All Glory to The Benbernanke

[3rdnlng]

That leaves out all of the fraud that occured at the origination level. One can point to the Bush admin castrating state regulators who were trying to pursue the "epidemic of mortgage fraud" the FBI had identified in 2005/06. Let's not try to politicize something that was so broad in scope. There is enough blame to go around for both parties.

 

Do I need to once again post the Youtube videos of the corrupt House members supporting Fannie & Freddie, or will this link be enough?

 

 

http://www.bucksright.com/bush-proposed-fannie-mae-freddie-mac-supervision-in-2003-1141

 

 

"A September 11, 2003 New York Times article shows that President Bush proposed “the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.” His proposal: An agency within the Treasury Department to supervise mortgage giants Fannie Mae and Freddie Mac.

Fearing that mortgages would no longer be available to people who were unable to pay them back, Democrats eventually killed the proposal. The current meltdown in the mortgage industry is a direct result of giving mortgages to people who could not pay them back, a practice protected by Congressional Democrats."

[DC Tom]

That leaves out all of the fraud that occured at the origination level. One can point to the Bush admin castrating state regulators who were trying to pursue the "epidemic of mortgage fraud" the FBI had identified in 2005/06. Let's not try to politicize something that was so broad in scope. There is enough blame to go around for both parties.

 

 

"Castrating state regulators" is a contradiction in terms - they were completely ball-less to begin with. You think the states and counties wanted to lose all that revenue the housing market was generating by cracking down on fly-by-night mortgage brokers and originators? Hell, they STILL won't - you wouldn't believe the corruption and criminal lending activity that still goes on at the local level in the real estate markets.

[TPS]

Do I need to once again post the Youtube videos of the corrupt House members supporting Fannie & Freddie, or will this link be enough?

 

 

http://www.bucksrigh...on-in-2003-1141

 

 

"A September 11, 2003 New York Times article shows that President Bush proposed “the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.” His proposal: An agency within the Treasury Department to supervise mortgage giants Fannie Mae and Freddie Mac.

Fearing that mortgages would no longer be available to people who were unable to pay them back, Democrats eventually killed the proposal. The current meltdown in the mortgage industry is a direct result of giving mortgages to people who could not pay them back, a practice protected by Congressional Democrats."

You misconstrue my point. Hell, Fannie was fined for fraud in early 2000s. My point is, you can try to blame one party, but there are so many different factors that "caused" the crisis, there is blame on both parties. And subprime was only a part of the problem as well; there was significant fraud in the so-called prime market as well. Then there's the fact that it was a global bubble: housing spiked and caused a financial crisis in the UK, EU, et al. Hell, the first shoe fell at a bank in England.

Really, to blame one party shows bias. Despite my good friend Alaska D's criticism of me, we agree that both parties are corrupt.

[3rdnlng]

You misconstrue my point. Hell, Fannie was fined for fraud in early 2000s. My point is, you can try to blame one party, but there are so many different factors that "caused" the crisis, there is blame on both parties. And subprime was only a part of the problem as well; there was significant fraud in the so-called prime market as well. Then there's the fact that it was a global bubble: housing spiked and caused a financial crisis in the UK, EU, et al. Hell, the first shoe fell at a bank in England.

Really, to blame one party shows bias. Despite my good friend Alaska D's criticism of me, we agree that both parties are corrupt.

 

 

So, in other words I do need to post a Youtube video showing a bunch of Dem Congresspeople spreading their legs for fannie & Freddie?

[meazza]

So QE1 & QE2 were not attempts to bring down unemployment?

 

http://www.realclearpolitics.com/video/2012/09/14/klein_qe3_will_fight_unemployment.html

[GG]

So, in other words I do need to post a Youtube video showing a bunch of Dem Congresspeople spreading their legs for fannie & Freddie?

 

Completely separate points. Stay on topic. Dodd & Frank protected Fan/Fred, but that on its own did not cause the rise & collapse (although was a major contributor).

 

But it's more silly to place blame on the financial collapse on Bush deregulation, when everyone had their mouth in the trough and it was a global financial market.

[DC Tom]

Completely separate points. Stay on topic. Dodd & Frank protected Fan/Fred, but that on its own did not cause the rise & collapse (although was a major contributor).

 

But it's more silly to place blame on the financial collapse on Bush deregulation, when everyone had their mouth in the trough and it was a global financial market.

 

Point of note: weren't the CDS's unregulated to begin with? How do you further deregulate something that is unregulated?

 

And I know that lender regulations that existed weren't even followed - RESPA violations by lenders were the rule, not the exception (still are, in fact - even though the regulations are tighter, they're still not enforced).

[GG]

Point of note: weren't the CDS's unregulated to begin with? How do you further deregulate something that is unregulated?

 

And I know that lender regulations that existed weren't even followed - RESPA violations by lenders were the rule, not the exception (still are, in fact - even though the regulations are tighter, they're still not enforced).

 

Don't you mean CDOs? No CDOs were not regulated, and if anything Basel-sanctioned regulations gave credit for AAA CDOs on the balance sheets.

[DC Tom]

Don't you mean CDOs? No CDOs were not regulated, and if anything Basel-sanctioned regulations gave credit for AAA CDOs on the balance sheets.

 

No, I did actually mean CDS's. But you make a better point - I had THOUGHT CDO's were regulated. It's rather more insane that they weren't. And makes even less sense to blame "deregulation" in that case.

 

 

That's probably the next round of QE, too...the Fed somehow capitalizing all the debt they're buying into CDO's to "prime the capital markets" or some other idiotic doublespeak. Because hey, they're already following Enron's accounting practices...why the hell not jump ahead to the next bad idea while they're at it?

[In-A-Gadda-Levitre]

Point of note: weren't the CDS's unregulated to begin with? How do you further deregulate something that is unregulated?

 

And I know that lender regulations that existed weren't even followed - RESPA violations by lenders were the rule, not the exception (still are, in fact - even though the regulations are tighter, they're still not enforced).

you're absolutely right, CDSs were unregulated when they were created and the banks fought hard (and won) to keep them that way.

 

Question: did you happen to read Fool's Gold by Gillian Tett? It's a pretty good history on the meltdown.

[GG]

No, I did actually mean CDS's. But you make a better point - I had THOUGHT CDO's were regulated. It's rather more insane that they weren't. And makes even less sense to blame "deregulation" in that case.

 

CDOs are a derivation of the RMBSs, so they fall under the SEC and equivalent rules of bond offerings. The biggest mistake was by central banks assigning regulatory capital to highly rated CDOs.

 

On the CDS front, even if they had been regulated, it would not have prevented a run on AIG's collateral when the capital calls started coming in. Remember that AIG stopped writing real estate related CDS in 2005.

[TPS]

 

 

But it's more silly to place blame on the financial collapse on Bush deregulation, when everyone had their mouth in the trough and it was a global financial market.

Thanks for making my point. It's silly in general to try to place more blame on one party than another, when there were so many contributing factors.

 

Don't you mean CDOs? No CDOs were not regulated, and if anything Basel-sanctioned regulations gave credit for AAA CDOs on the balance sheets.

Good point, as there is another factor that has nothing to do with GSEs: rating **** AAA....

[3rdnlng]

Completely separate points. Stay on topic. Dodd & Frank protected Fan/Fred, but that on its own did not cause the rise & collapse (although was a major contributor).

 

But it's more silly to place blame on the financial collapse on Bush deregulation, when everyone had their mouth in the trough and it was a global financial market.

 

It is my contention that the further regulation of the mortgage market by the (D) sponsored CRA (Carter & Clinton) was the catalyst for the collapse. Just to add fuel to the fire, it would be interesting to see if there was even one member of the CBC that wasn't solidly behind the lending standards (fiats) that were the equivalent of the one bad apple that contaminated the whole basket. No matter how many other factors ending up contributing, the fact remains that the foundation was flawed. Liken it to a golf swing. If your grip is faulty, it doesn't matter how great your weight shift is or if you are at the perfect position at the top. You're still going to be hitting your second shot from the beach.

[GG]

Let it go with the CRA. It was a goosepimple in the context of the overall global financial scheme.

[3rdnlng]

Let it go with the CRA. It was a goosepimple in the context of the overall global financial scheme.

 

Would you agree that it led to more lax lending policies that further poisoned the well?

[GG]

 

 

Would you agree that it led to more lax lending policies that further poisoned the well?

 

It led to looser lending standards on a very small portion of the mortgage market and had no statistical relevance in the securitizations that went bad.

[3rdnlng]

It led to looser lending standards on a very small portion of the mortgage market and had no statistical relevance in the securitizations that went bad.

 

I think it had a lot to do with the real estate "bubble" that certainly had a significant relevance.

[GG]

 

 

I think it had a lot to do with the real estate "bubble" that certainly had a significant relevance.

 

Yes as long as you believe it, you'll be OK.

[DC Tom]

I think it had a lot to do with the real estate "bubble" that certainly had a significant relevance.

 

Why don't you try actually looking into it, rather than just thinking it.

[3rdnlng]

Why don't you try actually looking into it, rather than just thinking it.

 

Well Tom, I've been involved and very close to the industry. The housing bubble was created by loose money lending policy. Would you agree that under previous standards the bubble would never have gained the traction that it did? Would you also agree that without these lowered standards that the practices that compounded the crises would never have happened?