OK Truthmatters

Discussion in 'Economy' started by Toro, Dec 25, 2012.

  1. Toro
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    Toro Diamond Member

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    TM
    http://www.usmessageboard.com/members/toro.html?tab=visitor_messaging#vmessage62541

    Me
    TM
    http://www.usmessageboard.com/members/truthmatters.html#vmessage62542

    http://www.usmessageboard.com/members/toro.html?tab=visitor_messaging#vmessage62545

    First, I've talked about this on the board numerous times.

    Next, yes the Financial Crisis still would have happened, though perhaps it wouldn't have gotten as big. Structures such as RMBS and SIVs increased demand, but the primary culprit in this is the Fed IMO for three reasons.

    First, the Fed kept too much liquidity into the system. This created asset inflation as liquidity flooded into the mortgage and housing markets.

    Second, because interest rates were so low, investors reached for yield and increased demand for the structures you mentioned. Had interest rates not fallen so low, institutions would not have demanded higher returns from more risky products. The Fed affects pricing across the interest rate curve by nailing down short-term rates, which drags down the long end of the curve if inflation expectations remain dormant. Lower mortgage rates mean cheaper mortgages which means more credit to pump up housing prices.

    Third, because of Greenspan's repeated actions to bail out the financial system whenever it got into trouble, the market believed that he would do so in the future. This was known as The Greenspan Put. It led investors to increase the leverage on their investments, which contributed greatly to the forced liquidation that caused the implosion of the financial system.

    I do think deregulation played a significant factor, but it was a minor one relative to the Fed. There is a long history around the world of financial deregulation and asset bubbles and collapses. This contributed to the crisis. But the reason why it almost certainly wasn't the primary factor was because there were housing bubbles around the world where structures and derivatives played a negligible roll.

    Finally, there were many other factors, including the role of the GSEs, which is mainly at the feet of the Democrats. I think this is overblown by ideologues but it wasn't zero either. Other factors included excess savings in Asia which recycled back into the US mortgage market, fraud and people's own greed.
     
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    Last edited: Dec 25, 2012
  2. Avorysuds
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    Avorysuds Gold Member

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    First: TM is an "Impossible person." She/he/it has no interest in bettering themselves, they believe in “us VS them” at any cost.

    God could come down from the heavens, lift TM into the clouds and then teleport her to another galaxy. While floating in space just above the largest sun in the universe, still alive due to "God-mode powers," God could announce to TM that she is in fact wrong and that the Party that he blindly follows too is wrong. TM's response would be to call God out as a red neck, white old Republican who hates the working class and their children, especially if they are a minority as well as pointing out how Gods policies are “historically failed” and caused a worldwide depression. Thus, to TM proving she is still somehow right.

    Point of that story is that TM has no interest in accepting responceability for policies that she and her party have put in place that helped cause the meltdown of the economy. Tiny children do better with learning and thinking outside of their small bubble than TM does.


    Secondly: People sound more and more like Ron Paul everyday!

    Disclaimer: I am not religious, nor am I pushing God or that God is real, republican, white or would waste their time trying to educate matter in the universe that goes out of its way to de-evolve itself as TM has managed to accomplish several times in a single lifetime.
     
    Last edited: Dec 25, 2012
  3. boedicca
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    boedicca Uppity Water Nymph Supporting Member

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    I admire Toro's dedication and thoroughness, but tis a futile tossing of pearls before swine given the audience for his OP.
     
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  4. Dot Com
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    Dot Com Nullius in verba Supporting Member

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  5. boedicca
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    boedicca Uppity Water Nymph Supporting Member

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    Please read up on Franklin Raines and his lobbying efforts to slacken lending standards, and then rethink your position.
     
  6. Avorysuds
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    Avorysuds Gold Member

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    One simple fact, if Government were not involved with helping people buy homes none of this would have ever happened, ever... Of course to get to this point the constitution had to read as the polar opposite as the FF clearly stated, but hey it’s 2012 and what can’t the Government do now that the General welfare clause has officially replaced the constitution?

    Serious question, what can’t the Government do?
     
  7. Avorysuds
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    Avorysuds Gold Member

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  8. Dot Com
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    Dot Com Nullius in verba Supporting Member

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    Did you read it :doubt:

    Fannie Mae and Freddie Mac were victims, not culprits - BusinessWeek
    FactWatch: Fannie and Freddie were followers, not leaders, in mortgage frenzy | The Center for Public Integrity
     
  9. boedicca
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    boedicca Uppity Water Nymph Supporting Member

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  10. Dot Com
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    Dot Com Nullius in verba Supporting Member

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    I will defer to Toro because he is quite knowledgeable about this industry. Just wanted to add the bit about F & F being followers as opposed to leaders in the orgy of greed. :)
     

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