No wonder everyone is so upset at Wall Street

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  • #738061

    redblack
    Participant

    and some of you want sooooo desperately to blame the government, when at the time they were hands-off the housing market. the evidence is plain and well-documented: a lack of regulation – by a republican government – caused the housing bubble.

    also, i need a cite for your assertion that most of the loans in those MBS were “crap.”

    regarding mccain, what did the republican senate do with that bill, kootch? your link just proves my point: that lack of regulation by a republican government caused the bubble to burst.

    look. when the ride ended, a lot of bank CEOs and stock traders parachuted right the hell out of there – with diamond-crusted golden parachutes. shareholders, taxpayers, and consumers took the beatings. that right there – who benefited – should tell you who’s at fault.

    but there are none so blind as those who won’t see.

    #738062

    kootchman
    Member

    redblack…. it was a Democratic filibuster that killed it. Just like ya whine when Republicans filibuster. Remember how to count to 60?

    “House and Senate Republicans brought attention to the shady practices of Fannie and Freddie numerous times, including introducing into the House HR 2803 Housing Finance Regulatory Restructuring Act of 2003. The bill was´╗┐ filibustered by the Democrats along party lines. It was then sent to the House Financial Services Committee where Barney Frank killed it. “

    The history is easily accessible. But.. you have to access it.

    CNN http://www.youtube.com/watch?NR=1&v=w-YtqVIKTTE

    This is particularly revealing.. CSPAN

    Want some more? God knows the republican tried.. but Fannie Mae was a campaign whale for Democrats. Watch the C-SPAN one… Maxine Walters at her stupidest. Facts are tough things, and we can all spin a little “predispositions”into our interpretations… but these are the very words of the killers of reform and oversight. The nightmare has its roots right here. As soon as the banks saw the lack of will and oversight, the flod gates were opened wide dude.

    #738063

    WD
    Participant

    And yet in another post I just read, you claimed the Democrats forced the banks to make bad loans, via lawsuits citing the CRA. So which is it? The poor banks were forced into making bad loans via the CRA or the banks rushed in to make easy money once the floodgates were “opened wide dude.”

    #738064

    kootchman
    Member

    If they weren’t crap redblack.. the why did the entire house inventory valuations fall over 35% nationwide? You do understand that over 28% of the housing loans made are underwater. That is the extent to which the market was distorted by cheap credit, low down payment, equity/debt ratio. What keeps ANY loan portfolio stable is the ability to cover default by collateral. In the case of housing, there is no collateral to cover the defaults. It is also the reason this lingers on and on and on… Fannie holds trillions of dollars in inventory that they can’t flush and take the “real market” valuations. SO they will, like an acid drip, keep asking for billions every quarter from the 10%… the loan portfolio is so staggering , they can’t do the write downs.

    Start watching !!!! http://www.youtube.com/watch?v=ivmL-lXNy64 Watch your man explain why it’s a “good idea” to bundle low income loans and hide em’ with the good ones.. to smooth out the default rates…watch Cuomo chortle that 2.5 BILLION in loans would go to those whose credit rating was so crappy they could never get a loan. He was giddy with delight explaining how successful he was forcing Citibank to take on 2.5 BILLION in what he recognized very candidly were bad loans. Sure… seems Citibank was a hell of a lot smarter… they dumped them as soon as they made them. On us. Banks did this? No. They can read financials, they can asess risk, and it was too steep for them.. so they pawned then off as quick as they made them. The whole purpose was to not hold them on the balance sheet and transfer them to anyone else but them. Fannie Mae, pension funds, foreign banks… anywhere. Including the sucker taxpayer. Flat out redblack… you don’t know the timeline or the origins of the problem.

    #738065

    kootchman
    Member

    WD watch Andy Cuomo’s braggadocio video. The loans were crap. Fannie said write em’ we’ll underwrite them, and the train went downhill. Obama is quoted as saying it was a great idea to taint mortgage backed securities with sub prime loans ..ACORN at it;s best… so the banks said great.. whose going to buy them? We will, we will said Fannie Mae… and the banking industry started to look line Payday loans. You do know that bundling mortgage backed securites was an FHA invention? Once the Feds took out risk..of course the banks made loans, they took the fees and points off the top and dumped the crap.

    #738066

    JoB
    Participant

    kootchman…

    the housing values fell because the foreclosures flooded the market with with houses that were sold at a loss.

    basic supply and demand

    loans that are “under water” today were not bad loans when they were made…

    you know.. before the mortgage industry was so stupid as to reduce the value it’s own collective collateral.

    #738067

    kootchman
    Member

    Step one in the crisis was loans started to default. I believe the current rate is around 9 per cent. I wasn’t foreclosures. It was defaults. In fact the foreclosures haven’t even started yet… as a percentage of inventory that is over 90 days in arrears. Eventually the market decides what the value is. C;mon you think the mortgage industry reduced its asset valuations? What was in “oversupply” were loans that were so bad, loaned to those unable to pay the obligations, that the defaults ripped apart balance sheets. That would be why housing prices fell another 13 per cent last quarter. It is also why Fannie is sniffing for another 8 billion of US taxpayer money. It’s not even close to being over. The Fed is hoping and praying if they just trickle out the foreclosures it won’t collapse entirely. Bad loans to bad credit risks…. historically, housing appreciated at about 2-3 per cent per year… not the 50 per cent in one decade. It was a speculative bubble that that was fed with cheap, unqualified credit. Inflated real estate was in oversupply, qualified buyers in short supply…. pop! the bubble burst. I was just looking at pictures of”starter homes” in old Levittown… compare those to starter homes of today which are three times bigger. I am interested in how that excess inventory is going to be absorbed… kinda tough to sell a 450K home to the 100K indebted college grad…still living at home with mom and dad and a local tax and fee burden that consumes 20 per cent of total income… guess we hit our limits eh? Our next generation of consumers is going to arrive on the scene 10 to 15 years too late to provide help. But not to worry right? We have Obamacare yet to inflict on them, tuition increases rising at 250 per cent per decade, rising property taxes passed along to renters, … the list goes on and on. BTY… as you well know Dodd/Frank is forcing higher reserve requirements on banks..they have to take the write downs. What did you expect them to do? Pretend there were no defaults? Sorta not include non performing assets in their balance sheets? That’s accounting fraud.. only the federal government can do that.

    #738068

    kootchman
    Member

    You are so determined, so hell bent to blame those evil, evil banks…you had a blow up of of one part of the welfare state… I see Wal Mart is gearing up to provide primary health care as an Obamacare provider… oh perfect! I can get my prostate exam while buying my polyester attire. There is your quality healthcare…There is your geriatric care. Clean up on aisle four!!! Now you actually have a chance to avoid the fiasco… but I am betting you won’t.. after all the Feds are so market adroit. I ttell ya the diff .. I know the banks are going to do me… as much as I let them. I love the purity of their intention. This “trust” in government… this belief you have they do so much good so little wrong… it’s just not based in reality. It’s an institution built on buying votes and for the office seekers and workers, increasingly more profitable. They are as transparant as the banks and as self motivated. Remember the Keating 5? They just finessed the game a bit this time. At least in the S & L scandal, bout’ some did jail time. And guess who reaappeared to head up the Federal Home Loan Mortgage Corporation under Clinton? (Freddie Mac) Sen Deconcini… it all came back again… bigger version, more corrupt, but smarter… the endless trough

    http://online.wsj.com/article/SB10001424052970204358004577028081422859896.html

    #738069

    JoB
    Participant

    kootch…

    you are so determined to believe that the mortgage industry didn’t create this crisis…

    and yet…

    the initial response from Alan Greenspan was that he didn’t believe they needed to be so closely regulated because it was their collateral they were rolling dice with.

    yes, bad loans were made.

    and they were packaged with good loans and sold to our country’s retirement system as top grade securities.

    but the “bad loans” you pinpoint weren’t enough to cause the worst economic meltdown in our history.

    Yes, the worst.

    even worse than the Great Depression

    the meltdown that left a lasting impression on our parents and grandparents

    the lesson that created the great prosperity that produced us.

    it took the financial meltdown created by greed

    and the resulting loss of jobs

    to create the foreclosure rate that tanked the housing market.

    the run on mortgages..

    the stampede of people protecting their assets and walking away from mortgages because they were “under water”

    didn’t help either

    but that was what “smart money” did

    they got out and got theirs so they could repurchase in a down market.

    The culture of quick return… short term profit over long term gain… bending the rules till they break for profit… the ends justifies the means and the only end that matters is personal profit .. broke the system.

    More of the same isn’t going to put it back together again.

    Do you remember ..

    “Ask not what your country can do for you?

    Ask what you can do for your country?”

    it turns out that wasn’t just idealistic nonsense..

    but a prescription for stability…

    and national economic health.

    #738070

    JanS
    Participant

    gee, Kootch…thanks for providing a link to an article that I can’t read all of unless I subscribe to the WSJ…no thanks…

    #738071

    kootchman
    Member

    Yea I remember.. it was an inaugural address.. rhetoric. Actions speak oh so much louder than words.

    No, you are determined not to admit there were two parties to the fiasco. Ya got screwed by you government and the banks that drove through the open gares.

    Too big to fail

    Too big to control

    And by the way… again ya gotta read… Old Man Greenburg DID in the end support the audits and testified before congress it wasa aunaway train.. wanna see the video? He was joined by Volker and by Friedman… a rare show of such egos in unanimous agreement.

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