112
   

Where is the US economy headed?

 
 
ican711nm
 
  0  
Reply Thu 15 Apr, 2010 02:34 pm
@ican711nm,
Quote:

http://teapartypatriots.org/BlogPostView.aspx?id=3ead6ca8-1f8c-4456-bbb4-1f6ee5a713ad

Once again, Tea Party Patriots will lead the conversation, with thousands of local coordinators hosting local events on April 15th which will include the participation of millions of Americans. We will use Tax Day as a means to further attract, educate, organize and mobilize our fellow citizens to secure public policy consistent with three core values of fiscal responsibility, Constitutionally limited government, and free markets.


Government Out of Control - Fast Facts

1. Job Killing Health Care Bill Raises Taxes. Obama Pays For His Government-Run Health Care Bill With $569.2 Billion In Job-Killing Taxes On Small Businesses, Investments And Innovation. (Douglas W. Elmendorf, Letter to Speaker Nancy Pelosi, 3/18/10)

2. Obama's $3.8 Trillion Budget Raises Taxes by $2 Trillion. "President Barack Obama's $3.8 trillion budget for fiscal 2011 raises $2 trillion in taxes, cuts spending on programs with considerable political support and still leaves the nation with $8.5 trillion in additional debt over the next decade."

(Jonathan Weisman, "White House Proposes $3.8 Trillion Budget," The Wall Street Journal, 2/1/10)
0 Replies
 
H2O MAN
 
  -2  
Reply Thu 15 Apr, 2010 02:52 pm


The US economy is burdened by the Obama administration.
This gang of radical liberals needs to do the patriotic thing and step aside.
0 Replies
 
georgeob1
 
  1  
Reply Thu 15 Apr, 2010 05:01 pm
@Cycloptichorn,
Cycloptichorn wrote:


Let me ask you: How exactly did Fannie and Freddie cause the value of homes to rise so precipitously? How did they cause the banks to write hundreds of thousands of bad loans on houses whose mortgages were too expensive to fall under Fannie guidelines? You say that gov't intervention leads to higher prices, but you don't ever explain exactly how it did.

Cycloptichorn


The answer is rather obvious. Both institutions attracted extraordinary amounts of capital to mortgage markets by supporting Congressionally mandated policies of directing specified percentages of lending to previously unqualified borrowers or borrowers who would otherwise have been required to make at least a 20% down payment on the property in question (thereby giving them some skin in the game even with a price decline), and, even more importantly, by buying and securitizing those loans from issuing banks, thereby relieving them of risk and indirectly contributing to the lowering of standards of care in issuing loans. The issuing banks thus relieved of their risk were free to, with the avid help of Fannie and Freddy, to then issue another round of loans --- all with the continuing applause and encouragement of Barney Frank and Maxine Waters.

Fannie and Freddie aren't in the game anymore. That's why it is now so difficult to get a mortgage.
hawkeye10
 
  1  
Reply Thu 15 Apr, 2010 05:08 pm
@georgeob1,
Quote:
Fannie and Freddie aren't in the game anymore. That's why it is now so difficult to get a mortgage.
NO, Mortgages have been difficult to get ever since the crash, because it was then that real numbers that could be documented became a requirement again. It is too soon to say what the further restriction of capital flow is caused by F/F no longer buying up everything in sight.
0 Replies
 
Thomas
 
  3  
Reply Thu 15 Apr, 2010 05:17 pm
@georgeob1,
georgeob1 wrote:
The answer is rather obvious. Both institutions attracted extraordinary amounts of capital to mortgage markets by supporting Congressionally mandated policies of directing specified percentages of lending to previously unqualified borrowers

Is that so? Tell me again, what was Fannie's and Freddie's share of the subprime mortage market, which is where the financial system began to break down? Conversely, what percentage of their balance sheets consisted of subprime loans? I suspect you're substantially overestimating both percentages because you want to make the crisis a story about Big Government excesses.
0 Replies
 
okie
 
  1  
Reply Thu 15 Apr, 2010 10:44 pm
@georgeob1,
georgeob1 wrote:

Cycloptichorn wrote:


Let me ask you: How exactly did Fannie and Freddie cause the value of homes to rise so precipitously? How did they cause the banks to write hundreds of thousands of bad loans on houses whose mortgages were too expensive to fall under Fannie guidelines? You say that gov't intervention leads to higher prices, but you don't ever explain exactly how it did.

Cycloptichorn


The answer is rather obvious. Both institutions attracted extraordinary amounts of capital to mortgage markets by supporting Congressionally mandated policies of directing specified percentages of lending to previously unqualified borrowers or borrowers who would otherwise have been required to make at least a 20% down payment on the property in question (thereby giving them some skin in the game even with a price decline), and, even more importantly, by buying and securitizing those loans from issuing banks, thereby relieving them of risk and indirectly contributing to the lowering of standards of care in issuing loans. The issuing banks thus relieved of their risk were free to, with the avid help of Fannie and Freddy, to then issue another round of loans --- all with the continuing applause and encouragement of Barney Frank and Maxine Waters.

Fannie and Freddie aren't in the game anymore. That's why it is now so difficult to get a mortgage.

Absolutely correct, George, and in fact anyone that tried to reform Fannie and Freddie were accused of racism. As I understand it, the Bush administration tried to institute some reforms, but the Democrats resisted, as I said, using the accusations of racism in the process, inlcuding Waters and others. I have posted the evidence as recorded on video, as have others, to no avail upon the living in denial crowd, such as cyclops and others, but it is all on tape for anyone that cares to face the truth of it.
okie
 
  0  
Reply Thu 15 Apr, 2010 11:20 pm
@okie,
Here is one video of the smoking gun. It has been posted before, probably many times, but still instructive for those that seem to have missed it or insist upon ignoring it:

0 Replies
 
Cycloptichorn
 
  0  
Reply Thu 15 Apr, 2010 11:24 pm
@georgeob1,
Oh, come on. F/F are responsible for the crisis because they 'indirectly' contributed to the lowering of lending standards?

Your account would make more sense if the CRE- and other Congressional mandated loans were the ones failing. They were and are not. I would love to see you attempt to answer Thomas' question on this issue; it would be interesting to see you reconcile the facts of the situation with your penchant for blaming Democrats for everything.

Nothing F/F did forced any bank to write bad or subprime mortgages. Nothing. The whole premise of blaming them for the crash is foolishly ignorant, George, and while I don't expect Okie to know better, you should.

It would truly be sad if you bought into the party line bullshit on this issue - that Big Government and the Democrats are to blame, and not those who made the loans in the first place. What happened to the concept of personal responsibility?

Cycloptichorn
okie
 
  1  
Reply Thu 15 Apr, 2010 11:28 pm
@Cycloptichorn,
Cycloptichorn wrote:

Nothing F/F did forced any bank to write bad or subprime mortgages.
Cycloptichorn

Its not about force, dolt. How dense can you be? It was all about encouragement and facilitating irresponsible behavior in the market, or enabling bad loans. The government made bad loans seem like a profitable endeavor.

Example, if the government set up organizations to encourage loans on clunkers, so that banks could make loans to people to buy junker cars, at inflated prices and to people with lousy credit, so that they could then bundle a bunch of those loans and even sell them to the government organizations that mandated such loans, how long would it take for the entire used car industry become one huge mess or house of cards? This is your test for the day, cyclops, write an essay for Econ 101 and see if you can get a passing grade.
Cycloptichorn
 
  0  
Reply Thu 15 Apr, 2010 11:35 pm
@okie,
okie wrote:

Cycloptichorn wrote:

Nothing F/F did forced any bank to write bad or subprime mortgages.
Cycloptichorn

Its not about force, dolt. How dense can you be? It was all about encouragement and facilitating irresponsible behavior in the market, or enabling bad loans. The government made bad loans seem like a profitable endeavor.


Nothing that F/F did made writing bad mortgages or loans seem like a profitable endeavor. I maintain that you have no idea what you are talking about and know nothing about the mortgage market, the mortgage resale marketm, collateralized debt obligations, or credit-default swaps. You don't seem to understand how the investment houses got into owning mortgages. The whole thing in your mind is so exceedingly simplified, it's crazy.

The truth is that banks and investment houses got into mortgages in a heavy way, because they were making money off of them hand over fist in a market which was unregulated. The banks and investment houses found an accounting trick (the Credit-default swap) that allowed them to pretend that they had no risk when purchasing heavily leveraged mortgage packages. AIG was happy to play along, because everyone was making a killing. It was too good to be true, and F/F were simply the first casualty of the same problem which took them all down.

A while back, even you were acknowledging the truth of this; talking about greedy mortgage lenders and investors who should have known better. What happened? Has your common sense been completely subsumed by your need to blame Obama and the Democrats for everything - even things which took place under Republican control of the entire government?

I would also point out that there were legions of people - supposedly some of the smartest people in the country, if you believe Wall Street anyways - working at these banks and investment houses, whose only job was to manage risk for their companies and investors. They specifically were paid to examine the situation and determine where investments should be made. You would have us believe that these people bear no responsibility at all for their failure to properly manage the risk that their company was bearing. You would have us believe that the government tricked all these intelligent people into making bad loans and risky loans. I find this extremely hard to believe, and what more, I don't believe that you even believe this.

Quote:

Example, if the government set up organizations to encourage loans on clunkers, so that banks could make loans to people to buy junker cars, at inflated prices and to people with lousy credit, so that they could then bundle a bunch of those loans and even sell them to the government organizations that mandated such loans, how long would it take for the entire used car industry become one huge mess or house of cards? This is your test for the day, cyclops, write an essay for Econ 101 and see if you can get a passing grade.


I wonder if you even realize how little this example resembles the actual mortgage market and the collapse that happened. The mortgages that failed at such a high rate are not ones mandated by the government - at all. I really get the idea that you bunch think a lot of poor folks defaulted on their houses and that's what caused the crisis. Nothing could be further from the truth.

Cycloptichorn
parados
 
  2  
Reply Fri 16 Apr, 2010 09:40 am
@Cycloptichorn,
Goldman accused of fraud in mortgages
Quote:
The Securities and Exchange Commission announced Friday civil fraud charges against the Wall Street powerhouse and one of its vice presidents. The agency alleges Goldman failed to disclose that one of its clients helped create " and then bet against " subprime mortgage securities that Goldman sold to investors.


It's a good thing okie isn't in charge of investigating what really happened.
H2O MAN
 
  -1  
Reply Fri 16 Apr, 2010 09:56 am
@parados,


Wall Street is being demonized by the Obama administration.
Wall Street is the scapegoat used to protect Frank and friends.
0 Replies
 
Cycloptichorn
 
  1  
Reply Fri 16 Apr, 2010 10:13 am
@parados,
parados wrote:

Goldman accused of fraud in mortgages
Quote:
The Securities and Exchange Commission announced Friday civil fraud charges against the Wall Street powerhouse and one of its vice presidents. The agency alleges Goldman failed to disclose that one of its clients helped create " and then bet against " subprime mortgage securities that Goldman sold to investors.


It's a good thing okie isn't in charge of investigating what really happened.


I was just coming here to post that!

An excellent example of the sort of greed and malfeasance that these guys got up to.

Cycloptichorn
0 Replies
 
ican711nm
 
  0  
Reply Fri 16 Apr, 2010 11:10 am
Congress was informed in advance about the pending decline of the USA's finance industry being caused by Fannie & Freddie.

1977
President Carter signs into law CRA (i.e., Community Investment Act) Carter.
Mandates banks invest in poor urban areas.

1991
Home Mortgage Disclosure Act is expanded to compares rejection rates by race.

1995
Clinton changes CRA to require banks provide mortgages to their poorer communities.

1998
Janet Reno declares that since inception of 1992 fair lending initiative, Justice Department has filed 13 major fair lending lawsuits.

2001
*04/…."Bush declares that the size of Fannie Mae and Freddie Mac is a potential large financial problem because financial trouble of a large "GSE (i.e., Government Sponsored Enterprise) could cause strong repercussions in financial markets."

2003
*01/22"Freddie Mac announces it must restate financial results for the previous 3 years due to earnings report errors.
*06/11"Freddie Mac is the subject of federal securities and criminal investigations.
*09/11"New York Times says, "Bush recommends the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago."
*09/25--Barney Frank responds, "Fannie Mae and Freddie Mac do very good work, and they are not endangering the fiscal health of this country … I believe there has been more alarm raised about potential unsafety and unsoundness than, in fact, exists."
*10/29"Fannie Mae discloses $1.2 billion accounting error.

2004
*06/16"Samuel Bodman, Deputy Secretary of Treasury, repeats Bush Administration call "for a new, first class, regulatory supervisor for three housing GSEs (i.e., Government Sponsored Enterprises): Fannie Mae, Freddie Mac, and the Federal Home Loan Banking System.
*10/06"Franklin Raines, Fannie Mae CEO, testifies before the House Financial Services Committee, "assets are so riskless that the capital for holding them should be under two percent. "

2006
*04/18"Freddie Mac pays a record $3.8 million Federal Election Commission fine.
*05/23"Fannie Mae’s regulator announces that Fannie Mae has for years overstated reported income and capital by $10.6 billion.

*05/25"Senator John McCain calls for GSE (i.e., Government Sponsored Enterprise) regulatory reform legislation, warning: "If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system and the economy as a whole.”
*11/07"Democrats win majorities in both houses of Congress. The U.S. economy is growing at about 3 percent, unemployment is at 4.5 percent, and inflation under 2 percent.

2007
*06/23"Two Bear Sterns hedge fund groups collapse due to their mortgage investments.
*08/09" President Bush requests Congress pass a reform package for Fannie Mae and Freddie Mac.
*12/06" President Bush warns Congress of need to pass legislation reforming GSEs (i.e., Government Sponsored Enterprises).


2008
*03/14"J.P. Morgan and the Federal Reserve recognize extent of Bear’s toxic assets, including sub-prime mortgages, and credit default swaps, and interconnection with other banks.
*03/14"At Economic Club of New York, President Bush requests Congress take action and reform Fannie Mae and Freddie Mac.
*04/14"President Bush issues a plea to Congress to pass legislation reforming Fannie Mae and Freddie Mac.
*05/03"President Bush issues a plea to Congress to pass legislation reforming Fannie Mae and Freddie Mac.
*05/19"President Bush issues a plea to Congress to pass legislation reforming Fannie Mae and Freddie Mac.
*05/31"President Bush issues a plea to Congress to pass legislation reforming Fannie Mae and Freddie Mac.
*06/06"President Bush issues a plea to Congress to pass legislation reforming Fannie Mae and Freddie Mac.
*07/11"Senator Chris Dodd says: "There’s sort of a panic going on today, and that’s not what ought to be. The facts don’t warrant that reaction, in my opinion … Fannie Mae and Freddie Mac were never bottom feeders in the residential mortgage market. People ought to feel comfortable about that. "

*07/13"Treasury Secretary Paulson asks Congress to grant him authority to take over Fannie Mae and Freddie Mac.
*09/07"Paulson takes over Fannie Mae and Freddie Mac, and offers them $200 billion, despite the fact their government credit line had been limited to $25 billion.
*09/15"Lehman Brothers officially collapses, the government does not intervene, and panic occurs, triggering a big Dow decline.
*09/16"Nancy Pelosi is asked if the Democrats bear some responsibility for the current crisis on Wall Street. Pelosi answers, "No. "
*09/17"Harry Reid regarding the economic collapse: "No one knows what to do."
*09/18"About 11:00 AM, the Federal Reserve noticed a tremendous drawdown of money market accounts in the United States within two hours, equal to about $550 billion. Treasury puts $105 billion in the system, but quickly realizes it cannot correct the problem.
*09/18"Paulson and Federal Reserve Chairman Ben Bernanke ask Congress for the required funds"and unprecedented authority to bail out the entire financial system. They say failure to act means "we may not have an economy on Monday."
*09/23" Paulson and Federal Reserve Chairman Ben Bernanke in Senate Banking Committee testimony outline the $700 billion asset relief program (TARP).
*09/29"That TARP version doesn’t pass the Democrat-controlled House of Representatives.
*10/03"Three days later TARP is passed after about $112 billion is added.
*11/05"The day after Barack Obama’s election, stocks plunge 500 points.
*11/12"Paulson changes the TARP rules from purchasing "troubled assets" to buying bank stocks to spur lending.
*11/23"Paulson gives Citibank a $308 billion bailout.
*12/06"Both houses of Congress agree to bail out the U.S. auto companies.
*12/18"President-elect Obama hints at an $800 billion to $1 trillion stimulus plan within his first month of office, and the Dow drops another 2.5 percent.

2009
*02/10"Treasury Secretary Tim Geitner unveils the Administration’s $2 trillion TARP II plan, and the Dow drops 382 points, or 4.6 percent
*02/17"President Obama signs a $787 billion bailout bill.
*02/18" President Obama reveals his mortgage bailout plan.
*02/19"Rick Santelli says in an impromptu speech on the floor of the Chicago Mercantile Exchange: "The government is promoting bad behavior … How many of you people want to pay for your neighbor’s mortgage? President Obama are you listening?" Santelli calls for a "Chicago Tea Party."
*02/20"The market falls as Chris Dodd, chairman of the Senate Banking Committee floats the idea of nationalizing the nation’s banks. The White House issues a denial, and the Dow ends down 100 points. The Dow is down now more than 800 points"nearly 10 percent"from the day before President Obama’s inauguration.
*02/21"Soros says, "The financial crisis marks end of a free-market model."
parados
 
  1  
Reply Fri 16 Apr, 2010 11:31 am
@ican711nm,
Quote:
1977
President Carter signs into law CRA (i.e., Community Investment Act) Carter.
Mandates banks invest in poor urban areas.

OMG ican.. it's the fault of the GOP because Reagan and his GOP congress didn't repeal that law.
0 Replies
 
plainoldme
 
  -1  
Reply Fri 16 Apr, 2010 06:48 pm
@okie,
If only you understood history and economics. If only you read both Death of a Salesman and Paper Money, which quotes the former.

For most of the 20th C., real estate prices in America were fairly stable. Then along came the Baby Boom, the result of the biggest homecoming since Ulysses. With that huge population spike, the cost of everything rose because more people were chasing the same amount of goods. Following so far?

While the Boomers were in junior high school, Simone de Beauvoir published The Second Sex and when the Boomers were in college, Betty Friedan wrote The Feminine Mystique. Somewhere in between the appearance of those books, The Pill went on the market. That meant that women were no longer content with being secretaries and weather girls and, furthermore, that women could remain in the job market longer because they could control their fertility.

Now, the left who really are family oriented unlike the right who pretend to be, wanted job sharing and husbands and wives . . . but I have said this a million times . . . big business said no. That meant that all those women who could put off mother hood, stayed in the labor market.

Whether the added numbers of working adults heated the economy or just raised prices while keeping wages low is something I am not qualified to say. Perhaps, a little bit of each.

Then, in the 1970s, the Baby Boomers began buying homes. More people were chasing scarce goods and the price of homes rose.

With the cost of domicile rising, it became essential for women to work. The right put an end to stay at home motherhood.

Then, the divorce boom hit. Families were living in two houses, not in a house in town and a vacation home on the side of a mountain or next to a lake, but in daddy's house and mummy's house.

Meanwhile, wages flattened.

Is the picture becoming clear to you?
plainoldme
 
  0  
Reply Fri 16 Apr, 2010 06:52 pm
@H2O MAN,
Did you watch Wall Street Week during the 1980s when all those talking heads told Louis Ruykeyser that there would be plenty of jobs in the service economy? Now, anyone who thinks those talking heads were prophets should not be allowed out alone after dark . . . those heads were the mouth pieces of those that controlled the coming economic disaster created by the loosening of controls on big business.

Why does history for you begin this week?
0 Replies
 
plainoldme
 
  0  
Reply Fri 16 Apr, 2010 06:52 pm
@old europe,
You can read and okie can't.
0 Replies
 
plainoldme
 
  -1  
Reply Fri 16 Apr, 2010 06:54 pm
@parados,
De par's wid de slaves, massa!
0 Replies
 
plainoldme
 
  0  
Reply Fri 16 Apr, 2010 06:54 pm
@H2O MAN,
Come on! Bet you like electric lights and refrigeration!
0 Replies
 
 

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