Republican Position - Minorities Caused the Financial Crisis

[lavender]

People wonder why many "elitists" thing the Republicans are a tad bit racist, even if not explicitly so.

 

[pinkstarfish]

Of course they are and of course they think that. Greed is powerful.

 

[IrezumiKiss]

And when their teenage daughters get pregnant out of wedlock, it's more or less a "planned decision that was considered by the family" than "irresponsibility."

 

[firespin]

So you're a Republican spokesperson now? Must be some affirmative action thing.

The single biggest cause of the problem was the people who wrote the mortgages didn't care if they were ever paid back. A lot of them committed fraud in various ways to get the loans processed...false documents, misleading terms, inflated appraisals...that cut across all socio-economic groups. The real estate speculators got hit as hard as anybody, but they don't make a lot of noise...they hope there's a bailout for all those unlucky people who are losing their homes...that they paid much less than market rate for, with little to no down.

 

[koalabear]

So you're a Republican spokesperson now? Must be some affirmative action thing.

The single biggest cause of the problem was the people who wrote the mortgages didn't care if they were ever paid back. A lot of them committed fraud in various ways to get the loans processed...false documents, misleading terms, inflated appraisals...that cut across all socio-economic groups. The real estate speculators got hit as hard as anybody, but they don't make a lot of noise...they hope there's a bailout for all those unlucky people who are losing their homes...that they paid much less than market rate for, with little to no down.

Kind of like all those zero interest car loans now. Ready to prop up Detroit next?

 

[richard_daily]

So you're a Republican spokesperson now? Must be some affirmative action thing.

The single biggest cause of the problem was the people who wrote the mortgages didn't care if they were ever paid back. A lot of them committed fraud in various ways to get the loans processed...false documents, misleading terms, inflated appraisals...that cut across all socio-economic groups. The real estate speculators got hit as hard as anybody, but they don't make a lot of noise...they hope there's a bailout for all those unlucky people who are losing their homes...that they paid much less than market rate for, with little to no down.

And the reason that it got out of hand was little-to-no regulation, and because the condo market was in a bubble.

Everyone saw free money for the taking... Very few people were looking at long-term ramifications.

 

[ksmybuttons]

People wonder why many "elitists" thing the Republicans are a tad bit racist, even if not explicitly so.

I'm really not liking the "blame game" going on right now. I wonder what would happen if someone took responsibility. The earth quit moving on it's axis?

 

[lavender]

I'm really not liking the "blame game" going on right now. I wonder what would happen if someone took responsibility. The earth quit moving on it's axis?

The responsibility rests with both parties and Wall Street, and the voters for buying the policies spewed on them.

But, there is an ideology that can be pin-pointed - i.e. complete deregulation.

Who promoted this deregulation is what is the blame game - the actual philosophy should be agreed upon and most importantly - CHANGED.

 

[firespin]

Kind of like all those zero interest car loans now. Ready to prop up Detroit next?

People don't write $200,000+ car loans, assuming the cars will appreciate in value.

The money that could be lost in those is a trifle compared to housing.

The big problem for Detroit is people are driving less and want more efficient cars.

 

[zipman]

The responsibility rests with both parties and Wall Street, and the voters for buying the policies spewed on them.

But, there is an ideology that can be pin-pointed - i.e. complete deregulation.

Who promoted this deregulation is what is the blame game - the actual philosophy should be agreed upon and most importantly - CHANGED.

Actually, the philosophy that had far more of an impact was the idea that everyone should be a homeowner which was started by the democrats and then taken to the next level by the Bush administration.

 

[lavender]

Actually, the philosophy that had far more of an impact was the idea that everyone should be a homeowner which was started by the democrats and then taken to the next level by the Bush administration.

It's broader than that, I think. Ultimately the problem is packaging mortgage backed securities having credit swaps and the way loans were structured.

Couple that with a housing market that is now deflated (because the housing bubble burst) and you have a financial mess.


I need to look into it - but Barney Frank indicated that in 1994 the Democratic Congress (right before Gingrich's revolution) asked for some of these issues to be addressed that were not until 2007. I'm going to look into that.

However, the argument that is based ultimately on the CSR which was created during Carter is incredibly flawed.

 

[Lancecastor]

If you're looking for who caused the mess you are in...have a look in the mirror.

The American Consumer eagerly signed up for the credit cards, mortgages and car loans they couldn't afford.

And now you're 700 Billion over your limit.

 

[lavender]

If you're looking for who caused the mess you are in...have a look in the mirror.

The American Consumer eagerly signed up for the credit cards, mortgages and car loans they couldn't afford.

And now you're 700 Billion over your limit.

I agree - but that is the microeconomic level. The macroeconomic level has to be addressed right now - because the macroeconomic level is what is about to crumble.

 

[firespin]

Back before the great depression, actually until 1934, you could buy stocks on any margin you could get from a broker. That led to people getting overextended, prices being big up too high, and small downturns turned into panic sales.

We haven't seen that happen in stocks since the margin requirements were standardized.

It used to be common for lenders to require down payments as much as 20%, which reduced the risk that people would get overextended, and also made small downturns in real estate just a small problem, since the owner had incentive to keep paying vs. lose the house.

Once we started seeing no-down-payment, no-documentation, interest-only loans that were going to all work out, since the house was the collateral, it was only a matter of time until it came crashing down. But...since the houses do have some inherent value, the downside is more limited than it was with stocks, but still significant since you need to live someplace.

This current crisis is less about the actual real estate market, and more about the credit market, and the requirement that security portfolios have to be marked to market, which is hard is a very illiquid mortgage security market. Thus the so-called bailout, which is really an asset sale, to someplace that doesn't have to mark to market.

 

[kevintn]

Here's an interesting read from the NY Times in 1999.

You may wish to read to whom this leftest rag points fingers.

However Lav, you being in the tank for the liberals, I don't expect you to give even this article much credence.

 

[Lancecastor]

I agree - but that is the microeconomic level. The macroeconomic level has to be addressed right now - because the macroeconomic level is what is about to crumble.

At a macro level, a free market economy will go up and down...it's supposed to.

Anything that softens the downcycles or caps the upcycles takes you (on a macro scale) closer to a socialist or communist controlled/closed market system.

I don't think you'll find any authoritative American economist who would say it wasn't a mistake for the Fed to keep its' hands off the markets following the 1929 crash...everyone says that had the Fed injected money into the economy instead of standing back and letting the free market decide, the Great Depression would have been a recession.

Since then, deficit spending and injections by the Fed into the economy have kept the US economy in longer upcycles.

This particularly large burp was caused yes by systematically removing increasing numbers of regulations...so the amount of Fed intervention now required to steady things is, naturally, larger.

But from a macro perspective, the housing bubble is the same as the .Com bubble. Just bigger.

And the way to fix it from a macro perspective is the same as it's always been since 1929. Just bigger.

Why? Well, you had a bigger idiot than usual as President for the past 8 years...a macro idiot.

But ultimately, the American Consumer decides the game, depending on who sells them the rosiest pair of glasses.

~~~

That's why Palin is so interesting...sure, political junkies and the intellectuals think she's less than zero...but she resonates with millions of people who aren't on the policy analysis drug and the millions who are getting pissed off enough at the old men in suits with fancy words to get out and vote this time.

When Obama talks about Main Street...you get the feeling he's been there to act interested.

But when Palin talks about Main Street...you feel like she still lives there, and that's a macro differentiator.

 

[tmleadr03]

So you're a Republican spokesperson now? Must be some affirmative action thing.

The single biggest cause of the problem was the people who wrote the mortgages didn't care if they were ever paid back. A lot of them committed fraud in various ways to get the loans processed...false documents, misleading terms, inflated appraisals...that cut across all socio-economic groups. The real estate speculators got hit as hard as anybody, but they don't make a lot of noise...they hope there's a bailout for all those unlucky people who are losing their homes...that they paid much less than market rate for, with little to no down.

I would have to disagree with that.

There were quite a few things that affected this.

1971 Disconnecting the gold standard
1977 Community Reinvestment Act to put pressure on the banks to give out risky loans
1994 Clinton increased pressure on the banks to give out risky loans with tightening the standards of the CRA. Also changing some of the rules in Fanny and Freddy to increase their ability to give out risky loans compaired to the rest of the banks.


It really is the .gov fault that this happened to this measure. If the .gov had kept out of it it would have not affected all of us this much.

 

[Sean]

I would have to disagree with that.

There were quite a few things that affected this.

1971 Disconnecting the gold standard
1977 Community Reinvestment Act to put pressure on the banks to give out risky loans
1994 Clinton increased pressure on the banks to give out risky loans with tightening the standards of the CRA. Also changing some of the rules in Fanny and Freddy to increase their ability to give out risky loans compaired to the rest of the banks.


It really is the .gov fault that this happened to this measure. If the .gov had kept out of it it would have not affected all of us this much.

Did you Google that as well? You know how well that works out for you.

 

[tmleadr03]

Did you Google that as well? You know how well that works out for you.

Thanks for joining the party. Glad to see you have more then one line... Oh wait...

 

[Sean]

Thanks for joining the party. Glad to see you have more then one line... Oh wait...

Still Googling things you don't understand. Sad, sad, little man.

 

[tmleadr03]

Still Googling things you don't understand. Sad, sad, little man.

Ah a new quip... oh wait...

 

[Sean]

Ah a new quip... oh wait...

Why do I need a new quip? You're a retard that Googles your arguments and runs away when you're made to look like a moron. The old ones are quite good enough for you.

 

[tmleadr03]

Why do I need a new quip? You're a retard that Googles your arguments and runs away when you're made to look like a moron. The old ones are quite good enough for you.

Google again! Yet you have nothing to say about the argument... Good for you, know your limitations.

 

[richard_daily]

When Obama talks about Main Street...you get the feeling he's been there to act interested.

But when Palin talks about Main Street...you feel like she still lives there, and that's a macro differentiator.

Good thing you're impartial...

 

[Sean]

Google again! Yet you have nothing to say about the argument... Good for you, know your limitations.

You don't have an argument, sonny. You have Google. You don't understand what you link and when you get called on it, you run away like the pathetic little cunt that you are.
You're nothing.