FACTS on Dubya's great recession

I highly doubt it.

 

No he is saying practice a little brevity and try being more concise, your post are a convoluted mess. Make A point, give your opinion and provide a cite to back it up.

 

You can’t get a loan for a house in a bubble, to even build the new house, without unsafe and unsound lack of capital requirements.

This is a Democrat stronghold, where my elementary school went from 0 to 99.9% colored in my lifetime, I used to howl at the moon the woods that became her hood:

"WILLIS: A truck driver, Bernita saved up $14,000 to close on a six-bedroom house. Purchase price -- $180 grand. She thought she got a deal on her first loan, a two-year adjustable rate mortgage at 8.375 percent. Her monthly payments -- $1,200." http://transcripts.cnn.com/TRANSCRIPTS/0803/28/siu.01.html

She was babysitting a housing glut. What in the name of Odin does a truck driver need with a six-bedroom house?

Culpability? Try everyone, then get back with me.

 

What I've said is that the housing bubble did not exist until Bush was in office, and that it grew to its absurd levels and started imploding while Bush was in office and the Republicans controlled Congress. Which is exactly true, as proved by another chart that has been posted in this thread multiple times:



The chart shows that while housing prices began rising in the late 1990s, before 2001 they were well within historical norms for fluctuations. There was no housing bubble when Clinton was president.

Yes, I know that Clinton signed off on the bill presented to him by the Republican Congress which repealed certain Glass-Stegall provisions. And I know that some people say this was a factor in the housing bubble, though others dispute that. And you can say that housing initiatives and the CRA and the HUD and the Fed and fractional lending and the invention of lending and money itself were factors.

But there was no bubble when Clinton was president. There was no indication of one or other factors suggesting the need to take actions to reign in mortgage lending activity.

If the partial repeal of Glass-Seagall was such a big deal, Bush and the Republicans had full control of the Govt for years, and they could have re-instituted those regulations when they saw housing prices skyrocketing well beyond historic norms. But they didn't do it. Why? Because Bush liked bragging about how successful his "ownership society" programs were, and he and the Republicans shared a belief that government regulation is bad, because businesses can regulate themselves.

Which we just recently saw with my post on the guy Bush appointed to "regulate" the banking industry, a guy who had spent the last 12 years as a bankers' lobbyist.

Tell me what did Bush do to stop them when housing prices soared to absurd levels? Tell me, what could Clinton do about it in 2005?

Yeah, there is plenty of blame to go around. People who have gold fever don't act rationally. But I reject the false equivalency conservatives try to make on attributing blame when it was the Republicans who controlled Congress from 1995 and controlled the Administration from 2001 through the peak of the housing bubble in 2006 when it began imploding.

You and your fellow partisan nutjobs want to blame Clinton, who wasn't in office for 8 years, and the gay guy in the House, who didn't have the power to get a vote on a bill on chewing bubble gum, for events that wholly occurred during the time the Republicans controlled the House, the Senate, the White House and Administration, and a majority of the Supreme Court, for that matter.

 

Even after empirical evidence proves you are leaving out one of the principle instigators, Clinton, you just keep lying on, and on, and on. It is obvious you get your lack of intelligence from left wing sites instead of using fact. Here is one more fact for you to ignore.

The inflationary line leading to the housing boom started in 1996 or 97 depending on the who makes the graph. Clinton is very much the instigator and Bush was a willing participant.

So get off your high horse and at least try to understand reality instead of believing propaganda from the left.

 

Would you really expect firm banking regulation and oversight by the guy Bush appointed as head of the agency responsible for bank regulation and oversight, who had spent his previous 12 years as a DC banker lobbyist?

What a surprise.

Fair enough. But we know many people are not sophisticated or forward thinking and will get into trouble with bad credit decisions. So it really doesn't make sense to have a system where people are rewarded for pushing things like no money down, no income verification, ARM or "teaser" rate mortgages on people who shouldn't have them, does it?

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I guess he should be believing propaganda from the right?


[video=youtube;hDou01X5d28]https://www.youtube.com/watch?v=hDou01X5d28[/video]

O'REILLY: And all of these ideologues, it gets me angry. I do talk radio and most of talk radio is conservative-dominated ideologues, Kool-Aid-drinking idiots -- idiots -- screaming at you, "This is socialism," this is this, this is that, "It's Clinton's fault." "It's Clinton's fault." "It's Clinton's fault"? Clinton hasn't been in office in eight years.

It's Bush's fault. It happened on Bush's watch. You know, Bush could've prevented this. He could've gone in easily and said, "Merrill Lynch is dealing in bad paper." He could have said that. "Merrill Lynch is dealing in bad paper." "Fannie Mae, Freddie Mac -- they're dealing in bad paper," so you, the investor, don't invest in those companies. You think they would have continued to deal in bad paper?

LIS WIEHL (co-host): I don't think so.

O'REILLY: No, they would not. One time, he had to say that. And he'd probably didn't even have to say it. He could've called them up and say, "You're dealing in bad paper, and if you don't stop it, I'm going out and telling everybody." No.

No, because he didn't want to get involved, didn't want to interfere. He didn't interfere when the oil speculators ran up the price of oil. He let them do it. He didn't come out and say, "Hey, this is bull. This is not supply and demand. This is a bunch of guys sitting there, driving it up, and you got to pay the price. That's wrong."

So, you got to believe Bush when he tells you it's bad, because Bush has just sat around and not done anything. Therefore, he has a 19-percent approval rating now. He's a decent man, ladies and gentlemen, but his last term has been a disaster. First term, I don't have a problem -- think he did a good job. Last term, my God, what happened?

But let's get back to this talk radio stuff. These idiots, I mean, they're misleading you. They're lying to you. They're rich, these guys -- big cigars, all of that. "Yeah. Oh yeah, my private jet." And they're saying, "Oh no, no bailout. Uh-uh. No way." Hey, you are gonna get it, not them. That foreign investment pulls out, we are toast.

And they'll pull out, if this bailout doesn't happen. Are you getting the message here? Walk away from these liars -- these right-wing liars. Walk away from them. They're not looking out for you.

http://mediamatters.org/print/resea...n-rep-frank-sen-dodd-i-swear-to-god-if/145233

There was no housing bubble when Clinton was president.

 

Nope! I don't accept left wing or right wing propaganda. I prefer to check out unadulterated and factual studies based on empirical evidence. But I understand, you have to cheer for the team. Have at it. Trying to prove O'Reilly is a stooge is preaching to the choir.

No, don't listen to any propaganda, look at the studies using empirical. The start of the inflationary swing in housing stared in 1996/67. The balloon burst under Bush. That is a fact you left wingers overlook on a regular basis. You seem to think you are a smart person, so look at the graph in this link, look over on the bottom line until you get to 1996. Follow the line up and you will see the beginning of the price advance. It is just like left wing extremists not to notice the start of the upward swing. That's ok! It only shows the stupidity of the left wing extremist and gives me my daily laugh at partisanship.

You haven't change an iota in the last year or so I was not using this forum. You are still a left wing stooge.

<src>http://www.jparsons.net/housingbubble/united_states.png</>

 

OK. You spoke of propaganda from the left so I thought you were making a distinction.

Housing prices historically fluctuate up and down. You seem to think you are a smart person, so look at the graph below, and you will see that in the '96-97 time frame, we were in the bottom of a down swing, and in the late 90s prices started going up.



But there was no bubble while Clinton was president. Housing prices were within historically normal fluctuations. We didn't see an historically abnormal bubble until we were into the 2002-06 time frame. It is just like right wing extremists not to see when we were in a housing bubble, and only shows the stupidity of the right wing extremist.

And no, I haven't "overlooked" that at all, and have commented on it several times in this thread, which you obviously haven't bothered to read.

 

It's really odd for me to see people who consider themselves conservative blame Clinton for signing a piece of legislation that deregulated some areas of the financial markets, and then to see people who consider themselves liberals blame Bush for his massive intervention in the market in an attempt to help poor people and minorities buy a home. Something just doesn't seem right with that scenario.

Anyways, contrary to what you would expect given their political affiliations, Clinton actually did more to deregulate the financial industry than Bush did (although it was still heavily regulated.) What Bush did for pretty much all of his 8 years is something I don't think any real conservative should applaud or support.

Yes, legislation was in place before Bush took office that stimulated lending to uncreditworthy individuals. But his actions starting in about 2001/2002 were destructive - all in an attempt to increase homeownership at all costs.

 

During Raygun he said, &#8220;they should have just bought them a house&#8221; in response to New York spending $30,000 to house a homeless couple. So I did it, I built a house for less than $30,000, but it was not easy because of zoning laws the NAACP prior to the CRA said were racially discriminatory, the NAACP dropped the suit after the CRA. You see my contractor tried to build lower income housing and was turned down, and that is why he was interested in my project, but he died at the pouring of the foundation, which is why I have a notebook with every expense in it from that point forward and can tell you to the penny what I spent.

&#8220;SERWER (voice-over): It was the dirty little secrets in the 1960s. Home loan lenders literally drew lines around entire minority neighborhoods and refused loans to these residents. It was called redlining. The dirty little secret of the last few years is reverse redlining. Seeking out minorities and setting them up with mortgages. It started in 2002, after President Bush issued a challenge.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: By the year 2010, we must increase minority homeowners by at least $5.5 million.

SERWER: Lenders found a way to boost their own bottom lines and increase minority homeownership. They offered subprime mortgages. High interest loans for people with low income or shaky credit. People like Bernita Jones. Remember her? Now she's packing up after losing her home.&#8221; http://transcripts.cnn.com/TRANSCRIPTS/0803/28/siu.01.html

I don&#8217;t see $5.5 million becoming a bubble, do you?

So how does thinking in terms of $5.5 million become a bubble?

The truck driver must live in upscale because of her uppity neighbor:

"WILLIS: A truck driver, Bernita saved up $14,000 to close on a six-bedroom house. Purchase price -- $180 grand. She thought she got a deal on her first loan, a two-year adjustable rate mortgage at 8.375 percent. Her monthly payments -- $1,200." http://transcripts.cnn.com/TRANSCRIPTS/0803/28/siu.01.html

Remember, all those zoning laws, the ones that my county had to prevent Negros from moving there, the same in Bernita Jones&#8217; majority black county, that could have allowed lower income housing of a smaller size, but did not in 1984 when a Negro who wired the pedestal of the C-130 was against my housing plan, that I based upon what Raygun said, because he did not want a poor black living next to his uppity black ass.

I got a Real Estate license, and one Black couple in the Clinton era I told flat out, never get an ARM, and I told them about my house; they only wanted to look at big houses, and he was wearing greasy coveralls. I used 123, that is DOS, and floppies to figure out those loans. That is when the bubble machine was made, it didn't blow up until later.

 

No, I haven't gone back to read. I just came back, and you are saying the same thing you did over a year ago. Your, "there was no bubble under Clinton" is irrelevant to my statement. The BEGINNING OF THE RISE STARTED IN 1996/97. That is a fact and the graph on the site to which I referred you to proves that fact. There is always a beginning and it happened on Clinton's watch. Bush caught the end. Like it or not the bubble BEGAN on Clinton's watch because of Clinton's policies. Bush was just stupid enough to continue Clinton's policies.

 

You're entire argument is irrelevant. It doesn't matter that prices started to rise under Clinton. Housing prices, which were in a low trough in 96/97, started to rise. So what? So what is your point? That Clinton should have slammed on the regulatory brakes and clamped down on banks because housing prices rose from the bottom of the trough? And that since he didn't the housing bubble is Clinton's fault? That logic is just silly.

Like it or not, there was no bubble on Clinton's watch. Housing prices were within historical trends and norms. That is a fact and the graph in my post and on the site to which you referred you to proves that fact. The bubble BEGAN on Bush's watch. It became a bubble on Bush's and the Republicans' watch, grew to absurd levels under Bush and the Republicans' watch, and started imploding on Bush and the Republicans' watch.

 

I was living in the Washington DC area in the mid 90's. Our company banked with many of the major banks in the District. I personally witnessed the overbearing Clinton Justice Department use the CRA, in combination with lawsuits from "activist" groups (kind of like the tactic used in EPA regulatory activities today) to bludgeon banks like Riggs bank into, first, paying ransom to the "activist" groups like the voter fraud group ACORN and then being required to commit to a particular number of dollars of loans (say, $100 mil) in "underserved" neighborhoods. Banks were threatened with having charters removed if they didn't comply with the results of the administration demands. They were given "goals" for investment in "underserved" communities by being threatened under the CRA act. A method by which they could satisfy this requirement in the 2000s was to invest in the Fannie/Freddie securities. (But nobody was regulating Fannie/Freddie).

The neighborhoods in question were said to be "redlined" but were in effect locations of deteriorating homes and persons with poor credit. The only way the banks could make loans in those neighborhoods to those customers with a high risk of default and still comply with banking regulations on credit quality was to sell the loans downstream. Franklin Raines, and later Jamie Gorelick and others who were later caught providing fradulent numbers to be able to enhance their own bonuses, built up the Fannie program of purchasing and securitizing the loans that were of questionable quality.

There are YouTube videos of Bawney Fwank and Maxine Watters praising Franklin Raines for his "zero down payment" programs that they said were working very well. http://content.time.com/time/specials/packages/article/0,28804,1877351_1877350_1877335,00.html Note Raines tenure in office and what he did.

Bawney Fwank was dismissing the concern of regulators in YouTube videos after assurances by Frank Raines that things were just peachy despite the regulator's concern they were not. It is disengenuous to claim that Bush Admin people told Fwank things were great when it was a Clinton appointee who caused the mess and cooked the books who made the assurances.

Republicans called for new regulatory agency to reign in the GSEs and to put them under the same scrutiny as banks. Democrats blocked the legislation. Barack Obama as a senator received 49 times more in campaign contributions from the GSEs as McCain. Why? Why were the GSEs able to make ANY contributions to politicians or hire lobbyists?

There are videos of John McCain demanding additional regulations of the GSE's and having them blocked by Democrat threats of filibuster. There is a YouTube video of BILL CLINTON saying that regulation of the GSEs was blocked when HE wanted to do it.

But then, if your source is the Huffington Post, or other leftist apologist groups, your devil will wind up being Bush. These are the people who said if you like your plan you can keep your plan. Jonathan Gruber did a study.

Here's what really happened. Note who created authorization for subprime mortgages, when it was done and who pushed it BEFORE BUSH WAS PRESIDENT! https://www.youtube.com/watch?v=TuCHqPkxGqg

 

And you learned all this all by yourself from hatchet job RW propaganda videos like the ones you linked to, right? Gee, where have we seen *that* before?

For those interested in truth on the Democrats and Freddie and Fannie, as opposed to the distorted spin of an right wing propaganda internet videos like Docontex cites, here is the actual vote of the Democrats on HR 1461, the Federal Housing Finance Reform Act of 2005, which was the *only* bill to regulate F/F to ever be passed (in 2005) by a chamber of the Republican controlled Congress.

If you look closely at the vote, maybe you can see the Democrats "blocking" the bill:

Party - Ayes - Nays
Republican 209 15
Democratic 122 74

http://clerk.house.gov/evs/2005/roll547.xml​

Ooops. Well, maybe you can't. Over 60% of the Democrats voted in favor of the Republican bill to increase F/F regulations.

Well then, certainly "Mr. Ownership Society" championed this bill to regulate F/F, right?

Here is the the Bush administration's response to this, the only bill to regulate F/F ever pased by either chamber of the Republican controlled Congress:

"the Administration opposes the bill"

http://www.presidency.ucsb.edu/ws/index.php?pid=24851

Ooops.

And here's links to an article about Republican Mike Oxley, of Sarbannes-Oxley fame, then ranking Republican majority member and chair of the House Financial Committee on Financial Services and sponsor of that bill, saying how they "got a one-finger salute&#8221; from the Bush White House.


He fumes about the criticism of his House colleagues. &#8220;All the handwringing and bedwetting is going on without remembering how the House stepped up on this,&#8221; he says. &#8220;What did we get from the White House? We got a one-finger salute.&#8221;

The House bill, the 2005 Federal Housing Finance Reform Act, would have created a stronger regulator with new powers to increase capital at Fannie and Freddie, to limit their portfolios and to deal with the possibility of receivership.

Mr Oxley reached out to Barney Frank, then the ranking Democrat on the committee and now its chairman, to secure support on the other side of the aisle. But after winning bipartisan support in the House, where the bill passed by 331 to 90 votes, the legislation lacked a champion in the Senate and faced hostility from the Bush administration. Adamant that the only solution to the problems posed by Fannie and Freddie was their privatisation, the White House attacked the bill. Mr Greenspan also weighed in, saying that the House legislation was worse than no bill at all.

http://www.ft.com/cms/s/0/8780c35e-7e91-11dd-b1af-000077b07658.html
http://www.salon.com/tech/htww/2008/09/10/greenspan_bush_fannie_freddie/index.html
http://krugman.blogs.nytimes.com/2008/09/10/one-finger-salute/

Yep. We sure see how the Dems were blocking bills. Just like the RW propaganda videos and Docontex tells us. Except it wasn't the Dems giving it "one-fingered salute."

 

Where did I deflect blame from Bush??

I've spent five pages trying to point out that there were a number of contributing factors behind the bubble, I've never excused the lack of oversight on Bush's watch. But too sit there and say that the housing crisis is 100% Bush's fault, is untrue. You can say that republicans controlled congress, but that doesn't mean the minority party can't obstruct legislation. Fannie and Freddie were the biggest subprime lenders in the country, and they're also Democratic sacred cows. Barney Frank and his fellow dems came out demagoging the issue as soon as alarm bells started going off.

 

Where did I ever say the housing crisis is 100% Bush's fault? The Republican controlled the Congress, and Bush controlled the Administration, and they had plenty of authority to put brakes the lending craze. But there were certainly other contributing causes as well.

They weren't by a long shot which has been amply proven in this thread. They did start getting heavily in subprimes in the 2005 time frame because they were losing market share to other lenders, big time.

I'm not sure why Frank is such a target for conservatives, except he's a Democrat and gay. He pushed for the bill to regulate F/F (though he actually voted against it for technical reasons) that the Bush administration killed. And there were certainly many others pushing for greater home ownership in that time frame, not the least of all was Bush himself with his "Ownership Society" programs.

 

MORE right wing garbage. Shocking

Q When did the Bush Mortgage Bubble start?

A The general timeframe is it started late 2004.

From Bush's President's Working Group on Financial Markets March 2008

"The Presidents Working Group’s March policy statement acknowledged that turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007."




Q Did the Community Reinvestment Act under Carter/Clinton caused it?


A "Since 1995 there has been essentially no change in the basic CRA rules or enforcement process that can be reasonably linked to the subprime lending activity. This fact weakens the link between the CRA and the current crisis since the crisis is rooted in poor performance of mortgage loans made between 2004 and 2007. "


http://www.federalreserve.gov/newsevents/speech/20081203_analysis.pdf






Q What about the conservative 'narrative' that Bush tried to stop the bubble?

A Its simply another false narrative created by the 'conservative entertainment complex'. That narrative is 'crafted' around the statements of Bush saying fannie and freddie needed to be regulated. Lets look at the structure of this narrative

Bush said GSEs needed to be regulated (actually true)
Barney Frank and other dems said GSEs were fine (actually true)
Democrats blocked reform (false)
GSEs caused the crisis (false)

Just another mish mosh of lies spin and half truths the 'conservative entertainment complex' relies on to push their agenda. Lets deconstruct the narrative. Yes, Bush repeatedly talked about GSE reform. The problem is reform in 2003 had nothing to do with subprime mortgages. As I've already documented, Bush lifted the restrictions Clinton placed on the GSEs to limit their purchase of abusive subprime loans. Later in 2004, Bush would increase the GSE housing goals forcing them to buy more low income home loans and get them to buy $440 billion more minority home loans in the secondary market.

"•Substantially increase by at least $440 billion, the financial commitment made by the government sponsored enterprises involved in the secondary mortgage market, specifically targeted toward the minority market;"

Homeownership Policy Book - Executive Summary

"In April, HUD proposed new federal regulations that would raise the GSEs targeted lending requirements. HUD estimates that over the next four years an additional one million low- and moderate-income families would be served as a result of the new goals."

HUD Archives: HUD DATA SHOWS FANNIE MAE AND FREDDIE MAC HAVE TRAILED THE INDUSTRY IN PROVIDING AFFORDABLE HOUSING IN 44 STATES

there goes the narrative that Bush tried to stop anything




Q What about the second part of the "bush tried to stop the bubble" narrative when "Barney Frank and other dems said GSEs were fine "? GSE's did go bankrupt

A Yes Barney Frank and other dems said there was nothing wrong with the GSEs. And they were fine in 2003. The Bush Mortgage Bubble hadn't started yet (remember we learned that it didnt start until late 2004). Once the Bush Mortgage Bubble started, any entity that bought mortgages or invested in mortgage backed securities got hammered. Of the big five investment banks, only one survived and remained independent (it did change its charter to commercial bank to qualify for TARP funds). Numerous hedge funds went under. And yes, Freddie and Fannie went bankrupt. The difference is nobody was forcing hedge funds, investment banks, pension funds, insurance companies etc. to buy mortgages and mortgage backed securities (see above).


Oh and here's the key part of about democrats saying there was nothing wrong with GSEs: They were just repeating what Bush told them. (yea, this doesnt get mentioned in any 'conservative entertainment complex' editorials does it?).

Testimony from W’s Treasury Secretary John Snow to the REPUBLICAN CONGRESS concerning the 'regulation’ of the GSE’s Sept 2003

"Mr. Frank: ...Are we in a crisis now with these entities?

Secretary Snow. No, that is a fair characterization, Congressman Frank, of our position. We are not putting this proposal before you because of some concern over some imminent danger to the financial system for housing; far from it.“

- THE TREASURY DEPARTMENT'S VIEWS ON THE REGULATION OF GOVERNMENT SPONSORED ENTERPRISES



Q are you serious? I've heard "Barney Frank said Freddie and Fannie were fine" a million times as if it proved something and now I find out that Bush said it too. I give up. Whats my next question?

A uh you want to ask me about "dems blocking reform"

Q fine, did dems block reform?

A Well since everything else the 'conservative entertainment complex' said was a lie, why wouldnt this be a lie? Now remembering that Bush forced GSEs to buy more low income home loans, got freddie and fannie to buy an additional $440 billion in mortgage backed securities and reversed the restrictions Clinton placed on the GSEs purchases of subprime home loans this will not be much of a shock

"Strong opposition by the Bush administration forced a top Republican congressman to delay a vote on a bill that would create a new regulator for mortgage giants Fannie Mae and Freddie Mac."

Oxley pulls Fannie, Freddie bill under heat from Bush - MarketWatch

Despite what appeared to be a broad consensus on GSE regulatory reform, efforts quickly stalled. A legislative markup scheduled for October 8, 2003, in the House of Representatives was halted because the Bush administration withdrew its support for the bill,


(fyi, broad consensus means it would have probably passed. what happened to it again? oh yea bush stopped it)


PAGE ONE BUBS

 

Don't disagree with any of this, BUT STILL DOESN'T TAKE AWAY FROM THE FACT THAT DUBYA AS THE EXECUTIVE BRANCH HAD POLICIES THAT NOT ONLY PUSHED THE BUBBLE, HE ACTIVELY FOUGHT THOSE THAT WANTED TO REGULATE THE BANKSTERS AND HE HAD EXECUTIVE BRANCH OVERSIGHT OF HUD, SEC, OCC, FBI, ETC...


Fed COULD'VE stopped many bad things, but THAT isn't their primary objective in monetary policy. Looking out for markets run amok? That was SUPPOSED to be the executive branch

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WHAT does the US federal reserve system have to do with a WORLD WIDE CREDIT BUBBLE AND BUST? One Dubya cheered on and fought for???

 

Sorry, that GOP didn't cause Dubya's regulator failure OR his bad policies I've outlined, start at page one

Conservative:


Why The Glass-Steagall Myth Persists


There is zero evidence this change unleashed the financial crisis. If you tally the institutions that ran into severe problems in 2008-09, the list includes Bear Stearns, Lehman Brothers, Merrill Lynch, AIG, and Fannie Mae and Freddie Mac, none of which would have come under Glass-Steagall’s restrictions. Even President Obama has recently acknowledged that “there is not evidence that having Glass-Steagall in place would somehow change the dynamic.”

As for the FDIC-insured commercial banks that ran into trouble, the record is also clear: what got them into trouble were not activities restricted by Glass-Steagall. Their problems arose from investments in residential mortgages and residential mortgage-backed securities—investments they had always been free to engage in.

http://www.forbes.com/sites/objectivist/2012/11/12/why-the-glass-steagall-myth-persists/



Liberal:


Repeal of Glass-Steagall: Not a cause, but a multiplier


The repeal of Glass-Steagall may not have caused the crisis — but its repeal was a factor that made it much worse. And it was a continuum of the radical deregulation movement. This philosophy incorrectly held that banks could regulate themselves, that government had no place in overseeing finance and that the free market works best when left alone.

http://www.washingtonpost.com/repea...a-multiplier/2012/08/02/gJQAuvvRXX_story.html

 

Just MORE of your partisan crap


IF Clinton DOH (I ASSUME YOU MEAN HUD) USED to "pressure banks" it meant US GOV'T EITHER BACKED THEM OR INSURED THEM. GUESS WHAT NO LESS TO THE PRIVATE BANKSTERS

Loans that were under government regulation did better than private loans, especially if they were regulated by the "Community Reinvestment Act." 450%-600% BETTER ON LOANS 2003-2008 THAT WERE AT THE HEART OF THE CRISIS

G/S IS A RED HERRING, NOTHING TO DO WITH DUBYA'S REGULATOR FAILURE

http://www.forbes.com/sites/objectivist/2012/11/12/why-the-glass-steagall-myth-persists/

INVESTMENT BANKS BY AND LARGE WEREN'T IN THE GAME BUBS, THEIR PUSH CAME 2003 FOWARD

http://www.mcclatchydc.com/2008/10/12/53802/private-sector-loans-not-fannie.html


Yes govt failed us. Are who was in charge of that govt? Can you say republicans? (I've found conservatives wont even state obvious facts)

How is there more than enough blame to go around. Republicans were in charge and implementing their policies and they were in charge of the regulators. Oh yea, that’s right, you blame democrats for not pounding their chest

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Done it DOZENS OF TIMES. Sorry


P. T. Barnum . . . The worst part about elephants is cleaning-up their messes

 

Just nonsense. Shocking

According to one narrative, people with lousy jobs, low incomes, and poor credit ratings have an uncanny ability to overwhelm the better judgement of banks and mortgage brokers, and dupe them into approving risky mortgages. I must have been sleeping that day in Econ 101 when they explained how that works.



"Another form of easing facilitated the rapid rise of mortgages that didn't require borrowers to fully document their incomes. In 2006, these low- or no-doc loans comprised 81 percent of near-prime, 55 percent of jumbo, 50 percent of subprime and 36 percent of prime securitized mortgages."

https://www.dallasfed.org/assets/documents/research/eclett/2007/el0711.pdf

Q HOLY JESUS! DID YOU JUST PROVE THAT OVER 50 % OF ALL MORTGAGES IN 2006 DIDN’T REQUIRE BORROWERS TO DOCUMENT THEIR INCOME?!?!?!?

A Yes.




Q WHO THE HELL LOANS HUNDREDS OF THOUSANDS OF DOLLARS TO PEOPLE WITHOUT CHECKING THEIR INCOMES?!?!?

A Banks.

Q WHY??!?!!!?!

A Two reasons, greed and Bush's regulators let them




Bush's documented policies and statements in timeframe leading up to the start of the Bush Mortgage Bubble include (but not limited to)

Wanting 5.5 million more minority homeowners
Tells congress there is nothing wrong with GSEs
Pledging to use federal policy to increase home ownership
Routinely taking credit for the housing market
Forcing GSEs to buy more low income home loans by raising their Housing Goals (2004)
Lowering Investment bank's capital requirements, Net Capital rule (2004)
Reversing the Clinton rule that restricted GSEs purchases of subprime loans (2004)
Lowering down payment requirements to 0% (2004)
Forcing GSEs to spend an additional $440 billion in the secondary markets (2003)
Giving away 40,000 free down payments (2004)
PREEMPTING ALL STATE LAWS AGAINST PREDATORY LENDING (2003)


But the biggest policy was regulators not enforcing lending standards.

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HOW FKKING DIFFICULT IS IT FOR CONS TO RECOGNIZE THE DIFFERENCE BETWEEN REGULATION AND REGULATOR FAILURE? Hint there was PLENTY of laws on the books for Dubya to act, in FACT the FIFTY STATES ATTORNEY GENERALS ALL FOUGHT DUBYA'S OCC FROM THEIR RULE IN 2003 THAT BIG FEDERAL GOV'T HAD RULED OVER INTRASTATE BANKSTERS!


Regulators and policymakers enabled this process at virtually every turn. Part of the reason they failed to understand the housing bubble was willful ignorance: they bought into the argument that the market would equilibrate itself. In particular, financial actors and regulatory officials both believed that secondary and tertiary markets could effectively control risk through pricing.


http://www.tobinproject.org/sites/tobinproject.org/files/assets/Fligstein_Catalyst of Disaster_0.pdf

 

GOV'T BACKED LOANS (CRA WERE COVERED) PERFORMED 450%-600% BETTER THAN THE PRIVATE MARKETS

Conservatives Can&#8217;t Escape Blame for the Financial Crisis


The onset of the recent financial crisis in late 2007 created an intellectual crisis for conservatives, who had been touting for decades the benefits of a hands-off approach to financial market regulation. As the crisis quickly spiraled out of control, it quickly became apparent that the massive credit bubble of the mid-2000s, followed by the inevitable bust that culminated with the financial markets freeze in the fall of 2008, occurred predominantly among those parts of the financial system that were least regulated, or where regulations existed but were largely unenforced.

Predictably, many conservatives sought to blame the bogeymen they always blamed. In March of 2008, Sen. Jon Kyl (R-AZ) blamed loans &#8220;to the minorities, to the poor, to the young&#8221; as causing foreclosures. Not long after, conservative commentator Michele Malkin went so far as to claim that illegal immigration caused the crisis.

This tendency to shift blame to minorities and poor people for the financial crisis soon developed into a well-honed narrative on the right.


https://www.americanprogress.org/issues/economy/news/2010/12/21/8832/politics-most-blatant/

President Hosts Conference on Minority Homeownership


I set an ambitious goal. It's one that I believe we can achieve. It's a clear goal, that by the end of this decade we'll increase the number of minority homeowners by at least 5.5 million families. (Applause.) NOT DOLLARS. BUSH FORCED F/F ALONE TO PURCHASE $440 BILLION IN MBS'S 2004-2007 ALONE. Not counting pushing the "goals" from 50% to 56% AND GETTING RID OF CLINTON'S 2000 RULE THAT RESTRICTED SUBPRIME LOANS!

http://georgewbush-whitehouse.archives.gov/news/releases/2002/10/20021015-7.html


Examining the big lie: How the facts of the economic crisis stack up


&#8226;The boom and bust was global. Proponents of the Big Lie ignore the worldwide nature of the housing boom and bust.




Nonbank mortgage underwriting exploded from 2001 to 2007, along with the private label securitization market, which eclipsed Fannie and Freddie during the boom.



&#8226;Private lenders not subject to congressional regulations collapsed lending standards. Taking up that extra share were nonbanks selling mortgages elsewhere, not to the GSEs. Conforming mortgages had rules that were less profitable than the newfangled loans. Private securitizers &#8212; competitors of Fannie and Freddie &#8212; grew from 10 percent of the market in 2002 to nearly 40 percent in 2006. As a percentage of all mortgage-backed securities, private securitization grew from 23 percent in 2003 to 56 percent in 2006

These firms had business models that could be called &#8220;Lend-in-order-to-sell-to-Wall-Street-securitizers.&#8221; They offered all manner of nontraditional mortgages &#8212; the 2/28 adjustable rate mortgages, piggy-back loans, negative amortization loans. These defaulted in huge numbers, far more than the regulated mortgage writers did.

http://www.washingtonpost.com/busin...sis-stack-up/2011/11/16/gIQA7G23cN_story.html

 

Sorry, it WASN'T A HOUSING BUST, BUT A SUBPRIME BUBBLE AND BUST. Where over 50% of loans in 2006 had NO/LOW DOCUMENTATION. Over 40% of ALL loans were considered subprimes. The time period to those who are honest are 2004-2007.


Barry Ritholtz
By Barry Ritholtz Columnist November 19, 2011

It’s fair to say that our discussion about the big lie touched a nerve.

The big lie of the financial crisis, of course, is that troubling technique used to try to change the narrative history and shift blame from the bad ideas and terrible policies that created it.
Ritholtz is chief investment officer of Ritholtz Wealth Management. He is the author of “Bailout Nation” and runs a finance blog, the Big Picture. View Archive

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Based on the scores of comments, people are clearly interested in understanding the causes of the economic disaster.




I want to move beyond what I call “the squishy narrative” — an imprecise, sloppy way to think about the world — toward a more rigorous form of analysis. Unlike other disciplines, economics looks at actual consequences in terms of real dollars. So let’s follow the money and see what the data reveal about the causes of the collapse.

Rather than attend a college-level seminar on the complex philosophy of causation, we’ll keep it simple. To assess how blameworthy any factor is regarding the cause of a subsequent event, consider whether that element was 1) proximate 2) statistically valid 3) necessary and sufficient.

Consider the causes cited by those who’ve taken up the big lie. Take for example New York Mayor Michael Bloomberg’s statement that it was Congress that forced banks to make ill-advised loans to people who could not afford them and defaulted in large numbers. He and others claim that caused the crisis. Others have suggested these were to blame: the home mortgage interest deduction, the Community Reinvestment Act of 1977, the 1994 Housing and Urban Development memo, Fannie Mae and Freddie Mac, Rep. Barney Frank (D-Mass.) and homeownership targets set by both the Clinton and Bush administrations.

When an economy booms or busts, money gets misspent, assets rise in prices, fortunes are made. Out of all that comes a set of easy-to-discern facts.

Here are key things we know based on data. Together, they present a series of tough hurdles for the big lie proponents.

•The boom and bust was global. Proponents of the Big Lie ignore the worldwide nature of the housing boom and bust.

A McKinsey Global Institute report noted “from 2000 through 2007, a remarkable run-up in global home prices occurred.” It is highly unlikely that a simultaneous boom and bust everywhere else in the world was caused by one set of factors (ultra-low rates, securitized AAA-rated subprime, derivatives) but had a different set of causes in the United States. Indeed, this might be the biggest obstacle to pushing the false narrative. How did U.S. regulations against redlining in inner cities also cause a boom in Spain, Ireland and Australia? How can we explain the boom occurring in countries that do not have a tax deduction for mortgage interest or government-sponsored enterprises? And why, after nearly a century of mortgage interest deduction in the United States, did it suddenly cause a crisis?

These questions show why proximity and statistical validity are so important.


http://www.washingtonpost.com/busin...sis-stack-up/2011/11/16/gIQA7G23cN_story.html

 

Oh for sure, and I did mentioned that the Whitehouse was in on the fix. Bush had wars to pay for and was running up deficits like crazy after having been handed a balanced budget. These deficits were the result of his pet war and tax cuts to the rich.

The economy was not doing too great in the beginning and he was not about to do anything to restrict the huge bubble nor regulate the massive shadow banking system.

http://www.nytimes.com/2008/09/27/business/27sec.html?em&_r=0

This was the "lets let the banks regulate themselves" Bush doctrine.

As the bubble grew the reaction of Bush was to cover ears, nose, mouth eyes and any other orifice that might let the bad news in. He was probably hoping the crash would not happen until after he left office. No such luck.

http://www.nytimes.com/2008/10/03/business/03sec.html?pagewanted=2&em

Oh Yeah .. Dubya's "eyes wide shut" policy in action.

There is a 5 min video in the above link that is worth watching titled " The Day the SEC Changed the Game"