|
nathanm
|
 |
« Reply #1230 on: November 19, 2011, 01:38:33 am » |
|
Our "collapse" was not caused by the banks themselves. It was caused by an influx of cheap money. That money came from a single place. It came from a single policy. Banks don't make it their business to loan money to people who can't pay it back UNLESS they have a backer. All of a sudden in the 90s, tens of millions of people who could not afford a home, suddenly were golden! Tens of millions more who already owned a home were gods. The $50,000 a year that used to afford a family an apartment or a small 2 bedroom house now qualified them for a $250,000 home. Why? Because the federal government became co-signer. In 1992 changes to the Community Reinvestment Act required Fanny May and Freddy Mac to purchase low-income high-risk loans. Because the banks viewed these entities as "government run," they were happy to process and sell as many mortgages as possible to them. Fanny and Freddy were willing to buy just about anything, because as part of their role they were required to devote their lending practices to affordable housing, rather than realistic risk assessment. When some of those loans failed, as expected, Freddy and Fanny were there to clean up the mess and shovel it under the carpet. Hell the economy was flush with this cheap money and jobs were plentiful, the gamble was worth it! Or was it?
In case anyone was wondering, this is complete and unmitigated horse puckey completely belied by the facts. However, it's the best the right-wing spinmeisters have come up with, so they're running with it like a German Shepherd after a crackhead. To do it, they redefined the word "subprime" to include mortgages that have been considered conforming since Fannie and Freddie were created. Simple question number one: If the CRA changes were made in 1992, why is it that the mortgage implosion waited nearly 20 years to arrive, even with intervening housing downturns? (One of which was actually a trial run of what actually happened in this last go-round) Simple question number two: If Fannie and Freddie were the source of the problem, why is it that they securitized fewer mortgages than the private issuers during the years in which most of the losses are occurring? (Usually it runs closer to 70% GSE) A few facts: Federal Reserve Board data show that: More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions. Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year. Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that's being lambasted by conservative critics. Read more: http://www.mcclatchydc.com/2008/10/12/53802/private-sector-loans-not-fannie.html#ixzz1e8PA8T9yIt really is amazing that you guys have managed to figure out a way to spin a boom and bust that both began and busted on your guy's watch, much of the time with your party controlling Congress, as the fault of liberals and the poor. It's freakin' amazing how the people with the least power in reality are the ones with all the power in your imagination. I know, the beatings will continue until morale improves. |
|
|
|
« Last Edit: November 19, 2011, 01:40:58 am by nathanm »
|
Logged
|
"Labor is prior to and independent of capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration" --Abraham Lincoln
|
|
|
|
we vs us
|
|
« Reply #1231 on: November 19, 2011, 07:22:20 am » |
|
It's nearly impossible to beat the fake narrative that Gassy loves to spout. Why? Two reasons, IMO: 1) the Obama admin never really put together a Pecora-style commission to publicly investigate the causes of the crash. So it's easy to fill the factual void with bullpucky. And 2) the underlying narrative pieces never get old, because they're used in every message the GOP sends out. (a) A corrupt government agency or agencies (b) colluded with the (c) greedy and indolent poor to (d)force the (e) innocent capitalists to do wrong.
|
|
|
|
|
Logged
|
|
|
|
|
|
|
Conan71
|
|
« Reply #1233 on: November 19, 2011, 10:36:46 am » |
|
In case anyone was wondering, this is complete and unmitigated horse puckey completely belied by the facts. However, it's the best the right-wing spinmeisters have come up with, so they're running with it like a German Shepherd after a crackhead. To do it, they redefined the word "subprime" to include mortgages that have been considered conforming since Fannie and Freddie were created.
Simple question number one: If the CRA changes were made in 1992, why is it that the mortgage implosion waited nearly 20 years to arrive, even with intervening housing downturns? (One of which was actually a trial run of what actually happened in this last go-round)
Simple question number two: If Fannie and Freddie were the source of the problem, why is it that they securitized fewer mortgages than the private issuers during the years in which most of the losses are occurring? (Usually it runs closer to 70% GSE)
A few facts:
It really is amazing that you guys have managed to figure out a way to spin a boom and bust that both began and busted on your guy's watch, much of the time with your party controlling Congress, as the fault of liberals and the poor. It's freakin' amazing how the people with the least power in reality are the ones with all the power in your imagination. I know, the beatings will continue until morale improves.
I like what you did here, Nate. I bet you've always credited Clinton with the robust economy and relative fiscal sanity of the 1990's and have never paid an ounce of credit to the GOP-controlled house and Senate from 1994 through 2000.
Actually his facts are, well, facts. Just because you don't like the facts or think he's a partisan hack doesn't change the evidence on the sequence of events that ultimately caused this implosion. Personally, I don't see a partisan spin unless you think the premise of government picking winners and losers and agreeing to be the silent co-signor on hundreds of thousands to millions of risky home loans comes from GOPtalkingpointscentral.com. Sorry I won't provide you with the secret web address where we get our talking points, oh crap, already did. IMO, Democrats and Republicans share equal blame for what transpired. Their campaigns were funded by banks, developers, builders, suppliers, and all sorts of people who benefited from a housing boom. Lower income people who didn't contribute to campaigns monetarily, came through with votes for those who helped make the American dream of owning a home they couldn't afford a reality. FWIW, this bust didn't wait 20 years. There were cracks in the veneer as early as 2000 and 2001. Bush and the GOP stuck band aids on it instead of facing the problem head-on which could have prevented the huge collapse of 2008, but no one wanted to cool down the housing market as it's pretty obvious it's a great driver in the economy. |
|
|
|
|
Logged
|
"It has been said that politics is the second oldest profession. I have learned that it bears a striking resemblance to the first” -Ronald Reagan
|
|
|
|
nathanm
|
|
« Reply #1234 on: November 19, 2011, 11:25:04 am » |
|
Once again, it's not a fact. It's made up BS. Over 80% of the subprime loans in 2006 were made by firms not subject to the CRA. Somewhere around zero percent of those were securitized by Fannie and Freddie.
And yes, 2000 or 2001 was the trial run I was talking about. Subprime blew up big. Again, almost exclusively in companies not covered by the CRA. Why does this keep happening? There's lots of money to be made when your interest rate spread is 2000 basis points.
As I said before, it's plainly obvious if you bother to look that the CRA explanation simply doesn't hold water. It's a cover to excuse regulatory failures that blew up under Bush. Not that you really care, but I do actually think that Clinton just got lucky in many ways on this. The regulatory agencies were just as screwed up past about '95 or '96 (largely due to the culture of deregulation that infected both Democrats and Republicans), but we hadn't had the time to build up such a giant bubble. It definitely could have happened on his watch, but it didn't.
You really should consider reading the FCIC report and its dissents.
Also, if poor people are so powerful, why is it that it's the other end of the income scale that almost always gets its way?
|
|
|
|
|
Logged
|
"Labor is prior to and independent of capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration" --Abraham Lincoln
|
|
|
|
guido911
|
|
« Reply #1235 on: November 19, 2011, 01:21:07 pm » |
|
 It's from our military, so it means more... |
|
|
|
|
Logged
|
Someone get Hoss a pacifier.
|
|
|
|
we vs us
|
|
« Reply #1236 on: November 19, 2011, 01:29:08 pm » |
|
|
|
|
|
|
Logged
|
|
|
|
|
guido911
|
|
« Reply #1237 on: November 19, 2011, 01:33:59 pm » |
|
That's what I'm talking about.... |
|
|
|
|
Logged
|
Someone get Hoss a pacifier.
|
|
|
|
we vs us
|
|
« Reply #1238 on: November 19, 2011, 02:27:32 pm » |
|
Starting to look a little like this:  |
|
|
|
|
Logged
|
|
|
|
|
Gaspar
|
|
« Reply #1239 on: November 19, 2011, 02:27:41 pm » |
|
You are simply wrong, but you know that. Nothing I have said is false or undocumented. 17 warnings were issued to congress, to presidents, and even by presidents predicting the collapse. It was such a powerfull vote buying tool for politicians, that they were simply more comfortable keeping their heads in the sand.
|
|
|
|
|
Logged
|
When attacked by a mob of clowns, always go for the juggler.
|
|
|
|
nathanm
|
|
« Reply #1240 on: November 19, 2011, 02:30:30 pm » |
|
You are simply wrong, but you know that. Nothing I have said is false or undocumented.
I know no such thing. I, in fact, know the opposite to be true through months of research and thought. 17 warnings were issued to congress, to presidents, and even by presidents predicting the collapse. It was such a powerfull vote buying tool for politicians, that they were simply more comfortable keeping their heads in the sand.
Now you're changing the subject. Nice one. Anyway, here's my feel-good story for the day. A shocking display of sanity: http://www.jsonline.com/news/milwaukee/flynn-says-protesters-craved-drama-of-arrests-t5341rt-134132698.html |
|
|
|
|
Logged
|
"Labor is prior to and independent of capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration" --Abraham Lincoln
|
|
|
|
patric
|
|
« Reply #1241 on: November 19, 2011, 02:40:57 pm » |
|
It's from our military, so it means more... The tragic part is they still have the mindset of an occupying army when they get back stateside and put on the other uniform. |
|
|
|
|
Logged
|
"Tulsa will lay off police and firemen before we will cut back on unnecessarily wasteful streetlights." -- March 18, 2009 TulsaNow Forum
|
|
|
|
patric
|
|
« Reply #1242 on: November 19, 2011, 02:46:57 pm » |
|
It's from our military, so it means more...
That cuts both ways: Marines furious over police attack on "brother" at Occupy Oaklandhttp://rt.com/usa/news/marine-oakland-reddit-olsen-923/and of course: [youtube]http://www.youtube.com/watch?v=WmEHcOc0Sys[/youtube] |
|
|
|
|
Logged
|
"Tulsa will lay off police and firemen before we will cut back on unnecessarily wasteful streetlights." -- March 18, 2009 TulsaNow Forum
|
|
|
|
|
|
guido911
|
|
« Reply #1244 on: November 19, 2011, 03:41:40 pm » |
|
Welcome to getting my point... |
|
|
|
|
Logged
|
Someone get Hoss a pacifier.
|
|
|
|
