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Obama XI: Turn And Face The Strange

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Re: Obama XI: Turn And Face The Strange

trucker said:
It sure is. I believe, and hope these types of loans have stopped since the crisis occurred but they are still legal as far as I know.
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Nobody really does neg am loans anymore. Most states, and the feds to some degree, finally woke up to their inherent problems, well after the fact, again. We stayed out of them for the most part, but some lenders, er former lenders, feasted on them, e.g., WAMU, Wachovia, etc. and paid accordingly. And those risks were transmitted into the larger system.
 
Re: Obama XI: Turn And Face The Strange

Plante26 said:
....and Company. Read to your little heart's content.

Pretty good synopsis on the rabid defense of the status quo by the Dems. And we all know how that turned out.......
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Fair enough. They should have taken the heat and stood up for more oversight and regulation. Short term they would have incurred a lot of flak, but long term when they were proved right, they would have had the credibility to implement what needed to be done. See also: Iraq.

In every work of genius we recognize our own rejected thoughts: they come back to us with a certain alienated majesty. Great works of art have no more affecting lesson for us than this. They teach us to abide by our spontaneous impression with good-humored inflexibility then most when the whole cry of voices is on the other side. Else, to-morrow a stranger will say with masterly good sense precisely what we have thought and felt all the time, and we shall be forced to take with shame our own opinion from another. - Emerson
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Re: Obama XI: Turn And Face The Strange

ScoobyDoo said:
They're all complicit. But no one was more proud of the "Ownership Society" than GW. No one.

http://www.hud.gov/news/speeches/presremarks.cfm
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True. In all fairness, his Administration was attempting to reform Fannie/Freddie to make them fiscally responsible.....the attempts of which were stymied. Like I said previously, I'd have liked to have seen the Bush Administration be more aggressive in those efforts.
 
Re: Obama XI: Turn And Face The Strange

5mn_Major said:
...and that's the total extent of the role the Dems played in steamrollering the GOP and causing the eventual financial meltdown?
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No. In addition, a decade of pushing for loosening lending guidelines and lowering capital requirements enabled Fannie/Freddie to take on more risk than a taxpayer-supported GSE should have. When 90% of the secondary mortgage market is essentially controlled by the government, and the Democrats are not only blocking any reforms to unsound lending practices at these giants, they're all saying that everything is copasetic--"No problems here!" Yeah......I would pin much of the blame on the Dems. I only wish the voices of reason amongst the GOP (and a small number of Dems) would've pushed harder for the needed reforms.

Meanwhile, Fannie Mae and Freddie Mac are allowed to hold less capital than normal financial institutions: e.g., it is allowed to sell mortgage-backed securities with only half as much capital backing them up as would be required of other financial institutions. Very little has changed with these two giants; Wall Street is being fingered as the evil culprit when all they did was buy MBSs from Fannie/Freddie and repackage/resell them. The Dems are essentially going after the middle man; that is, the MBSs would have been worthless regardless of whether or not they were split up and resold. The bottom line is that when the borrowers defaulted on the mortgages, the paper became worthless.
 
Re: Obama XI: Turn And Face The Strange

Plante26 said:
No. In addition, a decade of pushing for loosening lending guidelines and lowering capital requirements enabled Fannie/Freddie to take on more risk than a taxpayer-supported GSE should have. When 90% of the secondary mortgage market is essentially controlled by the government, and the Democrats are not only blocking any reforms to unsound lending practices at these giants, they're all saying that everything is copasetic--"No problems here!" Yeah......I would pin much of the blame on the Dems. I only wish the voices of reason amongst the GOP (and a small number of Dems) would've pushed harder for the needed reforms.

Meanwhile, Fannie Mae and Freddie Mac are allowed to hold less capital than normal financial institutions: e.g., it is allowed to sell mortgage-backed securities with only half as much capital backing them up as would be required of other financial institutions. Very little has changed with these two giants; Wall Street is being fingered as the evil culprit when all they did was buy MBSs from Fannie/Freddie and repackage/resell them. The Dems are essentially going after the middle man; that is, the MBSs would have been worthless regardless of whether or not they were split up and resold. The bottom line is that when the borrowers defaulted on the mortgages, the paper became worthless.
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This article from the Wall Street Journal disagrees:

http://online.wsj.com/article/SB122411519496138607.html

Here's an excerpt:

Fannie and Freddie do share some of the blame for the mortgage and housing bust. They recorded a combined $14 billion of losses in the 12 months ended June 30, largely because they lowered their credit standards and purchased or guaranteed dubious home loans.

But "they weren't the leaders in lowering credit standards," said Andrew Davidson, a mortgage industry consultant in New York who has done work for Fannie and Freddie and also criticized them for taking excessive risks. He noted that the worst-performing mortgages are those that were originated by subprime lenders and packaged into securities sold by Wall Street, rather than by Fannie and Freddie. And while loans for low-income people -- programs championed by Democrats as well as many Republicans -- have contributed to Fannie and Freddie's losses, they aren't the biggest part of the problem.
 
Re: Obama XI: Turn And Face The Strange

Charlie Crist has scheduled a press conference for tomorrow afternoon, he's expected to announce whether he'll be losing to Ricky Rubio in the Republican primary or to Rubio in the general election as an independent.
 
Re: Obama XI: Turn And Face The Strange

Plante26 said:
No. In addition, a decade of pushing for loosening lending guidelines and lowering capital requirements enabled Fannie/Freddie to take on more risk than a taxpayer-supported GSE should have.

The Dems are essentially going after the middle man; that is, the MBSs would have been worthless regardless of whether or not they were split up and resold. The bottom line is that when the borrowers defaulted on the mortgages, the paper became worthless.
Click to expand...

The GOP had the presidency, tightly controlled both the house and the senate and led a vast array of relevant state agencies such as the fed and treasury...and supposedly a minority party shut them down? Sorry...nobody's buying that one.

In the end, some would debate that the Bush govt left conservative doctrine. But as conservatives usually refuse to sign up GOP for blame for what happened when they controlled 95+% of govt levers and instead shift it to an outsider party...one can only reach the conclusion that conservatives were quite content with the GOP's conduct. The episode and resulting attempts at blame deflection makes one doubt that conservatives can be trusted to effectively manage the country's problems again.
 
Re: Obama XI: Turn And Face The Strange

trucker said:
This article from the Wall Street Journal disagrees:

http://online.wsj.com/article/SB122411519496138607.html

Here's an excerpt:

Fannie and Freddie do share some of the blame for the mortgage and housing bust. They recorded a combined $14 billion of losses in the 12 months ended June 30, largely because they lowered their credit standards and purchased or guaranteed dubious home loans.

But "they weren't the leaders in lowering credit standards," said Andrew Davidson, a mortgage industry consultant in New York who has done work for Fannie and Freddie and also criticized them for taking excessive risks. He noted that the worst-performing mortgages are those that were originated by subprime lenders and packaged into securities sold by Wall Street, rather than by Fannie and Freddie. And while loans for low-income people -- programs championed by Democrats as well as many Republicans -- have contributed to Fannie and Freddie's losses, they aren't the biggest part of the problem.
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I think blaming GSEs for the mortgage crisis is the same strawman argument some use for CRA, subprime, etc. The problem they had was they were/are quasi-public companies with shareholders who demanded certain returns similar to what Countrywide, New Century, etc. were offering. So, instead of just guaranteeing loans to middle-America, they started playing hedge fund, and actively traded MBS, CDOs, etc. in addition to lowering their standards to keep up with the private players in the secondary markets. To keep their market alive they had to offer higher rates, and that meant buying/trading riskier loans and securities.
 
Re: Obama XI: Turn And Face The Strange

5mn_Major said:
The GOP had the presidency, tightly controlled both the house and the senate and led a vast array of relevant state agencies such as the fed and treasury...and supposedly a minority party shut them down? Sorry...nobody's buying that one.
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So THAT'S how the dems managed to get exactly what they wanted done on health care. I was wondering - thanks for clearing that up.
 
Re: Obama XI: Turn And Face The Strange

The Democrats in Congress couldn't even hold a hearing without the GOP turning off the lights and cutting off the microphones, and we're supposed to believe they were the all-powerful beings behind the bank failure?

Riiiiight.
 
Re: Obama XI: Turn And Face The Strange

Priceless said:
The Democrats in Congress couldn't even hold a hearing without the GOP turning off the lights and cutting off the microphones, and we're supposed to believe they were the all-powerful beings behind the bank failure?

Riiiiight.
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Are you SURE you want to talk about majorities who "turn off the lights and cut off the microphones?" Are you SURE that's the road you want to go down, Your Rotundity?
 
Re: Obama XI: Turn And Face The Strange

Plante26 said:
True. In all fairness, his Administration was attempting to reform Fannie/Freddie to make them fiscally responsible.....the attempts of which were stymied. Like I said previously, I'd have liked to have seen the Bush Administration be more aggressive in those efforts.
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Correct me if I'm wrong, but wasn't Bush's 'reform' solely to do with the way Fannie and Freddie accounting practices, and little at all to do with the way they conducted their mortgage business?
 
Re: Obama XI: Turn And Face The Strange

Plante26 said:
Wall Street is being fingered as the evil culprit when all they did was buy MBSs from Fannie/Freddie and repackage/resell them. The Dems are essentially going after the middle man; that is, the MBSs would have been worthless regardless of whether or not they were split up and resold. The bottom line is that when the borrowers defaulted on the mortgages, the paper became worthless.
Click to expand...

Which completely disregards the fact that if Wall Street hadn't engaged in wholesale speculation with those repackaged MBS's, split them up and then packaged them with nothing else of any value in them, leveraged themselves to the hilt to buy them, and then leveraged some more when they purchased over $50 trillion worth of CDS's on those MBS's, which no one would be able to pay off if and when those MBS's fell in value, this crisis never would have reached the level that it did.

Sure, the banks and Wall Street would have lost money, but no where near the amounts that woul put our very economy on the verge of collapse.

They gambled with other people's money, and when they lost, they came crying for the government to protect them.
 
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