Privatized profits and socialised losses...
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Stan Shannon wrote:
The entire thing was caused by the government forcing lenders to make loans to people who they otherwise would not have lent to.
Are you saying that banks were forced to make these loans? They HAD TO? By law??? BS. I'm also not talking about blame for how this got to this point. I'm talking about the bailout. The banks did not have to make those loans. They profited from them so they stuck their necks out. They should pay for it. Not taxpayers. That's all I'm saying. Take billions of dollars from the taxpayers and give it to the banks for making bad decisions. Talk about redistributing wealth.
I've heard more said about less.
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Le Centriste wrote:
while bankers are laughing their asses off.
...along with all the leftists...
Chaining ourselves to the moral high ground does not make us good guys. Aside from making us easy targets, it merely makes us idiotic prisoners of our own self loathing.
Stan Shannon wrote:
...along with all the leftists...
Like a jack-in-the-box, you pop up with your idiotic desire to absolve Bush and his administration in every sub thread. You contribute about as much to this conversation as Adnan would. Have you got anything worth saying or is it all variations on "the liberals did it, mommy."
Jon Smith & Wesson: The original point and click interface
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a United States federal law that requires banks and thrifts to offer credit throughout their entire market area and prohibits them from targeting only wealthier neighborhoods with their services[^] The CRA directs four federal banking agencies to evaluate the extent to which banks and savings institutions are meeting local credit needs before they grant banks’ requests to expand, either by opening new branches or through mergers and acquisitions. A weak CRA record may be grounds for denial of an expansion request[^]
Chaining ourselves to the moral high ground does not make us good guys. Aside from making us easy targets, it merely makes us idiotic prisoners of our own self loathing.
modified on Monday, September 22, 2008 7:48 PM
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Le Centriste wrote:
while bankers are laughing their asses off.
...along with all the leftists...
Chaining ourselves to the moral high ground does not make us good guys. Aside from making us easy targets, it merely makes us idiotic prisoners of our own self loathing.
Stan Shannon wrote:
...along with all the leftists...
And the self-superior cynical lying asses, like DryRot. edit: Trying to open the eyes of these willfully blind lefties is important ... though thankless and quite unlikely to succeed because they don't *want* to see reality as it really is. I don't have the patience to try this (I have no patience for dealing with lies and liars), and since *they* will never thank you for attempting to open their eyes, please accept my expression of gratitude.
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Stan Shannon wrote:
But the people guarding the system were the democrats.
Neither Paulson nor Bernake are Democrats. Bush is not a Democrat. You're as bad as the pisants in Congress with you finger-pointing.
Jon Smith & Wesson: The original point and click interface
Every attempt to reform the system has been stopped by the democrats. Every attempt to exapnd it has been instigated by democrats. I suspect that if the social security system collapsed tomorrow and had to be bailed out you would also blame that on Bush.
Chaining ourselves to the moral high ground does not make us good guys. Aside from making us easy targets, it merely makes us idiotic prisoners of our own self loathing.
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Stan Shannon wrote:
...along with all the leftists...
Like a jack-in-the-box, you pop up with your idiotic desire to absolve Bush and his administration in every sub thread. You contribute about as much to this conversation as Adnan would. Have you got anything worth saying or is it all variations on "the liberals did it, mommy."
Jon Smith & Wesson: The original point and click interface
Oakman wrote:
or is it all variations on "the liberals did it, mommy."
They did.
Chaining ourselves to the moral high ground does not make us good guys. Aside from making us easy targets, it merely makes us idiotic prisoners of our own self loathing.
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Okay, I could nit-pick, but you definitely made your point.
Jon Smith & Wesson: The original point and click interface
This [^] is the best analysis I've read. What we need to do is remove the government's power to coerce, bribe, reward and bail out irrational decisions. The unfree market has failed. It's time for a truly free market. There were many factors, but the one common element is the attempt by the government to micro-manage the economy.
Chaining ourselves to the moral high ground does not make us good guys. Aside from making us easy targets, it merely makes us idiotic prisoners of our own self loathing.
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True, but Caesar didn't have the Secret Service. ;)
Visit BoneSoft.com for code generation tools (XML & XSD -> C#, VB, etc...) and some free developer tools as well.
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Every attempt to reform the system has been stopped by the democrats. Every attempt to exapnd it has been instigated by democrats. I suspect that if the social security system collapsed tomorrow and had to be bailed out you would also blame that on Bush.
Chaining ourselves to the moral high ground does not make us good guys. Aside from making us easy targets, it merely makes us idiotic prisoners of our own self loathing.
Stan Shannon wrote:
Every attempt to reform the system has been stopped by the democrats. Every attempt to exapnd it has been instigated by democrats.
Not every, but many. I understand your frustration with the Dems. What I don't understand is your willingness to let the Republicans crap all over you.
Stan Shannon wrote:
I suspect that if the social security system collapsed tomorrow and had to be bailed out you would also blame that on Bush.
Nope. Reagan.
Jon Smith & Wesson: The original point and click interface
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It seems to me that everybody has forgotten the fact that these sub-prime mortgages were only part of the problem. Another part of the problem was "short selling" where an even larger sum of money, I understand, was at threat. I rather suspect that if the "short selling" and other dubious Wall Street activities were not conducted, the issue of sub-prime mortgages probably would not be receiving the amount of attention here and in the press as it is getting. (Anyhow I'm off to bed)
Nonsense. Shorting stocks has been around forever. A short position is taken in response to an precived trend in a stock (or optionable security/commidty). Just by shorting a company doesn't gaurentee a loss of that companies value. It mearly is a bet based on a trend or insight that the stock will lose value. Shorting has been made a recent boogyman because it is eaiser to blame the shorts than to look and the flaws in a fiat based economy.
Sovereign ingredient for a happy marriage: Pay cash or do without. Interest charges not only eat up a household budget; awareness of debt eats up domestic felicity. --Lazarus Long
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Is the $120 billion the total value of the homes or the total value of all the mortgages (and don't forget 2nd and 3rd ones) on those homes?
Chris Meech I am Canadian. [heard in a local bar] In theory there is no difference between theory and practice. In practice there is. [Yogi Berra]
If you add up every mortgage in the United States (1st, 2nd, 3rd, etc) it totals $7 trillion. About 2.7% of all mortgages are either delinquent, in default, or in foreclosure, which is about $190 billion altogether. The $120 billion is a high-end estimate of mortgages in foreclosure and the actual value is probably lower. Also, foreclosed properties generally fetch 60% of market value, so the potential loss is 40% or so of the $120 billion. Actually, the subprime crisis is pretty much over, because those loans typically ballooned in 2 or 3 years and have worked their way out of the market. It's prime loans given to people with good incomes and good credit that are now experiencing the greatest rate of increase in defaults. It's best we stop blaming lower-income people for this mess because the middle and upper-middle classes are defaulting in much higher numbers than any other group.
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Nonsense. Shorting stocks has been around forever. A short position is taken in response to an precived trend in a stock (or optionable security/commidty). Just by shorting a company doesn't gaurentee a loss of that companies value. It mearly is a bet based on a trend or insight that the stock will lose value. Shorting has been made a recent boogyman because it is eaiser to blame the shorts than to look and the flaws in a fiat based economy.
Sovereign ingredient for a happy marriage: Pay cash or do without. Interest charges not only eat up a household budget; awareness of debt eats up domestic felicity. --Lazarus Long
I agree - shorting is always limited too. Criticism of the strategy only ever comes up when there's a crisis because it's easier to pin the problems on some sub-group than to sort through the complicated reality of the problem. Today short-sellers, tomorrow speculators...
...that mortally intolerable truth; that all deep, earnest thinking is but the intrepid effort of the soul to keep the open independence of her sea; while the wildest winds of heaven and earth conspire to cast her on the treacherous, slavish shore.
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Stan Shannon wrote:
Every attempt to reform the system has been stopped by the democrats. Every attempt to exapnd it has been instigated by democrats.
Not every, but many. I understand your frustration with the Dems. What I don't understand is your willingness to let the Republicans crap all over you.
Stan Shannon wrote:
I suspect that if the social security system collapsed tomorrow and had to be bailed out you would also blame that on Bush.
Nope. Reagan.
Jon Smith & Wesson: The original point and click interface
Oakman wrote:
What I don't understand is your willingness to let the Republicans crap all over you.
Stan has a fecal fetish!
...that mortally intolerable truth; that all deep, earnest thinking is but the intrepid effort of the soul to keep the open independence of her sea; while the wildest winds of heaven and earth conspire to cast her on the treacherous, slavish shore.
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I agree - shorting is always limited too. Criticism of the strategy only ever comes up when there's a crisis because it's easier to pin the problems on some sub-group than to sort through the complicated reality of the problem. Today short-sellers, tomorrow speculators...
...that mortally intolerable truth; that all deep, earnest thinking is but the intrepid effort of the soul to keep the open independence of her sea; while the wildest winds of heaven and earth conspire to cast her on the treacherous, slavish shore.
Yet when you look at the history of shorts, it has always courted both controversy and crude speculation that allegedly caused (1) the Wall Street crash of 1929, (2) the dotcom bubble of just a few years ago. It is a practice that has previously been banned as it has been now curbed albeit temporary.
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Yet when you look at the history of shorts, it has always courted both controversy and crude speculation that allegedly caused (1) the Wall Street crash of 1929, (2) the dotcom bubble of just a few years ago. It is a practice that has previously been banned as it has been now curbed albeit temporary.
Richard, I think the shorting in this case is a secondary problem. It was carried out by people looking to profit during the fall-out from the housing crisis. Short-selling is done on a regular basis everyday - it becomes a problem during market crashes as people try to profit from falling prices. The reason it has a more negative effect than taking a long position is because short positions are time-limited. The short seller has to return the borrowed securities within a finite time-frame.
...that mortally intolerable truth; that all deep, earnest thinking is but the intrepid effort of the soul to keep the open independence of her sea; while the wildest winds of heaven and earth conspire to cast her on the treacherous, slavish shore.
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Stan Shannon wrote:
Every attempt to reform the system has been stopped by the democrats. Every attempt to exapnd it has been instigated by democrats.
Not every, but many. I understand your frustration with the Dems. What I don't understand is your willingness to let the Republicans crap all over you.
Stan Shannon wrote:
I suspect that if the social security system collapsed tomorrow and had to be bailed out you would also blame that on Bush.
Nope. Reagan.
Jon Smith & Wesson: The original point and click interface
Oakman wrote:
What I don't understand is your willingness to let the Republicans crap all over you.
because this situation was inevitable given democrat economic changes to our way of life. The republicans may have mucked around with it, they may have gone along to get along, and, yes, they were in the pilot's seat when the wings fell off, but had we always erred on the side of free markdets and capitalism rather than erring on the side of socialism, this situation would never have occred.
Oakman wrote:
Nope. Reagan.
:rolleyes: So the people who actually created the system get no blame? But, sure, Reagan deserves the blame for just not ending social security entirely. Social security does not work, national health care will not work, giving people money to buy homes does not work. They all lead to the same exact set of problems. The only way to win that game is to not play it.
Chaining ourselves to the moral high ground does not make us good guys. Aside from making us easy targets, it merely makes us idiotic prisoners of our own self loathing.
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a United States federal law that requires banks and thrifts to offer credit throughout their entire market area and prohibits them from targeting only wealthier neighborhoods with their services[^] The CRA directs four federal banking agencies to evaluate the extent to which banks and savings institutions are meeting local credit needs before they grant banks’ requests to expand, either by opening new branches or through mergers and acquisitions. A weak CRA record may be grounds for denial of an expansion request[^]
Chaining ourselves to the moral high ground does not make us good guys. Aside from making us easy targets, it merely makes us idiotic prisoners of our own self loathing.
modified on Monday, September 22, 2008 7:48 PM
You're trying to blame the CRA? Sorry it just won't fly. But CRA has always had critics, and they now suggest that the law went too far in encouraging banks to lend in struggling communities. Rhetoric aside, the argument turns on a simple question: In the current mortgage meltdown, did lenders approve bad loans to comply with CRA, or to make money? The evidence strongly suggests the latter. First, consider timing. CRA was enacted in 1977. The sub-prime lending at the heart of the current crisis exploded a full quarter century later. In the mid-1990s, new CRA regulations and a wave of mergers led to a flurry of CRA activity, but, as noted by the New America Foundation's Ellen Seidman (and by Harvard's Joint Center), that activity "largely came to an end by 2001." In late 2004, the Bush administration announced plans to sharply weaken CRA regulations, pulling small and mid-sized banks out from under the law's toughest standards. Yet sub-prime lending continued, and even intensified -- at the very time when activity under CRA had slowed and the law had weakened. Second, it is hard to blame CRA for the mortgage meltdown when CRA doesn't even apply to most of the loans that are behind it. As the University of Michigan's Michael Barr points out, half of sub-prime loans came from those mortgage companies beyond the reach of CRA. A further 25 to 30 percent came from bank subsidiaries and affiliates, which come under CRA to varying degrees but not as fully as banks themselves. (With affiliates, banks can choose whether to count the loans.) Perhaps one in four sub-prime loans were made by the institutions fully governed by CRA. Most important, the lenders subject to CRA have engaged in less, not more, of the most dangerous lending. Janet Yellen, president of the San Francisco Federal Reserve, offers the killer statistic: Independent mortgage companies, which are not covered by CRA, made high-priced loans at more than twice the rate of the banks and thrifts. With this in mind, Yellen specifically rejects the "tendency to conflate the current problems in the sub-prime market with CRA-motivated lending.? CRA, Yellen says, "has increased the volume of responsible lending to low- and moderate-income households." [^]
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You're trying to blame the CRA? Sorry it just won't fly. But CRA has always had critics, and they now suggest that the law went too far in encouraging banks to lend in struggling communities. Rhetoric aside, the argument turns on a simple question: In the current mortgage meltdown, did lenders approve bad loans to comply with CRA, or to make money? The evidence strongly suggests the latter. First, consider timing. CRA was enacted in 1977. The sub-prime lending at the heart of the current crisis exploded a full quarter century later. In the mid-1990s, new CRA regulations and a wave of mergers led to a flurry of CRA activity, but, as noted by the New America Foundation's Ellen Seidman (and by Harvard's Joint Center), that activity "largely came to an end by 2001." In late 2004, the Bush administration announced plans to sharply weaken CRA regulations, pulling small and mid-sized banks out from under the law's toughest standards. Yet sub-prime lending continued, and even intensified -- at the very time when activity under CRA had slowed and the law had weakened. Second, it is hard to blame CRA for the mortgage meltdown when CRA doesn't even apply to most of the loans that are behind it. As the University of Michigan's Michael Barr points out, half of sub-prime loans came from those mortgage companies beyond the reach of CRA. A further 25 to 30 percent came from bank subsidiaries and affiliates, which come under CRA to varying degrees but not as fully as banks themselves. (With affiliates, banks can choose whether to count the loans.) Perhaps one in four sub-prime loans were made by the institutions fully governed by CRA. Most important, the lenders subject to CRA have engaged in less, not more, of the most dangerous lending. Janet Yellen, president of the San Francisco Federal Reserve, offers the killer statistic: Independent mortgage companies, which are not covered by CRA, made high-priced loans at more than twice the rate of the banks and thrifts. With this in mind, Yellen specifically rejects the "tendency to conflate the current problems in the sub-prime market with CRA-motivated lending.? CRA, Yellen says, "has increased the volume of responsible lending to low- and moderate-income households." [^]
That is a weak defense. The CRA forced banks to engage in activities which were not in their best economic interests. In order to continue to make profits, which is what they are supposed to be doing, banks looked for some more creative means of doing so. When the interests rates fell to artificially low levels under Greenspan, the profitability of subprime loans exploded, and banks jumped on it. This was all enabled by fannie mae and freddy mac, finally resulting, when home valus began to drop and interest rates increased, in a melt down of the entire system. There are any number of contributory factors, and certainly a lot of blame to go around. But the CRA, and other clumsy government interventionism, stands at the heart of the entire mess. Banks are supposed to make a profit, that is the only reason they even exist. They do not exist to help poor people get homes, they exist to make rich people richer. They were doing precisely what they were supposed to be doing. I'm fine with punishing any bankers, etc, who committed fraud in this process, but I also want the heads of all government bureaucrats who benefitted from it in any way - includeing Obama and McCain. And, BTW, the CRA is as gross an example of fascism as you are likely to find.
Chaining ourselves to the moral high ground does not make us good guys. Aside from making us easy targets, it merely makes us idiotic prisoners of our own self loathing.
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That is a weak defense. The CRA forced banks to engage in activities which were not in their best economic interests. In order to continue to make profits, which is what they are supposed to be doing, banks looked for some more creative means of doing so. When the interests rates fell to artificially low levels under Greenspan, the profitability of subprime loans exploded, and banks jumped on it. This was all enabled by fannie mae and freddy mac, finally resulting, when home valus began to drop and interest rates increased, in a melt down of the entire system. There are any number of contributory factors, and certainly a lot of blame to go around. But the CRA, and other clumsy government interventionism, stands at the heart of the entire mess. Banks are supposed to make a profit, that is the only reason they even exist. They do not exist to help poor people get homes, they exist to make rich people richer. They were doing precisely what they were supposed to be doing. I'm fine with punishing any bankers, etc, who committed fraud in this process, but I also want the heads of all government bureaucrats who benefitted from it in any way - includeing Obama and McCain. And, BTW, the CRA is as gross an example of fascism as you are likely to find.
Chaining ourselves to the moral high ground does not make us good guys. Aside from making us easy targets, it merely makes us idiotic prisoners of our own self loathing.
Stan Shannon wrote:
The CRA forced banks to engage in activities which were not in their best economic interests.
In some very narrow sense that might be true, and completely irrelevant.
Stan Shannon wrote:
In order to continue to make profits
Where is your proof that the CRA caused such an incredible hit to profits(or any hit at all) that compelled banks to create bad loans, and then leverage those loans 30X. It just isn't credible.
Stan Shannon wrote:
But the CRA, and other clumsy government interventionism, stands at the heart of the entire mess.
No, it doesn't. Lack of intervention, maybe. These finacial institutions made the bad loans and were not compelled to do so. They also chose to leverage those 'assets' as much as 30X compounding their exposure.
Stan Shannon wrote:
They were doing precisely what they were supposed to be doing.
Obviously not. They are going bankrupt and require a trillion dollar bailout.
Stan Shannon wrote:
And, BTW, the CRA is as gross an example of fascism as you are likely to find.
And, BTW, your definintion of fascism is completely bullshit.
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Stan Shannon wrote:
The CRA forced banks to engage in activities which were not in their best economic interests.
In some very narrow sense that might be true, and completely irrelevant.
Stan Shannon wrote:
In order to continue to make profits
Where is your proof that the CRA caused such an incredible hit to profits(or any hit at all) that compelled banks to create bad loans, and then leverage those loans 30X. It just isn't credible.
Stan Shannon wrote:
But the CRA, and other clumsy government interventionism, stands at the heart of the entire mess.
No, it doesn't. Lack of intervention, maybe. These finacial institutions made the bad loans and were not compelled to do so. They also chose to leverage those 'assets' as much as 30X compounding their exposure.
Stan Shannon wrote:
They were doing precisely what they were supposed to be doing.
Obviously not. They are going bankrupt and require a trillion dollar bailout.
Stan Shannon wrote:
And, BTW, the CRA is as gross an example of fascism as you are likely to find.
And, BTW, your definintion of fascism is completely bullshit.
http://mises.org/story/2963[^] The CRA was the stick, FM and FM were the carrot. One required banks to engage in non-profitable activities, FM and FM was always there to buy up the resulting bad loans in order to increase their own bottom line.
oilFactotum wrote:
Obviously not. They are going bankrupt and require a trillion dollar bailout.
Directly because of government creating a situation with which they had to deal as a part of their operational costs. Are you suggesting that the banks should have just saluted and said "Yes, sir, we'll abandon our profits to help all the poor folks"?
oilFactotum wrote:
And, BTW, your definintion of fascism is completely bullsh*t.
No, it is precisely what the man who invented fascism had in mind - corporatism - the state coercing the institutions of a society to achieve its collectivist goals.
Chaining ourselves to the moral high ground does not make us good guys. Aside from making us easy targets, it merely makes us idiotic prisoners of our own self loathing.