Could be the biggest news story so far this decade.

[Truthmatters]

Like UBS bank?

You know the one that hired Phil Gramm after he passed the Gram Leach Bialey act which killed Glass Steagal?

 

[Steve Hanson]

Like UBS bank?

You know the one that hired Phil Gramm after he passed the Gram Leach Bialey act which killed Glass Steagal?

The one signed into law by Bill Clinton?

But let me ask you this you mangy mutt. How does the repeal of Glass Steagal have anything to do with high risk loans?

Or are you just talking more shit here?

 

[Paulie]

In what capacity of banking did you live that gives you that vantage to make such specious claims?

I ask since you CLAIM to have inside information. What are your bono fides?




The above is simply not remotely true.

No government regulation made banks give liars loans, NINJA loans, 110% loans, or exploing in your face adjustible rate morgage loans, either. Those were the invention of the bnksters themselves.

If you doubt that, please do feel free to cite the bnaking givenment regulation which you "lived for 30 years" that forced bansters to make those loans

Tain't there, sport.

I don't say this lightly, I seldom bother, but in your case, it so obviously fits.

You, sir, are a liar.

Would you like my SSN, birth date and street address too? Whether you believe me or not doesn't bother me a bit. This is an interwebz bulletin board. You get what you pay for. That being said, I assure you that my wife and I have both worked in the industry since 1979. There is another side to this story that isn't being told by the media.

I believe you. And I have no doubt that what you have said is true. But I am sorry, I've worked in the financial industry for nearly 20 years, and I strongly disagree with the assertion that the CRA was the primary cause of this disaster. I came out of university as a diehard fire-breathing Ayn Rand / libertarian / Austrian School adherent. But after spending most of my career in financial markets making capital allocation decisions primarily in stocks but also into commodities, currencies, bonds and derivatives, and seeing two spectacular bubbles in a decade that dogmatic free market ideologues said should never theoretically happen, the idea that this one small program caused the global financial crisis precipitating the worst economy since the Depression boggles my mind. Yes, I get the Chaos Theory explanation akin to the butterfly in Brazil flapping it's wings causing a hurricane in Florida, but there have been so many changes in banking laws and regulations which loosened credit over the past 40 years, to boil it down to this one change is just a tad too convenient for those pushing a political narrative.

But Toro, you do know that Austrian advocates recognize the Fed as the main culprit in causing the bubbles, and even you yourself have said that.

We don't believe the Fed is conducive to a true free market, and that's why we're not surprised at all that the bubbles happened.

 

[Toro]

The whole point is that the banks WERE forced to loan money to people they couldn't afford. This clusterfuck goes waaaay deeper than bad banking practices, Care. Really, it does.

And the result was an extremely high percentage of high risk loans that crippled banks when they faulted. What was happening prior to the crash was smaller, weaker banks were failing. They were the precursors to the larger mess. Their assest, along with the bad debt were purchased by solvent entities. These solvent entities aquired more and more bad debt with their aquisitions to compund the ones they had issued on their own. They got stuk woth the hot potatoes when the market crashed.

Actually, most small community banks were not not hurt as bad as big ones. In general, the small community banks are more conservative. They didn't buy into the sub prime mortgage fiasco. I bank with a small community bank. Most of their home mortgages are 30 and 15 year fixed rate with 20% down. They also hold their mortgages so they are much more interested in the credit worthiness of the customer.

I track the performance of over 500 publicly traded banks. The majority of banks were profitable in both 2008 and 2009, which is pretty surprising when you think about it. In aggregate, the banking system was insolvent in 2008 but that's because the losses were concentrated in roughly 20 large banks.

 

[Intense]

What a pack of lies.

Only an idiot would belive that this was caused by what you claim.


Ask an unbiased economics proff and you have your answer.


The sub primes that were written had very little to do with the amount the gov required to be handed out.


Why would they write so many more than the gov required?


Becuase they repackaged them off and sold them as triple A investiments and made a shit load of money.

You need to recheck your premise.

 

[Toro]

Would you like my SSN, birth date and street address too? Whether you believe me or not doesn't bother me a bit. This is an interwebz bulletin board. You get what you pay for. That being said, I assure you that my wife and I have both worked in the industry since 1979. There is another side to this story that isn't being told by the media.

I believe you. And I have no doubt that what you have said is true. But I am sorry, I've worked in the financial industry for nearly 20 years, and I strongly disagree with the assertion that the CRA was the primary cause of this disaster. I came out of university as a diehard fire-breathing Ayn Rand / libertarian / Austrian School adherent. But after spending most of my career in financial markets making capital allocation decisions primarily in stocks but also into commodities, currencies, bonds and derivatives, and seeing two spectacular bubbles in a decade that dogmatic free market ideologues said should never theoretically happen, the idea that this one small program caused the global financial crisis precipitating the worst economy since the Depression boggles my mind. Yes, I get the Chaos Theory explanation akin to the butterfly in Brazil flapping it's wings causing a hurricane in Florida, but there have been so many changes in banking laws and regulations which loosened credit over the past 40 years, to boil it down to this one change is just a tad too convenient for those pushing a political narrative.

But Toro, you do know that Austrian advocates recognize the Fed as the main culprit in causing the bubbles, and even you yourself have said that.

We don't believe the Fed is conducive to a true free market, and that's why we're not surprised at all that the bubbles happened.

Yeah I do. And I think the Austrians are closest in accurately describing the sources of our problems.

Having said that, the dogmatic free marketeers - including the Austrians - argue that markets are self-regulating and are always trending towards equilibrium. This implies that there are no positive feedback loops. All feedback loops are negative. IOW, when prices get too far out of line, rational arbitragers will force prices back to equilibrium. As an iron law of economics, I think this is nonsense, and it is the main reason why I have turned away from dogmatic free market ideology. Markets often exhibit positive feedback loops, a concept most economists reject but one that psychologists and sociologists would view as blatantly obvious. A positive feedback loop is when people get caught up in a mania. People hear about their neighbor getting rich in Internet stocks or condos or silver, and rather than taking the opposite position and arbitraging the price back to equilibrium when prices get out of whack, they jump on the bandwagon, pushing prices higher still. General equilibrium economists will argue that bubbles cannot happen, or rarely happen, and if they happen, it is impossible to identify bubbles beforehand. Austrians are more willing to accept positive feedback loops - this is implied in their acceptance of "malinvestment" caused by government interference in the market. However, even there, if individuals were as rational as advertised, investors would be able to adjust for government interference and arbitrage prices back to equilibrium anyways.

 

[Trajan]

It was a good idea until it was abused.

Why is it a good idea to loan money to people who can't afford to pay it back?

you should ask the Banks that question! NONE of those banks or mortgage companies were FORCED to give ANYONE a loan that they could not afford..........yet they sold loans to millions of people without even a reference.

most homes foreclosed were to middle class people... btw.

its really simple the more the gov. got involved ala F&F the greater the bubble grew, they dropped regs so banks would lend more and reach down further into the income brackets, they didn''t like the fact that a family making 40K a year in an inner city could not branch out to the suburbs, they made it a class and minority issue when in fact it always was a RISK issue, the old school 20% down disappeared, documented income etc etc gone ...who underwrote a alot of those loans? ....the gov. wanted them to loan to folks who here to fore, if the sensible rules that had been in place were in effect would never have gotten a loan.


The lending institutions were pressured , this is not even a question and in the end, these guys k new there was little chance they would get their money back unless the full faith and credit of the UAS gov. would secure them.......and they are 5 times smarter then any politician even on their best day, there were not going to be left holding the bag, so they did what they did to protect themselves and make themselves rich. *shrugs* this is what comes of the gov. getting involved in markets........

at the end of the day, someone making, with 2 incomes 60K a year gets a no doc. adjustable rate mortgage for a 450K house, well, please don't tell me that they are to dumb to figure out that their $1000 mortgage a month for 3 years is going to turn into a $2000 payment, its right there with the HUD 1 and in the packet, they have to tell them and spell it ou at the singing, what the new % would be and the payment amount, if you have bought a home you KNOW they had to have seen it, but they didn't care.


Care- if there was a time to protect people against themselves it wasn't when they are sitting there with the chance to own a home that they wolud never have dreamed of in front them just 20 signatures away, the time to protect them was by NOT giving them the chance becasue, frankly they never ever should have even been allowed to conjure the fact that as a family with only an income of 60K is going to float a payment for a 450k house over the long term, they were teased and they bit, with the gov's eager help, caveat emptor.

 

[Trajan]

I remember reading a sob story of a family, the husband and wife were school bus drivers in Las Vegas, combined income 65K a year and they were crying and moaning because, they were being foreclosed, they were actually crying because their ARM had adjusted as their 5 years was up, and could not understand why they could not get help to stay in their……get ready for this………… 850K home…….unreal.

I am sorry but as I said, I am more than wiling to help the helpless, but I aint helping the clueless.

 

[Steve Hanson]

What a pack of lies.

Only an idiot would belive that this was caused by what you claim.


Ask an unbiased economics proff and you have your answer.


The sub primes that were written had very little to do with the amount the gov required to be handed out.


Why would they write so many more than the gov required?


Becuase they repackaged them off and sold them as triple A investiments and made a shit load of money.

You need to recheck your premise.

Truth of the matter is, she has no premise

 

[Toro]

FTR I spent the day at the beach looking at properties that are foreclosed or about to be. Woowee! There are some good deals out there. Things are starting to move but I think the good deals are going to get better.

 

[Toro]

I remember reading a sob story of a family, the husband and wife were school bus drivers in Las Vegas, combined income 65K a year and they were crying and moaning because, they were being foreclosed, they were actually crying because their ARM had adjusted as their 5 years was up, and could not understand why they could not get help to stay in their……get ready for this………… 850K home…….unreal.

I am sorry but as I said, I am more than wiling to help the helpless, but I aint helping the clueless.

The best story I read was of a homeless guy in Tampa found dead who was broke but had five deeds to houses in his pocket. Four had been foreclosed upon but one had yet to be. I wish I kept the link because I wouldn't blame people for saying I made this up!

 

[Steve Hanson]

I remember reading a sob story of a family, the husband and wife were school bus drivers in Las Vegas, combined income 65K a year and they were crying and moaning because, they were being foreclosed, they were actually crying because their ARM had adjusted as their 5 years was up, and could not understand why they could not get help to stay in their……get ready for this………… 850K home…….unreal.

I am sorry but as I said, I am more than wiling to help the helpless, but I aint helping the clueless.

The best story I read was of a homeless guy in Tampa found dead who was broke but had five deeds to houses in his pocket. Four had been foreclosed upon but one had yet to be. I wish I kept the link because I wouldn't blame people for saying I made this up!

You made that up

 

[editec]

Don't need to.......I'm part of the book. I've lived it.

In what capacity of banking did you live that gives you that vantage to make such specious claims?

I ask since you CLAIM to have inside information. What are your bono fides?

mortgage side of banking is that banks were forced by the government to make loans to people who didn't qualify and couldn't pay them back.

The above is simply not remotely true.

No government regulation made banks give liars loans, NINJA loans, 110% loans, or exploing in your face adjustible rate morgage loans, either. Those were the invention of the bnksters themselves.

If you doubt that, please do feel free to cite the bnaking givenment regulation which you "lived for 30 years" that forced bansters to make those loans

Tain't there, sport.

I don't say this lightly, I seldom bother, but in your case, it so obviously fits.

You, sir, are a liar.

Would you like my SSN, birth date and street address too? Whether you believe me or not doesn't bother me a bit. This is an interwebz bulletin board. You get what you pay for. That being said, I assure you that my wife and I have both worked in the industry since 1979. There is another side to this story that isn't being told by the media.

Spare me your protests.

Show me the REGULATIONS.

You sir, are a liar.

 

[editec]

The President is not the lawmaker, Congress is. You are right, the president is inconsequential for the most part in these decisions. Sure they have the right to veto but they rely on Congress to make the regulations for the most part.

Apportioning 'blame' in this fuck up is actually really funny. I find it just hysterical that the Democrats try and blame the GOP and the GOP blame the Democrats. They were ALL responsible. Both sides, the banks, and the American people all have a chunk of mea culpa in this clusterfuck.

I made more money off of AIG these last few years than I did working. A real good friend told me to bet the farm on AIG when they were under $10 and appearing like they were going under. It was a gamble, but I trusted him and did. He told me it was safe because of pending gov't investments. More than safe, a sure thing. So I put in everything I had and sold at over $50, making over 5 times my investment. It just shows you exactly how invested in them government is. Both sides.

Of course I don't really blame you for taking advantage of that situation, but...

Last accounting I heard about the cost to the taxpayer to save the stockholders and bond holders of AIG, the amount was up to $158 BILLION.

The company ought to have gone into recievership, the stockholders ought to have lost every cent, and then, the bondholders would have become the owners of the tattered remains of that company since they'd have been first in line after the restucturing.

The fact that the government stood behind AIG is evidence of just how much control the BANSTERS have over it.

What happend was NOT capitalism...it was gangsterism

 

[iamwhatiseem]

I remember reading a sob story of a family, the husband and wife were school bus drivers in Las Vegas, combined income 65K a year and they were crying and moaning because, they were being foreclosed, they were actually crying because their ARM had adjusted as their 5 years was up, and could not understand why they could not get help to stay in their……get ready for this………… 850K home…….unreal.

I am sorry but as I said, I am more than wiling to help the helpless, but I aint helping the clueless.

Thanks to your government...you have been helping them for 20 years.
And you will help them again...and again.
As long as we have a system that is willing to finance a broken economy with your tax dollars - you have no choice.

 

[kwc57]

I don't doubt that you sincerely believe that hogwash you just posted, but you have been rather clearly and cleverly misinformed.

Read a book.

Don't need to.......I'm part of the book. I've lived it.

being a bank teller doesn't make you an expert on banking practices and regulations.

You're absolutely correct brainiac......but this isn't 1979 when I started as a bank teller is it?

32 years later in 2011, I'm a Senior Business Analyst for one of the world's top-ranked technology providers to the banking industry. We have more than 30,000 experts in 100 countries and deliver the most comprehensive range of solutions for the broadest range of financial markets. We are part of the S&P 500 and have been named the number one overall financial technology provider in the world by American Banker and Financial Insights.

 

[kwc57]

In what capacity of banking did you live that gives you that vantage to make such specious claims?

I ask since you CLAIM to have inside information. What are your bono fides?




The above is simply not remotely true.

No government regulation made banks give liars loans, NINJA loans, 110% loans, or exploing in your face adjustible rate morgage loans, either. Those were the invention of the bnksters themselves.

If you doubt that, please do feel free to cite the bnaking givenment regulation which you "lived for 30 years" that forced bansters to make those loans

Tain't there, sport.

I don't say this lightly, I seldom bother, but in your case, it so obviously fits.

You, sir, are a liar.

Would you like my SSN, birth date and street address too? Whether you believe me or not doesn't bother me a bit. This is an interwebz bulletin board. You get what you pay for. That being said, I assure you that my wife and I have both worked in the industry since 1979. There is another side to this story that isn't being told by the media.

Spare me your protests.

Show me the REGULATIONS.

You sir, are a liar.

And you're a moron. Fuck you.

 

[iamwhatiseem]

Don't need to.......I'm part of the book. I've lived it.

being a bank teller doesn't make you an expert on banking practices and regulations.

You're absolutely correct brainiac......but this isn't 1979 when I started as a bank teller is it?

32 years later in 2011, I'm a Senior Business Analyst for one of the world's top-ranked technology providers to the banking industry. We have more than 30,000 experts in 100 countries and deliver the most comprehensive range of solutions for the broadest range of financial markets. We are part of the S&P 500 and have been named the number one overall financial technology provider in the world by American Banker and Financial Insights.

Then you just ousted yourself.
If you know this much information, then you intimately know about "originate and sell" bond shelving etc. It would be impossible to be so involved with Wall Street firms, and not be aware of the massive corruption in what comprises of $billions in profits for 20 years.

 

[Truthmatters]

What a pack of lies.

Only an idiot would belive that this was caused by what you claim.


Ask an unbiased economics proff and you have your answer.


The sub primes that were written had very little to do with the amount the gov required to be handed out.


Why would they write so many more than the gov required?


Becuase they repackaged them off and sold them as triple A investiments and made a shit load of money.

You need to recheck your premise.

How many of these loans were written and how many of these loans were required to be written by the gov?

The lie is a great big fail for anyone with half a brain

 

[Sunshine]

My wife and I have both worked in the banking industry for over 30 years now. What few people realize is that banking is one of the most heavily regulated industries in the country. The other thing that people don't realize about the mortgage side of banking is that banks were forced by the government to make loans to people who didn't qualify and couldn't pay them back. If you want to get to the root cause of the mortgage crisis, it is the government and not the banks. When it comes to lending money, the vast majority of banks are very conservative. They want to make loans to people and businesses that will actually pay the loans back as they make money off the interest payments. When forced to loan some high school dropout who is flipping burgers the money to buy a two bedroom house, they know they will most likely never get paid and the property will wind up in foreclosure.

Not saying you personally, but that is a cop-out.
Indeed the Federal Government strong-armed banks into giving loans to people who likely would not pay them back. Thank Clinton and Frank for this.
However - wall street in concert with banks took this notion to the nth degree.
They sold these mortgages, or should I say...HID...these mortgages in overly complicated bond vehicles and made enormous profits putting the entire system at great risk.
It is like... say you are a car dealer...and I told you that you need to give s few loans to people who can't really afford it. And you complied. Buuuut...realizing you can make a lot of money originating these loans and then selling them - you open 15 more car lots across the country and made $millions. This...is not what I originally encouraged you to do.

When I lived in TN, there were multiple bankruptcies in my subdivision. Banks were giving 100% loans to people who might have been able to make payments if they had been required to come up with a substantial down payment the way we had to 40 years ago.