Republicans so worried about the debt, yet they cause most of it.

[Toddsterpatriot]

Borrowing from the Discount Window isn't a bad thing.
Try to keep your moronic claims straight.

Why isn't that borrowing a bad thing, yet the government borrowing to pay its debts is?

Why isn't that borrowing a bad thing

Why isn't a fully collateralized overnight loan a bad thing?
Why do you think it's bad?

yet the government borrowing to pay its debts is?

If the government was repaying its borrowings the next day, I'd be less worried about government debt.

 

[Toddsterpatriot]

What's a "derivatives bubble"?

Going from $200T in derivatives to $600T in three years is a bubble. Do you not know how to read a chart?

hey need leverage to create loans or to buy and hold securities.
They don't need leverage to buy and then sell something.

Yes, they need the leverage to buy. You just said they did in the first sentence, then you contradicted that in the second sentence. The period between when the bank buys the security and when they sell it is the period they are holding it for, right!? So....are you being deliberately obtuse or is this just an act of sophistry?

Why are you conflating MBS with derivatives? Is it because you're clueless?

You don't know what the fuck you're talking about.

Going from $200T in derivatives to $600T in three years is a bubble

Why do you feel that? Which definition of bubble does it fit?

Yes, they need the leverage to buy.

If they buy bonds, or write mortgages, and turn around and sell them in a month, that money is available to buy a new batch of bonds. That's why they like to securitize loans, so they don't need more capital.

You just said they did in the first sentence

Holding securities requires leverage. Buying and then selling, not so much.

Why are you conflating MBS with derivatives?

You don't know what the fuck you're talking about.

Explain your MBS derivatives theory, I'll show you your error.

 

[The Derp]

The biggest banks got bigger.
More small banks were merged or taken over. Liberals have been whining about this since the crash.

Again, you don't have any proof of this. You refuse to provide it. You just insist and hope that papers over the gap of support for your argument. The big banks were getting bigger before Dodd-Frank. In fact, since Dodd-Frank the market share for the TBTF banks in the mortgage lending market has declined:

 

[Toddsterpatriot]

The biggest banks got bigger.
More small banks were merged or taken over. Liberals have been whining about this since the crash.

Again, you don't have any proof of this. You refuse to provide it. You just insist and hope that papers over the gap of support for your argument. The big banks were getting bigger before Dodd-Frank. In fact, since Dodd-Frank the market share for the TBTF banks in the mortgage lending market has declined:

Big banks writing fewer mortgages?
I wonder if the liberals will whine about that?

 

[Toddsterpatriot]

The biggest banks got bigger.
More small banks were merged or taken over. Liberals have been whining about this since the crash.

Again, you don't have any proof of this. You refuse to provide it. You just insist and hope that papers over the gap of support for your argument. The big banks were getting bigger before Dodd-Frank. In fact, since Dodd-Frank the market share for the TBTF banks in the mortgage lending market has declined:

In the first quarter of 2012, Wells Fargo was originating 28 percent of all new home loans. By the fourth quarter of last year, its market share had shrunk by about half, to 13.5 percent, according to Inside Mortgage Finance.


It’s still the biggest mortgage lender by far, doing almost twice the volume of No. 2 Chase. But it has clearly downsized in a market that is also shrinking — from $2.12 trillion in total originations in 2012 to just $1.24 trillion in 2014.


Wells is not the only bank that has been pulling back. Chase, U.S. Bank and Bank of America combined had 16.4 percent of the market in the first quarter of 2012. In the most recent quarter, they had 15 percent.

So who’s filling the vacuum? Nonbank lenders, mostly.

Unlike banks, they do not take in insured deposits that can be used to make loans. Instead, they borrow money — typically from investors or banks — lend it to homeowners, then quickly sell those mortgages and repay their own loans.


Banks also sell most of the loans they make, but hold some in their portfolios. Nonbanks rarely hold loans and as a result don’t need as much capital. Banks and nonbanks service many of the loans they sell for a fee. They collect payments, forward them to the new loan owner and take action when borrowers fall behind.

Why big banks are losing out to nonbank lenders in mortgages

They don't hold loans so they don't need as much capital.
That sounds strangely familiar. LOL!

 

[The Derp]

The SEC doesn't set capital requirements for banks. Idiot.

No, but what the SEC did was tell banks they could self-regulate and determine their own levels of capitalization. That is effectively removing the capitalization rule.

It has nothing to do with Dodd-Frank, it has to do with the Accounting 101 class you failed. And the fact that you don't know that capital and revenue are different.

Right, so how was it an "attack on the banks", then?

And less lending, if you double their capital requirement. DURR.

Why less lending? If the capitalization ratio remains the same, but the amount they are spending gambling is reduced or eliminated, does that not create more room with which they can then issue more loans? Again, these banks had capital ratios prior to 2004 and lent money with no issues. This only became an issue recently because banks were diving into the casinos.

hey did. A lot.

NO! They lost money when the assets those mortgages backed went toxic. Loans go unpaid all the time. What makes this scenario different is the fact that those loans that went unpaid were also tied to securities, and in most cases, a single subprime loan could have backed dozens, hundreds, thousands, millions, infinite numbers of securities. That's how you ended up with a derivatives market that tripled in size between 2004-2007. Between 2004-6, only 800,000 subprime mortgages were issued and a quarter of those entered delinquency within 18-24 months. But each one of those subprimes backed an infinite number of securities. So when the underlying mortgage enters delinquency, it turns the asset that mortgage backed toxic. So if you estimate that 25% of the 800,000 subprime loans went unpaid, that comes to 200,000 toxic subprime loans. Now multiply that number by dozens, hundreds, thousands, millions of securities tied to each single loan, and you have the Great Bush Financial Collapse.

Lots of derivative trading. No exchange clearing. No netting.

Derivative trading would imply that it was 1:1, yet the derivatives market grew 200% in 3 years between 2004-7. That's because derivatives were spun off a single mortgage, multiplied by the 200,000 subprimes that went toxic.

 

[The Derp]

Why do you feel that? Which definition of bubble does it fit?

Because a 200% increase in three years is a bubble. What else would you call it?

If they buy bonds, or write mortgages, and turn around and sell them in a month, that money is available to buy a new batch of bonds. That's why they like to securitize loans, so they don't need more capital.

Right, but they're buying and selling constantly, not in increments. So there's always a flow of capital because they are simultaneously buying and selling. What happened is that the buying and selling accounted for a greater and greater share of their profits, so that by the time everything unwound, these banks were hooked on the profits from those products. The shareholders were hooked on the profits from those products. Those products became more important to the banks than lending because those products were what delivered higher profits to meet lofty goals established by the Board, shareholders, top executives, or all the above.

Holding securities requires leverage. Buying and then selling, not so much.

OK, but these banks were doing buying, holding, and selling simultaneously. So at any given time, they were holding an unknown number of securities.

 

[The Derp]

Big banks writing fewer mortgages?
I wonder if the liberals will whine about that?

Well, the decline in market share may or may not indicate fewer overall mortgages written by that bank. But it certainly proves your assertion wrong that Dodd-Frank led to blanket mergers & acquisitions in the Financial Services industry. Clearly, with other options and other lenders out there, Dodd-Frank had a positive impact by reducing market share for the big lenders, at least in terms of mortgage origination.

 

[Toddsterpatriot]

The SEC doesn't set capital requirements for banks. Idiot.

No, but what the SEC did was tell banks they could self-regulate and determine their own levels of capitalization. That is effectively removing the capitalization rule.

It has nothing to do with Dodd-Frank, it has to do with the Accounting 101 class you failed. And the fact that you don't know that capital and revenue are different.

Right, so how was it an "attack on the banks", then?

And less lending, if you double their capital requirement. DURR.

Why less lending? If the capitalization ratio remains the same, but the amount they are spending gambling is reduced or eliminated, does that not create more room with which they can then issue more loans? Again, these banks had capital ratios prior to 2004 and lent money with no issues. This only became an issue recently because banks were diving into the casinos.

hey did. A lot.

NO! They lost money when the assets those mortgages backed went toxic. Loans go unpaid all the time. What makes this scenario different is the fact that those loans that went unpaid were also tied to securities, and in most cases, a single subprime loan could have backed dozens, hundreds, thousands, millions, infinite numbers of securities. That's how you ended up with a derivatives market that tripled in size between 2004-2007. Between 2004-6, only 800,000 subprime mortgages were issued and a quarter of those entered delinquency within 18-24 months. But each one of those subprimes backed an infinite number of securities. So when the underlying mortgage enters delinquency, it turns the asset that mortgage backed toxic. So if you estimate that 25% of the 800,000 subprime loans went unpaid, that comes to 200,000 toxic subprime loans. Now multiply that number by dozens, hundreds, thousands, millions of securities tied to each single loan, and you have the Great Bush Financial Collapse.

Lots of derivative trading. No exchange clearing. No netting.

Derivative trading would imply that it was 1:1, yet the derivatives market grew 200% in 3 years between 2004-7. That's because derivatives were spun off a single mortgage, multiplied by the 200,000 subprimes that went toxic.

No, but what the SEC did was tell banks they could self-regulate

The SEC doesn't regulate banks. They don't get to tell banks what to do or not do.
They aren't the correct regulatory body. Get a clue.

Right, so how was it an "attack on the banks", then?

Your confusion is not an attack on the banks.

Why less lending?

Higher capital requirements.

If the capitalization ratio remains the same

It didn't. It's higher. A lot higher.

Loans go unpaid all the time.

And when they do, banks lose money. In this instance, a lot of money...hundreds of billions.

What makes this scenario different is the fact that those loans that went unpaid were also tied to securities

Securities the banks sold are already off their books.

But each one of those subprimes backed an infinite number of securities.

Wow. Infinite? DERP!

So if you estimate that 25% of the 800,000 subprime loans went unpaid, that comes to 200,000 toxic subprime loans. Now multiply that number by dozens, hundreds, thousands, millions of securities tied to each single loan, and you have the Great Bush Financial Collapse.

Yes, the scary imaginary picture you just painted is scary.

I heard there may have been a trillion securities tied to a single home loan. DURR

Derivative trading would imply that it was 1:1,

Would imply what, specifically, was 1:1?

 

[Toddsterpatriot]

Why do you feel that? Which definition of bubble does it fit?

Because a 200% increase in three years is a bubble. What else would you call it?

If they buy bonds, or write mortgages, and turn around and sell them in a month, that money is available to buy a new batch of bonds. That's why they like to securitize loans, so they don't need more capital.

Right, but they're buying and selling constantly, not in increments. So there's always a flow of capital because they are simultaneously buying and selling. What happened is that the buying and selling accounted for a greater and greater share of their profits, so that by the time everything unwound, these banks were hooked on the profits from those products. The shareholders were hooked on the profits from those products. Those products became more important to the banks than lending because those products were what delivered higher profits to meet lofty goals established by the Board, shareholders, top executives, or all the above.

Holding securities requires leverage. Buying and then selling, not so much.

OK, but these banks were doing buying, holding, and selling simultaneously. So at any given time, they were holding an unknown number of securities.

Because a 200% increase in three years is a bubble.

Says who? You? You don't even understand what a derivative does.

Right, but they're buying and selling constantly,

Exactly. No need for increased leverage.

What happened is that the buying and selling accounted for a greater and greater share of their profits

And the profits reduced their need to borrow or leverage.

 

[Toddsterpatriot]

Big banks writing fewer mortgages?
I wonder if the liberals will whine about that?

Well, the decline in market share may or may not indicate fewer overall mortgages written by that bank. But it certainly proves your assertion wrong that Dodd-Frank led to blanket mergers & acquisitions in the Financial Services industry. Clearly, with other options and other lenders out there, Dodd-Frank had a positive impact by reducing market share for the big lenders, at least in terms of mortgage origination.

But it certainly proves your assertion wrong that Dodd-Frank led to blanket mergers & acquisitions in the Financial Services industry.

So I can ignore liberal whining about the big banks getting even bigger? Good to know.

Clearly, with other options and other lenders out there, Dodd-Frank had a positive impact by reducing market share for the big lenders,

The purpose of Dodd-Frank was to reduce market share for big lenders?
Which part, specifically?

 

[Spare_change]

I'm curious - how come we never hear about the government strong arming lending institutions to give high-risk loans to unqualified applicants in order to get the affirmative action numbers they needed to qualify for government guarantees on loans to veterans, etc.?

Because it never happened.

Wrong.

Call Barney Franks and ask him.

 

[Spare_change]

nahhh ---- I live only to educate idiots like you. My goal is to draw you out into the sunshine so you can see the light.

In order to educate someone, you first have to know what you're talking about. You don't.

While I admire the vociferousness by which you argue your view, I cringe at the absolute ignorance that has led you astray. You do nothing but regurgitate liberal talking points, with selective facts that would SEEM to support your position, but when viewed within the larger context, tell a different story.

Your inability to consider alternative scenarios severely limits your ability to collect knowledge. As it is now, you are nothing more than a megaphone for the liberal professor(s) who are indoctrinating you to the liberal style and grooming you to be a liberal mouthpiece for the rest of your life (well, until you grow up and go out in the world).

Frankly, I feel sorry for you. You are missing so much.