How the Democrats Created the Financial Crisis: Kevin Hassett

[jschuck12001]

I didn't write the article but simply used the largest number provided as a question to how it lies at the root of the problem. I am making no defense of Fannie or Freddie but the problem is so much larger that pointing a finger solely at them is clearly for purposes of a red-herring.

The problem is clearly how we deregulated. If it wasn't we wouldn't be in the process of trying to re-regulate would we...

I totally agree Peter, this is a point I have tried to make but there have been about 100 of these posts on the crisis and I get tired of posting the same thing over and over, it gets old. It goes much deeper than Fannie or Freddie.

 

[jschuck12001]

OK. I admit, Obama is a saint. There, I said it.

Look, I dont think any of them are saints and I have admitted on several posts that Dems are just as guilty on many of the issues we debate on this board. The more I research the 2 candidates the more I wish I had more choices for President but I feel that Obama was the new guy on the block and he made some good choices and some naive ones. We can pull the micro fiche out and look at Mccains early days in Politics and you will find much much worse than anything Obama has done to this point. I'm voting for inexperience because experience has taken us nowhere.

 

[I Missthe North]

Fannie Mae & Freddie Mac Failure: The Lies, the Cover Ups and the Making of a Disaster | Loan Modification & Home Loan News

I get really sick of hearing about how Democrats took all this money from Fannie Mae and Freddie Mac. The two companies spend over $170 million lobbying in Washington over the past ten years. I guarantee that money went to both sides equally.

 

[The Paperboy]

Fannie Mae & Freddie Mac Failure: The Lies, the Cover Ups and the Making of a Disaster | Loan Modification & Home Loan News

I get really sick of hearing about how Democrats took all this money from Fannie Mae and Freddie Mac. The two companies spend over $170 million lobbying in Washington over the past ten years. I guarantee that money went to both sides equally.

They're not all running for President or advisors to the nominee...

 

[PeterS]

Exactly, Thats why I get tired of hearing that Mccain wanted to pass a bill in late 2005. The damage was done and they could have passed any bill they wanted to and we would still be in the situation we are in today.

It seems there are others who agree:

Even if the 2006 effort to strengthen oversight had succeeded, it’s debatable whether it would have averted the subprime crisis. The extent of the problems was not yet fully known, and it’s a leap of faith to suggest that regulators granted expanded power would have noticed a deterioration in Fannie and Freddie’s loan portfolios soon enough and would have sounded an alarm.

 

[The Paperboy]

It seems there are others who agree:

Even if the 2006 effort to strengthen oversight had succeeded, it’s debatable whether it would have averted the subprime crisis. The extent of the problems was not yet fully known, and it’s a leap of faith to suggest that regulators granted expanded power would have noticed a deterioration in Fannie and Freddie’s loan portfolios soon enough and would have sounded an alarm.

At least there would have been a debate...

 

[jschuck12001]

It seems there are others who agree:

Even if the 2006 effort to strengthen oversight had succeeded, it’s debatable whether it would have averted the subprime crisis. The extent of the problems was not yet fully known, and it’s a leap of faith to suggest that regulators granted expanded power would have noticed a deterioration in Fannie and Freddie’s loan portfolios soon enough and would have sounded an alarm.

Its not in Congress's nature to act on something before its a problem. We didnt act on terrorism until they hit us on 9-11 and they didnt act on the mortgage crisis because they prayed like hell that things would get better so they wouldn't have to deal with the economic mess with what we have been seeing now with the banks and they felt it was better to wait because either way we were screwed, they were playing vegas craps at that point. This is just my opinion and I cannot back it up with facts.

 

[I Missthe North]

They're not all running for President or advisors to the nominee...

Come on man, you really want to talk about dirty campaign money? Let's talk about McCain and his oil money. Don't try to act like lobbyists don't play a big role in both of the candidates campaign and there decisions. Amazing reversal by McCain on off shore drilling an crazy how oil companies rewarded it with a dramatic increase in money. That is a terrible point to make coming from a Republican supporter.

Industry Gushed Money After Reversal on Drilling - washingtonpost.com

 

[PeterS]

I totally agree Peter, this is a point I have tried to make but there have been about 100 of these posts on the crisis and I get tired of posting the same thing over and over, it gets old. It goes much deeper than Fannie or Freddie.

You are in a better position to know the full extent to the problem then I am. My interest was peaked when I saw 380B in questionable debt vs 4.7T in assets. I have been in business long enough to know that even if the full 380B was written off it wouldn't be enough to make the entire house of cards fall. Even in Fannie and Freddie the problem lies much deeper.

What I worry about is whether all the fallacies being spun will only make the problem worse by spurring still worse legislation. I cringe at the thought that we are about to do nearly 1T in more bailouts with each side more concerned in covering their respective asses than accepting responsibility and passing the legislation that prevents it from happening again.

 

[Zoomie1980]

At least there would have been a debate...

The irony of the whole thing is this is a crisis involving SECURED paper! This isn't a credit card crisis. The assets underlieing all this bad paper still have value, it's just that the collateral is no longer worth anywhere near the paper value.

At some point the Federal government is going to own an ENORMOUS inventory of REAL assets....houses. And on those notes not foreclosed on, COLLATERALIZED paper. So while yes, we are talking a Trillion or more of "bailouts", there is a reasonable chance that in five-seven years most, if not all the money is going to be recoverable, and maybe the government will do something that has never happened before in its history....turn a profit??

 

[jschuck12001]

The irony of the whole thing is this is a crisis involving SECURED paper! This isn't a credit card crisis. The assets underlieing all this bad paper still have value, it's just that the collateral is no longer worth anywhere near the paper value.

At some point the Federal government is going to own an ENORMOUS inventory of REAL assets....houses. And on those notes not foreclosed on, COLLATERALIZED paper. So while yes, we are talking a Trillion or more of "bailouts", there is a reasonable chance that in five-seven years most, if not all the money is going to be recoverable, and maybe the government will do something that has never happened before in its history....turn a profit??

Thats an optimistic outlook, I hope your right, the foreclosures keep going up and they will continue as long as jobs are lost so we havent bottomed out yet. I'm scared it could be another year or 2 before we bottom out and then another 5 years before that paper is worth anything. The only way to raise home values is to take away the supply. How can the government do that unless they have a free for all sale which is what we have had for the past 8 years and look where we are.

 

[The Paperboy]

Prediction: McCain comes out against the bailout and proposes a different plan. This would leave Obama siding with Bush.

 

[PeterS]

Prediction: McCain comes out against the bailout and proposes a different plan. This would leave Obama siding with Bush.

So McCain's interest is in political maneuvering and not solving the problem?

 

[dilloduck]

So McCain's interest is in political maneuvering and not solving the problem?

You expect something different from a politician ?

 

[jschuck12001]

Prediction: McCain comes out against the bailout and proposes a different plan. This would leave Obama siding with Bush.

This is not Mccains ball of wax, I believe he said he didnt know much about the economy so I dont think he has a clue what to do because the economists dont have a clue.

 

[Toro]

It seems there are others who agree:

Even if the 2006 effort to strengthen oversight had succeeded, it’s debatable whether it would have averted the subprime crisis. The extent of the problems was not yet fully known, and it’s a leap of faith to suggest that regulators granted expanded power would have noticed a deterioration in Fannie and Freddie’s loan portfolios soon enough and would have sounded an alarm.

I haven't read the article. I'll get to it later. But tightening regulation on the GSEs would not have averted the problem. Most of the subprime mortgages were not guaranteed by the GSE. The prices of homes with qualifying mortgages never went as high as the places with all the problems.

More capital would have averted the collapse of the GSEs, there is little doubt about that. However, most of the problems in the mortgage market - and thus in the housing market - originated in the private market. There would have been a bubble and a collapse even with more capital at the GSEs, though the systemic problems today would be less.

 

[Diuretic]

In other words you have no idea what created the crisis and are just spewing partisan crap out your ass, as usual.

Gunny............one doesn't spew crap out of one's arse.

I mean, seriously.



Okay, as you were.

 

[editec]

Kevin's an idiot.

Anyone who thinks about this issue in partisan terms is so last week.

Political parties are over, dude.

Wake up, partisans the class war is ON.

 

[JimH52]

The GOP has been running the show, with the WH and Congress both for six years. Voters know where the mess came from. 1 in 2 voters beleive it was the GOP's fault. Bush and Graham cooked it up.

In November the GOP will pay...stay tuned!

 

[JimH52]

This is not Mccains ball of wax, I believe he said he didnt know much about the economy so I dont think he has a clue what to do because the economists dont have a clue.

Maybe the tundra chick will have a clue....naw,I guess not.