AMERICAN CONSERVATISM IN 2008 AND BEYOND

That's something the MACs on a2k will never see or admit to; they all want to blame Mae and Mac. It was essentially based on greed and stupidity that involved the banks and financial institutions of the world; they thought appreciation of real estate property values will continue to increase at those ridiculous rates forever.

I also remember all those speculators in properties who claimed they were making thousands (some millions) of dollars on their "investments" every month. TV programs were replete with those kinds of get rich quick stories. They were showing off their mansions and yachts. Haven't seen them lately.

I saw this on CNBC, being discussed. The panelists looked poleaxed by the number. I'll continue looking for more information today.

Cycloptichorn

In fairness to the Dems, Okie, 'our side' can be guilty of that too. For too long we turned our head and did not want to see the dishonesty being promoted or accommodated by the RINOs and CINOs among our elected leaders. We wanted to believe that the GOP was above that kind of irresponsibility. It wasn't. And once they regained power in the 2006 election, the Democrats have proved to be as bad or even worse because they think all they have to do is point to the GOP and say 'they did it too' in order to justify any irresponsible behavior now.

I say a pox on both of their houses and those of us who still have a clue better start making a lot of noise about what we expect from our elected leaders or we are in serious danger of losing America as we have known it.

Investor's Business Daily listed as not endorsing any candidate.

The editorials attacking Obama prior to the general election make me think it is highly unlikely the IBD endorsed him.

Really? And you think an editorial is evidence of this?

I think the printed standards for loans is more likely the place to look than an editorial that doesn't have to follow journalistic standards. An accusation that they were ordered to ignore part of the law doesn't really have any standing without some evidence.

Ooh, right. I guess the 'unintentional' consequence was the creation of a situation where the laws and rules could be manipulated by less-than-scrupulous business managers to make paper money.

That's like robbing a house and then saying 'well, you left the door so loosely latched, we couldn't resist!' It isn't a defense of stupid investments, Okie.

Cycloptichorn

Well, that's the number published here in Europe - said to come from an EU-paper.

I also read that the Euro countries are in complete termoil, because none of the "big" countries can agree on how to resolve the different countries demands.

I have always maintained that the Euro was a bad idea, because the countries who joined it could not freely try to resolve their own economy such as the situation we now have. I've also said that the Brits were smart to stay on their own currency.

The biggest problem we have here in the US is our government's penchant for trying to save AIG with taxpayer money which is a international conglomerate. In essense, the US taxpayers are helping the finances of foreign countries by trying to keep AIG solvent - now running almost 200 billion dollars. BIG MISTAKE of huge proportions!

AIG is just a proxy. All the money being poured into them is actually propping up the rest of our banks and financial institutions, b/c they all bought so heavy into AIG's cheese - it fails, they all fail.

Cycloptichorn

Excerpt:


This goes back to the Reagan quote closing that Investor Daily piece something to the effect that "Government is the problem causing such things and not the solution for" such things.

The way I see it, the CRA was the vehicle by which our government broke down some of the divisions between government, industry, and banks and it was that breakdown that was the primary catalyst of our current economic mess. The article linked here explains a bit of how our own imprudent actions started the snowball rolling and provided the trigger for the EU's economic woes.

I'm sorry, but this is simply untrue. You are blaming the CRA for things that have nothing to do with it and exaggerating it's importance. And this argument doesn't even make any sense. The CRA is responsible for an industry-wide financial collapse almost 40 years later? That does not seem logical at all, but instead just a way to complain about Big Government with no real causal chain shown.

I still have yet to hear any Conservative explain how all those financial trading houses and companies like AIG got their hands on mortgages, and how that was the government's fault in any way. How did the CRA make this happen?

Cycloptichorn

Wiki has a list of what AIG owns around the world:
http://en.wikipedia.org/wiki/American_International_Group

If you have yet to hear it, then you simply are not reading the information being provided. Nor have you provided any credible source rebutting all that information. You can say that it isn't so until the cows come home, but against all that informed opinion/evidence pointing to the CRA as the beginning of the problem, when you do, you simply look like you are, as Okie said, in a state of denial and refusing to accept what is.

No. The information you linked to does not explain this at all, as I have repeatedly pointed out to you.

Forget linking to anything. Please draw me a step-by-step explanation for how the housing market crash brought our financial industry to it's knees. I assure you I am more than happy to do so, but I'd love to hear your explanations for things which you have refused to provide so far, such as:

How did the Financial trading houses and AIG get involved in the mortgage market, and what proof do you have that the government 'forced' them to do this?



There exists no data pointing to a 40-year old law as the beginning of the problem, Fox, and you certainly haven't linked to any.

Just a bunch of editorials claiming that's the case. But they do not make a solid case for how this has happened! If you feel that they do, please - don't assert that they do, cut and paste the exact statements showing what happened!

Cycloptichorn

You were asked that question quite some time ago including being asked for the specific statements in your links that provided it. You did NOT do so.

Saying we haven't read it doesn't mean it is in your links. Provide the specifics and NOT from editorials.

Since several people have not seen it and you have not provided the specific words from your links, I don't think it is a reading problem on the part of those that can't find it.

How can you respect anything said by Reagan? He was a senile old moron who took direction from his wealthy controllers, an astrologer, and Nancy. His supply-side economics largely brought the country to its present terrible state.

Cyclop and C.I. and Parado-- I think you all believe that your beloved President and the Democrats are blameless and pure as the driven snow on this and that George Bush, the Republicans, and greedy capitalists are to blame for all of it. I'm sure you want to believe that the information I have posted doesn't make the case that the Democrats are culpable as are, the RINOs and CINOs, who did nothing to stop the bad practices when they had the chance. But frankly, I am tired of repeating myself, so unless any of you have ANYTHING to competently rebut the information I have posted, I will assume that a) you haven't read it or b) you refuse to believe it based on prejudice and partisanship.

You provide a competent rebuttal other than your own opinion, and we'll go from there. Otherwise, I think I've made my case sufficiently well for the point I intended to make.

Foxfyre wrote:

Quote:
The U.S. subprime mortgage mess impacted Europe almost immediately after it erupted in August 2007, causing write-downs and credit losses among some of the largest European banks. The Europe-wide cost of the subprime to date has been $323.3 billion in asset write-downs. Most analysts " though not Stratfor " mistook Europe’s initial resilience in the face of the U.S. subprime crisis for an overall economic robustness that would stave off a wider economic crisis.

Europe can only wish the U.S. subprime crisis were the extent of its problems, however.


The Importance of Banking to the European Economy

The underlying reason for Europe’s vulnerability is rooted not in the U.S. subprime " that is only the proximate trigger " but instead in the importance of banks to the entire European economy. In the United States, the crisis might be contained within the financial and housing sectors alone, but in Europe, the close connections between banks and industry almost assure a broad and deep spread of the contagion. Unlike the United States, where the government has spent more than a century battling to break the links among government, industry and banks, this battle is only rarely joined in Europe. If anything, such links " one could even say collusion " between banks and businesses were encouraged from the very beginning of modern European capitalism.

http://www.istockanalyst.com/article/viewarticle+articleid_2702034.html

I did exactly that, Fox, in my piece on the last page detailing how AIG was running a semi-scam in the CDO and Credit-Default swap market. It detailed exactly how financial trading houses and other non-traditional companies and funds got their hands on mortgages. You just didn't read it.

You cannot draw a simple, step-by-step picture to back up your allegations Fox, and that's pretty weak sauce. If the situation is as you say it is, this should be a trivial matter. If your links support your case the way you say they do, it should be a trivial matter to cut and paste the exact parts of them which do.

Here's the link again, just to show you that others are willing to hunt up information instead of just commanding you to find it yourself and haughtily commenting that we've already presented our case -

http://www.nytimes.com/2009/02/28/business/28nocera.html?_r=1&pagewanted=all

Cycloptichorn

Foxfyre wrote:

Re: Cycloptichorn (Post 3587788)
Cycloptichorn wrote:

The government did not mandate, enable, or encourage the repackaging of shitty securities as good ones, and the investment in these securities by trading houses and banks. Not at all.

You must have missed this the first time I posted it. (Reminder before declaring this a rightwing wacko group: they endorsed Barack Obama for president (which I am pretty sure they are regretting by now):

Quote:
Stop Covering Up And Kill The CRA
INVESTOR'S BUSINESS DAILY
11/28/2008

Regulation: The Community Reinvestment Act is to blame for the financial crisis, but it so powerfully serves Democrats' interests that they'll do anything to protect it " including revising history.

The CRA coerces banks into making loans based on political correctness, and little else, to people who can't afford them. Enforced like never before by the Clinton administration, the regulation destroyed credit standards across the mortgage industry, created the subprime market, and caused the housing bubble that has now burst and left us with the worst housing and banking crises since the Great Depression.

The CRA should be abolished, along with the government-sponsored enterprises that fueled the secondary market for subprimes " under pressure from Clinton, who ordered HUD to set quotas for "affirmative action" lending at Fannie Mae and Freddie Mac.

But powerful Democrats in Washington want to protect the act " along with Fannie and Freddie " and spin the subprime scandal as the result of too little regulation, not too much.

"Repealing or weakening the CRA would be a mistake," warns Senate Banking Committee Chairman Chris Dodd, D-Conn., who argues that the CRA should be strengthened.

Dodd, the top recipient of Fannie donations and himself a beneficiary of a sweetheart mortgage brokered by a subprime lender, recently invited one of Clinton's top enforcers of the CRA to testify.

"The notion that CRA has caused this problem is a pernicious thought," said former Comptroller of the Currency Gene Ludwig. "These are not truthful statements. The CRA has helped to create a better and sounder world for finance, not the opposite."

Dead wrong. But the mainstream media believe it, and have attacked those, including this paper, who dare to tell the truth about the crisis. Already the debacle has erased $13 trillion in wealth, while putting taxpayers on the hook for up to $8 trillion in bailouts.

"The latest salvo from conservatives began via a Sept. 15 editorial in Investor's Business Daily, titled 'The Real Culprits In This Meltdown,' " grumbled a column distributed by Scripps Howard News Service. "Its editorial blamed President Clinton for today's mess."

As we said, Clinton beefed up the CRA and used it to force banks to subsidize poor communities with close to $1 trillion in high-risk loans and other commitments that flouted underwriting rules.

Yet, somehow, these media-driven myths keep getting in the way of actual facts, such as:

Fact: The 1977 law was only lightly enforced until Clinton added teeth to it in 1994 and launched an anti-redlining campaign against banks, led by Ludwig, Housing Secretary Henry Cisneros (and later Andrew Cuomo) and Attorney General Janet Reno that lasted into this decade.

Minority homeownership rates, which had been flat, began a steep rise in 1995, and home prices soon followed, stoked by easier lending. Numerous bank officials complain that they still feel pressured by CRA regulators to make inner-city loans they know are at great risk of defaulting.

Myth: The CRA could not have led to financial Armageddon, because the overwhelming share of subprime mortgages came from lenders that were not banks and not regulated by the CRA.

Fact: Nearly 4 in 10 subprime loans between 2004 and 2007 were made by CRA-covered banks such as Washington Mutual and IndyMac. And that doesn't include loans made by subprime lenders owned by banks, which were in effect covered by the CRA.

Last year, when the bubble burst, bank subprime loans totaled $142 billion, dwarfing those made by lenders.

What's more, the biggest subprime lender, Countrywide, while not subject to the law, still came under federal pressure to make risky loans in minority communities.

Clinton created a separate department at HUD to police "fair lending" at Fannie and Freddie and also at lenders like Countrywide, which became Fannie's biggest client. In 1994, Countrywide became the nation's first mortgage lender to sign with HUD a "Declaration of Fair Lending Principles and Practices."

As a result, Countrywide made more loans to minorities than any other lender " and not surprisingly, was one of the first lenders swamped by loan defaults.

Other lenders felt the heat from Reno's Justice Department, which prosecuted them for failing to operate enough branches in black neighborhoods. Reno put the entire banking industry on notice about the CRA and her enforcement program.

Myth: The CRA did not force anyone to do subprime loans or take excessive risks.

Fact: Subprime loans were the vehicle banks used to satisfy CRA compliance, and Clinton and his regulators encouraged their use. Before Clinton took office, subprimes were virtually unheard of. By the time he left, they made up more than 9% of the market for mortgage originations. Today they're 20%.

"It's instructive to go back to the early stages of the subprime market, which has essentially emerged out of the CRA," ex-Fed chief Alan Greenspan said in recent testimony on the roots of the crisis.

Clinton pushed banks to grant mortgages to minorities with poor credit by using "flexible" underwriting standards " or risk being branded racist. Rules were weakened to the point where welfare and unemployment checks were accepted as qualifying income.

Myth: Greedy investment bankers, who securitized and sold subprime mortgages, drove us to the credit crisis, not government.

Fact: Clinton's regulatory policies led to the creation of this new risk on Wall Street. His CRA amendments created the subprime market, and only after he pressured Fannie and Freddie to socialize the risk and guarantee the profit from the subprime loans did Wall Street get involved in a big way.

The exotic securitizations that have gotten so much of the blame were a symptom, not the cause, of the crisis.

The architects of the crisis want to divert attention from their own culpability by blaming the markets rather than their own regulations mandating that banks make high-risk loans based on race.

In fact, regulations had almost everything to do with this mess. And instead of strengthening them to atone for the alleged "sins of capitalism," we should be abolishing them.

Two bills in the House would be a good place to start. HR 7264, which has nine co-sponsors, would repeal the CRA. And HR 7094, with 17 co-sponsors, would dissolve Fannie Mae and Freddie Mac.

During the last severe slump, President Reagan deregulated the economy, saying: "Government is not the solution to the problem; government is the problem." He's as right today as he was then.
http://www.investors.com/editorial/editorialcontent.asp?status=article&id=312766781716725&secid=1501

Cyclop, even you could not have carefully read the NY piece that you linked and failed to see how it does not only rebut my opinion on this, but actually reinforces it. You really don't understand those terms you asked me about earlier and then refused to define them or explain how they applied to this issue, can you.