The Fundamentals of are economy are STRONG?????

[Gaspar]

quote:Originally posted by Breadburner

You don't lose anything if you don't sell.....Big deal ya lost some dough on paper....

Correct, and I don't intend to sell for a long long time.

[waterboy]

quote:Originally posted by we vs us

quote:Originally posted by Gaspar

I lost 25%.  I'm going to take it out on those who created the regulations forcing banks and lenders to give money to people who had no means of paying it back, and those who pose any new regulation.

You keep saying this but I have no idea what you mean.  Who forced whom to lend to who again?

Good insight.

Anybody know the % of those $0 down bad loans that are for second and third vacation homes? It has been implied on Fox and CNBC that many of those loans to wealthy folks are among the ones packaged in with Johnny from McDonalds. Not only their ability to pay but the valuation of the properties is in question. They are walking off from their debt as well.

And every channel of news that I watch across the political spectrum considers the lack of oversight of regulators to be paramount in the failures.

I feel vindicated, since I'm just one of the simpletons.

[FOTD]

"In general, the art of government consists of taking as much money as possible from one class of citizens to give to another."
Voltaire

Otherwise known as: Republicanism

[we vs us]

quote:Originally posted by Gaspar

quote:Originally posted by we vs us

quote:Originally posted by Gaspar

I lost 25%.  I'm going to take it out on those who created the regulations forcing banks and lenders to give money to people who had no means of paying it back, and those who pose any new regulation.

You keep saying this but I have no idea what you mean.  Who forced whom to lend to who again?

Once upon a time. . .

Fanny and Freddy give Johnny who works at McDonalds a mortgage for a $200,000 house.  Now there is no way that Johnny could afford a mortgage of any size but because Johnny meets all of the criteria set forth by the Fanny and Freddy to grant loans to those who can't afford them they sign the papers and smile and shake.  

You see Freddy and Fanny are going to package Johnny's mortgage and exchange it for a government security.  Now if johnny has a college education and a good job, but still has no cash.  Fanny and Freddy are going to package Johnny's mortgage into a bond and sell it for profit, and they are actually going to market it that way.  What they are NOT going to market is the fact that Johnny has never proven any track record of paying debt on even the basic rudimentary level.  In fact Johnny has racked up quite a credit card debt, and as soon as he is granted this mortgage, he is going to be showered with more credit offers.

Now why can Freddy and Fanny operate this way and other banks usually will not shoulder the risk?

Because TA-DA Fanny and Freddy Bonds are guaranteed by the good folks at the federal government.  Fanny's and Freddy's operations are regulated and subject to congressional oversight (oxymoron the term congressional oversight, like getting a wolverine to watch your baby).

The End (no really The End)

I think you conveniently left out a step or two.  F and F buy loans that are already made, securitize them, and sell them off to the Lehmans of the world.  They don't make the loans themselves.  Companies like Countrywide (RIP) originated the dumb loans to Johnny who worked at McDonald's, F and F just helped that dumb mortgage and hundreds of thousands like them to become the CDOs that are exploding in the basements of all the major investment houses around the world.  

I see that you're trying kinda of desperately to peg this on government regulations, or a Democratic congress, or HUD, or Clinton, anyone that isn't private business or a Republican, but it just isn't gonna happen.  Private business went after these awful mortgages with gusto; they demanded them as much as any individual homeowner did. Republican led government turned a blind eye to an entirely new and entirely unregulated form of security market (the CDO market)into which several $T were pumped over the last decade or so.  Before that, the market didn't even exist.  

But if there's another way you can pin this on somebody other than a Republican administration or the financial industry, I'd love to see you work it.

[RecycleMichael]

"Blessed are the young for they shall inherit the national debt."

Herbert Hoover

[rwarn17588]

quote:Originally posted by Gaspar

.

The administration's decision to bail out AIG is foolish, not to mention illegal.  

Illegal? How?

And, if so, why don't you call the cops?

[Conan71]

quote:Originally posted by brunoflipper

quote:Originally posted by Conan71

If a business owner is flush with cash...

i was flush with cash until three days ago...
despite being broadly diversified with the most "ideal portfolio"  and "safest bet for your age"...

i lost 35% of my net worth... ouch...

looks like ten more years until i retire...

but everything is rainbows and tomorrow is a new day

oh well, call me a vindictive SOB but i'm going to take it out on the boys in charge...

Your cash didn't evaporate unless you spent it.  Not the first time in the last two decades people have lost 35% of their net worth.  Many people did worse in the dot bomb bubble. Don't sell and you've lost nothing.

[Gaspar]

quote:Originally posted by we vs us

quote:Originally posted by Gaspar

quote:Originally posted by we vs us

quote:Originally posted by Gaspar

I lost 25%.  I'm going to take it out on those who created the regulations forcing banks and lenders to give money to people who had no means of paying it back, and those who pose any new regulation.

You keep saying this but I have no idea what you mean.  Who forced whom to lend to who again?

Once upon a time. . .

Fanny and Freddy give Johnny who works at McDonalds a mortgage for a $200,000 house.  Now there is no way that Johnny could afford a mortgage of any size but because Johnny meets all of the criteria set forth by the Fanny and Freddy to grant loans to those who can't afford them they sign the papers and smile and shake.  

You see Freddy and Fanny are going to package Johnny's mortgage and exchange it for a government security.  Now if johnny has a college education and a good job, but still has no cash.  Fanny and Freddy are going to package Johnny's mortgage into a bond and sell it for profit, and they are actually going to market it that way.  What they are NOT going to market is the fact that Johnny has never proven any track record of paying debt on even the basic rudimentary level.  In fact Johnny has racked up quite a credit card debt, and as soon as he is granted this mortgage, he is going to be showered with more credit offers.

Now why can Freddy and Fanny operate this way and other banks usually will not shoulder the risk?

Because TA-DA Fanny and Freddy Bonds are guaranteed by the good folks at the federal government.  Fanny's and Freddy's operations are regulated and subject to congressional oversight (oxymoron the term congressional oversight, like getting a wolverine to watch your baby).

The End (no really The End)

I think you conveniently left out a step or two.  F and F buy loans that are already made, securitize them, and sell them off to the Lehmans of the world.  They don't make the loans themselves.  Companies like Countrywide (RIP) originated the dumb loans to Johnny who worked at McDonald's, F and F just helped that dumb mortgage and hundreds of thousands like them to become the CDOs that are exploding in the basements of all the major investment houses around the world.  

I see that you're trying kinda of desperately to peg this on government regulations, or a Democratic congress, or HUD, or Clinton, anyone that isn't private business or a Republican, but it just isn't gonna happen.  Private business went after these awful mortgages with gusto; they demanded them as much as any individual homeowner did. Republican led government turned a blind eye to an entirely new and entirely unregulated form of security market (the CDO market)into which several $T were pumped over the last decade or so.  Before that, the market didn't even exist.  

But if there's another way you can pin this on somebody other than a Republican administration or the financial industry, I'd love to see you work it.

Oops! I set that little trap well.  Hoping someone would fall in.

You see Once upon a time there was this piece of legislation called the Community Reinvestment Act.  It re-energized F&F to the tune of your Trillions of dollars worth of loans.

Lets see what that bill was?  Oh yeah.

It was nice and friendly back in 1977 when it was passed, but then came the horny ogre and the evil witch.

The Clinton Administration's regulatory revisions with an effective starting date of January 31, 1995 were credited with substantially increasing the number and aggregate amount of loans to small businesses and to low- and moderate-income borrowers for home loans. Part of the increase in home loans was due to increased efficiency and the genesis of lenders, like Countrywide, that do not mitigate loan risk with savings deposits as do traditional banks using the new subprime authorization. This is known as the secondary market for mortgage loans. The revisions allowed the securitization of CRA loans containing subprime mortgages. The first public securitization of CRA loans started in 1997 by Bear Stearns. The number of CRA mortgage loans increased by 39 percent between 1993 and 1998, while other loans increased by only 17 percent.

The market was suddenly heavy on junk loans and realistic lending became a thing of the past.

The End.

P.S. there are two more traps here.

[waterboy]

A tip for the unsuspecting. Don't ask for a source.

Also don't press him on the resulting benefits of the change in lending practices/policies during that time, their genesis and their tacit approval by Republican dominated congress starting in 1994. Finally, don't even imply that it was a Republican congress and administration during the last 8 years that kept rubber stamping the whole process because it so benefitted their base. Its the new Republicanism applied to oversight: Don't Ask, Don't Look, Don't Listen and Damn Sure Don't Take Responsibility.

[Conan71]

quote:Originally posted by waterboy

A tip for the unsuspecting. Don't ask for a source.

Also don't press him on the resulting benefits of the change in lending practices/policies during that time, their genesis and their tacit approval by Republican dominated congress starting in 1994. Finally, don't even imply that it was a Republican congress and administration during the last 8 years that kept rubber stamping the whole process because it so benefitted their base. Its the new Republicanism applied to oversight: Don't Ask, Don't Look, Don't Listen and Damn Sure Don't Take Responsibility.

Waterboy, "passed buck" thinking is sinking this nation.  

It's not a GOP or DEM issue near as much as a culture of corruption and special interests in DC.  As long as we allow the chairman of our Senate Banking Committee to accept money from the companies and industries he is charged with "regulating" we are going to reap what we sow.  If it were still a GOP majority, I'd say the same exact thing.  This stinks.  Dodd is sitting around blaming the Bush admin.  The Admin is blaming Congress.  In this election season, no one wants to lay the blame on greed and corruption which is the real truth of the matter.

As I predicted after the changing of the guard in 2006, and so many of the Democrats on here were squealing about Abramoff and big contributions going to GOP members, the tide of contributions would shift to the majority party in the Senate and HOR.  They did.

Democrats were going to stem corruption and reverse all the havoc wrought by the GOP the previous 12 years.

Remember Pelosi's "First 100 hours".

Chirp...chirp....

Business as usual in DC.  Nothing has changed just the party label in charge.  Different players, same corrupt patterns.

[we vs us]

quote:Originally posted by Gaspar
Oops! I set that little trap well.  Hoping someone would fall in.

You see Once upon a time there was this piece of legislation called the Community Reinvestment Act.  It re-energized F&F to the tune of your Trillions of dollars worth of loans.

Lets see what that bill was?  Oh yeah.

It was nice and friendly back in 1977 when it was passed, but then came the horny ogre and the evil witch.

The Clinton Administration's regulatory revisions with an effective starting date of January 31, 1995 were credited with substantially increasing the number and aggregate amount of loans to small businesses and to low- and moderate-income borrowers for home loans. Part of the increase in home loans was due to increased efficiency and the genesis of lenders, like Countrywide, that do not mitigate loan risk with savings deposits as do traditional banks using the new subprime authorization. This is known as the secondary market for mortgage loans. The revisions allowed the securitization of CRA loans containing subprime mortgages. The first public securitization of CRA loans started in 1997 by Bear Stearns. The number of CRA mortgage loans increased by 39 percent between 1993 and 1998, while other loans increased by only 17 percent.

The market was suddenly heavy on junk loans and realistic lending became a thing of the past.

The End.

P.S. there are two more traps here.

I love the way you have conversations with people, Gassy.  Setting rhetorical traps is a really effective way to, you know, win friends and influence people. It also increases in general the civility of the discussion, wouldn't you agree?

But I did find an interesting article in the Washington Post from January of this year that does in fact trace HUD's involvement in encouraging low and moderate income loans from Clinton establishing the initiative in '95

quote: Since HUD became their regulator in 1992, Fannie and Freddie each year are supposed to buy a portion of "affordable" mortgages made to underserved borrowers. Every four years, HUD reviews the goals to adapt to market changes.  

In 1995, President Bill Clinton's HUD agreed to let Fannie and Freddie get affordable-housing credit for buying subprime securities that included loans to low-income borrowers. The idea was that subprime lending benefited many borrowers who did not qualify for conventional loans. HUD expected that Freddie and Fannie would impose their high lending standards on subprime lenders.

However, by 2000, " . . . as HUD revisited its affordable-housing goals, the housing market had shifted."

quote: With escalating home prices, subprime loans were more popular. Consumer advocates warned that lenders were trapping borrowers with low "teaser" interest rates and ignoring borrowers' qualifications.  

HUD restricted Freddie and Fannie, saying it would not credit them for loans they purchased that had abusively high costs or that were granted without regard to the borrower's ability to repay. Freddie and Fannie adopted policies not to buy some high-cost loans.

The problems start to mount, and even as early as 2001, HUD's own researchers start to warn the incoming Bush administration about high foreclosure rates among subprime loans.

quote: But by 2004, when HUD next revised the goals, Freddie and Fannie's purchases of subprime-backed securities had risen tenfold. Foreclosure rates also were rising.  

That year, President Bush's HUD ratcheted up the main affordable-housing goal over the next four years, from 50 percent to 56 percent. John C. Weicher, then an assistant HUD secretary, said the institutions lagged behind even the private market and "must do more."  

For Wall Street, high profits could be made from securities backed by subprime loans. Fannie and Freddie targeted the least-risky loans. Still, their purchases provided more cash for a larger subprime market.  

"That was a huge, huge mistake," said Patricia McCoy, who teaches securities law at the University of Connecticut.

"That just pumped more capital into a very unregulated market that has turned out to be a disaster."

Though if we're talking mea culpas, it's worth noting that at least Clinton's guys can admit mistakes with hindsight, and shoulder some of the blame:

quote: William C. Apgar Jr., who was an assistant HUD secretary under Clinton, said he regrets allowing the companies to count subprime securities as affordable.  

"It was a mistake," he said. "In hindsight, I would have done it differently."  

Allen Fishbein, who was Apgar's adviser at HUD and is now at the Consumer Federation of America, said the agency failed to use its regulatory power by refusing to credit Fannie and Freddie for loans that were "contrary to good lending practices."  

"They chose not to put the brakes on this dangerous lending when they could have," Fishbein said.

And Gassy, I could care less about your other traps.  And neither could he.

[we vs us]

quote:Originally posted by Conan71

quote:Originally posted by waterboy

A tip for the unsuspecting. Don't ask for a source.

Also don't press him on the resulting benefits of the change in lending practices/policies during that time, their genesis and their tacit approval by Republican dominated congress starting in 1994. Finally, don't even imply that it was a Republican congress and administration during the last 8 years that kept rubber stamping the whole process because it so benefitted their base. Its the new Republicanism applied to oversight: Don't Ask, Don't Look, Don't Listen and Damn Sure Don't Take Responsibility.

Waterboy, "passed buck" thinking is sinking this nation.  

It's not a GOP or DEM issue near as much as a culture of corruption and special interests in DC.  As long as we allow the chairman of our Senate Banking Committee to accept money from the companies and industries he is charged with "regulating" we are going to reap what we sow.  If it were still a GOP majority, I'd say the same exact thing.  This stinks.  Dodd is sitting around blaming the Bush admin.  The Admin is blaming Congress.  In this election season, no one wants to lay the blame on greed and corruption which is the real truth of the matter.

As I predicted after the changing of the guard in 2006, and so many of the Democrats on here were squealing about Abramoff and big contributions going to GOP members, the tide of contributions would shift to the majority party in the Senate and HOR.  They did.

Democrats were going to stem corruption and reverse all the havoc wrought by the GOP the previous 12 years.

Remember Pelosi's "First 100 hours".

Chirp...chirp....

Business as usual in DC.  Nothing has changed just the party label in charge.  Different players, same corrupt patterns.

If we're bipartisaning here, have any GOPers you'd like tossed out, too?  You're focused in like a laser on guys who've had power for the last two years, or who had power almost a decade ago.  Surely somewhere in the last 8 years -- as this problem was hitting critical mass -- someone let their hand drift from the the wheel . . .?

[Gaspar]

You are correct in your statement

quote:The problems start to mount, and even as early as 2001, HUD's own researchers start to warn the incoming Bush administration about high foreclosure rates among subprime loans.

You are also correct that action should have been taken earlier, and the Bush administration is guilty for waiting until it was too late.

There was however an attempt to take action in 2005/2006 that fell on the deaf ears of Congress.

I believe that this was the speech that some sick old white guy gave to congress in 2006:

I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.

I believe that Barney's (not the dinosaur) response was that there was nothing wrong with Freddy or Fanny, and Pelosi and Reed supported this stance.

Congressional record is a beyotch.

[Gaspar]

Good news Bruno.  You don't have to work another 10 years.

Retirement party back on.