Republicans: explain why Wall Street had nothing to do with bringing down the economy

[rdean]

I keep hearing the Recession began because of Freddie/Fannie. Seems it had nothing to do with Wall Street.

When I explain that 70% of the mortgage market moved to Wall Street and Wall Street sold those mortgages as "securities" and those securities were "insured" and when the securities tanked and the insurance companies had to pay off their debt which were called "derivatives", that was when the economy took a nose dive. The right wingers keep telling me how stupid I am and that's not what happened at all. That it was all Freddie/Fannie and the Democrats.

So I'm asking those economically savvy Republicans, "What exactly caused the Recession". Please explain in a "step by step" manner. I really want to know.

I asked one right winger what a "derivative" is and this was their answer:
"a derivative is a financial instrument"

So please, from the right wing perspective, explain the financial meltdown. I really want to know. Make sure to explain why Wall Street had nothing to do with the financial meltdown and how derivatives are nothing.

 

[expat_panama]

I keep hearing the Recession began because of Freddie/Fannie. Seems it had nothing to do with Wall Street...

It sounds like you're saying is that the '08 drop in mortgage prices was not caused by government officials buying and selling mortgages, and that the real cause was the free market itself and that we want to keep the government officials and do away with the free market.

That doesn't make sense, what are you trying to say?

 

[The Rabbi]

I keep hearing the Recession began because of Freddie/Fannie. Seems it had nothing to do with Wall Street...

It sounds like you're saying is that the '08 drop in mortgage prices was not caused by government officials buying and selling mortgages, and that the real cause was the free market itself and that we want to keep the government officials and do away with the free market.

That doesn't make sense, what are you trying to say?

HE's trying to say that Republicans, whom he has never met one, and people who wokr on Wall Street are EEVUL. That's about all he can say. He sure doesn't know what a derivative is.

 

[editec]

I keep hearing the Recession began because of Freddie/Fannie. Seems it had nothing to do with Wall Street.

When I explain that 70% of the mortgage market moved to Wall Street and Wall Street sold those mortgages as "securities" and those securities were "insured" and when the securities tanked and the insurance companies had to pay off their debt which were called "derivatives", that was when the economy took a nose dive. The right wingers keep telling me how stupid I am and that's not what happened at all. That it was all Freddie/Fannie and the Democrats.

So I'm asking those economically savvy Republicans, "What exactly caused the Recession". Please explain in a "step by step" manner. I really want to know.

I asked one right winger what a "derivative" is and this was their answer:
"a derivative is a financial instrument"

So please, from the right wing perspective, explain the financial meltdown. I really want to know. Make sure to explain why Wall Street had nothing to do with the financial meltdown and how derivatives are nothing.

I believe that we have already heard the Republican take on it, haven't we?

Their POV is that the poor and stupid were duped into buying homes they cannot afford and the poor poor banksters were entirely without responsibility for that.

And the reason they like to go after Fannie and Freddie is because, even though those organziations are privately owned, the perception was that they were backed by the government.

Of course if you really want the blow by blow answer to what happened to this economy, it won't be found in such simple theories.

It takes hundreds of pages just to describe the complex interaction of banking and finance to see how the banking system nearly unraveled.

It is the interconnectedness of banks, and the debt instuments they devised which made the mortgage crises become a crises in confidence in bank balances.

And the poor, or the middle class who paid too much for their homes can hardly be blamed for that mess.

 

[sparky]

i find any accusation of partisanship weak at best after Barny Frank headed the commission that basically handed Wall street a pass to continue on as it did ......

 

[editec]

i find any accusation of partisanship weak at best after Barny Frank headed the commission that basically handed Wall street a pass to continue on as it did ......

word!

 

[rdean]

i find any accusation of partisanship weak at best after Barny Frank headed the commission that basically handed Wall street a pass to continue on as it did ......

word!

With Republicans controlling both houses and the presidency, it was Barney Frank? A gay guy? Republicans let a gay guy have all that power.

Now I've heard everything. Sounds like Twilight Zone.

 

[rdean]

I keep hearing the Recession began because of Freddie/Fannie. Seems it had nothing to do with Wall Street...

It sounds like you're saying is that the '08 drop in mortgage prices was not caused by government officials buying and selling mortgages, and that the real cause was the free market itself and that we want to keep the government officials and do away with the free market.

That doesn't make sense, what are you trying to say?

Selling mortgages to anyone that wants one and then selling the bundled mortgages overseas as "securities" so you could insure them, essentially betting they fail, used to be against the law. Republicans deregulated that early in the Bush administration when they had both houses. Wall Street didn't break the law. They bought the Republican leadership to change the law, which they did.

It's why no one except Republicans on this board even mention Freddie/Fannie. It's why every politician and economist mentions "Wall Street" and "derivatives". For USMB Republicans to accept it was Wall Street, they would have to accept Republican culpability, which will never happen. Hell, some are now even insisting it was Obama who signed TARP and started the Afghanistan and Iraqi wars. They can't even admit jobs were being lost at 7 or 8 hundred thousand BEFORE Obama was even signed in.

Worse, they want to take credit for getting Bin Laden. What a bunch of slimes.

I'm assuming you've heard the word, "Lobbiest". It's what they do.

 

[martybegan]

I keep hearing the Recession began because of Freddie/Fannie. Seems it had nothing to do with Wall Street...

It sounds like you're saying is that the '08 drop in mortgage prices was not caused by government officials buying and selling mortgages, and that the real cause was the free market itself and that we want to keep the government officials and do away with the free market.

That doesn't make sense, what are you trying to say?

Selling mortgages to anyone that wants one and then selling the bundled mortgages overseas as "securities" so you could insure them, essentially betting they fail, used to be against the law. Republicans deregulated that early in the Bush administration when they had both houses. Wall Street didn't break the law. They bought the Republican leadership to change the law, which they did.

It's why no one except Republicans on this board even mention Freddie/Fannie. It's why every politician and economist mentions "Wall Street" and "derivatives". For USMB Republicans to accept it was Wall Street, they would have to accept Republican culpability, which will never happen. Hell, some are now even insisting it was Obama who signed TARP and started the Afghanistan and Iraqi wars. They can't even admit jobs were being lost at 7 or 8 hundred thousand BEFORE Obama was even signed in.

Worse, they want to take credit for getting Bin Laden. What a bunch of slimes.

I'm assuming you've heard the word, "Lobbiest". It's what they do.

I am trying to find where they deregulated this in the early 2000's, but from what I see this stuff was going on since the 80s', with Fannie and Freddie issuing the lion's share of these securities.

 

[Mad Scientist]

Selling mortgages to anyone that wants one and then selling the bundled mortgages overseas as "securities" so you could insure them, essentially betting they fail, used to be against the law. Republicans deregulated that early in the Bush administration when they had both houses. Wall Street didn't break the law. They bought the Republican leadership to change the law, which they did.

You lie.

Glass/Steagall was repealed in 1999 by Clinton and the Republican Congress.

Glass

The repeal of provisions of the Glass–Steagall Act of 1933 by the Gramm-Leach-Bliley Act effectively removed the separation that previously existed between Wall Street investment banks and depository banks. Some experts believe that this repeal directly contributed to the severity of the Financial Crisis of 2007-2010 by allowing banks to gamble with their depositor's money.

 

[expat_panama]

...Selling mortgages to anyone that wants one and then selling the bundled mortgages overseas as "securities" so you could insure them, essentially betting they fail, used to be against the law...

That doesn't make sense to The Rabbi and me. Buying and selling debt has always been legal and necessary.

...HE's trying to say that Republicans, whom he has never met one, and people who wokr on Wall Street are EEVUL. That's about all he can say. He sure doesn't know what a derivative is.

If that's what he's trying to say then he's succeeding. I thought he was trying to make sense but failing.

 

[CrusaderFrank]

I keep hearing the Recession began because of Freddie/Fannie. Seems it had nothing to do with Wall Street.

When I explain that 70% of the mortgage market moved to Wall Street and Wall Street sold those mortgages as "securities" and those securities were "insured" and when the securities tanked and the insurance companies had to pay off their debt which were called "derivatives", that was when the economy took a nose dive. The right wingers keep telling me how stupid I am and that's not what happened at all. That it was all Freddie/Fannie and the Democrats.

So I'm asking those economically savvy Republicans, "What exactly caused the Recession". Please explain in a "step by step" manner. I really want to know.

I asked one right winger what a "derivative" is and this was their answer:
"a derivative is a financial instrument"

So please, from the right wing perspective, explain the financial meltdown. I really want to know. Make sure to explain why Wall Street had nothing to do with the financial meltdown and how derivatives are nothing.

F/F set the standard for essentially AAA rated paper...even for No Income and No Asset borrowers

http://www.usmessageboard.com/econo...e-between-wall-street-fannie-and-freddie.html

I was going to add a section on the distortion caused by CRA as well

 

[California Girl]

I keep hearing the Recession began because of Freddie/Fannie. Seems it had nothing to do with Wall Street.

When I explain that 70% of the mortgage market moved to Wall Street and Wall Street sold those mortgages as "securities" and those securities were "insured" and when the securities tanked and the insurance companies had to pay off their debt which were called "derivatives", that was when the economy took a nose dive. The right wingers keep telling me how stupid I am and that's not what happened at all. That it was all Freddie/Fannie and the Democrats.

So I'm asking those economically savvy Republicans, "What exactly caused the Recession". Please explain in a "step by step" manner. I really want to know.

I asked one right winger what a "derivative" is and this was their answer:
"a derivative is a financial instrument"

So please, from the right wing perspective, explain the financial meltdown. I really want to know. Make sure to explain why Wall Street had nothing to do with the financial meltdown and how derivatives are nothing.

Actually, what you want is to yet another partisan bitchfest. Sorry, deanie, this is getting way too boring now. Only 6% of your posts contain anything other than bullshit and whining.

People have already spoon fed you this information - many times, in many formats - and you have steadfastly ignored any thing that does not suit your stupid ideology.

 

[CrusaderFrank]

Also even the OP admits that the Gubbamint was the 900 pound Gorilla in the room at 40%, not 30% of the residential mortgage market because its the GSE and FHA.

 

[daveman]

I keep hearing the Recession began because of Freddie/Fannie. Seems it had nothing to do with Wall Street...

It sounds like you're saying is that the '08 drop in mortgage prices was not caused by government officials buying and selling mortgages, and that the real cause was the free market itself and that we want to keep the government officials and do away with the free market.

That doesn't make sense, what are you trying to say?

No, that doesn't make sense -- but that's what he's trying to say.

Rderp needs the government to make all his decisions for him.

 

[uscitizen]

If the housing bubble was our only major economic problem we would have already recovered from that.

 

[The Rabbi]

If the housing bubble was our only major economic problem we would have already recovered from that.

The housing market is still in the crapper. But you're right. Our biggest problem is the gov't itself and its myriad programs that have discouraged savings and investment.

 

[Wry Catcher]

If the housing bubble was our only major economic problem we would have already recovered from that.

The housing market is still in the crapper. But you're right. Our biggest problem is the gov't itself and its myriad programs that have discouraged savings and investment.

Saving has never been a strength in my lifetime; most Americans play now, pay latter -even those who claim to be conservatives. The largest investment most Americans make is in their home, that's not doing very well now, is it.

How many 'fiscal' conservatives carry over debt on their credit cards? How many engage in deficit spending each month? Why would an American worker save, banks pay an historical low interest on savings today, and an outragious amount on funds borrowed? Pay down the debt, don't buy it if you can't pay cash and forget about retirement - pension funds are going, going, going and healthcare will continue to rise much faster than inflation.

Why invest in stocks or bonds? Americans no longer trust financial advisors, having learned their financial adviser rarely invested in instruments s/he recommended for their clients and has no more insight into tomorrow than your neighbors dog.

My advice, use only local banks or credit unions, never pay for an extended warrinty on anything. Write refused on mail recieved offering new credit cards and send them back and never, ever, ever vote for a Republican. Voting for a Republican is tantamount to being a Cubs fan, at the end you lose.

 

[The Rabbi]

If the housing bubble was our only major economic problem we would have already recovered from that.

The housing market is still in the crapper. But you're right. Our biggest problem is the gov't itself and its myriad programs that have discouraged savings and investment.

Saving has never been a strength in my lifetime; most Americans play now, pay latter -even those who claim to be conservatives. The largest investment most Americans make is in their home, that's not doing very well now, is it.

How many 'fiscal' conservatives carry over debt on their credit cards? How many engage in deficit spending each month? Why would an American worker save, banks pay an historical low interest on savings today, and an outragious amount on funds borrowed? Pay down the debt, don't buy it if you can't pay cash and forget about retirement - pension funds are going, going, going and healthcare will continue to rise much faster than inflation.

Why invest in stocks or bonds? Americans no longer trust financial advisors, having learned their financial adviser rarely invested in instruments s/he recommended for their clients and has no more insight into tomorrow than your neighbors dog.

My advice, use only local banks or credit unions, never pay for an extended warrinty on anything. Write refused on mail recieved offering new credit cards and send them back and never, ever, ever vote for a Republican. Voting for a Republican is tantamount to being a Cubs fan, at the end you lose.

You want fries with that?

 

[Wiseacre]

All right, from the top:

30 some years ago you had to have a down payment and a good credit rating to buy a house. You had to essentially prove you could afford it, your mortgage couldn't be higher than 30-40% of your income unless you forked over more money on the down payment.

Then the gov't changed all that, basically did away with all of it so that any swingin' dick could buy a house. They created Adjustable Rate Martgages (ARMs) that were initially very low but would accelerate the rate over time depending on the prime rate. Fannie and Freddie backed the loans and the gov't all but forced banks to loan money to people that wouldn't have been able to qualify years earlier. The regulators relaxed the enforcement, people took out mortgages on those ARMs deals, and anybody who raised objections or questions from either party or no party was summarily dismissed.

Bunches of sub prime mortgages were lumped together and sold as AAA rated securities when in fact they werreobviously not that secure. And all was well until the interest rates started to go up and people couldn't make their payments on the mortgages. And it all came down like a house of cards.

Were the Wall Street bankers and Investment firms responsible? Sure, but no more than the gov't who pushed this far beyond what was financially sound, and the regulators and credit ratings agencies and the underwriters and the people themselves who had to know they were buying something that they couldn't afford down the road. And of course Fannie and Freddie, who many think were the chief architects of the whole mess.