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Ok so the bailout was rejected, or whatever (pg. 11)
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| josh4 |
| quote: | Originally posted by Shakka
I believe the points in that video may account for about 1/3 of the cause of the problem.
And Josh, the point to you is that the seeds were laid long before George Bush got into office, but you're apparently too young and too blinded by hate for the right to know anything prior to 2000. |
I'm not blinded by anything. I'll start seriously considering your arguments when you have the adequate sources to back them up. Its funny watching you guys. Whenever something like this happens your camp all scramble to spin it without sacrificing your views or whatever. This usually means quoting biased blogs without displaying the source and questionable videos that get removed from youtube. Show me a WSJ article that supports your theory (whatever that is). |
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| Trancer-X |
| quote: | Originally posted by josh4
I'm not blinded by anything. I'll start seriously considering your arguments when you have the adequate sources to back them up. Its funny watching you guys. Whenever something like this happens your camp all scramble to spin it without sacrificing your views or whatever. This usually means quoting biased blogs without displaying the source and questionable videos that get removed from youtube. Show me a WSJ article that supports your theory (whatever that is). |
Oh, but josh4 we know that you are just soooo blinded by hate!!
hahahahaha, that actually had me :haha: :stongue: :crazy: :stongue: :haha: |
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| Shakka |
| quote: | Originally posted by josh4
I'm not blinded by anything. I'll start seriously considering your arguments when you have the adequate sources to back them up. Its funny watching you guys. Whenever something like this happens your camp all scramble to spin it without sacrificing your views or whatever. This usually means quoting biased blogs without displaying the source and questionable videos that get removed from youtube. Show me a WSJ article that supports your theory (whatever that is). |
Jesus ing christ. OK, for starters, this was posted by me, about 4 posts after the video post...
| quote: | WSJ: September 30, 1999
Fannie Mae Eases Credit To Aid Mortgage Lending
By STEVEN A. HOLMES
In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.
The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.
Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.
In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans.
''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.''
Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market.
In moving, even tentatively, into this new area of lending, 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.''
Under Fannie Mae's pilot program, consumers who qualify can secure a mortgage with an interest rate one percentage point above that of a conventional, 30-year fixed rate mortgage of less than $240,000 -- a rate that currently averages about 7.76 per cent. If the borrower makes his or her monthly payments on time for two years, the one percentage point premium is dropped.
Fannie Mae, the nation's biggest underwriter of home mortgages, does not lend money directly to consumers. Instead, it purchases loans that banks make on what is called the secondary market. By expanding the type of loans that it will buy, Fannie Mae is hoping to spur banks to make more loans to people with less-than-stellar credit ratings.
Fannie Mae officials stress that the new mortgages will be extended to all potential borrowers who can qualify for a mortgage. But they add that the move is intended in part to increase the number of minority and low income home owners who tend to have worse credit ratings than non-Hispanic whites.
Home ownership has, in fact, exploded among minorities during the economic boom of the 1990's. The number of mortgages extended to Hispanic applicants jumped by 87.2 per cent from 1993 to 1998, according to Harvard University's Joint Center for Housing Studies. During that same period the number of African Americans who got mortgages to buy a home increased by 71.9 per cent and the number of Asian Americans by 46.3 per cent.
In contrast, the number of non-Hispanic whites who received loans for homes increased by 31.2 per cent.
Despite these gains, home ownership rates for minorities continue to lag behind non-Hispanic whites, in part because blacks and Hispanics in particular tend to have on average worse credit ratings.
In July, the Department of Housing and Urban Development proposed that by the year 2001, 50 percent of Fannie Mae's and Freddie Mac's portfolio be made up of loans to low and moderate-income borrowers. Last year, 44 percent of the loans Fannie Mae purchased were from these groups.
The change in policy also comes at the same time that HUD is investigating allegations of racial discrimination in the automated underwriting systems used by Fannie Mae and Freddie Mac to determine the credit-worthiness of credit applicants. |
I never posted a biased blog. This is not theory Josh, this is fact. Subprime lending is not an innovation of the Bush administration, nor is it something that just came about in the last 8 years. I reiterate that your understanding of history and the economy beyond the last 8 years (when you would have to concede that you were very young considering that this is the first time you've ever voted in a presidential election) is remarkably poor. The facts are that debt levels began to build well beyond historical norms in the 90's. This is not some George Bush phenomenon that we are witnessing right now. It goes so far beyond politics, yet you seem to want to believe that just about anything is debatable within a simple political construct. Please get your head on straight. |
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| Groundhog Boy |
| quote: | Originally posted by jerZ07002
i love the attachment of 115 billion in tax breaks. What a ing joke! Congress keeps digging the hole deeper and deeper. there needs to be rules about how much content can go into a bill and what can be attached. a bill that has the primary goal of dealing with a certain issue shouldn't have an unrelated rider provision. it's getting sickening. |
Vote out every ing person who rejected it the first time and sides with it this time around. It's insulting to everyone. |
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| josh4 |
| quote: | Who Caused the Economic Crisis?
FactCheck.org
October 1, 2008
A MoveOn.org Political Action ad plays the partisan blame game with the economic crisis, charging that John McCain’s friend and former economic adviser Phil Gramm “stripped safeguards that would have protected us.” The claim is bogus. Gramm’s legislation had broad bipartisan support and was signed into law by President Clinton. Moreover, the bill had nothing to do with causing the crisis, and economists – not to mention President Clinton – praise it for having softened the crisis.
A McCain-Palin ad, in turn, blames Democrats for the mess. The ad says that the crisis “didn’t have to happen,” because legislation McCain cosponsored would have tightened regulations on Fannie Mae and Freddie Mac. But, the ad says, Obama "was notably silent" while Democrats killed the bill. That’s oversimplified. Republicans, who controlled the Senate at the time, did not bring the bill forward for a vote. And it’s unclear how much the legislation would have helped, as McCain signed on just two months before the housing bubble popped.
In fact, there’s ample blame to go around. Experts have cited everyone from home buyers to Wall Street, mortgage brokers to Alan Greenspan.
Analysis
As Congress wrestled with a $700 billion rescue for Wall Street's financial crisis, partisans on both sides got busy – pointing fingers. MoveOn.org Political Action on Sept. 25 released a 60-second TV ad called "My Friends’ Mess," blaming Sen. John McCain and Republican allies who supported banking deregulation. The McCain-Palin campaign released its own 30-second TV spot Sept. 30, saying "Obama was notably silent" while Democrats blocked reforms leaving taxpayers "on the hook for billions." Both ads were to run nationally.
And both ads are far wide of the mark.
MoveOn.org Ad:
"My Friends' Mess"
MoveOn.org Ad, "My Friends"
Narrator: We all know the economy is in crisis, but who's responsible?
McCain: My friends. My friends. My friends.
Narrator: John McCain's friend Phil Gramm wrote the bill that deregulated the banking industry, and stripped the safeguards that would have protected us.
McCain asked Gramm to help write his economic plan.
John McCain's friend Rick Davis lobbied for Fannie and Freddie for years, "defending" them against stricter regulation. And now? He runs McCain's presidential campaign.
And John McCain himself? He's stood by "deregulation" time and time again.
McCain: I think the deregulation was probably helpful to the growth of our economy.
Narrator: And now that the markets are in meltdown? John McCain's friend George Bush wants hardworking Americans to write the biggest blank check in history, bailing out the Wall Street firms and the Washington lobbyists who got us into this mess. Main Street giving Wall Street $700 billion and getting nothing in return? It's outrageous.
Americans shouldn't have to foot the bill for mistakes that John McCain and his friends made.
Narrator: MoveOn.org Political Action is responsible for the content of this advertisement.
Blame the Republicans!
The MoveOn.org Political Action ad blames a banking deregulation bill sponsored by former Sen. Phil Gramm, a friend and one-time adviser to McCain's campaign. It claims the bill "stripped safeguards that would have protected us."
That claim is bunk. When we contacted MoveOn.org spokesman Trevor Fitzgibbons to ask just what "safeguards" the ad was talking about, he came up with not one single example. The only support offered for the ad's claim is one line in one newspaper article that reported the bill "is now being blamed" for the crisis, without saying who is doing the blaming or on what grounds.
The bill in question is the Gramm-Leach-Bliley Act, which was passed in 1999 and repealed portions of the Glass-Steagall Act, a piece of legislation from the era of the Great Depression that imposed a number of regulations on financial institutions. It's true that Gramm authored the act, but what became law was a widely accepted bipartisan compromise. The measure passed the House 362 - 57, with 155 Democrats voting for the bill. The Senate passed the bill by a vote of 90 - 8. Among the Democrats voting for the bill: Obama's running mate, Joe Biden. The bill was signed into law by President Clinton, a Democrat. If this bill really had "stripped the safeguards that would have protected us," then both parties share the blame, not just "John McCain's friend."
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.
Last year the liberal writer Robert Kuttner, in a piece in The American Prospect, argued that "this old-fashioned panic is a child of deregulation." But even he didn't lay the blame primarily on Gramm-Leach-Bliley. Instead, he described "serial bouts of financial deregulation" going back to the 1970s. And he laid blame on policies of the Federal Reserve Board under Alan Greenspan, saying "the Fed has become the chief enabler of a dangerously speculative economy."
What Gramm-Leach-Bliley did was to allow commercial banks to get into investment banking. Commercial banks are the type that accept deposits and make loans such as mortgages; investment banks accept money for investment into stocks and commodities. In 1998, regulators had allowed Citicorp, a commercial bank, to acquire Traveler's Group, an insurance company that was partly involved in investment banking, to form Citigroup. That was seen as a signal that Glass-Steagall was a dead letter as a practical matter, and Gramm-Leach-Bliley made its repeal formal. But it had little to do with mortgages.
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.
Observers as diverse as former Clinton Treasury official and current Berkeley economist Brad DeLong and George Mason University's Tyler Cowen, a libertarian, have praised Gramm-Leach-Bliley has having softened the crisis. The deregulation allowed Bank of America and J.P. Morgan Chase to acquire Merrill Lynch and Bear Stearns. And Goldman Sachs and Morgan Stanley have now converted themselves into unified banks to better ride out the storm. That idea is also endorsed by former President Clinton himself, who, in an interview with Maria Bartiromo published in the Sept. 24 issue of Business Week, said he had no regrets about signing the repeal of Glass-Steagall:
Bill Clinton (Sept. 24): 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.
No, Blame the Democrats!
McCain-Palin 2008 Ad: "Rein"
McCain Ad, "Rein"
Narrator: John McCain fought to rein in Fannie and Freddie.
The Post says: McCain "pushed for stronger regulation"..."while Mr. Obama was notably silent."
But, Democrats blocked the reforms.
Loans soared. Then, the bubble burst. And, taxpayers are on the hook for billions.
Bill Clinton knows who is responsible.
Clinton: I think the responsibility that the Democrats have may rest more in resisting any efforts by Republicans in the Congress or by me when I was President to put some standards and tighten up a little on Fannie Mae and Freddie Mac.
Narrator: You're right, Mr. President. It didn't have to happen.
McCain: I'm John McCain and I approve this message.
The McCain-Palin campaign fired back with an ad laying blame on Democrats and Obama. Titled "Rein," it highlights McCain's 2006 attempt to "rein in Fannie and Freddie." The ad accurately quotes the Washington Post as saying "Washington failed to rein in" the two government-sponsored entities, the Federal National Mortgage Association ("Fannie Mae") and the Federal Home Loan Mortgage Corporation ("Freddie Mac"), both of which ran into trouble by underwriting too many risky home mortgages to buyers who have been unable to repay them. The ad then blames Democrats for blocking McCain's reforms. As evidence, it even offers a snippet of an interview in which former President Clinton agrees that "the responsibility that the Democrats have" might lie in resisting his own efforts to "tighten up a little on Fannie Mae and Freddie Mac." We're then told that the crisis "didn't have to happen."
It's true that key Democrats opposed the Federal Housing Enterprise Regulatory Reform Act of 2005, which would have established a single, independent regulatory body with jurisdiction over Fannie and Freddie – a move that the Government Accountability Office had recommended in a 2004 report. Current House Banking Committee chairman Rep. Barney Frank of Massachusetts opposed legislation to reorganize oversight in 2000 (when Clinton was still president), 2003 and 2004, saying of the 2000 legislation that concern about Fannie and Freddie was "overblown." Just last summer, Senate Banking Committee chairman Chris Dodd called a Bush proposal for an independent agency to regulate the two entities "ill-advised."
But saying that Democrats killed the 2005 bill "while Mr. Obama was notably silent" oversimplifies things considerably. The bill made it out of committee in the Senate but was never brought up for consideration. At that time, Republicans had a majority in the Senate and controlled the agenda. Democrats never got the chance to vote against it or to mount a filibuster to block it.
By the time McCain signed on to the legislation, it was too late to prevent the crisis anyway. McCain added his name on May 25, 2006, when the housing bubble had already nearly peaked. Standard & Poor's Case-Schiller Home Price Index, which measures residential housing prices in 20 metropolitan regions and then constructs a composite index for the entire United States, shows that housing prices began falling in July 2006, barely two months later.
The Real Deal
So who is to blame? There's plenty of blame to go around, and it doesn't fasten only on one party or even mainly on what Washington did or didn't do. As The Economist magazine noted recently, the problem is one of "layered irresponsibility ... with hard-working homeowners and billionaire villains each playing a role." Here's a partial list of those alleged to be at fault:
* The Federal Reserve, which slashed interest rates after the dot-com bubble burst, making credit cheap.
* Home buyers, who took advantage of easy credit to bid up the prices of homes excessively.
* Congress, which continues to support a mortgage tax deduction that gives consumers a tax incentive to buy more expensive houses.
* Real estate agents, most of whom work for the sellers rather than the buyers and who earned higher commissions from selling more expensive homes.
* The Clinton administration, which pushed for less stringent credit and downpayment requirements for working- and middle-class families.
* Mortgage brokers, who offered less-credit-worthy home buyers subprime, adjustable rate loans with low initial payments, but exploding interest rates.
* Former Federal Reserve chairman Alan Greenspan, who in 2004, near the peak of the housing bubble, encouraged Americans to take out adjustable rate mortgages.
* Wall Street firms, who paid too little attention to the quality of the risky loans that they bundled into Mortgage Backed Securities (MBS), and issued bonds using those securities as collateral.
* The Bush administration, which failed to provide needed government oversight of the increasingly dicey mortgage-backed securities market.
* An obscure accounting rule called mark-to-market, which can have the paradoxical result of making assets be worth less on paper than they are in reality during times of panic.
* Collective delusion, or a belief on the part of all parties that home prices would keep rising forever, no matter how high or how fast they had already gone up.
The U.S. economy is enormously complicated. Screwing it up takes a great deal of cooperation. Claiming that a single piece of legislation was responsible for (or could have averted) is just political grandstanding. We have no advice to offer on how best to solve the financial crisis. But these sorts of partisan caricatures can only make the task more difficult.
http://www.factcheck.org/elections-2008/who_caused_the_economic_crisis.html |
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| Q5echo |
| quote: | Originally posted by Groundhog Boy
Vote out every ing person who rejected it the first time and sides with it this time around. It's insulting to everyone. |
i wouldnt go that far but i'm very disappointed right now and feel like a fool. very curious to see how the House will go on this.
for the record i now support the Paulson plan in it's entirety minus the rest of this crap that could've been voted on individually. |
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| Groundhog Boy |
| quote: | Originally posted by Q5echo
for the record i now support the Paulson plan in it's entirety minus the rest of this crap that could've been voted on individually. |
I was fine with pretty much all the things that the House shot down the first time around.
The "Paulson Plan" was not a bill. It was an outline of the course of action to solve the problem. Both sides sounded retarded when they made speeches about how it was deficient and how could they pass a plan that was only 3 pages. Of course it was going to get taxpayer safeguards included in it that the Congress had to hammer out. It isn't the Treasury's role to write a full bill, especially with such a novel idea. Paulson didn't really protest any of the House add-ons, but this new in the Senate bill is absurd. 300 more pages of crap, running up the bill another $100+ billion, including great provisions like removing the excise tax from wooden arrows for kids, as opposed to hunting arrows for adults (Sec. 503). Or making it easier to import rum like Sec. 308 provides.
Great job Republican House members. They knew that this close to election that there had to be some level of bi-partisanship on such a protested bill that was necessary. |
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| occrider |
| quote: | Originally posted by Q5echo
how about satisfied? probably a little better characterization of someone who prefaces "at least" describing someone who could "at most" lead half of her own party to eat crap.
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What? Are you daft? "At least" implies that she was able to accomplish the task at a bare MINIMUM. Now I understand that with the Bush administration's record, you 22%ers have had to lower your standards of success, happiness, mission accomplished, or whatever you guys go by by now to the bare MINIMUM, but for the rest of the normal population, the preface of "at least" does not equate with satisfied.
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i agree thats very "simple" but WOW talk about "mischaracterization". reminicent of the hissy fit the Dow had yesterday losing 7%
FYI, these "hacks" actually work for the "ignoramouses" that voted them into office.
when these hacks fight for a better bill and subsequent passage of it this week i'm sure we'll all forget who mischaracterized whom, right? |
Well even despite the conversion of your support, I stand by my original statement: Those who voted against it were either ignorant of what was at stake or they were partisan hacks. I can either argue the economics of the former or the failure of doing what's best for our country on the latter.
| quote: | Originally posted by ShakkaI believe the points in that video may account for about 1/3 of the cause of the problem.
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Granted I didn't watch the entire video but I'm inclined to wonder what that 1/3 of the problem was. I know from a charter perspective both fannie and freddie were PROHIBITED from buying mortgages above a certain limit ($300,000 I think). As such you're always going to run into diversification issues with a cap like that. In addition, I know that every year, at the end of the year, there was a mad rush to push forth less than profitable deals, and credit questionable deals, in order to meet HUD goals. I have to say that HUD was a key driver of a lot of deals and well ... you know who set HUD goals. |
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| Shakka |
| quote: | Originally posted by josh4
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So what's your ing point? The very information you highlighted clearly states that blame is spread all over the place, which nobody, including myself, has denied. It has been you who has consistently, and rather persistently, insisted that the fallout from all of this somehow lies squarely and solely at the feet of the Bush administration. Sheesh. |
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| Shakka |
| quote: | Originally posted by occrider
Granted I didn't watch the entire video but I'm inclined to wonder what that 1/3 of the problem was. I know from a charter perspective both fannie and freddie were PROHIBITED from buying mortgages above a certain limit ($300,000 I think). As such you're always going to run into diversification issues with a cap like that. In addition, I know that every year, at the end of the year, there was a mad rush to push forth less than profitable deals, and credit questionable deals, in order to meet HUD goals. I have to say that HUD was a key driver of a lot of deals and well ... you know who set HUD goals. |
1/3 is kind of arbitrary. Probably more like 1/4 - 1/5 or so, depending on how I allocate and weight blame between irresponsible borrowers, irresponsible lenders, irresponsible Fed policy, irresponsible regulators and irresponsible profit driven Wall Street investment bankers...
btw, I think that limit originally stood at like $285K, which was then moved up, and then moved up more recently to $417K, and might've even been raised again since then, but my head has been spinning so much lately that I can't specifically recall! I bet you're glad you left that job though! |
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| Shakka |
He was potentially writing? Or was he actually writing? How does one potentially write? That's just silly!;) |
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