Who's to blame for the financial crisis? Why ...
-
John W. McBush, that's who. In 1982, the same year John McCain entered the Senate, a bill was put forward that would substantially deregulate the savings and loan industry. The Garn-St. Germain Depository Institutions Act was an initiative of the Reagan administration, and was largely authored by lobbyists for the S&L industry--including John McCain's warm-up speaker at the Republican National Convention, Fred Thompson. Seven years later, the S&L industry was collapsing. What was the cause? Garn-St. Germain had handed the S&Ls a greatly expanded range of capabilities, allowing them to go head to head with full service banks, but it hadn't handed them the bank's regulations. Left to operate in an anarchistic gray area, S&Ls had chased profits, indulged in amazing extravagances and cranked out enough cheap mortgages to fuel a real estate boom. They had also experimented with lots of complex, creative--and risky--investments, even though they didn't have the economic models to really determine the worth of the things they were buying. The result was a mountain of bad debts and worthless "assets." Does any of that sound eerily (or nauseatingly) familiar?[^]
-
John W. McBush, that's who. In 1982, the same year John McCain entered the Senate, a bill was put forward that would substantially deregulate the savings and loan industry. The Garn-St. Germain Depository Institutions Act was an initiative of the Reagan administration, and was largely authored by lobbyists for the S&L industry--including John McCain's warm-up speaker at the Republican National Convention, Fred Thompson. Seven years later, the S&L industry was collapsing. What was the cause? Garn-St. Germain had handed the S&Ls a greatly expanded range of capabilities, allowing them to go head to head with full service banks, but it hadn't handed them the bank's regulations. Left to operate in an anarchistic gray area, S&Ls had chased profits, indulged in amazing extravagances and cranked out enough cheap mortgages to fuel a real estate boom. They had also experimented with lots of complex, creative--and risky--investments, even though they didn't have the economic models to really determine the worth of the things they were buying. The result was a mountain of bad debts and worthless "assets." Does any of that sound eerily (or nauseatingly) familiar?[^]
Ed, absolutely everything you linked to is true - on the other hand, in 2005 John McCain tried to move heaven and earth to rein in Fannie and Freddie - he was totally stymied by Chris Dodd (D) Chairman of the Banking Comittee.
Jon Smith & Wesson: The original point and click interface
-
Ed, absolutely everything you linked to is true - on the other hand, in 2005 John McCain tried to move heaven and earth to rein in Fannie and Freddie - he was totally stymied by Chris Dodd (D) Chairman of the Banking Comittee.
Jon Smith & Wesson: The original point and click interface
Oakman wrote:
Chris Dodd (D) Chairman of the Banking Comittee
Chris Dodd, senator from Connecticut, home of the insurance industry in America. I don't know if there's a connection, but Dodd (and others, including Republicans) were moving heaven and earth to help insurers, so I don't think his opposition was from any fondness for Fannie and Freddie, more likely protection for Aetna and The Hartford.
-
Oakman wrote:
Chris Dodd (D) Chairman of the Banking Comittee
Chris Dodd, senator from Connecticut, home of the insurance industry in America. I don't know if there's a connection, but Dodd (and others, including Republicans) were moving heaven and earth to help insurers, so I don't think his opposition was from any fondness for Fannie and Freddie, more likely protection for Aetna and The Hartford.
Ed Gadziemski wrote:
so I don't think his opposition was from any fondness for Fannie and Freddie, more likely protection for Aetna and The Hartford.
When they're sticking it to you, it doesn't matter whether they are using their left hand or their right hand - either way, you're going to end up bleeding in the gutter.
Jon Smith & Wesson: The original point and click interface
-
Ed Gadziemski wrote:
so I don't think his opposition was from any fondness for Fannie and Freddie, more likely protection for Aetna and The Hartford.
When they're sticking it to you, it doesn't matter whether they are using their left hand or their right hand - either way, you're going to end up bleeding in the gutter.
Jon Smith & Wesson: The original point and click interface
And don't forget KPMG, the big financial auditing firm. They are the Arthur Anderson (of Enron fame) of the mortgage mess, advising Fannie and Freddie on how best to cook the books so as to artificially inflate their stock price.
-
John W. McBush, that's who. In 1982, the same year John McCain entered the Senate, a bill was put forward that would substantially deregulate the savings and loan industry. The Garn-St. Germain Depository Institutions Act was an initiative of the Reagan administration, and was largely authored by lobbyists for the S&L industry--including John McCain's warm-up speaker at the Republican National Convention, Fred Thompson. Seven years later, the S&L industry was collapsing. What was the cause? Garn-St. Germain had handed the S&Ls a greatly expanded range of capabilities, allowing them to go head to head with full service banks, but it hadn't handed them the bank's regulations. Left to operate in an anarchistic gray area, S&Ls had chased profits, indulged in amazing extravagances and cranked out enough cheap mortgages to fuel a real estate boom. They had also experimented with lots of complex, creative--and risky--investments, even though they didn't have the economic models to really determine the worth of the things they were buying. The result was a mountain of bad debts and worthless "assets." Does any of that sound eerily (or nauseatingly) familiar?[^]
In July, the Department of Housing and Urban Development proposed that by the year 2001, 50 percent of Fannie Mae's and Freddie Mac's portfolio be made up of loans to low and moderate-income borrowers. Last year, 44 percent of the loans Fannie Mae purchased were from these groups. The change in policy also comes at the same time that HUD is investigating allegations of racial discrimination in the automated underwriting systems used by Fannie Mae and Freddie Mac to determine the credit-worthiness of credit applicants. [^] sort of shines some light on teh subject - note the publication date in the article.
Mike - typical white guy. The USA does have universal healthcare, but you have to pay for it. D'oh. Thomas Mann - "Tolerance becomes a crime when applied to evil." The NYT - my leftist brochure. Calling an illegal alien an “undocumented immigrant” is like calling a drug dealer an “unlicensed pharmacist”. God doesn't believe in atheists, therefore they don't exist.
-
In July, the Department of Housing and Urban Development proposed that by the year 2001, 50 percent of Fannie Mae's and Freddie Mac's portfolio be made up of loans to low and moderate-income borrowers. Last year, 44 percent of the loans Fannie Mae purchased were from these groups. The change in policy also comes at the same time that HUD is investigating allegations of racial discrimination in the automated underwriting systems used by Fannie Mae and Freddie Mac to determine the credit-worthiness of credit applicants. [^] sort of shines some light on teh subject - note the publication date in the article.
Mike - typical white guy. The USA does have universal healthcare, but you have to pay for it. D'oh. Thomas Mann - "Tolerance becomes a crime when applied to evil." The NYT - my leftist brochure. Calling an illegal alien an “undocumented immigrant” is like calling a drug dealer an “unlicensed pharmacist”. God doesn't believe in atheists, therefore they don't exist.
-
In July, the Department of Housing and Urban Development proposed that by the year 2001, 50 percent of Fannie Mae's and Freddie Mac's portfolio be made up of loans to low and moderate-income borrowers. Last year, 44 percent of the loans Fannie Mae purchased were from these groups. The change in policy also comes at the same time that HUD is investigating allegations of racial discrimination in the automated underwriting systems used by Fannie Mae and Freddie Mac to determine the credit-worthiness of credit applicants. [^] sort of shines some light on teh subject - note the publication date in the article.
Mike - typical white guy. The USA does have universal healthcare, but you have to pay for it. D'oh. Thomas Mann - "Tolerance becomes a crime when applied to evil." The NYT - my leftist brochure. Calling an illegal alien an “undocumented immigrant” is like calling a drug dealer an “unlicensed pharmacist”. God doesn't believe in atheists, therefore they don't exist.
Unfortunately, lefties never learn ... they seem to have a special module, let's call it a "Logic Shunt," which turns off their minds when actual facts, much less actual logical reasoning, is detected in their vicinity ... and they keep inflicting their mind-dead, stupid, counter-productive, self-centered and dangerous "compassion" on the rest of us.
-
John W. McBush, that's who. In 1982, the same year John McCain entered the Senate, a bill was put forward that would substantially deregulate the savings and loan industry. The Garn-St. Germain Depository Institutions Act was an initiative of the Reagan administration, and was largely authored by lobbyists for the S&L industry--including John McCain's warm-up speaker at the Republican National Convention, Fred Thompson. Seven years later, the S&L industry was collapsing. What was the cause? Garn-St. Germain had handed the S&Ls a greatly expanded range of capabilities, allowing them to go head to head with full service banks, but it hadn't handed them the bank's regulations. Left to operate in an anarchistic gray area, S&Ls had chased profits, indulged in amazing extravagances and cranked out enough cheap mortgages to fuel a real estate boom. They had also experimented with lots of complex, creative--and risky--investments, even though they didn't have the economic models to really determine the worth of the things they were buying. The result was a mountain of bad debts and worthless "assets." Does any of that sound eerily (or nauseatingly) familiar?[^]
At the end of the day a very large part of the fault lies with the consumers who took credit they were unable to repay or didnt fully understand. If a mortgage broker attempts to sell you a loan product while you have no income, no job & no assets which offers only a few years of low interest replayments before the payments sky rocket there is only one person to blame.
-
At the end of the day a very large part of the fault lies with the consumers who took credit they were unable to repay or didnt fully understand. If a mortgage broker attempts to sell you a loan product while you have no income, no job & no assets which offers only a few years of low interest replayments before the payments sky rocket there is only one person to blame.
Josh Gray wrote:
If a mortgage broker attempts to sell you a loan product while you have no income, no job & no assets which offers only a few years of low interest replayments before the payments sky rocket there is only one person to blame.
Agreed, but if that mortgage broker knows or even strong suspects that your abi;lity to pay down the loan is non-existent and he sells the mortage to someone else - who is to blame then? And when that third party - who is just as aware of the chicanery as the original broker - in turn sells that loan and many more like it. . .well you get the idea. Ultimately a whole bunch of crooks were allowed to pull their scams, because the cops (Treasury, Federal Reserve, Congress) were being paid off.
Jon Smith & Wesson: The original point and click interface
-
Josh Gray wrote:
If a mortgage broker attempts to sell you a loan product while you have no income, no job & no assets which offers only a few years of low interest replayments before the payments sky rocket there is only one person to blame.
Agreed, but if that mortgage broker knows or even strong suspects that your abi;lity to pay down the loan is non-existent and he sells the mortage to someone else - who is to blame then? And when that third party - who is just as aware of the chicanery as the original broker - in turn sells that loan and many more like it. . .well you get the idea. Ultimately a whole bunch of crooks were allowed to pull their scams, because the cops (Treasury, Federal Reserve, Congress) were being paid off.
Jon Smith & Wesson: The original point and click interface
Oakman wrote:
Agreed, but if that mortgage broker knows or even strong suspects that your abi;lity to pay down the loan is non-existent and he sells the mortage to someone else - who is to blame then? And when that third party - who is just as aware of the chicanery as the original broker - in turn sells that loan and many more like it. . .well you get the idea. Ultimately a whole bunch of crooks were allowed to pull their scams, because the cops (Treasury, Federal Reserve, Congress) were being paid off.
When did risk become a commodity to be profited from? There are many people in many positions that have contributed to this situation. What I would like to know is how these debts, when repackaged as various derivative products were able to be classified as investment grade rather than speculative securities. To my mind that is where the regulators have let the market down.
-
At the end of the day a very large part of the fault lies with the consumers who took credit they were unable to repay or didnt fully understand. If a mortgage broker attempts to sell you a loan product while you have no income, no job & no assets which offers only a few years of low interest replayments before the payments sky rocket there is only one person to blame.
I disagree. If the consumers were at fault we could foreclose their properties and write off $120 billion to be done with it, because that is the total amount of all mortgages currently in foreclosure. But consider this: All of the mortgages in the United States, both performing and non-performing ones, total $7 trillion. The amount insured by credit default swaps is $49 trillion. So there is only $1 of actual asset to secure each $7 of funny money, much of which is now at risk. How can you blame that on the consumers? Please explain your reasoning as to how consumers with $120 billion US (120,000,000,000) of debt are at fault for a financial crisis involving $49 trillion US (49,000,000,000,000). Maybe I'm stupid or something, but ....
-
At the end of the day a very large part of the fault lies with the consumers who took credit they were unable to repay or didnt fully understand. If a mortgage broker attempts to sell you a loan product while you have no income, no job & no assets which offers only a few years of low interest replayments before the payments sky rocket there is only one person to blame.
True. But America in general has developed this mentality that debt is not only OK, but the normal thing to do. That coupled with a strong desire for instant gratification and a complete lack of not only restraint but any concept or thought to restraint, and you have lots of problems we're now seeing. 400 lbs inconsiderate people trading in their SUV every two years for a brand new one, with a cell phone in one hand and a large fries and a jumbo milkshake in the other. The lifestyle we've fashioned for ourselves really is destructive, and now that that's finally evident, it's way too late. And I don't know what made us this way, but it's something I fight with daily even knowing that it's an issue. I know a lot of people who have no clue that it's even an issue, they grew up with it and don't know any other way to be. Maybe Rome really is a good analogy for where we are headed...
Visit BoneSoft.com for code generation tools (XML & XSD -> C#, VB, etc...) and some free developer tools as well.
-
At the end of the day a very large part of the fault lies with the consumers who took credit they were unable to repay or didnt fully understand. If a mortgage broker attempts to sell you a loan product while you have no income, no job & no assets which offers only a few years of low interest replayments before the payments sky rocket there is only one person to blame.
Josh Gray wrote:
If a mortgage broker attempts to sell you a loan product while you have no income, no job & no assets which offers only a few years of low interest replayments before the payments sky rocket there is only one person to blame.
The Mortgage Broker. Under the Trades Practices Act (I'm sure that's it, crammed so much crap into my head in 3 days if trainnig for the new job I can't now determine which way is up) it is illegal for anyone to sell a loan to someone they know cannot pay for it.
Michael Martin Australia "I controlled my laughter and simple said "No,I am very busy,so I can't write any code for you". The moment they heard this all the smiling face turned into a sad looking face and one of them farted. So I had to leave the place as soon as possible." - Mr.Prakash One Fine Saturday. 24/04/2004
-
I disagree. If the consumers were at fault we could foreclose their properties and write off $120 billion to be done with it, because that is the total amount of all mortgages currently in foreclosure. But consider this: All of the mortgages in the United States, both performing and non-performing ones, total $7 trillion. The amount insured by credit default swaps is $49 trillion. So there is only $1 of actual asset to secure each $7 of funny money, much of which is now at risk. How can you blame that on the consumers? Please explain your reasoning as to how consumers with $120 billion US (120,000,000,000) of debt are at fault for a financial crisis involving $49 trillion US (49,000,000,000,000). Maybe I'm stupid or something, but ....
Every irresponsible individual and organization has to be held accountable. Or we are doomed to repeat these mistakes. Sure they don't add up to the grand total, but that doesn't negate their responsibility. I don't think they should be strung up (at least not the consumers) but there should be consequences. They weren't duped into getting a loan, they sought them out.
Visit BoneSoft.com for code generation tools (XML & XSD -> C#, VB, etc...) and some free developer tools as well.
-
Josh Gray wrote:
If a mortgage broker attempts to sell you a loan product while you have no income, no job & no assets which offers only a few years of low interest replayments before the payments sky rocket there is only one person to blame.
The Mortgage Broker. Under the Trades Practices Act (I'm sure that's it, crammed so much crap into my head in 3 days if trainnig for the new job I can't now determine which way is up) it is illegal for anyone to sell a loan to someone they know cannot pay for it.
Michael Martin Australia "I controlled my laughter and simple said "No,I am very busy,so I can't write any code for you". The moment they heard this all the smiling face turned into a sad looking face and one of them farted. So I had to leave the place as soon as possible." - Mr.Prakash One Fine Saturday. 24/04/2004
Michael Martin wrote:
The Mortgage Broker. Under the Trades Practices Act (I'm sure that's it, crammed so much crap into my head in 3 days if trainnig for the new job I can't now determine which way is up) it is illegal for anyone to sell a loan to someone they know cannot pay for it.
In Australia yes but I doubt if its ever enforced. And what about the letters Amex keep sending me saying Im preapproved for $20K? I've never had any dealings with them and there is no way they can know my finantial position. Whats the new job?
-
I disagree. If the consumers were at fault we could foreclose their properties and write off $120 billion to be done with it, because that is the total amount of all mortgages currently in foreclosure. But consider this: All of the mortgages in the United States, both performing and non-performing ones, total $7 trillion. The amount insured by credit default swaps is $49 trillion. So there is only $1 of actual asset to secure each $7 of funny money, much of which is now at risk. How can you blame that on the consumers? Please explain your reasoning as to how consumers with $120 billion US (120,000,000,000) of debt are at fault for a financial crisis involving $49 trillion US (49,000,000,000,000). Maybe I'm stupid or something, but ....
Ed Gadziemski wrote:
Please explain your reasoning as to how consumers with $120 billion US (120,000,000,000) of debt are at fault for a financial crisis involving $49 trillion US (49,000,000,000,000).
Because the mortgage situation is only one reason the markets have been massivly over valued for years. If people had the brains to not spend what they cant afford to repay there wouldnt be the bad debt to repackage and sell on as good debt. You're not only paying for the bad debt, you've also indirectly paying for the profit people made out of the housing boom.
-
In July, the Department of Housing and Urban Development proposed that by the year 2001, 50 percent of Fannie Mae's and Freddie Mac's portfolio be made up of loans to low and moderate-income borrowers. Last year, 44 percent of the loans Fannie Mae purchased were from these groups. The change in policy also comes at the same time that HUD is investigating allegations of racial discrimination in the automated underwriting systems used by Fannie Mae and Freddie Mac to determine the credit-worthiness of credit applicants. [^] sort of shines some light on teh subject - note the publication date in the article.
Mike - typical white guy. The USA does have universal healthcare, but you have to pay for it. D'oh. Thomas Mann - "Tolerance becomes a crime when applied to evil." The NYT - my leftist brochure. Calling an illegal alien an “undocumented immigrant” is like calling a drug dealer an “unlicensed pharmacist”. God doesn't believe in atheists, therefore they don't exist.
So you're saying the credit problem is because colored people were allowed to buy houses? How many porch monkeys bought houses, and how many of them are in default or foreclosure? Must be an awful lot of heebie-jeebies sitting on the corner who used to be sitting on porches. C'mon, Mike. I'm not going to call you a racist, but consider this: There are only $120 billion worth of mortgages in foreclosure. Our government wants to hand out $700 billion to Wall Street and odds are that it won't be close to enough. The math don't add up, so throwing out accusations without facts to back them up is beneath you.
-
So you're saying the credit problem is because colored people were allowed to buy houses? How many porch monkeys bought houses, and how many of them are in default or foreclosure? Must be an awful lot of heebie-jeebies sitting on the corner who used to be sitting on porches. C'mon, Mike. I'm not going to call you a racist, but consider this: There are only $120 billion worth of mortgages in foreclosure. Our government wants to hand out $700 billion to Wall Street and odds are that it won't be close to enough. The math don't add up, so throwing out accusations without facts to back them up is beneath you.
Ed Gadziemski wrote:
So you're saying the credit problem is because colored people were allowed to buy houses? How many porch monkeys bought houses, and how many of them are in default or foreclosure? Must be an awful lot of heebie-jeebies sitting on the corner who used to be sitting on porches. C'mon, Mike. I'm not going to call you a racist, ...
You're a real ass (or really, really, really stupid); you'll fit in with "the community" swimmingly.
-
Ed Gadziemski wrote:
Please explain your reasoning as to how consumers with $120 billion US (120,000,000,000) of debt are at fault for a financial crisis involving $49 trillion US (49,000,000,000,000).
Because the mortgage situation is only one reason the markets have been massivly over valued for years. If people had the brains to not spend what they cant afford to repay there wouldnt be the bad debt to repackage and sell on as good debt. You're not only paying for the bad debt, you've also indirectly paying for the profit people made out of the housing boom.
Josh Gray wrote:
If people had the brains to not spend what they cant afford to repay there wouldnt be the bad debt to repackage and sell
The Savings & Loan mortgage bubble of the 1980s morphed into the tech stock bubble of the 1990s which morphed into the housing bubble of the 2000s which morphed into the commodities bubble of 2007 - 2008. Rampant credit-fueled speculation and massive, systemic over-valuation of assets is what the world's economy has run on the past 30 years. If governments and businesses and people had the brains to not spend what they can't affort to repay, we'd still be wearing loincloths and living in caves.