Strange bedfellows: Cruz and Warren

[BoyNextDoor]

Sen Cruz and Sen Warren both do not like the so-called "Cromnibus" bill that both legislates and funds the federal government for a year, albeit for completely different reasons.

If the ends of the spectrum rallied against the middle to open the bill for amendments that would be a very interesting event especially headed into the new congress next year. The House has gone home for the recess so in theory there is no way to reconcile changes before the next sitting of the House. They have already had to extend the continuing resolution to Wednesday.

Any chance of Cruz and Warren cooperating?

 

[RobDownSouth]

It's an ugly bill, to be sure. Hitler Cruz doesn't like it because it funds the DHS.
Warren doesn't like it because it re-introduces the same sort of derivative bullshit that caused the Bush Recession. Wall Street uber alles in this bill, it's sowing the seed of a long term financial disaster AGAIN.

 

[BoyNextDoor]

So apart from the good or bad policy aspects of their respective sides on those issues, the hammer seems to be that the bill can't be opened for amendment because the House is in recess so any changes. I'd love to see them get the bill opened for amendment!

On the policy, I agree with both of them. Defund Homeland Security (abolish the department IMHO) but not at all for the same reasons as Cruz and under no freeking circumstances weaken Dodd/Frank!!

 

[RobDownSouth]

On the policy, I agree with both of them. Defund Homeland Security (abolish the department IMHO) but not at all for the same reasons as Cruz and under no freeking circumstances weaken Dodd/Frank!!

I'd support that.

 

[Que]

So apart from the good or bad policy aspects of their respective sides on those issues, the hammer seems to be that the bill can't be opened for amendment because the House is in recess so any changes. I'd love to see them get the bill opened for amendment!

On the policy, I agree with both of them. Defund Homeland Security (abolish the department IMHO) but not at all for the same reasons as Cruz and under no freeking circumstances weaken Dodd/Frank!!

What do you like about Dodd/Frank?

I like the irony of the two Fannie Freddie boosters most responsible for the housing bubble being enshrined on a solution that didn't address that problem.

 

[Ulaven_Demorte]

What do you like about Dodd/Frank?

I like the irony of the two Fannie Freddie boosters most responsible for the housing bubble being enshrined on a solution that didn't address that problem.

Except that Fannie and Freddie weren't most responsible for the housing bubble. That would be the privately held banks that pushed sub prime mortgages, of which Frankie and Freddie held a very small percentage.

In the end it was the weakening of Glass-Steagal that lead to the housing bubble. Banks pushed sub prime mortgages onto people who should never have qualified because of artificially inflated property values. Property values artificially inflated by the banks themselves.

I have a goat. My brother in law says that my goat is worth a million dollars. My uncle loans me a million dollars based on his son's appraisal. They sell my million dollar goat loan to my neighbor for 1.25 million as a great investment in the future of goats.

 

[Que]

Except that Fannie and Freddie weren't most responsible for the housing bubble. That would be the privately held banks that pushed sub prime mortgages, of which Frankie and Freddie held a very small percentage.

In the end it was the weakening of Glass-Steagal that lead to the housing bubble. Banks pushed sub prime mortgages onto people who should never have qualified because of artificially inflated property values. Property values artificially inflated by the banks themselves.

I have a goat. My brother in law says that my goat is worth a million dollars. My uncle loans me a million dollars based on his son's appraisal. They sell my million dollar goat loan to my neighbor for 1.25 million as a great investment in the future of goats.

Private banks do not hold paper...they bundle it and sell it, hence the collapse. Fannie and Freddie are the facilitators that stir that paper. Without them, this never could have happens from the sheer scale of the number of mortgages originated. All of the banks together do not have anything close to that amount of money on deposit.

The banks do not and did not set the lending guidelines for a loan to be acceptable to fannie mae for bundling...fannie mae does. Fannie not only lowered the lending standards the insisted that banks actively go out and seek out opportunities to generate what is known as grade B paper or face extra scrutiny by federal bank examiners that will be looking for red-lining.

Fannie and Freddie are both responsible for the inflated prosperity of the housing bubble as well as the predictable outcome of that the crash.

Prior to the government manipulated lowering of interest rates and fannie's lowering of standards including debt to income ratios, accepting lower FICO scores and lowering reserve requirements and making formerly illegal seller kickbacks legal and encouraged...the average Gross Rent Multiplier was 110. At the time of the crash it was 245.

To put that in perspective a property that had a fair market rent of 1000 per month sold for $110,000. After the run-up it still rented for $1000 per month and now cost $235,000, making the return on investment for the hypothetical property completely untenable.

 

[Ulaven_Demorte]

Private banks do not hold paper...they bundle it and sell it, hence the collapse. Fannie and Freddie are the facilitators that stir that paper. Without them, this never could have happens from the sheer scale of the number of mortgages originated. All of the banks together do not have anything close to that amount of money on deposit.

The banks do not and did not set the lending guidelines for a loan to be acceptable to fannie mae for bundling...fannie mae does. Fannie not only lowered the lending standards the insisted that banks actively go out and seek out opportunities to generate what is known as grade B paper or face extra scrutiny by federal bank examiners that will be looking for red-lining.

Fannie and Freddie are both responsible for the inflated prosperity of the housing bubble as well as the predictable outcome of that the crash.

Prior to the government manipulated lowering of interest rates and fannie's lowering of standards including debt to income ratios, accepting lower FICO scores and lowering reserve requirements and making formerly illegal seller kickbacks legal and encouraged...the average Gross Rent Multiplier was 110. At the time of the crash it was 245.

To put that in perspective a property that had a fair market rent of 1000 per month sold for $110,000. After the run-up it still rented for $1000 per month and now cost $235,000, making the return on investment for the hypothetical property completely untenable.

Fannie and Freddie were not responsible for the sheer number of sub-prime loans which caused the housing bubble, those originated at privately held banking institutions. Nobody forced any bank to makes loans. The assertion that Fannie and Freddie caused the collapse when they were responsible for a fraction of the outright fraudulent loans and subsequent sales of worthless paper bridled into investment portfolios.

Deregulation of the banking industry was the culprit, not the fact that Fannie and Freddie were trying to make housing affordable for lower income people, as it had been doing for decades. It wasn't until safeguards put in place following the crash of 1929 were repealed that banks went right back to practices similar to what caused that crash. Now the banking industry are lobbying congress to weaken Dodd-Frank so that they can again engage in the very same practices. Einstein's definition of insanity demonstrated for all to see.

 

[RobDownSouth]

Fannie and Freddie were not responsible for the sheer number of sub-prime loans which caused the housing bubble, those originated at privately held banking institutions. Nobody forced any bank to makes loans. The assertion that Fannie and Freddie caused the collapse when they were responsible for a fraction of the outright fraudulent loans and subsequent sales of worthless paper bridled into investment portfolios.

Deregulation of the banking industry was the culprit, not the fact that Fannie and Freddie were trying to make housing affordable for lower income people, as it had been doing for decades. It wasn't until safeguards put in place following the crash of 1929 were repealed that banks went right back to practices similar to what caused that crash. Now the banking industry are lobbying congress to weaken Dodd-Frank so that they can again engage in the very same practices. Einstein's definition of insanity demonstrated for all to see.

"But...but....Fannie and Freddie" is one of their favorite excuses.

 

[Que]

Huge bills that no one likes packed with privileges for friends? Sounds like "how sausage is made" in congress.