortgages. It would be analogous to the government making cars and giving them to GM so everyone could have a car. If GM got them by the ton and for very little money of course they would find a way to move them . This is essentially what the Banks did with the free money. In addition to the Federal Reserve System you had Fanny and Freddie which bought and guaranteed many of the mortgages so no one had to worry about them failing. Then you had CRA, FHA, Federal Home Loan Bank Board( 3% down payment loans) and several others that were designed to get everybody in their own home.

When the states tried to move against predatory lending by national banks they were blocked by the bank's federal regulator, the office of the comptroller of the currency, That empowered money lenders say Lynn Turner.

Just as significantly you had very badly conceived accounting rules that hid the problems from everyone until it was too late. Accounting rules are supposed to do the opposite, not move billions in potential liabilities off the balance sheet onto tiny footnote on the bottom of a page as happened at Citibank, or onto on sentence at the end of a 10-Q report as happened at AIG, or as generally happened with SIVs (structured investment vehicles). Then you had gov't rules from the last crisis, the Enron Crisis, the created mark-to- market accounting rules for this crisis that many believe greatly exacerbated this crisis.

Then you had the problem with the government backed ratings agencies that simply failed to rate the mortgage backed and related securities, properly. Sorry, it had little to do with Bush, but had everything to do with inane attempts by the liberal to regulate the free market!


Warren Buffett: "There are significant limits to what regulation can accomplish. As a dramatic illustration, take two of the biggest accounting disasters in the past ten years: Freddie Mac and Fannie Mae. We're talking billions and billions of dollars of misstatements at both places".

Now, these are two incredibly important institutions. I mean, they accounted for over 40% of the mortgage flow a few years back. Right now I think they're up to 70%. They're quasi-governmental in nature. So the government set up an organization called OFHEO. I'm not sure what all the letters stand for. [Note to Warren: They stand for Office of Federal Housing Enterprise Oversight.] But if you go to OFHEO's website, you'll find that its purpose was to just watch over these two companies. OFHEO had 200 employees. Their job was simply to look at two companies and say, "Are these guys behaving like they're supposed to?" And of course what happened were two of the greatest accounting misstatements in history while these 200 people had their jobs. It's incredible. I mean, two for two!

“Whatever regulatory changes are made, they will pale in comparison to the change already evident in today’s markets,” he said. “Those markets for an indefinite future will be far more restrained than would any currently contemplated new regulatory regime.”-Alan Greenspan

Courtesy A. Smith:FDR created Fannie.
LBJ Privatized Fannie - creating an "enron" like environment:
Greg Mankiw's Blog: Thanks, LBJ

Carter's Community Reinvestment Act - accelerated by Clinton - pushed risky loans:
Community Reinvestment Act - Wikipedia, the free encyclopedia

Clinton pushed Fannie into Subprime - the most critical mistake:
Andrew Cuomo and Fannie and Freddie - Page 1 - News - New York - Village Voice

Even the NY Times figured this out: Fannie Mae Eases Credit To Aid Mortgage Lending - NYTimes.com

Bush and McCain attempted to reform Fannie on 17 occasions
Bush Called For Reform of Fannie Mae & Freddie Mac 17 Times in 2008 Alone Only To Have Dems Ignored His Warnings :: Political News and commentaries :: Hyscience

The risky subprime loans fueled another layer of risk - derivatives
https://www.istockanalyst.com/article/viewarticle/articleid/2947518

The LA Times reported on Clinton's "subprime" success in 1999:
Minorities' Home Ownership Booms Under Clinton but Still Lags Whites' - Los Angeles Times

 

[American Horse]

Wow, there is a non biased and well supported analysis of what happened. All freddy and fanny. And that nasty fed.
So, a whole series of postings that say what a con would like to believe. You could spend some time looking at the other issues out there that independent experts actually believe caused the crash. But then, as a con, you only look at what you would like to believe. Waste of time.

Who are these experts you rely on? Do you know anything about it you haven't been told by partisan hacks who actually are relying on their own narrative to protect their political allies?

For you and quick, (before you google any of these) do you actually know what the Fannies did? Do you know what a GSE is? Do you know what an implied guarantee is? Do you know what a moral hazard is? Do you know what the CRA is/was and what it required of banks?

All the rest, like mortgage backed securities, their derivatives, credit default swaps, etc all naturally spun out of the first list.

And I don't recall much mention made about the fed; but I will add that Greenspan strongly believed that the real estate/home construction industry was America's strongest ace in the hole, while warning about the growth and implied guarantee of the federal govt behind the Fannies.

The politicians have been able to completely obfuscate the main derivative cause of the financial crises, leaving us only protected by a fig leaf called Dodd-Frank which actually preserves the status-quo-ante, and institutionalizes "Too Big To Fail, and Implied Guarantee.

It appears to any informed person, informed by primary sources, not just by political pundits masquerading as economic experts, that the only thing that's been accomplished is to cover some political asses and assure the next time it happens (and it surely will) that the blame will be able to be put on the backs of Republicans and a lack of sufficient regulations, while the pols will directly benefit by buying votes by building new constituencies with taxpayer bailout money

 

[EdwardBaiamonte]

Wow, there is a non biased and well supported analysis of what happened. All freddy and fanny. And that nasty fed.

you mean well supported by our major newspapers and economists on left and right?

"First consider the once controversial view that the crisis was largely caused by the Fed's holding interest rates too low for too long after the 2001 recession. This view is now so widely held that the editorial pages of both the NYTimes and the Wall Street Journal agree on its validity!"...John B. Taylor


" The Federal reserve having done so much to create the problems in which the economy is now mired, having mistakenly thought that even after the housing bubble burst the problems were contained, and having underestimated the severity of the crisis, now wants to make a contribution to preventing the economy from sinking into a Japanese Style malaise....... - "Joseph Stiglitz"( uber left economist)

You may not have heard of the Federal Reserve system but it exists to inflate and deflate the currency supply through the housing market. They inflated too much for too long. This caused what they call a housing bubble. While the bubble was inflating all the big banks and many insurance companies bought bubble mortgages thinking they were sound rather than merely purchased or made possible by newly printed funny money. When the bubble deflated they all lost money on the mortgages. It would be analogous to the government making cars and giving them to GM so everyone could have a car. If GM got them by the ton and for very little money of course they would find a way to move them . This is essentially what the Banks did with the free money. In addition to the Federal Reserve System you had Fanny and Freddie which bought and guaranteed many of the mortgages so no one had to worry about them failing. Then you had CRA, FHA, Federal Home Loan Bank Board( 3% down payment loans) and several others that were designed to get everybody in their own home.

When the states tried to move against predatory lending by national banks they were blocked by the bank's federal regulator, the office of the comptroller of the currency, That empowered money lenders say Lynn Turner.

Just as significantly you had very badly conceived accounting rules that hid the problems from everyone until it was too late. Accounting rules are supposed to do the opposite, not move billions in potential liabilities off the balance sheet onto tiny footnote on the bottom of a page as happened at Citibank, or onto on sentence at the end of a 10-Q report as happened at AIG, or as generally happened with SIVs (structured investment vehicles). Then you had gov't rules from the last crisis, the Enron Crisis, the created mark-to- market accounting rules for this crisis that many believe greatly exacerbated this crisis.

Then you had the problem with the government backed ratings agencies that simply failed to rate the mortgage backed and related securities, properly. Sorry, it had little to do with Bush, but had everything to do with inane attempts by the liberal to regulate the free market!


Warren Buffett: "There are significant limits to what regulation can accomplish. As a dramatic illustration, take two of the biggest accounting disasters in the past ten years: Freddie Mac and Fannie Mae. We're talking billions and billions of dollars of misstatements at both places".

Now, these are two incredibly important institutions. I mean, they accounted for over 40% of the mortgage flow a few years back. Right now I think they're up to 70%. They're quasi-governmental in nature. So the government set up an organization called OFHEO. I'm not sure what all the letters stand for. [Note to Warren: They stand for Office of Federal Housing Enterprise Oversight.] But if you go to OFHEO's website, you'll find that its purpose was to just watch over these two companies. OFHEO had 200 employees. Their job was simply to look at two companies and say, "Are these guys behaving like they're supposed to?" And of course what happened were two of the greatest accounting misstatements in history while these 200 people had their jobs. It's incredible. I mean, two for two!

“Whatever regulatory changes are made, they will pale in comparison to the change already evident in today’s markets,” he said. “Those markets for an indefinite future will be far more restrained than would any currently contemplated new regulatory regime.”-Alan Greenspan

Courtesy A. Smith:FDR created Fannie.
LBJ Privatized Fannie - creating an "enron" like environment:
Greg Mankiw's Blog: Thanks, LBJ

Carter's Community Reinvestment Act - accelerated by Clinton - pushed risky loans:
Community Reinvestment Act - Wikipedia, the free encyclopedia

Clinton pushed Fannie into Subprime - the most critical mistake:
Andrew Cuomo and Fannie and Freddie - Page 1 - News - New York - Village Voice

Even the NY Times figured this out: Fannie Mae Eases Credit To Aid Mortgage Lending - NYTimes.com

Bush and McCain attempted to reform Fannie on 17 occasions
Bush Called For Reform of Fannie Mae & Freddie Mac 17 Times in 2008 Alone Only To Have Dems Ignored His Warnings :: Political News and commentaries :: Hyscience

The risky subprime loans fueled another layer of risk - derivatives
https://www.istockanalyst.com/article/viewarticle/articleid/2947518

The LA Times reported on Clinton's "subprime" success in 1999:
Minorities' Home Ownership Booms Under Clinton but Still Lags Whites' - Los Angeles Times