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quote:

Originally posted by pkcRAISTLIN nice one krypt.

Yea, I'm tired of hearing the same old, "It's the government's fault" argument concerning the subprime crisis. Especially from this guy...

Anybody who wants to make some money on Wednesday, listen up. A new IPO is coming out on Wednesday. Cramer fronted it. Ticker is going to be EM. Looks good. They are a huge player in the electronic medical billing and administration industry. They have a great vertical structure which gives them the ability to charge at every step in the medical billing and record keeping process while also saving healthcare providers money. Get ready, call your broker tomorrow, do what you gotta do. It's gonna pop.

quote:

Originally posted by Krypton Another thing, the CRA had nothing to do with the subprime mortgage crisis...

That is a flat out falsehood. Clinton's people wrote as part of it to REQUIRE loans be made to subprime borrowers... it was public policy that drove the market and the demand for the subprime market was created by the CRA.

Some of the provisions Clinton had in the CRA: requiring strictly numerical assessments to get a satisfactory CRA rating; using federal home-loan data broken down by neighborhood, income group, and race; encouraging community groups to complain when banks were not loaning enough to specified neighborhood, income group, and race; allowing community groups that marketed loans to targeted groups to collect a fee from the banks.

Subprime mortgages went from 1% of the whole to 12% in just a couple of years. Hellooooo.

quote:

The U.S. Department of Housing and Urban Development's mortgage policies fueled the trend towards issuing risky loans. In 1995, Fannie Mae and Freddie Mac began receiving affordable housing credit for purchasing mortgage bank securities which included loans to low income borrowers. This resulted in the agencies purchasing subprime securities. Subprime mortgage loan originations surged by a whopping 25 percent per year between 1994 and 2003, resulting in a nearly ten-fold increase in the volume of these loans in just nine years. As of November 2007 Fannie Mae a held a total of $55.9 billion of subprime securities and $324.7 billion of Alt-A securities in their portfolios. As of the 2008Q2 Freddie Mac had $190 billion in Alt-A mortgages. Together they have more than half of the $1 trillion of Alt-A mortgages.[82] The growth in the subprime mortgage market, which included B, C and D paper bought by private investors such as hedge funds, fed a housing bubble that later burst.

See http://www.washingtonpost.com/wp-dy...8061000059.html

/\ click the link to see a nice graph.

quote:

Originally posted by The17sss That is a flat out falsehood. Clinton's people wrote as part of it to REQUIRE loans be made to subprime borrowers... it was public policy that drove the market and the demand for the subprime market was created by the CRA. Some of the provisions Clinton had in the CRA: requiring strictly numerical assessments to get a satisfactory CRA rating; using federal home-loan data broken down by neighborhood, income group, and race; encouraging community groups to complain when banks were not loaning enough to specified neighborhood, income group, and race; allowing community groups that marketed loans to targeted groups to collect a fee from the banks. Subprime mortgages went from 1% of the whole to 12% in just a couple of years. Hellooooo. See http://www.washingtonpost.com/wp-dy...8061000059.html /\ click the link to see a nice graph.

quote:

In private conversations with our friend Barry Ritholtz about these matters, he has challenged me to explain why the Community Reinvestment Act (CRA) did not create a boom (or crisis) from 1977 to 2002. This is a fair point and one that I think few (if any) have failed to address. What changed in recent years is that (i) the CRA received some teeth in 1995, (ii) the Federal Reserve lowered interest rates to historic lows for an extended period of time, and (iii) the increased use of private securitization. Ultimately, I think that (ii) and (iii) are the most important both in creating the economic shock and that (i) played a minor role in that the other two factors facilitated the compliance with government policy. When government regulation is created, there is an immediate incentive to circumvent the regulation. However, the use of securitization essentially made it easier for banks to comply with CRA (by buying securitized mortgages that complied or by issuing the mortgages themselves and selling them off as part of an ABS in the future). Thus far all we have is lower bound estimates of the impact of the CRA on subprime loans, but this lower bound is decidedly not zero. As the link above indicates, a recent Fed study indicated that only about 8% of subprime loans can be correctly tied to the CRA. Nevertheless, as Lawrence White points out in that post, this ignores potential �demonstration� effects. In other words, once banks who are not required to comply with the CRA discover that other banks are making these loans somewhat successfully, they might be more inclined to enter the market to compete directly with these firms (this might explain why 75% of troubled mortgages originate from firms that are not required to comply with the CRA). In any event, however, it is unlikely that the percentage of subprime that originated directly as a result of CRA exceeds 20% and therefore must be deemed a relatively small factor.

http://everydayecon.wordpress.com/tag/tarp/

http://www.businessinsider.com/the-...rs-guide-2009-6

/discussion

http://gawker.com/5334275/our-favor...word-mancession

quote:

Originally posted by The17sss http://www.businessinsider.com/the-...rs-guide-2009-6 /discussion

lots of good info in there, not that i have the time to read every single link he's provided. but what his argument says is that the CRA contributed to lax lending standards. i could buy that.

but, what i think most of us here are arguing is repeated on that page you posted:

quote:

It isn�t losses from CRA loans that drove the crisis (although they are disproportionately responsible for losses at some banks). Instead, the CRA required lax lending standards that spread to the rest of the mortgage market. That fueled the mortgage boom and bust.

it also mentions that defaults for CRA loans were no more than regular loans.

so, you can rack up the CRA influence in the "perfect storm" scenario, but even that page makes it clear that it was far from the biggest contributor to the crisis.

quote:

Originally posted by Krypton Hmm, looks a little high when looking at the 52week low-high. Check out SPXU which is really close to its 52 week low.

Eh? The 52 week high is more than $60 compared to the $34.50 we're looking at today...admittedly that does take into account levels before the major September/October selloffs but that's compounded ETFs for you.

Personally investing in shorts tends to contradict my strategy.

quote:

Originally posted by Krypton Unfortunately, these inverse ETFs are compounded daily which means investors can only stay in for short periods of time, like a maximum of a week from what I hear from some people. Which sucks because it'd be nice if they traded like normal shorted stocks. Not compounded every bloody day.

I understand that's how these ETFs are designed but I feel there can be some unseen merit into buying these when they've been kicked right down and there is only a real upside long term to the market. I bought my first lot of DDM at around $21 and a second lump at $23, even with some dips off the current level I'm still looking healthy.

I'm only really playing with this stuff so if I lose it I'm not distraught, the vast majority of my non-retirement assets are managed in a full service brokerage account.

quote:

Originally posted by The17sss That is a flat out falsehood.

So you reject out of hand an empirical analysis of the relation of the CRA to the subprime mortgage crisis. It's pretty obvious you didn't even read it. Even more obvious you want to blame the subprime crisis on Clinton no matter what evidence to the contrary is presented to you. Even if its from the Federal Reserve, which is a non-partisan institution of great economic minds.

quote:

Clinton's people wrote as part of it to REQUIRE loans be made to subprime borrowers... it was public policy that drove the market and the demand for the subprime market was created by the CRA. Some of the provisions Clinton had in the CRA: requiring strictly numerical assessments to get a satisfactory CRA rating; using federal home-loan data broken down by neighborhood, income group, and race; encouraging community groups to complain when banks were not loaning enough to specified neighborhood, income group, and race; allowing community groups that marketed loans to targeted groups to collect a fee from the banks.

You want to prove that? Show the clause. You are right about public policy, but the CRA surely isn't that policy. If you read the Federal Reserve's analysis on the CRA's relationship to the subprime crisis, you'd have read that CRA related subprime loans WERE A VERY SMALL PART OF THE SUBRPIME MARKET. That means the vast majority of subprime loans HAD NOTHING TO DO WITH THE CRA. Additionally, the CRA has been in existence since the 1970's, with banks maintaining satisfactory mortgage lending standards during the majority of that time.

Let me tell what policy you should be mad at but probably won't because it comes from the Republicans. The Gramm-Leach-Bliley Act (1999), drafted and passed by a Republican Congress, repealed the Glass-Steagall Act which prevented the all too well known "too big to fail" bank. Banks saw a huge untapped market in the subprime loan industry and they went into it WITHOUT government coercion. They did it willingly, (no, enthusiastically!), and most of the loans they made HAD NOTHING TO DO WITH THE CRA.

Additionally, the subprime mortgage crisis was more of a perfect storm of causes. Low interest rates, high speculation, huge foreign liquidity inflows, banks shirking their risk profiles, etc. The CRA, as the Federal Reserve found in an EMPIRICAL analysis, had nothing to do with the subprime mortgage crisis.

quote:

Subprime mortgages went from 1% of the whole to 12% in just a couple of years. Hellooooo.

LOL, you call that causation? Read the Federal Reserve's empirical analysis, then come back to me.

quote:

See http://www.washingtonpost.com/wp-dy...8061000059.html /\ click the link to see a nice graph.

Nice graph, but having nothing to do with the CRA. Again, your link of causation is without merit and simply throwing a graph showing how subprime mortgages increased and telling me how they increased from 1% to 12% says absolutely nothing more than the statement itself. Ya, we all know about subprime mortgages increasing. What's your point? It doesn't prove anything you have said.

quote:

Originally posted by fbgdavidson Eh? The 52 week high is more than $60 compared to the $34.50 we're looking at today...admittedly that does take into account levels before the major September/October selloffs but that's compounded ETFs for you. Personally investing in shorts tends to contradict my strategy. I understand that's how these ETFs are designed but I feel there can be some unseen merit into buying these when they've been kicked right down and there is only a real upside long term to the market. I bought my first lot of DDM at around $21 and a second lump at $23, even with some dips off the current level I'm still looking healthy. I'm only really playing with this stuff so if I lose it I'm not distraught, the vast majority of my non-retirement assets are managed in a full service brokerage account.

How long have you been holding SDD?

quote:

Originally posted by Krypton How long have you been holding SDD?

I've not. I'm in DDM.

quote:

Originally posted by fbgdavidson I've not. I'm in DDM.

How long have you been in?

Geithner Asks Congress to Increase Federal Debt Limit

http://online.wsj.com/article/SB124970470294516541.html

quote:

Washington -- U.S. Treasury Secretary Timothy Geithner asked Congress to increase the $12.1 trillion debt limit on Friday, saying it is "critically important" that they act in the next two months. Mr. Geithner, in a letter to U.S. lawmakers, said that the Treasury projects that the current debt limit could be reached as early mid-October. Increasing the limit is important to instilling confidence in global investors, Mr. Geithner said.

lol..$12.1 trillion in debt is "not enough".

Got gold?

quote:

Originally posted by Krypton How long have you been in?

I bought two decent slugs; one in mid March at $21, another at the end or March at around $23.

quote:

Originally posted by Max Thomson right, because you folk down under know SO MUCH about the crumbling American empire. let me tell you, I live in the midwestern united states where the effects of this dreadful economic clusterf*ck aren't boiled down to a single keyword bernanke drops on national tv, or something you read about it on some newfangled economist blog. no, its a brutish reality defined by urban decay, open-air drug markets, and a lack of basic services for an inordinate amount of people. all this in the most wealthiest country in the world, so don't tell me about the green shoots, come here and go to Indiana and tell me how much the economy is improving.

It was scarcasm, I have heard about how theres been a growing disconnetion between mainstreet and wallstreet over the last several months.

quote:

Originally posted by Krypton Yea, I'm tired of hearing the same old, "It's the government's fault" argument concerning the subprime crisis. Especially from this guy...

http://www.ronpaul.com/on-the-issue...eserve-hr-1207/

quote:

Originally posted by iTranscendence http://www.ronpaul.com/on-the-issue...eserve-hr-1207/

Oh, look. What a surprise. Our newest conspiracy theorist copy-pasting the same stuff all the other CT crew have already done. Do you EVER think for yourself? Or do you merely regurgitate un-parsed information like the guy in searle�s chinese room?

So goddamn predictable. And I�ll wager you don�t know the first fucking thing about the federal reserve or central banking.

Here, learn something:

quote:

JIM LEHRER: I've got an online question from Robert Dietrich in Towson, Md. "What do you see is the most significant current or potential threat to the Federal Reserve's independence?" BEN BERNANKE: Well, again, the independence of the Fed is extraordinarily important. If the Congress or the administration were to begin to interfere with our monetary policy decisions, then the markets would say, "Wait a minute, if there's going to be more inflation because of political reasons, more inflation because the government wants to the Fed to spend money in order to pay for the deficit." So it's incredibly important that the Fed maintain its independence. I think we will. I think we need just to be very vigilant and make sure that there isn't any bill or any other effort made by anyone to take away that independence. And we're going to do our best to maintain it because it is so critical for the stability of our economy. JIM LEHRER: As you know, there's an effort in Congress now, in the House in particular, to audit what the Federal Reserve does, particularly a monetary policy. How do you feel about that? BEN BERNANKE: So that bill - people don't fully understand what that bill is about. It sounds like audit the Fed, it sounds like let's look at the books. It's not what it sounds like. The Congress already looks at our books. We have many different layers of auditors. The GAO, the General Accountability Office, which is supposed to be doing this audit, already looks at virtually all of our activities, and the ones it doesn't - our financial books and our financial loans and so on, and the ones it's not looking at and where the taxpayer needs some assurance is we're willing to work with Congress to make sure that the GAO gets the information it needs. What people don't understand is that this bill would give the GAO the authority to audit monetary policy. And what does that mean? That means that if the Federal Reserve decided a year from now that because of incipient inflation it was time to raise interest rates, that the Congress would say, "Oh, the GAO's going to audit that decision. It's going to subpoena your materials. It's going to demand information from the members of the FOMC. It's going to evaluate your decision and report to Congress." I don't think that's consistent with independence. So we are completely open to providing any information that Congress wants to make sure we're using taxpayer money safely and soundly, that we are meeting all our responsibilities. I don't think the American people want Congress running monetary policy, and I think that's very, very critical for people to understand. JIM LEHRER: And do you think that's what -- would end up doing? BEN BERNANKE: Exactly. That's what it would do. There's a provision in that law which currently, current law, which carves out monetary policy, and it doesn't give Congress authority or GAO authority to audit it. That was put in in 1978, at a time when we had a lot of inflation, as you may remember. After that, the Fed became more independent, brought inflation down. But now that's exactly what it would do. If that carve-out is eliminated, the Congress would have the authority anytime to ask the GAO to come in and audit and look at and evaluate the monetary policy decisions made by the Fed. That's not consistent with independence.

The rest of the excellent program, �bernanke on the record� is available for viewing on the PBS site.

and you wonder why im so abusive when all you fucking do is post ignorant drivel and masquerade as an "independent thinker".

quote:

Originally posted by pkcRAISTLIN Oh, look. What a surprise. Our newest conspiracy theorist copy-pasting the same stuff all the other CT crew have already done. Do you EVER think for yourself? Or do you merely regurgitate un-parsed information like the guy in searle�s chinese room? So goddamn predictable. And I�ll wager you don�t know the first fucking thing about the federal reserve or central banking. Here, learn something: The rest of the excellent program, �bernanke on the record� is available for viewing on the PBS site. and you wonder why im so abusive when all you fucking do is post ignorant drivel and masquerade as an "independent thinker".

Are you saying it's a good thing that they don't disclose their books?

quote:

Originally posted by iTranscendence Are you saying it's a good thing that they don't disclose their books?

*sighs*

virtually all and everything the fed does is audited by the GAO. If there are any MINOR things that currently aren�t, Bernanke has said the fed is happy to accommodate congress in this regard. But no, nobody of sane mind wants congress to have the ability to audit monetary policy. The whole point of a central bank is that it is independent from the politics and nonsense from congress.

Virtually nothing would change from 1207, except that congress would now have the ability to stick their noses where they don�t belong. You seem to be a rabid anti-government ideologue, yet here you are championing even more power for government in an area it shouldn�t have it? You guys are so contradictory at times, it boggles my mind. And im sorry if I keep referring to you as �you guys� but there�s a ~30 page thread in the PDD where we�ve already tried to explain ourselves to the ron paul fanboys.

quote:

Originally posted by pkcRAISTLIN *sighs* virtually all and everything the fed does is audited by the GAO. If there are any MINOR things that currently aren�t, Bernanke has said the fed is happy to accommodate congress in this regard. But no, nobody of sane mind wants congress to have the ability to audit monetary policy. The whole point of a central bank is that it is independent from the politics and nonsense from congress. Virtually nothing would change from 1207, except that congress would now have the ability to stick their noses where they don�t belong. You seem to be a rabid anti-government ideologue, yet here you are championing even more power for government in an area it shouldn�t have it? You guys are so contradictory at times, it boggles my mind. And im sorry if I keep referring to you as �you guys� but there�s a ~30 page thread in the PDD where we�ve already tried to explain ourselves to the ron paul fanboys.

The GAO hasn't been doing their job.

quote:

Originally posted by iTranscendence The GAO hasn't been doing their job.

And you know this how? Because Ron Paul told you?



The last audit of the Federal Reserve. Read it yourself.....

quote:

Office of Inspector General Semiannual Report to Congress October 1, 2008 � March 31, 2009 http://www.federalreserve.gov/oig/f...rch_31_2009.pdf http://www.federalreserve.gov/oig/s...rch_31_2009.htm

quote:

Originally posted by iTranscendence The GAO hasn't been doing their job.

What absolute nonsense.

*in before you post that clip from youtube where the secretary general answers a question with "i dont know"*

oh the humanity!

quote:

Originally posted by fbgdavidson I bought two decent slugs; one in mid March at $21, another at the end or March at around $23.

What returns have you made? Anything around 50%?

quote:

Originally posted by Krypton Anybody who wants to make some money on Wednesday, listen up. A new IPO is coming out on Wednesday. Cramer fronted it. Ticker is going to be EM. Looks good. They are a huge player in the electronic medical billing and administration industry. They have a great vertical structure which gives them the ability to charge at every step in the medical billing and record keeping process while also saving healthcare providers money. Get ready, call your broker tomorrow, do what you gotta do. It's gonna pop.

Today was EM's IPO to institutional investors (i.e. huge banks). Emdeon sold 23.7 million shares and raised about $365.7 million in an IPO led by Morgan Stanley (MS.N), Goldman Sachs & Co, (GS.N) UBS Investment Bank (UBSN.VX) and Barclays Capital (BARC.L).

Tomorrow, the stock opens on the New York Stock Exchange, at $15.50. I'm waking up early (7:20AM) so I can buy right at the market open (7:30AM Mountain Time). Judging by the institutionals buying freaking $365 million worth of stock, this baby is gonna pop!

quote:

Originally posted by Krypton Today was EM's IPO to institutional investors (i.e. huge banks). Emdeon sold 23.7 million shares and raised about $365.7 million in an IPO led by Morgan Stanley (MS.N), Goldman Sachs & Co, (GS.N) UBS Investment Bank (UBSN.VX) and Barclays Capital (BARC.L). Tomorrow, the stock opens on the New York Stock Exchange, at $15.50. I'm waking up early (7:20AM) so I can buy right at the market open (7:30AM Mountain Time). Judging by the institutionals buying freaking $365 million worth of stock, this baby is gonna pop!

gonna laugh if it doesn't

you're usually not wrong though

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