Markets Fail When Humans Are Unregulated

[FireFly]

That's like saying the Dutch "Tulip Bulb Mania" of 1637 was the fault of the tulip bulbs.

I wonder how many even know about that?

I saw a PBS program about that... Thousands for one bulb!

Tulips

Just imagine how out of hand "tulip mania" would have gotten had the Dutch Republic backed loans for tulips no mater what class of society, credit rating or income level you were in because the government felt as (Obamas pal Franklin Reins CEO of Fannie Mae) did when he told congress tulip loans are so riskless that 100 to 1 leverage was safe because tulip prices have never gone down. Now you have some idea of how stupid the Congressional Black Cacus is & how screwed we are.

 

[Contumacious]

If the mortgages had been properly rated, they wouldn't have been written up in the first place.

Deregulation had nothing to do with that.

Certain regulation contributed to some of the bad loans.

ALL THE REGULATIONS CONTRIBUTED TO BAD LOANS

Place the blame not only on the banks, but also on the institutions that are siphoning off their liabilities for irresponsible behavior, and that would be Freddie and Fannie. And who created these?

They were created by FDR in 1938 to fund mortgages insured by the Federal Home Administration. They were used by every president as a means to achieve this weird American value that every last person must own a home, no matter what.

.

 

[Vast LWC]

And, finally, it is certainly true that mortgages should be restricted in ways that prevent such future risks from occurring.

I agree with that assessment, and also agree that said bad mortgages were probably the result of Democratic legislation, as I stated earlier.

Such restrictions are otherwise known as "Government Regulation".

 

[FireFly]

And, finally, it is certainly true that mortgages should be restricted in ways that prevent such future risks from occurring.

I agree with that assessment, and also agree that said bad mortgages were probably the result of Democratic legislation, as I stated earlier.

Such restrictions are otherwise known as "Government Regulation".

OFHEO was the regulator & the Congression Black Cacus along with Barney Frank prevented them from regulating & cut their funding when they blew the wistle on the GSEs.

Here is Barney Franks letter to cut funding for OFHEO because they blew the whistle on Subprime criminal activity at Fannie Mae. [ame="http://www.youtube.com/watch?v=_MGT_cSi7Rs&feature=player_embedded"]Regulator Punished By Congress[/ame]

 

[Vast LWC]

ALL THE REGULATIONS CONTRIBUTED TO BAD LOANS

Place the blame not only on the banks, but also on the institutions that are siphoning off their liabilities for irresponsible behavior, and that would be Freddie and Fannie. And who created these?

They were created by FDR in 1938 to fund mortgages insured by the Federal Home Administration. They were used by every president as a means to achieve this weird American value that every last person must own a home, no matter what.

.

"Regulations" did not contribute to bad loans.

First of all a full 40% of subprime mortgages were to speculators, not to families moving into homes.

Secondly, banks and lenders were giving out predatory loans that should have been regulated, but were not.

Thirdly, the creation of various types of loans that were used for Sub-Prime mortgages, in 1982, by a Democratic congress (though in your interpretation, signed by a Republican President) was DEREGULATION, as it made the terms of loans that could be given looser than they were previously.

If anything it was a lack of regulation that contributed to the crisis.

 

[Vast LWC]

OFHEO was the regulator & the Congression Black Cacus along with Barney Frank prevented them from regulating & cut their funding when they blew the wistle on the GSEs.

Here is Barney Franks letter to cut funding for OFHEO because they blew the whistle on Subprime criminal activity at Fannie Mae. Regulator Punished By Congress

Yep, which was a failure in putting regulations in place that should have been enacted.

In this case the failure was bipartisan, as Republicans were in the majority, but with most of the blame, admittedly, probably correctly directed at Democrats.

But, how did this turn into a race issue exactly? Are there no poor white people?

 

[Vast LWC]

Just imagine how out of hand "tulip mania" would have gotten had the Dutch Republic backed loans for tulips no mater what class of society, credit rating or income level you were in because the government felt as (Obamas pal Franklin Reins CEO of Fannie Mae) did when he told congress tulip loans are so riskless that 100 to 1 leverage was safe because tulip prices have never gone down. Now you have some idea of how stupid the Congressional Black Cacus is & how screwed we are.

And when, exactly, did Franklin Raines, become "Obama's Buddy" except in e-mail hoaxes from the RNC and attack ads from the McCain campaign?

 

[Mr.Fitnah]

Markets self correct when left alone.

 

[Vast LWC]

Markets self correct when left alone.

Yes, and sometimes that correction is also known as a "Crash", which has been known to result in Depressions.

 

[johnrocks]

Problem with regulations are, they are always chasing a problem with 20/20 hindsight, rarely having foresight and usually crating unforeseen negative consequences once they are implemented.

 

[FireFly]

Just imagine how out of hand "tulip mania" would have gotten had the Dutch Republic backed loans for tulips no mater what class of society, credit rating or income level you were in because the government felt as (Obamas pal Franklin Reins CEO of Fannie Mae) did when he told congress tulip loans are so riskless that 100 to 1 leverage was safe because tulip prices have never gone down. Now you have some idea of how stupid the Congressional Black Cacus is & how screwed we are.

And when, exactly, did Franklin Raines, become "Obama's Buddy" except in e-mail hoaxes from the RNC and attack ads from the McCain campaign?

Fannie Mae Contributions to Obama & others in congress. Obama ranked #2 after only a short time in senate. Obama's top contributors were involved in meltdown. Congressional Black Cacus [ame="http://www.youtube.com/watch?v=YED5imIUyVw"]Frank Raines[/ame]

 

[Vast LWC]

Fannie Mae Contributions to Obama & others in congress. Obama ranked #2 after only a short time in senate. Obama's top contributors were involved in meltdown. Congressional Black Cacus Frank Raines

Oh, so making campaign contributions to someone makes him your "Buddy"? Well, that leaves a lot of room for interpretation on what is or isn't a "Buddy". Probably makes a hell of a lot of really sketchy people "buddies" of any politician you can name. It means Ted Haggard is a "close buddy" to half the Republican Party.

And let's see, rich black guy makes contribution to the campaign of the first black President? Well, that's pretty surprising. Not.

Did they go bowling together? Did Obama hire him to do his taxes?

Hell, the links you posted don't even show contributions from Raines, they show contributions from all Fannie Mae employees in total.

 

[Vast LWC]

Not to mention the fact that your video is a Sean Hannity opinion piece. And even that shows no evidence at all that Obama and Raines were even friendly, much less "buddies".

When did Sean Hannity become factual news? Hmmm?

 

[FireFly]

Fannie Mae Contributions to Obama & others in congress. Obama ranked #2 after only a short time in senate. Obama's top contributors were involved in meltdown. Congressional Black Cacus Frank Raines

Oh, so making campaign contributions to someone makes him your "Buddy"? Well, that leaves a lot of room for interpretation on what is or isn't a "Buddy". Probably makes a hell of a lot of really sketchy people "buddies" of any politician you can name. It means Ted Haggard is a "close buddy" to half the Republican Party.

And let's see, rich black guy makes contribution to the campaign of the first black President? Well, that's pretty surprising. Not.

Did they go bowling together? Did Obama hire him to do his taxes?

Hell, the links you posted don't even show contributions from Raines, they show contributions from all Fannie Mae employees in total.

Franklin Raines was Barack Obama's presidential campaign advsor on mortgage and housing policy matters. That was in my links. This is the cause of the crisis. Take the time to read & follow the links & discussion. I am tired of re-explaining to idiots who do not read, listen or follow links. All you want to do is attack the messenger because you sure can't attack the message.

 

[Vast LWC]

Franklin Raines was Barack Obama's presidential campaign advsor on mortgage and housing policy matters. That was in my links. This is the cause of the crisis. Take the time to read & follow the links & discussion. I am tired of re-explaining to idiots who do not read, listen or follow links. All you want to do is attack the messenger because you sure can't attack the message.

Don't know what links you were talking about, but.... OK.

In response to the one you just posted:

You forgot to mention the retraction printed by the same paper:

Linking Obama to Ex-Fannie Mae Chief Is a Stretch - washingtonpost.com

Including this gem:

The Obama campaign issued a statement by Raines on Thursday night insisting, "I am not an advisor to Barack Obama, nor have I provided his campaign with advice on housing or economic matters." Obama spokesman Bill Burton went a little further, saying in an e-mail that the campaign had "neither sought nor received" advice from Raines "on any matter.

As far as your second link goes, it is an opinion piece from a right-wing opinion magazine, and is filled with half-truths and false accusations.

Of course I attack the messenger when the message is: "It's all the Democrats fault".

ROFL.

I have admitted in several places in this thread where Democrats were in fact at fault, as well as pointed out where Republicans are at fault.

My premise has been to point out that regulation is needed, something you have not proved to be false, and that various deregulations are to blame for much of the fiasco we have experienced, including (but not limited to):
legislation from 1999 and 2000 that changed the laws concerning derivatives trading, and 1982 legislation concerning lending rules.

In addition it has been to point out that both Fannie/Freddy and private industry are to blame, with the majority of the fault going to various private firms.

Your response is a partisan attack on Democrats and President Obama. How... Typical.

 

[Toro]

Markets create the most wealth for the most people, most of the time. Markets do not create all the wealth for all the people, all of the time.

Markets usually work but at times go off the rails because people are emotional and sometimes irrational. Markets also fail when there is a wide disparity of information, i.e. you don't know enough to make an intelligent decision, or a decision that you wouldn't otherwise make with enough information.

 

[uscitizen]

And, finally, it is certainly true that mortgages should be restricted in ways that prevent such future risks from occurring.

I agree with that assessment, and also agree that said bad mortgages were probably the result of Democratic legislation, as I stated earlier.

Such restrictions are otherwise known as "Government Regulation".

Yes no doubt they were led by the left. But I do recall Bush touting home ownership.
You might want to check and see how many Republicans voted for those housing regulations that greatly contributed to our problems.

 

[uscitizen]

Not to mention the fact that your video is a Sean Hannity opinion piece. And even that shows no evidence at all that Obama and Raines were even friendly, much less "buddies".

When did Sean Hannity become factual news? Hmmm?

I'm Lovin it !

 

[Toro]

Just imagine how out of hand "tulip mania" would have gotten had the Dutch Republic backed loans for tulips no mater what class of society, credit rating or income level you were in because the government felt as (Obamas pal Franklin Reins CEO of Fannie Mae) did when he told congress tulip loans are so riskless that 100 to 1 leverage was safe because tulip prices have never gone down. Now you have some idea of how stupid the Congressional Black Cacus is & how screwed we are.

And when, exactly, did Franklin Raines, become "Obama's Buddy" except in e-mail hoaxes from the RNC and attack ads from the McCain campaign?

Fannie Mae Contributions to Obama & others in congress. Obama ranked #2 after only a short time in senate. Obama's top contributors were involved in meltdown. Congressional Black Cacus [ame="http://www.youtube.com/watch?v=YED5imIUyVw"]Frank Raines[/ame]

TulipMania almost destroyed the Dutch nation. Hypotheticals about government programs aren't necessary to find insane behavior by individuals in the market.

Freddie and Fannie as the underlying cause of this crisis isn't a serious argument, and is usually pushed by people with an ideological axe to grind. This is a simple argument. If you believe that the GSEs were the primary cause of the financial crisis, then the homes backed by GSE loans would have gone up the most. In fact, the opposite happened. As for subprime, total GSE backing of subprime loans was a minority of the market, and the subprime market was in full swing before Fannie and Freddie got involved. Also, if the GSEs were the primary cause of the financial crisis, why did housing prices rise more in other nations, such as Spain and Ireland? Many countries had housing bubbles. Were the GSEs also responsible for housing bubbles in the UK and Canada as well?

Certainly, the GSEs were a contributing factor, as were many others. But it was not the reason why we are in the mess today.

 

[uscitizen]

One of those two Quasi agencies were cooking the books too. I forget which one.