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On Oct 6, 4:28 pm, c...@w...net wrote:
> we could have weathered the bad loans if the congress had stepped in and
> stopped the energy speculators from driving up oil to hurt the economy.
Comics, were you born this stupid or do you have to work at it? Did
your
alcoholic mom drop you on your head a few times?
Your wife is posting over at facebook about you having a very small,
miniscule
penis, less than 2". That is why she left you.
.
Democrats tell us that the credit collapse was caused by
Credit Default Swaps and other unregulated banking
practices.
Republicans tell us the credit collapse was caused by the
Community Reinvestment Act and poor oversight of
Fannie Mae and Freddie Mac.
Many people in foreclosure say the credit collapse was
caused by Adjustable Rate Mortgages.
They are all right.
rw
On Mon, 6 Oct 2008 12:14:38 -0700 (PDT), Lifsabsurd <b...@a...net>
wrote:
>On Oct 6, 2:07 pm, W...@I...com wrote:
>> On Mon, 6 Oct 2008 11:03:12 -0700 (PDT), w...@g...com wrote:
>> >Lehman's Richard Fuld, during this morning's congressional hearings,
>> >mentioned the pressure re: giving mortgages to previously unqualified
>> >people, read mostly Blacks. And Wells Fargo boasting about mortgages
>> >for illegal aliens.
>>
>> That's a cop out by Lehman. It has nothing to do with leverage,
>> derivatives, CDS's, or the other side bets made by Wall Street which
>> caused the mess. Nobody in Congress understands this system. They'd
>> best get somebody to explain it to them.
>>
>> >The question is; was this sort of an alliance between the liberals who
>> >pressured the mortgage
>> >industry to accept worthless paper. Or, in response to liberal/
>> >governmental pressure, did the banks jump on the bandwagon
>> >anticipating an ultimate end to the ponzi scheme?
>>
>> None of the above. You conveniently forget that the repeal of Glass-
>> Steagall and the following legislation sponsored by Gramm opened the
>> door fully, where before it had been slightly ajar. After reading your
>> post - derivatives, CDS's, and other "insurance" which leveraged the
>> US housing market to the hilt are above your pay grade. You can go
>> back to Limbaugh or Hannity now.
>>
>> WB Yeats
>
>You've got the cart before the horse. The problem started with trying
>to give "affordable housing" to the poor. That's why the bad loans
>were made in the first place. What the Demoncraps set up got out of
>hand, yes. But the Demoncraps (socialists) were the ones who set this
>up.
That's just BS. Get your talking points from someone other than
Limbaugh or Hannity. Neither knows a damn thing about the current
crisis. According to a study done by the Cleveland branch of the Fed,
from 1977-2000 the foreclosure rate on loans under federal programs
like Comm Dev, Truth in Lending etc; had a failure rate that was
"marginally higher than the national average." This was confirmed by
both the FHA and the NAR. None of the subprimes were either authorized
or guaranteed by any fully federal agency. Due to criminal
mismanagement and a nudge from Treasury, FNMA and FMAC purchased $200
billion in AAA (no such animal) subprime type loans. This is what
brought the two agencies down. Does the $ number ring a bell?
The concept of mortgage based securities, credit default swaps, and
other assorted "insurance" was brought to us by private enterprise all
on their lonesome's. Obviously the understanding of this is way above
your pay grade. When the book is written on this subject, it will
parallel the S&L debacle of the 80's. A few SoCal businessmen brought
you the S&L crisis. A few Wall Street firms brought some
mathematicians and (believe it or not, physicists) in to write the
formulas which gave us the method which gave it the way yadda yadda
yadda that brought down the house that Jack built. The only folks who
fully understood the formulae were the writers. And they assumed a
rising housing market. In other words, reality was taken out of the
equation and substituted for with an unrealistic assumption.
WB Yeats
On Mon, 06 Oct 2008 21:46:25 +0200, John Galt <k...@g...com>
wrote:
>W...@I...com wrote:
>> On Mon, 6 Oct 2008 11:03:12 -0700 (PDT), w...@g...com wrote:
>>
>>> Lehman's Richard Fuld, during this morning's congressional hearings,
>>> mentioned the pressure re: giving mortgages to previously unqualified
>>> people, read mostly Blacks. And Wells Fargo boasting about mortgages
>>> for illegal aliens.
>>
>> That's a cop out by Lehman.
>
>No, it's not. Leverage, derivatives, CDSs, et all ultimately had to be
>backed by *something*. I suspect we agree that borrowing 30 dollars for
>each dollar of asset is ill-advised; however, the house of cards doesn't
>tumble down unless that dollar of asset value turns out to be $.20,
>which is what has occurred. When you make loans to people who can't pay
>because of the noble but unwise desire to increase homeownership, you
>inflate prices, increase risk, and insure a nightmare someplace in the
>future.
Ummm... excuse me sir but the market value of all that paper is 40c on
the dollar. The book value is 80c on average.
>Here's a quote from the Times back in 1999 that is chillingly predictive:
>
>"In moving, even tentatively, into this new area of lending [subprime
>loans to unqualified buyers], Fannie Mae is taking on significantly more
>risk, which may not pose any difficulties during flush economic times.
>But the government-subsidized corporation may run into trouble in an
>economic downturn, prompting a government rescue similar to that of the
>savings and loan industry in the 1980's.
>
>''From the perspective of many people, including me, this is another
>thrift industry growing up around us,'' said Peter Wallison a resident
>fellow at the American Enterprise Institute. ''If they fail, the
>government will have to step up and bail them out the way it stepped up
>and bailed out the thrift industry.''"
>
>http://query.nytimes.com/gst/fullpage.html?res=9C0D
E7DB153EF933A0575AC0A96F958260&sec=&spon=&pagewanted
=1
>
>Here's an interesting article in the City Journal outlining the entire
>problem. The chilling part is that it was written in 2000:
>
>http://www.city-journal.org/html/10_1_the_trillion_
dollar.html
Gee - so far so good. FNMA and FMAC were acting like the private
sector. Their first steps into subprimes were tentative and never
should have occurred.
>.It has nothing to do with leverage,
>> derivatives, CDS's, or the other side bets made by Wall Street which
>> caused the mess. Nobody in Congress understands this system. They'd
>> best get somebody to explain it to them.
>>
>>> The question is; was this sort of an alliance between the liberals who
>>> pressured the mortgage
>>> industry to accept worthless paper. Or, in response to liberal/
>>> governmental pressure, did the banks jump on the bandwagon
>>> anticipating an ultimate end to the ponzi scheme?
>>
>> None of the above. You conveniently forget that the repeal of Glass-
>> Steagall and the following legislation sponsored by Gramm opened the
>> door fully, where before it had been slightly ajar.
>
>Glass-Steagall has nothing to do with this. NOTHING. If GS was in place,
>(1) the mortgages still would have been securitized, (2) they still
>would have been sold by the mortgage lenders, and (3) they still would
>have been sold to financial services firms and packaged into CDO's.
>There is ***NOTHING*** in Glass Steagall to prevent that from occurring.
>NOTHING. This is a leftist canard.
Beep - wrong. It kept a very strtict line drawn between investment
banks and commercial banks. That line got fuzzed and all hell broke
loose.
>However, if GS was still in place, we'd be in even worse shape than we
>are now, because weak financial services institutions would be
>restricted from merging, thus strenghening their balance sheets.
>
>Further, let's understand that when the Gramm-Leach-Riley bill was
>passed, it earned 370 votes in the House, 93 votes in the Senate,
>Clinton signed it, and just recently (three weeks ago) reaffirmed to
>Maria Bartiromo in an interview that he believes it was the right thing
>to do. The repeal of GS was WHOLLY a bipartisan matter.
I didn't say it wasn't bipartisan.
>Here's some relevant information from FactCheck.org:
>
>"The truth is, however, the Gramm-Leach-Bliley Act had little if
>anything to do with the current crisis. In fact, economists on both
>sides of the political spectrum have suggested that the act has probably
>made the crisis less severe than it might otherwise have been."
>
>"Actually, deregulated banks were not the major culprits in the current
>debacle. Bank of America, Citigroup, Wells Fargo and J.P. Morgan Chase
>have weathered the financial crisis in reasonably good shape, while Bear
>Stearns collapsed and Lehman Brothers has entered bankruptcy, to name
>but two of the investment banks which had remained independent despite
>the repeal of Glass-Steagall. "
>
>Bill Clinton, when asked about the subject:
>
>" Indeed, one of the things that has helped stabilize the current
>situation as much as it has is the purchase of Merrill Lynch by Bank of
>America, which was much smoother than it would have been if I hadn't
>signed that bill. ...You know, Phil Gramm and I disagreed on a lot of
>things, but he can't possibly be wrong about everything. On the
>Glass-Steagall thing, like I said, if you could demonstrate to me that
>it was a mistake, I'd be glad to look at the evidence. But I can't blame
>[the Republicans]. This wasn't something they forced me into."
>
>
>If GS was in place today, what we're experiencing would be worse.
>
> > After reading your
> > post - derivatives, CDS's, and other "insurance" which leveraged the
> > US housing market to the hilt are above your pay grade. You can go
> > back to Limbaugh or Hannity now.
>
>What the HELL are you talking about? You wiffed on the cause of the
>crisis --- it's declining home prices and resulting foreclosures, mostly
>by unqualified buyers. Leverage and derivatives make the situation
>worse, but neither are the root cause. You wiffed on Glass Steagall and
>it's (non)involvement in this whole issue, and you wiffed on the
>bipartisan nature of the Gramm Leach Biley.
You seem to have whiffed on everything. The underwiters had to write
more and more mortgages to keep the ball afloat. They finally ran out
of even barely qualified buyers and assumed at the outset that the
houses would always go up and bet on it. The houses went down, their
underqualfied buyers foreclosed, and they were toast. Problem usually
ends here.
But because all these wonderful private enterprise banks and such had
sunk so much of their capital into "funny paper" they went broke.
Meanwhile Wall Street leveraged everything to the hilt and when their
Ponzi Scheme came to an end there was no cash left for credit to
business, individuals, etc; All these wonderful loans were generated
by the private market and guaranteed by nothing until the two Fed
GSE's got involved against the "spirit" of their charter, and they
went poof. This was mismanagement on a grand scale.
Had this only been a housing meltdown, everything probably would have
worked out. But with the financial credit market going at the same
time because of derivative paper, we have the current situation.
WB Yeats
W...@I...com wrote:
> On Mon, 06 Oct 2008 21:46:25 +0200, John Galt <k...@g...com>
> wrote:
>
>> W...@I...com wrote:
>>> On Mon, 6 Oct 2008 11:03:12 -0700 (PDT), w...@g...com wrote:
>>>
>>>> Lehman's Richard Fuld, during this morning's congressional hearings,
>>>> mentioned the pressure re: giving mortgages to previously unqualified
>>>> people, read mostly Blacks. And Wells Fargo boasting about mortgages
>>>> for illegal aliens.
>>> That's a cop out by Lehman.
>> No, it's not. Leverage, derivatives, CDSs, et all ultimately had to be
>> backed by *something*. I suspect we agree that borrowing 30 dollars for
>> each dollar of asset is ill-advised; however, the house of cards doesn't
>> tumble down unless that dollar of asset value turns out to be $.20,
>> which is what has occurred. When you make loans to people who can't pay
>> because of the noble but unwise desire to increase homeownership, you
>> inflate prices, increase risk, and insure a nightmare someplace in the
>> future.
>
> Ummm... excuse me sir but the market value of all that paper is 40c on
> the dollar. The book value is 80c on average.
Nope. Mark to market. Look it up. Two weeks ago either Merrill or Morgan
Stanley, I can't recall which, went to market and got 22 cents. Thus,
cash had to be raised to meet the new value of the asset, or have the
FDIC wander in for a 'friendly' visit.
But, that's not really the point. The *point* is that the way the
leverage mechanism was structured, it couldn;t tolerate much in the way
of home price depriciation. How do you get depriciation? By putting
governemntal pressure on the market to finance virtually everyone. THe
builders then build to the new demand levels, thus increasing supply,
and eventually, when you increase supply enough, prices drop.
>
>> Here's a quote from the Times back in 1999 that is chillingly predictive:
>>
>> "In moving, even tentatively, into this new area of lending [subprime
>> loans to unqualified buyers], Fannie Mae is taking on significantly more
>> risk, which may not pose any difficulties during flush economic times.
>> But the government-subsidized corporation may run into trouble in an
>> economic downturn, prompting a government rescue similar to that of the
>> savings and loan industry in the 1980's.
>>
>> ''From the perspective of many people, including me, this is another
>> thrift industry growing up around us,'' said Peter Wallison a resident
>> fellow at the American Enterprise Institute. ''If they fail, the
>> government will have to step up and bail them out the way it stepped up
>> and bailed out the thrift industry.''"
>>
>> http://query.nytimes.com/gst/fullpage.html?res=9C0DE
7DB153EF933A0575AC0A96F958260&sec=&spon=&pagewanted=
1
>>
>> Here's an interesting article in the City Journal outlining the entire
>> problem. The chilling part is that it was written in 2000:
>>
>> http://www.city-journal.org/html/10_1_the_trillion_d
ollar.html
>
> Gee - so far so good. FNMA and FMAC were acting like the private
> sector. Their first steps into subprimes were tentative and never
> should have occurred.
In 1999, regs were changed to enable their participation in all this, so
the government could get home ownership in the lower quartile up. The
rest is just watching dominos fall.
>
>> .It has nothing to do with leverage,
>>> derivatives, CDS's, or the other side bets made by Wall Street which
>>> caused the mess. Nobody in Congress understands this system. They'd
>>> best get somebody to explain it to them.
>>>
>>>> The question is; was this sort of an alliance between the liberals who
>>>> pressured the mortgage
>>>> industry to accept worthless paper. Or, in response to liberal/
>>>> governmental pressure, did the banks jump on the bandwagon
>>>> anticipating an ultimate end to the ponzi scheme?
>>> None of the above. You conveniently forget that the repeal of Glass-
>>> Steagall and the following legislation sponsored by Gramm opened the
>>> door fully, where before it had been slightly ajar.
>> Glass-Steagall has nothing to do with this. NOTHING. If GS was in place,
>> (1) the mortgages still would have been securitized, (2) they still
>> would have been sold by the mortgage lenders, and (3) they still would
>> have been sold to financial services firms and packaged into CDO's.
>> There is ***NOTHING*** in Glass Steagall to prevent that from occurring.
>> NOTHING. This is a leftist canard.
>
> Beep - wrong. It kept a very strtict line drawn between investment
> banks and commercial banks. That line got fuzzed and all hell broke
> loose.
Wrong. There was nothing in the law that prevented the SALE OF MORTGAGE
assets from one company to the other. For example, Lehmann bought
mortgages from Countrywide, packaged them up into CDO, sold some and
kept the rest. Nothing in GS prevents that from happening. All GS says
is that bank holding companies from owning other financial institutions.
It had no regulations that prevented the packaging of mortgages and the
sale of mortgages. None.
>
>> However, if GS was still in place, we'd be in even worse shape than we
>> are now, because weak financial services institutions would be
>> restricted from merging, thus strenghening their balance sheets.
>>
>> Further, let's understand that when the Gramm-Leach-Riley bill was
>> passed, it earned 370 votes in the House, 93 votes in the Senate,
>> Clinton signed it, and just recently (three weeks ago) reaffirmed to
>> Maria Bartiromo in an interview that he believes it was the right thing
>> to do. The repeal of GS was WHOLLY a bipartisan matter.
>
> I didn't say it wasn't bipartisan.
Good.
>
>> Here's some relevant information from FactCheck.org:
>>
>> "The truth is, however, the Gramm-Leach-Bliley Act had little if
>> anything to do with the current crisis. In fact, economists on both
>> sides of the political spectrum have suggested that the act has probably
>> made the crisis less severe than it might otherwise have been."
>>
>> "Actually, deregulated banks were not the major culprits in the current
>> debacle. Bank of America, Citigroup, Wells Fargo and J.P. Morgan Chase
>> have weathered the financial crisis in reasonably good shape, while Bear
>> Stearns collapsed and Lehman Brothers has entered bankruptcy, to name
>> but two of the investment banks which had remained independent despite
>> the repeal of Glass-Steagall. "
>>
>> Bill Clinton, when asked about the subject:
>>
>> " Indeed, one of the things that has helped stabilize the current
>> situation as much as it has is the purchase of Merrill Lynch by Bank of
>> America, which was much smoother than it would have been if I hadn't
>> signed that bill. ...You know, Phil Gramm and I disagreed on a lot of
>> things, but he can't possibly be wrong about everything. On the
>> Glass-Steagall thing, like I said, if you could demonstrate to me that
>> it was a mistake, I'd be glad to look at the evidence. But I can't blame
>> [the Republicans]. This wasn't something they forced me into."
>>
>>
>> If GS was in place today, what we're experiencing would be worse.
>>
>>> After reading your
>>> post - derivatives, CDS's, and other "insurance" which leveraged the
>>> US housing market to the hilt are above your pay grade. You can go
>>> back to Limbaugh or Hannity now.
>> What the HELL are you talking about? You wiffed on the cause of the
>> crisis --- it's declining home prices and resulting foreclosures, mostly
>> by unqualified buyers. Leverage and derivatives make the situation
>> worse, but neither are the root cause. You wiffed on Glass Steagall and
>> it's (non)involvement in this whole issue, and you wiffed on the
>> bipartisan nature of the Gramm Leach Biley.
>
> You seem to have whiffed on everything. The underwiters had to write
> more and more mortgages to keep the ball afloat. They finally ran out
> of even barely qualified buyers and assumed at the outset that the
> houses would always go up and bet on it. The houses went down, their
> underqualfied buyers foreclosed, and they were toast. Problem usually
> ends here.
>
> But because all these wonderful private enterprise banks and such had
> sunk so much of their capital into "funny paper" they went broke.
> Meanwhile Wall Street leveraged everything to the hilt and when their
> Ponzi Scheme came to an end there was no cash left for credit to
> business, individuals, etc; All these wonderful loans were generated
> by the private market and guaranteed by nothing until the two Fed
> GSE's got involved against the "spirit" of their charter, and they
> went poof. This was mismanagement on a grand scale.
I have no quarrel with that characterization, in general. HOWEVER,
unless you understand a problem, you're doomed to repeat it, so lets
understand it without partisanship.
(1) If you want the true core of the problem, it's the NHS of 1967 which
first permitted the securitization of mortgages.
(2) That aside, the core of the problem is government interference in
the housing market by "encouraging" (an understatement) a lowering of
lending standards to meet the political goal(s) of higher ownership
among low-income minorities and overall homeownership in the US. Sounds
noble, but when the government interferes in the buyer/seller
relationship to that extent, things never end well.
(3) In 1999, Fannie and Freddie were freed up to buy subprime paper.
This increased the risk of the national portfolio signficantly.
(4) In 2001, the Bush administration continued the wrongheaded policies
of the prior administration in this regard, undoubtedly out of
cowardice, knowing that restoring the standards would have invoked
whelps of racism.
(5) After 9/11, to avert a national recession, Greenspan sent interest
rates to irrationally low levels. This stimulated the subprime market as
per item (2) above, and stimulated a housing buidilng boom, ultimately
creating a supply/demand imbalance.
(6) Wall Street smart guys decided to apply Modern Portfolio Theory and
create something called "CDO's". This allowed them to create obligations
with coupon returns in the double digits. S*P and Moodys were complicit
in that they rated the obligations AAA and AA. They sold like hotcakes.
(7) Since the CDO's were liquid assets, they could be used as collateral
to borrow money. Financial institutions borrowed against them like crazy.
(8) In 2005, seeing imbalances in the FNMA portfolio, the Administration
suggested new regulation creating an uber regulator over Fannie and
Freddie. Democrats were not in favor, and the measure died. Of course,
the Admin *could* have addressed the problem as per item (5) above, but
didn't.
(9) In 2007, the Fed engaged in significant interest rate increases
because of inflationary pressures. This resulted in increases in the
indexes that ARMs are tied to, meaning that the ARMs held by many, but
primarily the low-income subprime borrowers, who cannot easily alter
their income to accomodate the increasing rates, reset at significantly
higher rates. Foreclosures started to rise, adding unsold inventory to
the market, and creating a supply/demand imbalance. Supplies increased
as builders continued their frenetic building rate, foreclosures moved
into inventory, and at the same time higher rates decreased demand.
(10) In late 2007, seeing a pullback in the housing market and an
increase in subprime foreclosures, the feared event happened -- some
institutions, in a cash crunch, tried to sell their CDO's, thus setting
a market (as in mark-to-market) price for them. Badda-boom, and the
house of cards started to unwind.
> Had this only been a housing meltdown, everything probably would have
> worked out. But with the financial credit market going at the same
> time because of derivative paper, we have the current situation.
Without objection. HOWEVER, the key event in the above chain is not the
leverage. The key event is the inability for low-income borrowers (who
shouldn't have had homes in the first place, sorry) to make their
payments after reset. As you say, without the leverage, things would be
not-as-bad, but still bad. The cart cannot pull the horse, and when this
is over, if the government is still strong-arming lenders to meet
certain racial and socioeconomic ratios using subprimes, this will all
happen again. One would assume that we will increase reserve
requirements on derivatives, shrinking that market, and thus making the
institutions able to pay for their own bailout the next time it happens.
HOWEVER, as long as we're making subprime loans to low-income borrowers,
we will still have a a situation where changing economic conditions
(increase in unemployment, increase in interest rates due to inflation,
whatever) can take out up to 30% of the mortgage backed securities. Not
good.
JG
>
> WB Yeats
John Galt wrote:
> W...@I...com wrote:
>> On Mon, 06 Oct 2008 21:46:25 +0200, John Galt <k...@g...com>
>> wrote:
>>
>>> W...@I...com wrote:
>>>> On Mon, 6 Oct 2008 11:03:12 -0700 (PDT), w...@g...com wrote:
>>>>
>>>>> Lehman's Richard Fuld, during this morning's congressional hearings,
>>>>> mentioned the pressure re: giving mortgages to previously unqualified
>>>>> people, read mostly Blacks. And Wells Fargo boasting about mortgages
>>>>> for illegal aliens.
>>>> That's a cop out by Lehman.
>>> No, it's not. Leverage, derivatives, CDSs, et all ultimately had to
>>> be backed by *something*. I suspect we agree that borrowing 30
>>> dollars for each dollar of asset is ill-advised; however, the house
>>> of cards doesn't tumble down unless that dollar of asset value turns
>>> out to be $.20, which is what has occurred. When you make loans to
>>> people who can't pay because of the noble but unwise desire to
>>> increase homeownership, you inflate prices, increase risk, and insure
>>> a nightmare someplace in the future.
>>
>> Ummm... excuse me sir but the market value of all that paper is 40c on
>> the dollar. The book value is 80c on average.
>
> Nope. Mark to market. Look it up. Two weeks ago either Merrill or Morgan
> Stanley, I can't recall which, went to market and got 22 cents. Thus,
> cash had to be raised to meet the new value of the asset, or have the
> FDIC wander in for a 'friendly' visit.
>
> But, that's not really the point. The *point* is that the way the
> leverage mechanism was structured, it couldn;t tolerate much in the way
> of home price depriciation. How do you get depriciation? By putting
> governemntal pressure on the market to finance virtually everyone. THe
> builders then build to the new demand levels, thus increasing supply,
> and eventually, when you increase supply enough, prices drop.
>>
>>> Here's a quote from the Times back in 1999 that is chillingly
>>> predictive:
>>>
>>> "In moving, even tentatively, into this new area of lending [subprime
>>> loans to unqualified buyers], Fannie Mae is taking on significantly
>>> more risk, which may not pose any difficulties during flush economic
>>> times. But the government-subsidized corporation may run into trouble
>>> in an economic downturn, prompting a government rescue similar to
>>> that of the savings and loan industry in the 1980's.
>>>
>>> ''From the perspective of many people, including me, this is another
>>> thrift industry growing up around us,'' said Peter Wallison a
>>> resident fellow at the American Enterprise Institute. ''If they fail,
>>> the government will have to step up and bail them out the way it
>>> stepped up and bailed out the thrift industry.''"
>>>
>>> http://query.nytimes.com/gst/fullpage.html?res=9C0DE
7DB153EF933A0575AC0A96F958260&sec=&spon=&pagewanted=
1
>>>
>>>
>>> Here's an interesting article in the City Journal outlining the
>>> entire problem. The chilling part is that it was written in 2000:
>>>
>>> http://www.city-journal.org/html/10_1_the_trillion_d
ollar.html
>>
>> Gee - so far so good. FNMA and FMAC were acting like the private
>> sector. Their first steps into subprimes were tentative and never
>> should have occurred.
>
> In 1999, regs were changed to enable their participation in all this, so
> the government could get home ownership in the lower quartile up. The
> rest is just watching dominos fall.
>>
>>> .It has nothing to do with leverage,
>>>> derivatives, CDS's, or the other side bets made by Wall Street which
>>>> caused the mess. Nobody in Congress understands this system. They'd
>>>> best get somebody to explain it to them.
>>>>
>>>>> The question is; was this sort of an alliance between the liberals who
>>>>> pressured the mortgage
>>>>> industry to accept worthless paper. Or, in response to liberal/
>>>>> governmental pressure, did the banks jump on the bandwagon
>>>>> anticipating an ultimate end to the ponzi scheme?
>>>> None of the above. You conveniently forget that the repeal of Glass-
>>>> Steagall and the following legislation sponsored by Gramm opened the
>>>> door fully, where before it had been slightly ajar.
>>> Glass-Steagall has nothing to do with this. NOTHING. If GS was in
>>> place, (1) the mortgages still would have been securitized, (2) they
>>> still would have been sold by the mortgage lenders, and (3) they
>>> still would have been sold to financial services firms and packaged
>>> into CDO's. There is ***NOTHING*** in Glass Steagall to prevent that
>>> from occurring. NOTHING. This is a leftist canard.
>>
>> Beep - wrong. It kept a very strtict line drawn between investment
>> banks and commercial banks. That line got fuzzed and all hell broke
>> loose.
>
> Wrong. There was nothing in the law that prevented the SALE OF MORTGAGE
> assets from one company to the other. For example, Lehmann bought
> mortgages from Countrywide, packaged them up into CDO, sold some and
> kept the rest. Nothing in GS prevents that from happening. All GS says
> is that bank holding companies from owning other financial institutions.
> It had no regulations that prevented the packaging of mortgages and the
> sale of mortgages. None.
>>
>>> However, if GS was still in place, we'd be in even worse shape than
>>> we are now, because weak financial services institutions would be
>>> restricted from merging, thus strenghening their balance sheets.
>>>
>>> Further, let's understand that when the Gramm-Leach-Riley bill was
>>> passed, it earned 370 votes in the House, 93 votes in the Senate,
>>> Clinton signed it, and just recently (three weeks ago) reaffirmed to
>>> Maria Bartiromo in an interview that he believes it was the right
>>> thing to do. The repeal of GS was WHOLLY a bipartisan matter.
>>
>> I didn't say it wasn't bipartisan.
>
> Good.
>>
>>> Here's some relevant information from FactCheck.org:
>>>
>>> "The truth is, however, the Gramm-Leach-Bliley Act had little if
>>> anything to do with the current crisis. In fact, economists on both
>>> sides of the political spectrum have suggested that the act has
>>> probably made the crisis less severe than it might otherwise have been."
>>>
>>> "Actually, deregulated banks were not the major culprits in the
>>> current debacle. Bank of America, Citigroup, Wells Fargo and J.P.
>>> Morgan Chase have weathered the financial crisis in reasonably good
>>> shape, while Bear Stearns collapsed and Lehman Brothers has entered
>>> bankruptcy, to name but two of the investment banks which had
>>> remained independent despite the repeal of Glass-Steagall. "
>>>
>>> Bill Clinton, when asked about the subject:
>>>
>>> " Indeed, one of the things that has helped stabilize the current
>>> situation as much as it has is the purchase of Merrill Lynch by Bank
>>> of America, which was much smoother than it would have been if I
>>> hadn't signed that bill. ...You know, Phil Gramm and I disagreed on a
>>> lot of things, but he can't possibly be wrong about everything. On
>>> the Glass-Steagall thing, like I said, if you could demonstrate to me
>>> that it was a mistake, I'd be glad to look at the evidence. But I
>>> can't blame [the Republicans]. This wasn't something they forced me
>>> into."
>>>
>>>
>>> If GS was in place today, what we're experiencing would be worse.
>>>
>>>> After reading your
>>>> post - derivatives, CDS's, and other "insurance" which leveraged the
>>>> US housing market to the hilt are above your pay grade. You can go
>>>> back to Limbaugh or Hannity now.
>>> What the HELL are you talking about? You wiffed on the cause of the
>>> crisis --- it's declining home prices and resulting foreclosures,
>>> mostly by unqualified buyers. Leverage and derivatives make the
>>> situation worse, but neither are the root cause. You wiffed on Glass
>>> Steagall and it's (non)involvement in this whole issue, and you
>>> wiffed on the bipartisan nature of the Gramm Leach Biley.
>>
>> You seem to have whiffed on everything. The underwiters had to write
>> more and more mortgages to keep the ball afloat. They finally ran out
>> of even barely qualified buyers and assumed at the outset that the
>> houses would always go up and bet on it. The houses went down, their
>> underqualfied buyers foreclosed, and they were toast. Problem usually
>> ends here.
>>
>> But because all these wonderful private enterprise banks and such had
>> sunk so much of their capital into "funny paper" they went broke.
>> Meanwhile Wall Street leveraged everything to the hilt and when their
>> Ponzi Scheme came to an end there was no cash left for credit to
>> business, individuals, etc; All these wonderful loans were generated
>> by the private market and guaranteed by nothing until the two Fed
>> GSE's got involved against the "spirit" of their charter, and they
>> went poof. This was mismanagement on a grand scale.
>
> I have no quarrel with that characterization, in general. HOWEVER,
> unless you understand a problem, you're doomed to repeat it, so lets
> understand it without partisanship.
>
> (1) If you want the true core of the problem, it's the NHS of 1967 which
> first permitted the securitization of mortgages.
>
> (2) That aside, the core of the problem is *government interference* in
> the housing market by "encouraging" (an understatement) a lowering of
> lending standards to meet the political goal(s) of higher ownership
> among low-income minorities and overall homeownership in the US. Sounds
> noble, but when the government interferes in the buyer/seller
> relationship to that extent, things never end well.
Things are great huh. Government fixed everything.
>
> (3) In 1999, Fannie and Freddie were freed up to buy subprime paper.
> This increased the risk of the national portfolio signficantly.
>
Encouraged to buy... *maybe coerced*
> (4) In 2001, the Bush administration continued the wrongheaded policies
> of the prior administration in this regard, undoubtedly out of
> cowardice, knowing that restoring the standards would have invoked
> whelps of racism.
That and they couldn't get anything passed due to Democrats sticking
together and voting in Lock step to oppose all Republican attempts to
fix Fannie and Freddie.
"On December 18, 2006, U.S. regulators filed 101 civil charges against
chief executive Franklin Raines; chief financial officer J. Timothy
Howard; and the former controller Leanne G. Spencer. The three are
accused of manipulating Fannie Mae earnings to maximize their bonuses.
The lawsuit sought to recoup more than $115 million in bonus payments,
collectively accrued by the trio from 1998-2004, and about $100 million
in penalties for their involvement in the accounting scandal."
Who installs the CEO at Fannie Mae? And who installed Franklin Reins as
CEO?
>
> (5) After 9/11, to avert a national recession, Greenspan sent interest
> rates to irrationally low levels. This stimulated the subprime market as
> per item (2) above, and stimulated a housing buidilng boom, ultimately
> creating a supply/demand imbalance.
>
Over built and under Capitalized.
> (6) Wall Street smart guys decided to apply Modern Portfolio Theory and
> create something called "CDO's". This allowed them to create obligations
> with coupon returns in the double digits. S*P and Moodys were complicit
> in that they rated the obligations AAA and AA. They sold like hotcakes.
>
> (7) Since the CDO's were liquid assets, they could be used as collateral
> to borrow money. Financial institutions borrowed against them like crazy.
>
Fannie and Freddie were pushed to accept loans that were not to people
of good credit standing.
> (8) In 2005, seeing imbalances in the FNMA portfolio, the Administration
> suggested new regulation creating an uber regulator over Fannie and
> Freddie. Democrats were not in favor, and the measure died. Of course,
> the Admin *could* have addressed the problem as per item (5) above, but
> didn't.
>
The Republicans needed to kill Fannie Mae and Freddie Mac..... the
Congress/government holds too much power over them because they are an
arm of the government. Didn't Clinton Appoint Franklin Riens?
> (9) In 2007, the Fed engaged in significant interest rate increases
> because of inflationary pressures. This resulted in increases in the
> indexes that ARMs are tied to, meaning that the ARMs held by many, but
> primarily the low-income subprime borrowers, who cannot easily alter
> their income to accomodate the increasing rates, reset at significantly
> higher rates. Foreclosures started to rise, adding unsold inventory to
> the market, and creating a supply/demand imbalance. Supplies increased
> as builders continued their frenetic building rate, foreclosures moved
> into inventory, and at the same time higher rates decreased demand.
>
> (10) In late 2007, seeing a pullback in the housing market and an
> increase in subprime foreclosures, the feared event happened -- some
> institutions, in a cash crunch, tried to sell their CDO's, thus setting
> a market (as in mark-to-market) price for them. Badda-boom, and the
> house of cards started to unwind.
>
>
>> Had this only been a housing meltdown, everything probably would have
>> worked out. But with the financial credit market going at the same
>> time because of derivative paper, we have the current situation.
>
> Without objection. HOWEVER, the key event in the above chain is not the
> leverage. The key event is the inability for low-income borrowers (who
> shouldn't have had homes in the first place, sorry) to make their
> payments after reset. As you say, without the leverage, things would be
> not-as-bad, but still bad. The cart cannot pull the horse, and when this
> is over, if the government is still strong-arming lenders to meet
> certain racial and socioeconomic ratios using subprimes, this will all
> happen again. One would assume that we will increase reserve
> requirements on derivatives, shrinking that market, and thus making the
> institutions able to pay for their own bailout the next time it happens.
> HOWEVER, as long as we're making subprime loans to low-income borrowers,
> we will still have a a situation where changing economic conditions
> (increase in unemployment, increase in interest rates due to inflation,
> whatever) can take out up to 30% of the mortgage backed securities. Not
> good.
>
You can just say it as I have for months and years.... Affirmative
Action Mortgages, have wreaked havoc on the economy.
The Liberals have pushed the wagon over the Cliff.
On Tue, 07 Oct 2008 02:51:55 +0200, John Galt <k...@g...com>
wrote:
>W...@I...com wrote:
>> On Mon, 06 Oct 2008 21:46:25 +0200, John Galt <k...@g...com>
>> wrote:
>>
>>> W...@I...com wrote:
>>>> On Mon, 6 Oct 2008 11:03:12 -0700 (PDT), w...@g...com wrote:
>>>>
>>>>> Lehman's Richard Fuld, during this morning's congressional hearings,
>>>>> mentioned the pressure re: giving mortgages to previously unqualified
>>>>> people, read mostly Blacks. And Wells Fargo boasting about mortgages
>>>>> for illegal aliens.
>>>> That's a cop out by Lehman.
>>> No, it's not. Leverage, derivatives, CDSs, et all ultimately had to be
>>> backed by *something*. I suspect we agree that borrowing 30 dollars for
>>> each dollar of asset is ill-advised; however, the house of cards doesn't
>>> tumble down unless that dollar of asset value turns out to be $.20,
>>> which is what has occurred. When you make loans to people who can't pay
>>> because of the noble but unwise desire to increase homeownership, you
>>> inflate prices, increase risk, and insure a nightmare someplace in the
>>> future.
>>
>> Ummm... excuse me sir but the market value of all that paper is 40c on
>> the dollar. The book value is 80c on average.
>
>Nope. Mark to market. Look it up. Two weeks ago either Merrill or Morgan
>Stanley, I can't recall which, went to market and got 22 cents. Thus,
>cash had to be raised to meet the new value of the asset, or have the
>FDIC wander in for a 'friendly' visit.
It was Merrill but it was my understanding that this was a severe case
- not the norm. If it's the norm, there will be more banks out of
business than in business unless Paulson pays more - which it's
beginning to look like he will. The 40c on the dollar number came from
an analyst at Citicorp and an analyst on NPR the other A .M.
>But, that's not really the point. The *point* is that the way the
>leverage mechanism was structured, it couldn;t tolerate much in the way
>of home price depriciation. How do you get depriciation? By putting
>governemntal pressure on the market to finance virtually everyone. THe
>builders then build to the new demand levels, thus increasing supply,
>and eventually, when you increase supply enough, prices drop.
The loans that were under government aegis had a failure rate
(1977-2000) 'marginally above the national average" according to a
study by the Cleveland Fed. This was later backed up by data from the
FHA and the NAR. The pressure for more houses was a direct result of
low interest rates. The depreciation of the housing market was because
the affordability index was dropping to new lows and foreclosures due
to marginal loans which the banks made willingly when they though
housing prices would never go down. Don't these folks ever learn/
>>> Here's a quote from the Times back in 1999 that is chillingly predictive:
>>>
>>> "In moving, even tentatively, into this new area of lending [subprime
>>> loans to unqualified buyers], Fannie Mae is taking on significantly more
>>> risk, which may not pose any difficulties during flush economic times.
>>> But the government-subsidized corporation may run into trouble in an
>>> economic downturn, prompting a government rescue similar to that of the
>>> savings and loan industry in the 1980's.
>>>
>>> ''From the perspective of many people, including me, this is another
>>> thrift industry growing up around us,'' said Peter Wallison a resident
>>> fellow at the American Enterprise Institute. ''If they fail, the
>>> government will have to step up and bail them out the way it stepped up
>>> and bailed out the thrift industry.''"
>>>
>>> http://query.nytimes.com/gst/fullpage.html?res=9C0DE
7DB153EF933A0575AC0A96F958260&sec=&spon=&pagewanted=
1
>>>
>>> Here's an interesting article in the City Journal outlining the entire
>>> problem. The chilling part is that it was written in 2000:
>>>
>>> http://www.city-journal.org/html/10_1_the_trillion_d
ollar.html
>>
>> Gee - so far so good. FNMA and FMAC were acting like the private
>> sector. Their first steps into subprimes were tentative and never
>> should have occurred.
>
>In 1999, regs were changed to enable their participation in all this, so
>the government could get home ownership in the lower quartile up. The
>rest is just watching dominos fall.
Yup - what a perfect scam. The private sector could now issue marginal
loans and FMAC and FNMA would now buy them enabling the banks to issue
more in a never ending spiral - until the bottom dropped out.
>>> .It has nothing to do with leverage,
>>>> derivatives, CDS's, or the other side bets made by Wall Street which
>>>> caused the mess. Nobody in Congress understands this system. They'd
>>>> best get somebody to explain it to them.
>>>>
>>>>> The question is; was this sort of an alliance between the liberals who
>>>>> pressured the mortgage
>>>>> industry to accept worthless paper. Or, in response to liberal/
>>>>> governmental pressure, did the banks jump on the bandwagon
>>>>> anticipating an ultimate end to the ponzi scheme?
>>>> None of the above. You conveniently forget that the repeal of Glass-
>>>> Steagall and the following legislation sponsored by Gramm opened the
>>>> door fully, where before it had been slightly ajar.
>>> Glass-Steagall has nothing to do with this. NOTHING. If GS was in place,
>>> (1) the mortgages still would have been securitized, (2) they still
>>> would have been sold by the mortgage lenders, and (3) they still would
>>> have been sold to financial services firms and packaged into CDO's.
>>> There is ***NOTHING*** in Glass Steagall to prevent that from occurring.
>>> NOTHING. This is a leftist canard.
>>
>> Beep - wrong. It kept a very strtict line drawn between investment
>> banks and commercial banks. That line got fuzzed and all hell broke
>> loose.
>
>Wrong. There was nothing in the law that prevented the SALE OF MORTGAGE
>assets from one company to the other. For example, Lehmann bought
>mortgages from Countrywide, packaged them up into CDO, sold some and
>kept the rest. Nothing in GS prevents that from happening. All GS says
>is that bank holding companies from owning other financial institutions.
>It had no regulations that prevented the packaging of mortgages and the
>sale of mortgages. None.
>>
>>> However, if GS was still in place, we'd be in even worse shape than we
>>> are now, because weak financial services institutions would be
>>> restricted from merging, thus strenghening their balance sheets.
>>>
>>> Further, let's understand that when the Gramm-Leach-Riley bill was
>>> passed, it earned 370 votes in the House, 93 votes in the Senate,
>>> Clinton signed it, and just recently (three weeks ago) reaffirmed to
>>> Maria Bartiromo in an interview that he believes it was the right thing
>>> to do. The repeal of GS was WHOLLY a bipartisan matter.
>>
>> I didn't say it wasn't bipartisan.
>
>Good.
>>
>>> Here's some relevant information from FactCheck.org:
>>>
>>> "The truth is, however, the Gramm-Leach-Bliley Act had little if
>>> anything to do with the current crisis. In fact, economists on both
>>> sides of the political spectrum have suggested that the act has probably
>>> made the crisis less severe than it might otherwise have been."
>>>
>>> "Actually, deregulated banks were not the major culprits in the current
>>> debacle. Bank of America, Citigroup, Wells Fargo and J.P. Morgan Chase
>>> have weathered the financial crisis in reasonably good shape, while Bear
>>> Stearns collapsed and Lehman Brothers has entered bankruptcy, to name
>>> but two of the investment banks which had remained independent despite
>>> the repeal of Glass-Steagall. "
>>>
>>> Bill Clinton, when asked about the subject:
>>>
>>> " Indeed, one of the things that has helped stabilize the current
>>> situation as much as it has is the purchase of Merrill Lynch by Bank of
>>> America, which was much smoother than it would have been if I hadn't
>>> signed that bill. ...You know, Phil Gramm and I disagreed on a lot of
>>> things, but he can't possibly be wrong about everything. On the
>>> Glass-Steagall thing, like I said, if you could demonstrate to me that
>>> it was a mistake, I'd be glad to look at the evidence. But I can't blame
>>> [the Republicans]. This wasn't something they forced me into."
>>>
>>>
>>> If GS was in place today, what we're experiencing would be worse.
>>>
>>>> After reading your
>>>> post - derivatives, CDS's, and other "insurance" which leveraged the
>>>> US housing market to the hilt are above your pay grade. You can go
>>>> back to Limbaugh or Hannity now.
>>> What the HELL are you talking about? You wiffed on the cause of the
>>> crisis --- it's declining home prices and resulting foreclosures, mostly
>>> by unqualified buyers. Leverage and derivatives make the situation
>>> worse, but neither are the root cause. You wiffed on Glass Steagall and
>>> it's (non)involvement in this whole issue, and you wiffed on the
>>> bipartisan nature of the Gramm Leach Biley.
>>
>> You seem to have whiffed on everything. The underwiters had to write
>> more and more mortgages to keep the ball afloat. They finally ran out
>> of even barely qualified buyers and assumed at the outset that the
>> houses would always go up and bet on it. The houses went down, their
>> underqualfied buyers foreclosed, and they were toast. Problem usually
>> ends here.
>>
>> But because all these wonderful private enterprise banks and such had
>> sunk so much of their capital into "funny paper" they went broke.
>> Meanwhile Wall Street leveraged everything to the hilt and when their
>> Ponzi Scheme came to an end there was no cash left for credit to
>> business, individuals, etc; All these wonderful loans were generated
>> by the private market and guaranteed by nothing until the two Fed
>> GSE's got involved against the "spirit" of their charter, and they
>> went poof. This was mismanagement on a grand scale.
>
>I have no quarrel with that characterization, in general. HOWEVER,
>unless you understand a problem, you're doomed to repeat it, so lets
>understand it without partisanship.
>
>(1) If you want the true core of the problem, it's the NHS of 1967 which
>first permitted the securitization of mortgages.
>
>(2) That aside, the core of the problem is government interference in
>the housing market by "encouraging" (an understatement) a lowering of
>lending standards to meet the political goal(s) of higher ownership
>among low-income minorities and overall homeownership in the US. Sounds
>noble, but when the government interferes in the buyer/seller
>relationship to that extent, things never end well.
Disagree here. Beginning with the end of WWII the government has
encouraged and aided in the home buying process. Without agencies such
as FNMA, FMAC, FHA (earlier) etc; many Americans would not own homes.
If you look at the failure rate of these loans, they were not
excessive until the current crisis which began with the privately
financed subprimes and snowballed from there.
>(3) In 1999, Fannie and Freddie were freed up to buy subprime paper.
>This increased the risk of the national portfolio signficantly.
>
>(4) In 2001, the Bush administration continued the wrongheaded policies
>of the prior administration in this regard, undoubtedly out of
>cowardice, knowing that restoring the standards would have invoked
>whelps of racism.
>
>(5) After 9/11, to avert a national recession, Greenspan sent interest
>rates to irrationally low levels. This stimulated the subprime market as
>per item (2) above, and stimulated a housing buidilng boom, ultimately
>creating a supply/demand imbalance.
>
>(6) Wall Street smart guys decided to apply Modern Portfolio Theory and
>create something called "CDO's". This allowed them to create obligations
>with coupon returns in the double digits. S*P and Moodys were complicit
>in that they rated the obligations AAA and AA. They sold like hotcakes.
>
>(7) Since the CDO's were liquid assets, they could be used as collateral
>to borrow money. Financial institutions borrowed against them like crazy.
>
>(8) In 2005, seeing imbalances in the FNMA portfolio, the Administration
>suggested new regulation creating an uber regulator over Fannie and
>Freddie. Democrats were not in favor, and the measure died. Of course,
>the Admin *could* have addressed the problem as per item (5) above, but
>didn't.
>
>(9) In 2007, the Fed engaged in significant interest rate increases
>because of inflationary pressures. This resulted in increases in the
>indexes that ARMs are tied to, meaning that the ARMs held by many, but
>primarily the low-income subprime borrowers, who cannot easily alter
>their income to accomodate the increasing rates, reset at significantly
>higher rates. Foreclosures started to rise, adding unsold inventory to
>the market, and creating a supply/demand imbalance. Supplies increased
>as builders continued their frenetic building rate, foreclosures moved
>into inventory, and at the same time higher rates decreased demand.
>
>(10) In late 2007, seeing a pullback in the housing market and an
>increase in subprime foreclosures, the feared event happened -- some
>institutions, in a cash crunch, tried to sell their CDO's, thus setting
>a market (as in mark-to-market) price for them. Badda-boom, and the
>house of cards started to unwind.
(imo) With the exception of the weight you place on Point 2 that's an
excellent time line. I disagree that low-income borrowers were to
blame in any primary way. They were set up to fail the minute credit
tightened and housing prices headed South. The speculators and the
folks who used their house as a cash cow in the 90's are more to blame
in my opinion.
>> Had this only been a housing meltdown, everything probably would have
>> worked out. But with the financial credit market going at the same
>> time because of derivative paper, we have the current situation.
>
>Without objection. HOWEVER, the key event in the above chain is not the
>leverage. The key event is the inability for low-income borrowers (who
>shouldn't have had homes in the first place, sorry) to make their
>payments after reset. As you say, without the leverage, things would be
>not-as-bad, but still bad. The cart cannot pull the horse, and when this
>is over, if the government is still strong-arming lenders to meet
>certain racial and socioeconomic ratios using subprimes, this will all
>happen again. One would assume that we will increase reserve
>requirements on derivatives, shrinking that market, and thus making the
>institutions able to pay for their own bailout the next time it happens.
>HOWEVER, as long as we're making subprime loans to low-income borrowers,
>we will still have a a situation where changing economic conditions
>(increase in unemployment, increase in interest rates due to inflation,
>whatever) can take out up to 30% of the mortgage backed securities. Not
>good.
>
>JG
WB Yeats
W...@I...com wrote:
> On Tue, 07 Oct 2008 02:51:55 +0200, John Galt <k...@g...com>
> wrote:
>
>> W...@I...com wrote:
>>> On Mon, 06 Oct 2008 21:46:25 +0200, John Galt <k...@g...com>
>>> wrote:
>>>
>>>> W...@I...com wrote:
>>>>> On Mon, 6 Oct 2008 11:03:12 -0700 (PDT), w...@g...com wrote:
>>>>>
>>
>> (2) That aside, the core of the problem is government interference in
>> the housing market by "encouraging" (an understatement) a lowering of
>> lending standards to meet the political goal(s) of higher ownership
>> among low-income minorities and overall homeownership in the US. Sounds
>> noble, but when the government interferes in the buyer/seller
>> relationship to that extent, things never end well.
>
> Disagree here. Beginning with the end of WWII the government has
> encouraged and aided in the home buying process. Without agencies such
> as FNMA, FMAC, FHA (earlier) etc; many Americans would not own homes.
> If you look at the failure rate of these loans, they were not
> excessive until the current crisis which began with the privately
> financed subprimes and snowballed from there.
And now it has ended in Depression. (2) was correct
On Tue, 07 Oct 2008 12:05:58 -0400, *Poetic Justice*
<@http://Poetic-Justice.Talk-n-Dog.com> wrote:
>> Disagree here. Beginning with the end of WWII the government has
>> encouraged and aided in the home buying process. Without agencies such
>> as FNMA, FMAC, FHA (earlier) etc; many Americans would not own homes.
>> If you look at the failure rate of these loans, they were not
>> excessive until the current crisis which began with the privately
>> financed subprimes and snowballed from there.
>
>And now it has ended in Depression. (2) was correct
What caused the depression is the same "thinking" of
the early 20th century---that "hands-off" by
government, no regulation, no restraints on financial
markets, no fiscal laws would be "good"
Reagan began the long spiral down---staved off for a
decade under clinton, then reinstituted by Dumbya.
You simply cannot blame it on anyone but FAILED
Conservative republican fiscal and economic policy
N...@C...com wrote:
> On Tue, 07 Oct 2008 12:05:58 -0400, *Poetic Justice*
> <@http://Poetic-Justice.Talk-n-Dog.com> wrote:
>
>>> Disagree here. Beginning with the end of WWII the government has
>>> encouraged and aided in the home buying process. Without agencies such
>>> as FNMA, FMAC, FHA (earlier) etc; many Americans would not own homes.
>>> If you look at the failure rate of these loans, they were not
>>> excessive until the current crisis which began with the privately
>>> financed subprimes and snowballed from there.
>> And now it has ended in Depression. (2) was correct
>
> What caused the depression is the same "thinking" of
> the early 20th century---that "hands-off" by
> government, no regulation, no restraints on financial
> markets, no fiscal laws would be "good"
>
Several thing contributed to this but.... Democrats created the scam
that broke the camels back.
Another contributor is the FACT that government has imprisoned 10% of
America and made criminals of far more then that, the war on drugs and
the war on vice, the tax war on the population has made criminals of too
many.
Just like the first Depression with bootlegging and consuming alcohol.
--
http://www.youtube.com/watch?v=QJFO6COAMCY
http://www.youtube.com/watch?v=rUEQz5dltmI
http://OutSourcedNews.net
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