I'm talking Keynesian economics. When the private sector stops spending, the gov't must intervene and keep spending going while enacting legislation to avoid similar events in the future.
Given what's just happened to the world economy, I'm suprised anyone dares mention his name anymore.
The problem is the gov't uses "Keynesian economics" 100% of the time and not just in emergencies as Keynes intended. You can't play the same ace twice in one hand.
What you need to recognise, is that the private sector funds the government.
Also that dishonest people are just as likely to work in the government as in the private sector.
I personally find it easier to trust someone spending his own money than I do someone spending mine. I also economically trust people who create wealth with my investments above those who simply spend it.
I enjoyed your comments about poor people not being poor just because they are lazy. I think this is very true. I also think that rich people are not rich just becuase they exploit others.
With regards to your above idea's on democracy, I think you misunderstand how the system works. A democracy does not grant every citizen a say in political decisions. Decisions are still made by elites. As they should be. In a democracy, (and also communism) citizens have some say in in chosing which elites run the country.
The point of Keynesian economics is to have adequate tax revenue to where you can afford to run a deficit during the downtimes, and pay that money back during the good times. Instead we're cutting taxes in the middle of a war, running huge deficits during the peak of our economic cycle, and being insanely irresponsible. You can't fault an economic strategy for failure when it's being used incorrectly, any more than you can fault a baseball bat for a bad hit when you use the wrong end.
And the problem with the people in the gov't is that many of them have come from the private sector to work for the gov't, their role to police those industries that they have ties to. Often, instead of policing them, they serve their interests and look the other way when they're doing things they shouldn't. This will likely always be a problem.
Agreed about the wealthy.
That's fine and understandable to trust someone to spend their own money wisely, but the way money works in our world is much more complicated than that. Problem is, as has been seen, we're all interdependent to some extent. When a small number of people have a large percentage of the wealth, what they decide to do with it can jeopardize us all.
As it relates to the banking crisis, that was OUR money they were playing with.
It comes back to two points.
If a company can get "too big to fail", does it make sense to allow it to get that big?
Does an economy exist to serve the people, or do the people exist to serve the economy?
Lastly, I'm in perfect understanding of democracy. And I see the role of democracy to be the means with which to change the direction of a country without having to resort to violence. I'd trust a gov't that I can vote out before I'll trust private enterprise to act in the best interest of the public. I'd rather have to trust neither of them, but well... I guess that would be MY Utopia.
Nothing is to big to not let fail. Let them fail the market will expand and rite itself. I am pist because as you say that is our money they are monkeying around with. Again I do not care for failures in life. If you can not make it it is not my responsibility to pick you up so you can feed 15 kids! Oh sorry bad example. Again if you want to quote me if you are to pathetic to over come the niche you have to fill not my problem. An ass for every seat as they say. If we allow those like Robsolf to run things we will have no middle class and only the lies of utopia to keep us warm. No thanks I would rather become wealthy on my own and know I get to keep it, not those pathetic sole who I crushed along the path of sucess. If that is elitism you can blow me, I was told if you work hard in life you keep what is yours. Guess I was lied to, it is now taken from me and given to some welfare crack addict and I should get a warm and fuzzy over it. Well I dont.
"Life, liberty and the pursuit of happiness". No one can stop anyone from pursuing happiness, but life and liberty are said to only exist if they are deliberately sought and paid for".
The majority of the people voted for this guy and are slowly understanding they made a mistake. It is this guy that will make our great country socialistic. Socialism fails, it has always failed.
The stocks drop because Wall Street doesnt trust him. He painted a bleak picture for the US.
His ratings are slowly dropping. This is not the stimulus package we need. The money is needed for the economy and the people, not pet projects.
The majority of the people voted for this guy and are slowly understanding they made a mistake. It is this guy that will make our great country socialistic. Socialism fails, it has always failed. The stocks drop because Wall Street doesnt trust him. He painted a bleak picture for the US. His ratings are slowly dropping. This is not the stimulus package we need. The money is needed for the economy and the people, not pet projects.
I agree but McCain would be doing the exact same stuff if he was in office. The only difference would be the liberal media would be tearing him apart and saying he's continuing the Bush Doctrine while Sarah Palin is eating mooseburgers and casting spells. We would be better off if someone like Ron Paul was in office but the big corps don't like him.
Don't be terrorized! You're more likely to die of a car accident, drowning, fire, or murder! More people die every year from prescription drugs than terrorism LOL!
The roots of this crisis go back to the Carter administration. That was when government officials, egged on by left-wing activists, began accusing mortgage lenders of racism and "redlining" because urban blacks were being denied mortgages at a higher rate than suburban whites.
Now that the bubble has burst it is apparent to all, Frank declares: "The private sector got us into this mess." Well, give the congressman points for gall. Wall Street and private lenders have plenty to answer for, but it was Washington and the political class that derailed this train.
The democrats in congress stopped President Bush’s plan for a major overhaul of Feddie and Fannie. Now here we are five years later and because congress choose to do nothing, we are in the middle of this major meltdown. It’s real easy to point a finger at President Bush and use him as a scapegoat, but when we really look at the truth of the matter, we see the finger prints of the democrats all over this mess.
Don't be terrorized! You're more likely to die of a car accident, drowning, fire, or murder! More people die every year from prescription drugs than terrorism LOL!
The point of Keynesian economics is to have adequate tax revenue to where you can afford to run a deficit during the downtimes, and pay that money back during the good times. Instead we're cutting taxes in the middle of a war, running huge deficits during the peak of our economic cycle, and being insanely irresponsible. You can't fault an economic strategy for failure when it's being used incorrectly, any more than you can fault a baseball bat for a bad hit when you use the wrong end. And the problem with the people in the gov't is that many of them have come from the private sector to work for the gov't, their role to police those industries that they have ties to. Often, instead of policing them, they serve their interests and look the other way when they're doing things they shouldn't. This will likely always be a problem. Agreed about the wealthy. That's fine and understandable to trust someone to spend their own money wisely, but the way money works in our world is much more complicated than that. Problem is, as has been seen, we're all interdependent to some extent. When a small number of people have a large percentage of the wealth, what they decide to do with it can jeopardize us all. As it relates to the banking crisis, that was OUR money they were playing with. It comes back to two points. If a company can get "too big to fail", does it make sense to allow it to get that big? Does an economy exist to serve the people, or do the people exist to serve the economy? Lastly, I'm in perfect understanding of democracy. And I see the role of democracy to be the means with which to change the direction of a country without having to resort to violence. I'd trust a gov't that I can vote out before I'll trust private enterprise to act in the best interest of the public. I'd rather have to trust neither of them, but well... I guess that would be MY Utopia.
Tax cuts are Keynsian.
And with relation to the banking crisis, it's not your money they are playing with. It's some old couple in China's life savings. Some one poorer than you. Someone poorer than your poorest people.
They've already spent your money. They spent it so casually it's already gone when you needed it most.
Private sector people should have a very large input into government. Government is entirely funded by the private sector. It is dependant on it in every way. These people are the primary drivers of the economy. The engines of the nation.
There are plenty of companies too critical to allow to fail. And plenty of companies that need to be that large in order for them to be of any use.
Boeing for example is a mainstay of national defence. It constantly needs bailing out again and again with every economic downturn, as domestic airflights are the first things to get cut or affected by terrorism.
Again the motor industry is critical as is the banking industry. If they were small companies only, they would not have been able to fulfill the needs of the country in the first place. Large companies = efficient mass production > small companies with expensive smaller production runs.
Banks for example have been providing 70% of the tax income in my country for decades. Despite bailing them out to a similar tune to the U.S. (even though our country is 1/5 of the size) the government has still made a profit on them over all. They will again.
This is the problem of the electorate and also the elected government, they are unwilling to look beyond the short term. Unwilling to promise economic pain in the run up to an election that wil cost them their own jobs. Their own personal wealth and security.
Many of them have no understanding of the economic principles involved and little to no understanding of how it relates to them personally. Their expertise lies in other areas. They just get the headlines.
Bailouts funded by YOUR taxes.
Only they aren't. They are funded by foreign investment. These are guarenteed by the threat of your taxes. Taxes that you won't be paying because you are getting Keynsian tax cuts. The taxes you are paying don't even cover what you have already spent before any bailout, before any credit crunch.
And yes I can fault Keynsian economics when it is being used incorrectly if it is used incorrectly everytime. Which it has been.
The Keynsian silver bullet has already been fired. It is no longer possible to use it correctly. Any attempt to adopt Keynsian policies now is an incorrect use of it. You use it once, then you get the economy straightened out, then you are free to use it again.
But that hasn't happened.
It's been refired before the previous deficits have been redressed and now it is doing untold long term economic damage. And why? In the name of socialism. To bribe unhappy people who partisan voted and will hopefully partisan vote again. It's not all bad poor people need relief, but the economy is being sacrificed to give it to them. If no government is willing to face up to the abject social pain required to rebalance it, it will get worse and worse until it derails completely.
The very idea that you can "borrow your way out of debt" is of limited credability to start with.
The roots of this crisis go back to the Carter administration. That was when government officials, egged on by left-wing activists, began accusing mortgage lenders of racism and "redlining" because urban blacks were being denied mortgages at a higher rate than suburban whites.
Again, show me in the legislation that "forces" banks to give loans to people who can't afford them.
It doesn't exist. FHA loans are the only thing close, and they're federally insured. You REALLY need to stop listening to Limbaugh and look some stuff up for yourself.
The point of Keynesian economics is to have adequate tax revenue to where you can afford to run a deficit during the downtimes, and pay that money back during the good times. Instead we're cutting taxes in the middle of a war, running huge deficits during the peak of our economic cycle, and being insanely irresponsible. You can't fault an economic strategy for failure when it's being used incorrectly, any more than you can fault a baseball bat for a bad hit when you use the wrong end. And the problem with the people in the gov't is that many of them have come from the private sector to work for the gov't, their role to police those industries that they have ties to. Often, instead of policing them, they serve their interests and look the other way when they're doing things they shouldn't. This will likely always be a problem. Agreed about the wealthy. That's fine and understandable to trust someone to spend their own money wisely, but the way money works in our world is much more complicated than that. Problem is, as has been seen, we're all interdependent to some extent. When a small number of people have a large percentage of the wealth, what they decide to do with it can jeopardize us all. As it relates to the banking crisis, that was OUR money they were playing with. It comes back to two points. If a company can get "too big to fail", does it make sense to allow it to get that big? Does an economy exist to serve the people, or do the people exist to serve the economy? Lastly, I'm in perfect understanding of democracy. And I see the role of democracy to be the means with which to change the direction of a country without having to resort to violence. I'd trust a gov't that I can vote out before I'll trust private enterprise to act in the best interest of the public. I'd rather have to trust neither of them, but well... I guess that would be MY Utopia.
Tax cuts are Keynsian.
And with relation to the banking crisis, it's not your money they are playing with. It's some old couple in China's life savings. Some one poorer than you. Someone poorer than your poorest people.
They've already spent your money. They spent it so casually it's already gone when you needed it most.
Private sector people should have a very large input into government. Government is entirely funded by the private sector. It is dependant on it in every way. These people are the primary drivers of the economy. The engines of the nation.
There are plenty of companies too critical to allow to fail. And plenty of companies that need to be that large in order for them to be of any use.
Boeing for example is a mainstay of national defence. It constantly needs bailing out again and again with every economic downturn, as domestic airflights are the first things to get cut or affected by terrorism.
Again the motor industry is critical as is the banking industry. If they were small companies only, they would not have been able to fulfill the needs of the country in the first place. Large companies = efficient mass production > small companies with expensive smaller production runs.
Banks for example have been providing 70% of the tax income in my country for decades. Despite bailing them out to a similar tune to the U.S. (even though our country is 1/5 of the size) the government has still made a profit on them over all. They will again.
This is the problem of the electorate and also the elected government, they are unwilling to look beyond the short term. Unwilling to promise economic pain in the run up to an election that wil cost them their own jobs. Their own personal wealth and security.
Many of them have no understanding of the economic principles involved and little to no understanding of how it relates to them personally. Their expertise lies in other areas. They just get the headlines.
Bailouts funded by YOUR taxes.
Only they aren't. They are funded by foreign investment. These are guarenteed by the threat of your taxes. Taxes that you won't be paying because you are getting Keynsian tax cuts. The taxes you are paying don't even cover what you have already spent before any bailout, before any credit crunch.
And yes I can fault Keynsian economics when it is being used incorrectly if it is used incorrectly everytime. Which it has been.
The Keynsian silver bullet has already been fired. It is no longer possible to use it correctly. Any attempt to adopt Keynsian policies now is an incorrect use of it. You use it once, then you get the economy straightened out, then you are free to use it again.
But that hasn't happened.
It's been refired before the previous deficits have been redressed and now it is doing untold long term economic damage. And why? In the name of socialism. To bribe unhappy people who partisan voted and will hopefully partisan vote again. It's not all bad poor people need relief, but the economy is being sacrificed to give it to them. If no government is willing to face up to the abject social pain required to rebalance it, it will get worse and worse until it derails completely.
The very idea that you can "borrow your way out of debt" is of limited credability to start with.
Here in Britain we widely attribute the uptake of toxic debt to the policies of the Clinton administration. (It's the economy stupid!).
The Community Reinvestment Act was part of it, but not all the steps he made to encourage loose mortgages to the poorest elements of society, (toxic debt), were done by using new legislation, much of it was done by using existing discrimination laws to enforce lending to minorities (Traditionally poorer minorites such as blacks and native indians for example). Also CRA ratings were given to banks in return for lending to low income customers (toxic borrowers). CRA ratings that would be needed for banks to have their mergers and aquisitions approved.
Responsable lending they called it. Doh!
Rather than spend money on social housing the fantasy model prefered by the post Thatcher / Post Reagun neo socialists was to use private sector money rather than taxation revenue.
Well, they did what they set out to do, and now that money has all been doled out. It's gone. Spent. The private sector is no longer able to contribute towards social programs, in fact it is no longer able to sustain itself either.
They killed the goose that lays the golden eggs.
Current suggested cure by our glorious governments? More social programs funded by the private sector. Restart lending to the low income sections of society. More toxic debt FTW.
The roots of this crisis go back to the Carter administration. That was when government officials, egged on by left-wing activists, began accusing mortgage lenders of racism and "redlining" because urban blacks were being denied mortgages at a higher rate than suburban whites.
Again, show me in the legislation that "forces" banks to give loans to people who can't afford them.
It doesn't exist. FHA loans are the only thing close, and they're federally insured. You REALLY need to stop listening to Limbaugh and look some stuff up for yourself.
In the name of fighting “racism” and “redlining” ACORN and the government forced banks to make riskier loans in areas less economically stable or viable and customers who had low income and were a high credit risk. Banks said it was risk management, Democrats said it was racism.
Political appointees (not financial guru’s) were placed in charge of Fannie Mae and Freddie Mac; people like Franklin Raines, Jeff Johnson and former Clinton Deputy Attorney General Jamie Gorelick. It was the policy of the Clinton Administration and Congressional Democrats to lean on banks, and Freddie and Fannie to get loans to low income people so that “everyone could have a home” (besides all that loan money out there propped up and somewhat inflated the economy so it helped make the numbers look good).
Corruption and influence peddling begin to infect the entire system. While the law made it clear that sound financial principles were to be practiced, political pressure caused people to look the other way. The political cronies running Fannie and Freddie realized that they could make themselves rich with tens of millions of dollars in bonuses by buying more loans to make it seem on paper that they had all this money coming in from people’s house payments as if the loans they owned were good, but they weren’t. Too many of the loans were high risk, they had bought “bad paper”. The bonuses were spread around, but they wanted to keep the cash train flowing and help their fellow political friends so Fannie and Freddie gave $200 million away in political donations, to candidates and partisan organizations, a majority of those being Democrats. Barack Obama and Banking Committee Chairman Chris Dodd were the two biggest recipients of this money in the Senate. Fannie and Freddie had become the money train for the corrupt. The regulators who reported to Congress warned what was going on but members of the banking committee who were getting paid didn’t want to hear it.
President Bush tried to put an end to this in 2003 and John McCain tried to stop this in 2005-6. Congressional Banking leaders Chris Dodd and barney Frank said that everything was just fine and no reforms were needed.
These attempts to fix the system were blocked by Democrats.
Here in Britain we widely attribute the uptake of toxic debt to the policies of the Clinton administration. (It's the economy stupid!). The Community Reinvestment Act was part of it, but not all the steps he made to encourage loose mortgages to the poorest elements of society, (toxic debt), were done by using new legislation, much of it was done by using existing discrimination laws to enforce lending to minorities. Also CRA rating were given to banks in return for lending to low income customers (toxic borrowers). CRA ratings that would be needed for banks to have their mergers and aquisitions approved.
Rather than spend money on social housing the fantasy model prefered by the post Thatcher / Post Reagun neo socialists was to use private sector money rather than taxation revenue. Well, they did what they set out to do, and now that money has all been doled out. It's gone. Spent. The private sector is no longer able to contribute towards social programs, in fact it is no longer able to sustain itself either. They killed the goose that lays the golden eggs.
Current suggested cure by our glorious governments? More social programs funded by the private sector. Restart lending to the low income sections of society. More toxic debt FTW.
I don't really agree with you about where this toxic debt really comes from. It seems to be assumed in conservative circles that it comes from low income communities, but as I've mentioned too many times, most of those loans are federally insured.
However, middle-upper class loans rarely are insured, and the keep up with the Jones crowd really knows how to rack up debt.
Still other toxic debt comes from credit cards being pimped out to college kids. You can't walk 20 feet on a campus these days without tripping over credit card apps. They are approving these kids, even the ones that don't have jobs. And if they can't pay them back, they get a collections people to call and threaten them with jail time and other illegal practices.
Point being, is that the private sector didn't need encouragement to lend this money out to people who couldn't pay it back. Subprime debt is(WAS) a known money maker for quite some time, with insane interest rates and ridiculous fees and people from many walks of life get bitten by them.
Bankers WANT to give people loans. It pays their bills. If you're a banker at 1 branch of 400, what do you care if the customer can pay the loan back?
Dealers WANT to sell you that car. F&I offices are in pretty much any decent sized dealership that send your info out to dozens of creditors for a bite.
Credit Card companies WANT to give you a credit card.
Department stores WANT you to get one of their cards.
And when they do, they aren't doing you ANY favors.
It's sad; my mainstream bank is now doing the payday loan thing. Sure, they call it something else, but it's still insane fees so that you can get your "paycheck" early.
We know the result, and we can certainly agree on that; you have enough of this debt floating out there that it would drag the rest of the industry down.
We may not agree on other things but I read your POV loud and clear. And when it comes to what it will take to make it right, you may be correct. I just don't know that people properly respect the consequences of taking that option.
In the name of fighting “racism” and “redlining” ACORN and the government forced banks to make riskier loans in areas less economically stable or viable and customers who had low income and were a high credit risk. Banks said it was risk management, Democrats said it was racism.
Political appointees (not financial guru’s) were placed in charge of Fannie Mae and Freddie Mac; people like Franklin Raines, Jeff Johnson and former Clinton Deputy Attorney General Jamie Gorelick. It was the policy of the Clinton Administration and Congressional Democrats to lean on banks, and Freddie and Fannie to get loans to low income people so that “everyone could have a home” (besides all that loan money out there propped up and somewhat inflated the economy so it helped make the numbers look good).
Corruption and influence peddling begin to infect the entire system. While the law made it clear that sound financial principles were to be practiced, political pressure caused people to look the other way. The political cronies running Fannie and Freddie realized that they could make themselves rich with tens of millions of dollars in bonuses by buying more loans to make it seem on paper that they had all this money coming in from people’s house payments as if the loans they owned were good, but they weren’t. Too many of the loans were high risk, they had bought “bad paper”. The bonuses were spread around, but they wanted to keep the cash train flowing and help their fellow political friends so Fannie and Freddie gave $200 million away in political donations, to candidates and partisan organizations, a majority of those being Democrats. Barack Obama and Banking Committee Chairman Chris Dodd were the two biggest recipients of this money in the Senate. Fannie and Freddie had become the money train for the corrupt. The regulators who reported to Congress warned what was going on but members of the banking committee who were getting paid didn’t want to hear it.
President Bush tried to put an end to this in 2003 and John McCain tried to stop this in 2005-6. Congressional Banking leaders Chris Dodd and barney Frank said that everything was just fine and no reforms were needed.
These attempts to fix the system were blocked by Democrats.
Where is this evidence of Clinton "leaning on banks"? What legislation did Bush and McCain produce that couldn't get by a Democratic minority?
You think Clinton was going to be able to "strongarm" banks with their massive lobbies and massive capacity to contribute to campaigns, DURING a republican majority in congress? Seriously?
You know, I could almost buy your story had you said that Clinton caved to the banks, but not the other way around. The notion that some massive "poor people lobby" under Bubba threatened those poor defenseless bankers into subservience is a bit laughable.
Thanks Mr. I appreciate your view and discussion also.
The subprime market was a money maker for the brokers who traded it. No one else.
It was a loss leader for the original lenders.
Investment banks needed no encouragement to trade it, insure it and leverage against it. Major High Street banks have avoided it like the plague.
There is perhaps a nomenclature here that differentiates between the two types of business.
Investment institution and bank.
Clumping the two together makes for some confusion. The majority of banks did not engage in Sub prime loans at all. They have been hit in a knock-on effect by interbank lending to Sub Prime lenders who have gone bankrupt and been unable to repay them.
It is in the nature of modern global banking that the collapse of two or three sub prime lenders has triggered a chain reaction of banking collapses worldwide in businesses that didn't even know they were exposed to that market, let alone willingly embraced it.
While middle class borrowers most certainly can be sub prime borrowers and I'm sure many of them are, the size of their incomes can protect them from a lot of lifes financial pitfalls in way that low income borrowers are not able. It is the low income earners who are most at risk in society from financial insecurity. Those without the resources needed to tide them over in a rough spot.
Low income families are also traditonally the least finacially literate in society. Those least equiped to plan for and expect financial downturns that others may take for granted. They are also those with least to lose by declaring themselves bankrupt.
While bad credit card debts have most certainly been a serious problem for banks, they are not in the same league as the morgage market. These toxic assets are not bank breakers. We are discussing typical personal loans in the thousands rather than typical personal loans in the hundreds of thousands.
Without the Sub Prime crash that preceded and in many ways even triggered them, they would not be significant losses in their own right.
In my country student loans have been another example of the neo socialist model. In order to lower taxes, university education that was formerly subsidised by the tax payer, has now been replaced by state enforced social lending from the private sector.
Where before you got a government grant you now get a legally enforced bank loan.
With regards to Clinton bullying, it's easy. If you wish to trade in America, you lend money to low income families. Or your big deals don;t get approved. Nor your lisence.
He didn't need a majority in congress because he didn't need to legislate to do it. He used existing laws. His appointee's would either personally approve or disapprove banks commercial applications as they saw fit. All Clinton had to do was summon his appointee's to his office and agree with them what kind of banks they would favour (and which they would investigate and prosecute against). To this effect, he introduced a ratings system called CRA.
Any bank wanting to make money in the U.S. would then have to suck up to him. To earn Clinton Points or never lvl up. Banks that failed to do enough would face investigation under existing discrimination laws. Carrot and Stick.
The state is the largest monopoly in town. It can bully all of the lesser institutions with ease.
In the name of fighting “racism” and “redlining” ACORN and the government forced banks to make riskier loans in areas less economically stable or viable and customers who had low income and were a high credit risk. Banks said it was risk management, Democrats said it was racism.
Political appointees (not financial guru’s) were placed in charge of Fannie Mae and Freddie Mac; people like Franklin Raines, Jeff Johnson and former Clinton Deputy Attorney General Jamie Gorelick. It was the policy of the Clinton Administration and Congressional Democrats to lean on banks, and Freddie and Fannie to get loans to low income people so that “everyone could have a home” (besides all that loan money out there propped up and somewhat inflated the economy so it helped make the numbers look good).
Corruption and influence peddling begin to infect the entire system. While the law made it clear that sound financial principles were to be practiced, political pressure caused people to look the other way. The political cronies running Fannie and Freddie realized that they could make themselves rich with tens of millions of dollars in bonuses by buying more loans to make it seem on paper that they had all this money coming in from people’s house payments as if the loans they owned were good, but they weren’t. Too many of the loans were high risk, they had bought “bad paper”. The bonuses were spread around, but they wanted to keep the cash train flowing and help their fellow political friends so Fannie and Freddie gave $200 million away in political donations, to candidates and partisan organizations, a majority of those being Democrats. Barack Obama and Banking Committee Chairman Chris Dodd were the two biggest recipients of this money in the Senate. Fannie and Freddie had become the money train for the corrupt. The regulators who reported to Congress warned what was going on but members of the banking committee who were getting paid didn’t want to hear it.
President Bush tried to put an end to this in 2003 and John McCain tried to stop this in 2005-6. Congressional Banking leaders Chris Dodd and barney Frank said that everything was just fine and no reforms were needed.
These attempts to fix the system were blocked by Democrats.
Where is this evidence of Clinton "leaning on banks"? What legislation did Bush and McCain produce that couldn't get by a Democratic minority?
You think Clinton was going to be able to "strongarm" banks with their massive lobbies and massive capacity to contribute to campaigns, DURING a republican majority in congress? Seriously?
You know, I could almost buy your story had you said that Clinton caved to the banks, but not the other way around. The notion that some massive "poor people lobby" under Bubba threatened those poor defenseless bankers into subservience is a bit laughable.
The subprime market was a money maker for the brokers who traded it. No one else. It was a loss leader for the original lenders.
Investment banks needed no encouragement to trade it, insure it and leverage against it. Major High Street banks have avoided it like the plague.
There is perhaps a nomenclature here that differentiates between the two types of business. Investment institution and bank. Clumping the two together makes for some confusion. The majority of banks did not engage in Sub prime loans at all. They have been hit in a knock effect by comercially lending to Sub Prime lenders who have gone bankrupt and been unable to repay them. It is in the nature of modern Global banking that the collapse of two or three sub prime lenders has triggered a chain reaction of banking collapses worldwide in businesses that didn't even know they were exposed to that market let alone willingly embraced it.
While middle class borrowers most certainly can be sub prime borrowers and I'm sure many of them are, the size of their incomes can protect them from a lot of lifes financial pitfalls in way that low income borrowers are not able. It is the low income earners who are most at risk from financial insecurity. Those without the resources needed to tide them over in a rough spot.
While bad credit card debts have most certainly been a serious problem for banks, they are not in the same league as the morgage market. These toxic assets are not bank breakers. We are discussing typical personal loans in the thousands rather than typical personal loans in the hundreds of thousands. Without the Sub Prime crash that preceded and in many ways even triggered them, they would not be significant losses in their own right.
With regards to Clinton bullying, it's easy. If you wish to trade in America, you lend money to low income families. He didn't need a majority in congress because he didn't need to legislate to do it. He used existing laws. His appointee's would either personally approve or disapprove banks commercial applications as they saw fit. All Clinton had to do was summon his appointee's to his office and agree with them what kind of banks they would favour. Any bank wanting to make money in the U.S. would then have to suck up to him.
"Investment banks needed no encouragement to trade it, insure it and leverage against it. Major High Street banks have avoided it like the plague."
Maybe by name they are, but not by practice. What few banks there are these days that have their assets clear of toxic debt, are beginning to treat their customers as sub-prime folks. My prior example of the pay-day loan system they now have at my current bank, for example. The same bank that houses my one credit card, my car loan, and my mortgage. Why on earth would a respectable bank create such an irresponsible product?
"While middle class borrowers most certainly can be sub prime borrowers and I'm sure many of them are, the size of their incomes can protect them from a lot of lifes financial pitfalls in way that low income borrowers are not able."
Can't say I agree with this. I'd refer you to the Tower of Babel. The closer you are to the ground, the easier the fall. And jobs that pay, say, 9 bucks an hour are much easier to replace than, say, a 110k a year job as a project manager. And a $600 house payment much easier to pay with unemployment than a $1800 payment(unemployment is capped somewhere around 700/week). Add to this the much bigger potential for loss on a mid-upper shortsale compared to a low income loan, and you can probably see what I'm getting at.
I read you about the 2 different types of financial institutions. It's one of the big things that really hosed us regarding the FM twins.
But again... most low income mortgages are federally insured. Either thru FHA, or mortgages without down payments(likely a vast majority of low income loans) are required by law to have PMI insurance, which pays the bank if the loan defaults.
In the name of fighting “racism” and “redlining” ACORN and the government forced banks to make riskier loans in areas less economically stable or viable and customers who had low income and were a high credit risk. Banks said it was risk management, Democrats said it was racism.
Political appointees (not financial guru’s) were placed in charge of Fannie Mae and Freddie Mac; people like Franklin Raines, Jeff Johnson and former Clinton Deputy Attorney General Jamie Gorelick. It was the policy of the Clinton Administration and Congressional Democrats to lean on banks, and Freddie and Fannie to get loans to low income people so that “everyone could have a home” (besides all that loan money out there propped up and somewhat inflated the economy so it helped make the numbers look good).
Corruption and influence peddling begin to infect the entire system. While the law made it clear that sound financial principles were to be practiced, political pressure caused people to look the other way. The political cronies running Fannie and Freddie realized that they could make themselves rich with tens of millions of dollars in bonuses by buying more loans to make it seem on paper that they had all this money coming in from people’s house payments as if the loans they owned were good, but they weren’t. Too many of the loans were high risk, they had bought “bad paper”. The bonuses were spread around, but they wanted to keep the cash train flowing and help their fellow political friends so Fannie and Freddie gave $200 million away in political donations, to candidates and partisan organizations, a majority of those being Democrats. Barack Obama and Banking Committee Chairman Chris Dodd were the two biggest recipients of this money in the Senate. Fannie and Freddie had become the money train for the corrupt. The regulators who reported to Congress warned what was going on but members of the banking committee who were getting paid didn’t want to hear it.
President Bush tried to put an end to this in 2003 and John McCain tried to stop this in 2005-6. Congressional Banking leaders Chris Dodd and barney Frank said that everything was just fine and no reforms were needed.
These attempts to fix the system were blocked by Democrats.
Where is this evidence of Clinton "leaning on banks"? What legislation did Bush and McCain produce that couldn't get by a Democratic minority?
You think Clinton was going to be able to "strongarm" banks with their massive lobbies and massive capacity to contribute to campaigns, DURING a republican majority in congress? Seriously?
You know, I could almost buy your story had you said that Clinton caved to the banks, but not the other way around. The notion that some massive "poor people lobby" under Bubba threatened those poor defenseless bankers into subservience is a bit laughable.
Where is this evidence of Clinton "leaning on banks"? What legislation did Bush and McCain produce that couldn't get by a Democratic minority?
You think Clinton was going to be able to "strongarm" banks with their massive lobbies and massive capacity to contribute to campaigns, DURING a republican majority in congress? Seriously?
You know, I could almost buy your story had you said that Clinton caved to the banks, but not the other way around. The notion that some massive "poor people lobby" under Bubba threatened those poor defenseless bankers into subservience is a bit laughable.
"The law emphasizes that an institution's CRA activities should be undertaken in a safe and sound manner, and does not require institutions to make high-risk loans that may bring losses to the institution.[2][9] An institution's CRA compliance record is taken into account by the banking regulatory agencies when the institution seeks to expand through merger, acquisition or branching. The law does not mandate any other penalties for non-compliance with the CRA."
Read your own links, and get out of the Limbaugh mindset. Here's more:
"According to Ben Bernanke, this law greatly increased the ability of advocacy groups, researchers, and other analysts to "perform more-sophisticated, quantitative analyses of banks' records," thereby influencing the lending policies of banks. Over time, community groups and nonprofit organizations established "more-formalized and more-productive partnerships with banks."
That's right. Ben Bernanke... appointed by YOUR GUY. Here's more:
"Responding to concerns that the CRA would lower bank profitability, a 1997 research paper by economists at the Federal Reserve found that "[CRA] lenders active in lower-income neighborhoods and with lower-income borrowers appear to be as profitable as other mortgage-oriented commercial banks".[27] Speaking in 2007, Federal Reserve Chair Ben Bernanke noted that, "managers of financial institutions found that these loan portfolios, if properly underwritten and managed, could be profitable" and that the loans "usually did not involve disproportionately higher levels of default".[9]"
So, smooth sailing, right?
But here's the beginning of the end:
"In 1999 the Congress enacted and President Clinton signed into law the Gramm-Leach-Bliley Act, also known as the "Financial Services Modernization Act," which repealed the part of the Glass-Steagall Act, which prohibited a bank from offering a full range of investment, commercial banking, and insurance services. "
Mixing investment banking with commercial... dumb dumb dumb. Clinton WRONG, FDR and the GS act were right. You don't crap where you eat.
More tidbits:
"Economists and financial people writing a Federal Reserve report, including Jeffrey W. Gunther, who also wrote a report on CRA for the Cato Institute, have wondered if the CRA was – or at least had become – irrelevant, because it was not needed to force banks to make profitable loans to a variety of borrowers.[42][43] In a 2003 research paper, economists at the Federal Reserve could not find clear evidence that the CRA increased lending and home ownership more in low income neighborhoods than in higher income ones.[44] A 2008 Competitive Enterprise Institute study resulted in a similar finding.[45] Federal Reserve chair Ben Bernanke has stated that an underlying assumption of the CRA – that more lending equals better outcomes for local communities – may not always be true. However, he also notes that at least in some instances, "the CRA has served as a catalyst, inducing banks to enter under-served markets that they might otherwise have ignored".[9]"
If you find any more stuff out on the web that makes your argument irrelevent, feel free to post.
I suppose you skipped over all that and read:
"In an article for the New York Post, economist Stan Liebowitz wrote that community activists intervention at yearly bank reviews resulted in their obtaining large amounts of money from banks, since poor reviews could lead to frustrated merger plans and even legal challenges by the Justice Department.[51] Michelle Minton noted that Chase Manhattan and J.P. Morgan donated hundreds of thousands of dollars to ACORN at about the same time they were to apply for permission to merge and needed to comply with CRA regulations.[45]"
An alarming claim if true. Remember, this is the New York Post. Onward...
"According to the New York Times, some of these housing advocacy groups provided early warnings about the potential impact of lowered credit standards and the resulting unsupportable increase in real estate values they were causing in low to moderate income communities. Ballooning mortgages on rental properties threatened to require large rent increases from low and moderate income tenants that could ill afford them. [52]
Housing advocacy groups were also leaders in the fight against subprime lending in low- and moderate-income communities, "In fact, community advocates had been telling the Federal Reserve about the dangers of subprime lending since the 1990s", according to Inner City Press. "For example, Bronx-based Fair Finance Watch commented to the Federal Reserve about the practices of now-defunct non-bank subprime lender New Century, when U.S. Bancorp bought warrants for 24% of New Century's stock. The Fed, rather than take any action on New Century, merely waited until U.S. Bancorp sold off some of the warrants, and then said the issue was moot." However, subprime loans were so profitable, that they were aggressively marketed in low-and moderate-income communities, even over the objections and warnings of housing advocacy groups like ACORN.[53]
[edit] Predatory Lending
In a 2002 study exploring the relationship between the CRA and lending looked at as predatory, Kathleen C. Engel and Patricia A. McCoy noted that banks could receive CRA credit by lending or brokering loans in lower-income areas that would be considered a risk for ordinary lending practices. CRA regulated banks may also inadvertently facilitate these lending practices by financing lenders. They also noted that CRA regulations as it was then administered and carried out by Fannie Mae and Freddie MAC, did not penalize banks that engaged in in these lending practices. They recommended that the federal agencies use the CRA to sanction behavior that either directly or indirectly increased predatory lending practices by lowering the CRA rating of any bank that facilitated in these lending practices.[54]"
...which illustrates that a program that worked well pre-1999, that helped people get affordable low income fixed rate mortgages was soon after used to prey on the poor through confusing adjustable income and balloon loans. Yet another program that worked fine for 22 years, destroyed under Bush's watch. And yes, admittedly, Clinton was flat out DUMB to repeal Glass-Steagal. Positive thing is, THAT's the bit that made ALL of us take the hit, rather than just the poor. Otherwise we'd have probably ignored it.
We've also slid bit by bit from being another country with another economy to being an economic superpower. Comparing the standard of living post WWII with the atrocious labor standards and robber barons and indentured servitude of the america before... well, there's just no comparison. But hey, back then the wealthy got to be wealthy, and those "too pathetic to help themselves" got to be their servants, right? Just as it ought to be in the conservative world. "The point I'm stressing is more goverment intrusion is costing more as a whole. I haven't seen the opposite as the left has claimed." Actually, the banking bailout is a perfect example. Had Glass-Steagol(as put into law by FDR and repealed by Clinton) still been around and enforced, we wouldn't have just shelled out 850 billion to the banks last October. How much did we save by NOT keeping Glass-Steagol over the last 9 years? Any idea? Was it more than 850 billion? And hey, "my side" isn't the one claiming that World War II, with the most socialistic tax table and gov't control over the private sector in our nations history to date, is responsible for lifting us out of the Great Depression. "Your side" is. It was "your sides" administration that effectively nationalized the banks. And don't even THINK about disowning GWB. "Your side" were rallying to him and attacking any criticism of him, right up to the last election cycle after which you threw him under the bus. And those that you listen to on the radio that foster this nonsense about how America is being turned into a Soviet Socialist country... ummm... they became MILLIONAIRES in this "soviet socialist" post New Deal country. Millionaires that get to make that money bitching about the people in power all while keeping their heads, in this "soviet socialist" country. Hurricane relief is another topic altogether. But if you really think people caught up in a hurricane are just "waiting around for the gov't to save them", you have no clue, whatsoever. And to believe that of Americans, I really have to wonder why you live here. Of course the banks aren't lending money. There is NO confidence in our private economic system right now, and there's no reason for there to be. People are holding on to their money, as well they should, and there's no reason to believe that the economy will grow again in the immediate future. Yes, the bailout mad me mad. Not that we did it, but because Paulson was demanding full control of it without being subject to review. Not even the president should have that kind of power. And with all that, we wonder why the money can't be accounted for. Either way, I miss your point in bringing this up, because it has nothing to do with the stimulus package. What was the reason for the bailout? Why didn't we just let them fail? We were told, "they're too big to fail". So we gave them money. Many of them went out and bought up other banks, making them even bigger. How's that for balls? What the stimulus package does is it keeps people working. It was not intended to fix the banks or restore confidence in the market. It's meant to get people working and pay them so that they go and spend some money and keep other businesses afloat. It has some other stuff in it for alternative energy to get the ball rolling for cheaper energy in the future. Some flat out stupid stuff, too. It's not what I would have hoped for, but it's what could get passed in a short period of time. And unlike the bank bailout, it can be accounted for. The auto bailouts... guess what? They SAID they'd probably need more money later. And now they do. At least they actually build something instead of push paper around.
I'm going to ignore the ad homniem attacks of your left but still comment on one thing on that. (The "you don't belong in my version of the US" comments)
I don't use a radio and only use books/TV/internet as forms of media. (Lou Dobbs in TV too) Also if we're going to be lumped like that then you're lumped into barrackobama.com (infomercial propaganda at its worst), NBC/MSNBC (Obama headquarters), and newshounds. (Where the slogan is "We Watch Fox News So You Don't Have To")
To futher fight your stereotype I'm a former Democrat and now a Republican with reservations towards independence when necessary. (conservative though)
Why don't you drop all that though while ahead? At least I'd stop the word for word style of this aggressive rebuttal. You're not praticing what you're preaching anyway.
I'm still curious if you're going to answer the Alexis Glick quote about how to value something if you can't form a current history high/low history with no bottom to judge the low.
Anyway I'm glad to see you admit policies in FDR's era were beginning the slope towards socialism. Something my side opposed as they felt what was coming. (Conservative Coalition)
In the Repeal of the Act the foundations are laid out why to oppose it anyway.
For the earlier history of the US the Civil War devastated the South economically and that was a result from the breakdown of goverment forcing policy without compromise. The same ruin can come from not listening to debate and thought for that matter.
Sure I can disagree with Bush just as you stated this bill is not exactly how you wanted it/go down. You're the only one who can disagree with your own side? You want to promote that double standard? Come on! To have money to allocate Congress had to vote in the first place in any case.
Besides you bringing up how the bank bailout money is being used just demonstrates why goverment shouldn't be further intruding.
My point with the hurricane relief fiasco and bailouts are there is an expansion of dependance. The auto bailout is just another further evidence of dependance.
Enigma lists on page 3 what the bill does. The major part I'll agree with is pursuing alternative energy. That's a noble path any side should agree on.
So for me it is a physc play. More so there when are those who won't question it.
I'll let you have the last word. Till I have something further to add.
Seems pretty standard fare for a high street bank.
Isn't the problem with Fannie Mae and Freddy Mac that all those sub prime mortgages defaluted and the government is now stuck a 5 trillion dollar insurance bill?
If I understand it right, FHA loan insurance is what the Bailout is paying for.
The government insured it, and now it's got to pay it.
But I see what you are saying about low income buyers. The only problem is FHA loans haven't been so widely taken up since 1990 when housing price inflation went up. The problem years.
And lenders are only insured against the current value of the houses not the amount of money they originally loaned out. So in the current depreciating market they are still getting stuffed.
The insurance doesn't cover their loses. They still go bankrupt as their assets are now worth up to 25% less than they paid for them.
With our example of Fannie Mae and Freddy Mac that combined write down could be up to the outside region of 1 Trillion dollars lost to FHA insured low income borrowers alone.
Even a fraction of that figure is bank breaking numbers. Multiple banks.
Where is this evidence of Clinton "leaning on banks"?
Published: September 30, 1999
The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.
Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.
Comments
Given what's just happened to the world economy, I'm suprised anyone dares mention his name anymore.
The problem is the gov't uses "Keynesian economics" 100% of the time and not just in emergencies as Keynes intended. You can't play the same ace twice in one hand.
What you need to recognise, is that the private sector funds the government.
Also that dishonest people are just as likely to work in the government as in the private sector.
I personally find it easier to trust someone spending his own money than I do someone spending mine. I also economically trust people who create wealth with my investments above those who simply spend it.
I enjoyed your comments about poor people not being poor just because they are lazy. I think this is very true. I also think that rich people are not rich just becuase they exploit others.
With regards to your above idea's on democracy, I think you misunderstand how the system works. A democracy does not grant every citizen a say in political decisions. Decisions are still made by elites. As they should be. In a democracy, (and also communism) citizens have some say in in chosing which elites run the country.
The point of Keynesian economics is to have adequate tax revenue to where you can afford to run a deficit during the downtimes, and pay that money back during the good times. Instead we're cutting taxes in the middle of a war, running huge deficits during the peak of our economic cycle, and being insanely irresponsible. You can't fault an economic strategy for failure when it's being used incorrectly, any more than you can fault a baseball bat for a bad hit when you use the wrong end.
And the problem with the people in the gov't is that many of them have come from the private sector to work for the gov't, their role to police those industries that they have ties to. Often, instead of policing them, they serve their interests and look the other way when they're doing things they shouldn't. This will likely always be a problem.
Agreed about the wealthy.
That's fine and understandable to trust someone to spend their own money wisely, but the way money works in our world is much more complicated than that. Problem is, as has been seen, we're all interdependent to some extent. When a small number of people have a large percentage of the wealth, what they decide to do with it can jeopardize us all.
As it relates to the banking crisis, that was OUR money they were playing with.
It comes back to two points.
If a company can get "too big to fail", does it make sense to allow it to get that big?
Does an economy exist to serve the people, or do the people exist to serve the economy?
Lastly, I'm in perfect understanding of democracy. And I see the role of democracy to be the means with which to change the direction of a country without having to resort to violence. I'd trust a gov't that I can vote out before I'll trust private enterprise to act in the best interest of the public. I'd rather have to trust neither of them, but well... I guess that would be MY Utopia.
Only have a few intelligent words to convey:
Nothing is to big to not let fail. Let them fail the market will expand and rite itself. I am pist because as you say that is our money they are monkeying around with. Again I do not care for failures in life. If you can not make it it is not my responsibility to pick you up so you can feed 15 kids! Oh sorry bad example. Again if you want to quote me if you are to pathetic to over come the niche you have to fill not my problem. An ass for every seat as they say. If we allow those like Robsolf to run things we will have no middle class and only the lies of utopia to keep us warm. No thanks I would rather become wealthy on my own and know I get to keep it, not those pathetic sole who I crushed along the path of sucess. If that is elitism you can blow me, I was told if you work hard in life you keep what is yours. Guess I was lied to, it is now taken from me and given to some welfare crack addict and I should get a warm and fuzzy over it. Well I dont.
"Life, liberty and the pursuit of happiness". No one can stop anyone from pursuing happiness, but life and liberty are said to only exist if they are deliberately sought and paid for".
The majority of the people voted for this guy and are slowly understanding they made a mistake. It is this guy that will make our great country socialistic. Socialism fails, it has always failed.
The stocks drop because Wall Street doesnt trust him. He painted a bleak picture for the US.
His ratings are slowly dropping. This is not the stimulus package we need. The money is needed for the economy and the people, not pet projects.
I agree but McCain would be doing the exact same stuff if he was in office. The only difference would be the liberal media would be tearing him apart and saying he's continuing the Bush Doctrine while Sarah Palin is eating mooseburgers and casting spells. We would be better off if someone like Ron Paul was in office but the big corps don't like him.
Don't be terrorized! You're more likely to die of a car accident, drowning, fire, or murder! More people die every year from prescription drugs than terrorism LOL!
The roots of this crisis go back to the Carter administration. That was when government officials, egged on by left-wing activists, began accusing mortgage lenders of racism and "redlining" because urban blacks were being denied mortgages at a higher rate than suburban whites.
Now that the bubble has burst it is apparent to all, Frank declares: "The private sector got us into this mess." Well, give the congressman points for gall. Wall Street and private lenders have plenty to answer for, but it was Washington and the political class that derailed this train.
The democrats in congress stopped President Bush’s plan for a major overhaul of Feddie and Fannie. Now here we are five years later and because congress choose to do nothing, we are in the middle of this major meltdown. It’s real easy to point a finger at President Bush and use him as a scapegoat, but when we really look at the truth of the matter, we see the finger prints of the democrats all over this mess.
Crisis of Credit Visualized
www.youtube.com/watch
Don't be terrorized! You're more likely to die of a car accident, drowning, fire, or murder! More people die every year from prescription drugs than terrorism LOL!
Tax cuts are Keynsian.
And with relation to the banking crisis, it's not your money they are playing with. It's some old couple in China's life savings. Some one poorer than you. Someone poorer than your poorest people.
They've already spent your money. They spent it so casually it's already gone when you needed it most.
Private sector people should have a very large input into government. Government is entirely funded by the private sector. It is dependant on it in every way. These people are the primary drivers of the economy. The engines of the nation.
There are plenty of companies too critical to allow to fail. And plenty of companies that need to be that large in order for them to be of any use.
Boeing for example is a mainstay of national defence. It constantly needs bailing out again and again with every economic downturn, as domestic airflights are the first things to get cut or affected by terrorism.
Again the motor industry is critical as is the banking industry. If they were small companies only, they would not have been able to fulfill the needs of the country in the first place. Large companies = efficient mass production > small companies with expensive smaller production runs.
Banks for example have been providing 70% of the tax income in my country for decades. Despite bailing them out to a similar tune to the U.S. (even though our country is 1/5 of the size) the government has still made a profit on them over all. They will again.
This is the problem of the electorate and also the elected government, they are unwilling to look beyond the short term. Unwilling to promise economic pain in the run up to an election that wil cost them their own jobs. Their own personal wealth and security.
Many of them have no understanding of the economic principles involved and little to no understanding of how it relates to them personally. Their expertise lies in other areas. They just get the headlines.
Bailouts funded by YOUR taxes.
Only they aren't. They are funded by foreign investment. These are guarenteed by the threat of your taxes. Taxes that you won't be paying because you are getting Keynsian tax cuts. The taxes you are paying don't even cover what you have already spent before any bailout, before any credit crunch.
And yes I can fault Keynsian economics when it is being used incorrectly if it is used incorrectly everytime. Which it has been.
The Keynsian silver bullet has already been fired. It is no longer possible to use it correctly. Any attempt to adopt Keynsian policies now is an incorrect use of it. You use it once, then you get the economy straightened out, then you are free to use it again.
But that hasn't happened.
It's been refired before the previous deficits have been redressed and now it is doing untold long term economic damage. And why? In the name of socialism. To bribe unhappy people who partisan voted and will hopefully partisan vote again. It's not all bad poor people need relief, but the economy is being sacrificed to give it to them. If no government is willing to face up to the abject social pain required to rebalance it, it will get worse and worse until it derails completely.
The very idea that you can "borrow your way out of debt" is of limited credability to start with.
@ ;RoflCTRL stick on tatooes are unmanly.
Again, show me in the legislation that "forces" banks to give loans to people who can't afford them.
It doesn't exist. FHA loans are the only thing close, and they're federally insured. You REALLY need to stop listening to Limbaugh and look some stuff up for yourself.
Tax cuts are Keynsian.
And with relation to the banking crisis, it's not your money they are playing with. It's some old couple in China's life savings. Some one poorer than you. Someone poorer than your poorest people.
They've already spent your money. They spent it so casually it's already gone when you needed it most.
Private sector people should have a very large input into government. Government is entirely funded by the private sector. It is dependant on it in every way. These people are the primary drivers of the economy. The engines of the nation.
There are plenty of companies too critical to allow to fail. And plenty of companies that need to be that large in order for them to be of any use.
Boeing for example is a mainstay of national defence. It constantly needs bailing out again and again with every economic downturn, as domestic airflights are the first things to get cut or affected by terrorism.
Again the motor industry is critical as is the banking industry. If they were small companies only, they would not have been able to fulfill the needs of the country in the first place. Large companies = efficient mass production > small companies with expensive smaller production runs.
Banks for example have been providing 70% of the tax income in my country for decades. Despite bailing them out to a similar tune to the U.S. (even though our country is 1/5 of the size) the government has still made a profit on them over all. They will again.
This is the problem of the electorate and also the elected government, they are unwilling to look beyond the short term. Unwilling to promise economic pain in the run up to an election that wil cost them their own jobs. Their own personal wealth and security.
Many of them have no understanding of the economic principles involved and little to no understanding of how it relates to them personally. Their expertise lies in other areas. They just get the headlines.
Bailouts funded by YOUR taxes.
Only they aren't. They are funded by foreign investment. These are guarenteed by the threat of your taxes. Taxes that you won't be paying because you are getting Keynsian tax cuts. The taxes you are paying don't even cover what you have already spent before any bailout, before any credit crunch.
And yes I can fault Keynsian economics when it is being used incorrectly if it is used incorrectly everytime. Which it has been.
The Keynsian silver bullet has already been fired. It is no longer possible to use it correctly. Any attempt to adopt Keynsian policies now is an incorrect use of it. You use it once, then you get the economy straightened out, then you are free to use it again.
But that hasn't happened.
It's been refired before the previous deficits have been redressed and now it is doing untold long term economic damage. And why? In the name of socialism. To bribe unhappy people who partisan voted and will hopefully partisan vote again. It's not all bad poor people need relief, but the economy is being sacrificed to give it to them. If no government is willing to face up to the abject social pain required to rebalance it, it will get worse and worse until it derails completely.
The very idea that you can "borrow your way out of debt" is of limited credability to start with.
@ RoflCTRL stick on tatooes are unmanly.
Good post!
@Robself.
Here in Britain we widely attribute the uptake of toxic debt to the policies of the Clinton administration. (It's the economy stupid!).
The Community Reinvestment Act was part of it, but not all the steps he made to encourage loose mortgages to the poorest elements of society, (toxic debt), were done by using new legislation, much of it was done by using existing discrimination laws to enforce lending to minorities (Traditionally poorer minorites such as blacks and native indians for example). Also CRA ratings were given to banks in return for lending to low income customers (toxic borrowers). CRA ratings that would be needed for banks to have their mergers and aquisitions approved.
Responsable lending they called it. Doh!
Rather than spend money on social housing the fantasy model prefered by the post Thatcher / Post Reagun neo socialists was to use private sector money rather than taxation revenue.
Well, they did what they set out to do, and now that money has all been doled out. It's gone. Spent. The private sector is no longer able to contribute towards social programs, in fact it is no longer able to sustain itself either.
They killed the goose that lays the golden eggs.
Current suggested cure by our glorious governments? More social programs funded by the private sector. Restart lending to the low income sections of society. More toxic debt FTW.
Again, show me in the legislation that "forces" banks to give loans to people who can't afford them.
It doesn't exist. FHA loans are the only thing close, and they're federally insured. You REALLY need to stop listening to Limbaugh and look some stuff up for yourself.
In the name of fighting “racism” and “redlining” ACORN and the government forced banks to make riskier loans in areas less economically stable or viable and customers who had low income and were a high credit risk. Banks said it was risk management, Democrats said it was racism.
Political appointees (not financial guru’s) were placed in charge of Fannie Mae and Freddie Mac; people like Franklin Raines, Jeff Johnson and former Clinton Deputy Attorney General Jamie Gorelick. It was the policy of the Clinton Administration and Congressional Democrats to lean on banks, and Freddie and Fannie to get loans to low income people so that “everyone could have a home” (besides all that loan money out there propped up and somewhat inflated the economy so it helped make the numbers look good).
Corruption and influence peddling begin to infect the entire system. While the law made it clear that sound financial principles were to be practiced, political pressure caused people to look the other way. The political cronies running Fannie and Freddie realized that they could make themselves rich with tens of millions of dollars in bonuses by buying more loans to make it seem on paper that they had all this money coming in from people’s house payments as if the loans they owned were good, but they weren’t. Too many of the loans were high risk, they had bought “bad paper”. The bonuses were spread around, but they wanted to keep the cash train flowing and help their fellow political friends so Fannie and Freddie gave $200 million away in political donations, to candidates and partisan organizations, a majority of those being Democrats. Barack Obama and Banking Committee Chairman Chris Dodd were the two biggest recipients of this money in the Senate. Fannie and Freddie had become the money train for the corrupt. The regulators who reported to Congress warned what was going on but members of the banking committee who were getting paid didn’t want to hear it.
President Bush tried to put an end to this in 2003 and John McCain tried to stop this in 2005-6. Congressional Banking leaders Chris Dodd and barney Frank said that everything was just fine and no reforms were needed.
These attempts to fix the system were blocked by Democrats.
I don't really agree with you about where this toxic debt really comes from. It seems to be assumed in conservative circles that it comes from low income communities, but as I've mentioned too many times, most of those loans are federally insured.
However, middle-upper class loans rarely are insured, and the keep up with the Jones crowd really knows how to rack up debt.
Still other toxic debt comes from credit cards being pimped out to college kids. You can't walk 20 feet on a campus these days without tripping over credit card apps. They are approving these kids, even the ones that don't have jobs. And if they can't pay them back, they get a collections people to call and threaten them with jail time and other illegal practices.
Point being, is that the private sector didn't need encouragement to lend this money out to people who couldn't pay it back. Subprime debt is(WAS) a known money maker for quite some time, with insane interest rates and ridiculous fees and people from many walks of life get bitten by them.
Bankers WANT to give people loans. It pays their bills. If you're a banker at 1 branch of 400, what do you care if the customer can pay the loan back?
Dealers WANT to sell you that car. F&I offices are in pretty much any decent sized dealership that send your info out to dozens of creditors for a bite.
Credit Card companies WANT to give you a credit card.
Department stores WANT you to get one of their cards.
And when they do, they aren't doing you ANY favors.
It's sad; my mainstream bank is now doing the payday loan thing. Sure, they call it something else, but it's still insane fees so that you can get your "paycheck" early.
We know the result, and we can certainly agree on that; you have enough of this debt floating out there that it would drag the rest of the industry down.
We may not agree on other things but I read your POV loud and clear. And when it comes to what it will take to make it right, you may be correct. I just don't know that people properly respect the consequences of taking that option.
In the name of fighting “racism” and “redlining” ACORN and the government forced banks to make riskier loans in areas less economically stable or viable and customers who had low income and were a high credit risk. Banks said it was risk management, Democrats said it was racism.
Political appointees (not financial guru’s) were placed in charge of Fannie Mae and Freddie Mac; people like Franklin Raines, Jeff Johnson and former Clinton Deputy Attorney General Jamie Gorelick. It was the policy of the Clinton Administration and Congressional Democrats to lean on banks, and Freddie and Fannie to get loans to low income people so that “everyone could have a home” (besides all that loan money out there propped up and somewhat inflated the economy so it helped make the numbers look good).
Corruption and influence peddling begin to infect the entire system. While the law made it clear that sound financial principles were to be practiced, political pressure caused people to look the other way. The political cronies running Fannie and Freddie realized that they could make themselves rich with tens of millions of dollars in bonuses by buying more loans to make it seem on paper that they had all this money coming in from people’s house payments as if the loans they owned were good, but they weren’t. Too many of the loans were high risk, they had bought “bad paper”. The bonuses were spread around, but they wanted to keep the cash train flowing and help their fellow political friends so Fannie and Freddie gave $200 million away in political donations, to candidates and partisan organizations, a majority of those being Democrats. Barack Obama and Banking Committee Chairman Chris Dodd were the two biggest recipients of this money in the Senate. Fannie and Freddie had become the money train for the corrupt. The regulators who reported to Congress warned what was going on but members of the banking committee who were getting paid didn’t want to hear it.
President Bush tried to put an end to this in 2003 and John McCain tried to stop this in 2005-6. Congressional Banking leaders Chris Dodd and barney Frank said that everything was just fine and no reforms were needed.
These attempts to fix the system were blocked by Democrats.
Where is this evidence of Clinton "leaning on banks"? What legislation did Bush and McCain produce that couldn't get by a Democratic minority?
You think Clinton was going to be able to "strongarm" banks with their massive lobbies and massive capacity to contribute to campaigns, DURING a republican majority in congress? Seriously?
You know, I could almost buy your story had you said that Clinton caved to the banks, but not the other way around. The notion that some massive "poor people lobby" under Bubba threatened those poor defenseless bankers into subservience is a bit laughable.
Thanks Mr. I appreciate your view and discussion also.
The subprime market was a money maker for the brokers who traded it. No one else.
It was a loss leader for the original lenders.
Investment banks needed no encouragement to trade it, insure it and leverage against it. Major High Street banks have avoided it like the plague.
There is perhaps a nomenclature here that differentiates between the two types of business.
Investment institution and bank.
Clumping the two together makes for some confusion. The majority of banks did not engage in Sub prime loans at all. They have been hit in a knock-on effect by interbank lending to Sub Prime lenders who have gone bankrupt and been unable to repay them.
It is in the nature of modern global banking that the collapse of two or three sub prime lenders has triggered a chain reaction of banking collapses worldwide in businesses that didn't even know they were exposed to that market, let alone willingly embraced it.
While middle class borrowers most certainly can be sub prime borrowers and I'm sure many of them are, the size of their incomes can protect them from a lot of lifes financial pitfalls in way that low income borrowers are not able. It is the low income earners who are most at risk in society from financial insecurity. Those without the resources needed to tide them over in a rough spot.
Low income families are also traditonally the least finacially literate in society. Those least equiped to plan for and expect financial downturns that others may take for granted. They are also those with least to lose by declaring themselves bankrupt.
While bad credit card debts have most certainly been a serious problem for banks, they are not in the same league as the morgage market. These toxic assets are not bank breakers. We are discussing typical personal loans in the thousands rather than typical personal loans in the hundreds of thousands.
Without the Sub Prime crash that preceded and in many ways even triggered them, they would not be significant losses in their own right.
In my country student loans have been another example of the neo socialist model. In order to lower taxes, university education that was formerly subsidised by the tax payer, has now been replaced by state enforced social lending from the private sector.
Where before you got a government grant you now get a legally enforced bank loan.
With regards to Clinton bullying, it's easy. If you wish to trade in America, you lend money to low income families. Or your big deals don;t get approved. Nor your lisence.
He didn't need a majority in congress because he didn't need to legislate to do it. He used existing laws. His appointee's would either personally approve or disapprove banks commercial applications as they saw fit. All Clinton had to do was summon his appointee's to his office and agree with them what kind of banks they would favour (and which they would investigate and prosecute against). To this effect, he introduced a ratings system called CRA.
Any bank wanting to make money in the U.S. would then have to suck up to him. To earn Clinton Points or never lvl up. Banks that failed to do enough would face investigation under existing discrimination laws. Carrot and Stick.
The state is the largest monopoly in town. It can bully all of the lesser institutions with ease.
In the name of fighting “racism” and “redlining” ACORN and the government forced banks to make riskier loans in areas less economically stable or viable and customers who had low income and were a high credit risk. Banks said it was risk management, Democrats said it was racism.
Political appointees (not financial guru’s) were placed in charge of Fannie Mae and Freddie Mac; people like Franklin Raines, Jeff Johnson and former Clinton Deputy Attorney General Jamie Gorelick. It was the policy of the Clinton Administration and Congressional Democrats to lean on banks, and Freddie and Fannie to get loans to low income people so that “everyone could have a home” (besides all that loan money out there propped up and somewhat inflated the economy so it helped make the numbers look good).
Corruption and influence peddling begin to infect the entire system. While the law made it clear that sound financial principles were to be practiced, political pressure caused people to look the other way. The political cronies running Fannie and Freddie realized that they could make themselves rich with tens of millions of dollars in bonuses by buying more loans to make it seem on paper that they had all this money coming in from people’s house payments as if the loans they owned were good, but they weren’t. Too many of the loans were high risk, they had bought “bad paper”. The bonuses were spread around, but they wanted to keep the cash train flowing and help their fellow political friends so Fannie and Freddie gave $200 million away in political donations, to candidates and partisan organizations, a majority of those being Democrats. Barack Obama and Banking Committee Chairman Chris Dodd were the two biggest recipients of this money in the Senate. Fannie and Freddie had become the money train for the corrupt. The regulators who reported to Congress warned what was going on but members of the banking committee who were getting paid didn’t want to hear it.
President Bush tried to put an end to this in 2003 and John McCain tried to stop this in 2005-6. Congressional Banking leaders Chris Dodd and barney Frank said that everything was just fine and no reforms were needed.
These attempts to fix the system were blocked by Democrats.
Where is this evidence of Clinton "leaning on banks"? What legislation did Bush and McCain produce that couldn't get by a Democratic minority?
You think Clinton was going to be able to "strongarm" banks with their massive lobbies and massive capacity to contribute to campaigns, DURING a republican majority in congress? Seriously?
You know, I could almost buy your story had you said that Clinton caved to the banks, but not the other way around. The notion that some massive "poor people lobby" under Bubba threatened those poor defenseless bankers into subservience is a bit laughable.
Oh, by the way, check this out:
http://www.nhi.org/online/issues/125/goingsubprime.html
Short story being, subprime credit was off limits for the FM twins til' 2002. It was strictly a private sector gig before then.
It's probably fair so say, though, that we'd be in a lot better shape had they stayed out of it like they should have.
"Investment banks needed no encouragement to trade it, insure it and leverage against it. Major High Street banks have avoided it like the plague."
Maybe by name they are, but not by practice. What few banks there are these days that have their assets clear of toxic debt, are beginning to treat their customers as sub-prime folks. My prior example of the pay-day loan system they now have at my current bank, for example. The same bank that houses my one credit card, my car loan, and my mortgage. Why on earth would a respectable bank create such an irresponsible product?
"While middle class borrowers most certainly can be sub prime borrowers and I'm sure many of them are, the size of their incomes can protect them from a lot of lifes financial pitfalls in way that low income borrowers are not able."
Can't say I agree with this. I'd refer you to the Tower of Babel. The closer you are to the ground, the easier the fall. And jobs that pay, say, 9 bucks an hour are much easier to replace than, say, a 110k a year job as a project manager. And a $600 house payment much easier to pay with unemployment than a $1800 payment(unemployment is capped somewhere around 700/week). Add to this the much bigger potential for loss on a mid-upper shortsale compared to a low income loan, and you can probably see what I'm getting at.
I read you about the 2 different types of financial institutions. It's one of the big things that really hosed us regarding the FM twins.
But again... most low income mortgages are federally insured. Either thru FHA, or mortgages without down payments(likely a vast majority of low income loans) are required by law to have PMI insurance, which pays the bank if the loan defaults.
Take care!
In the name of fighting “racism” and “redlining” ACORN and the government forced banks to make riskier loans in areas less economically stable or viable and customers who had low income and were a high credit risk. Banks said it was risk management, Democrats said it was racism.
Political appointees (not financial guru’s) were placed in charge of Fannie Mae and Freddie Mac; people like Franklin Raines, Jeff Johnson and former Clinton Deputy Attorney General Jamie Gorelick. It was the policy of the Clinton Administration and Congressional Democrats to lean on banks, and Freddie and Fannie to get loans to low income people so that “everyone could have a home” (besides all that loan money out there propped up and somewhat inflated the economy so it helped make the numbers look good).
Corruption and influence peddling begin to infect the entire system. While the law made it clear that sound financial principles were to be practiced, political pressure caused people to look the other way. The political cronies running Fannie and Freddie realized that they could make themselves rich with tens of millions of dollars in bonuses by buying more loans to make it seem on paper that they had all this money coming in from people’s house payments as if the loans they owned were good, but they weren’t. Too many of the loans were high risk, they had bought “bad paper”. The bonuses were spread around, but they wanted to keep the cash train flowing and help their fellow political friends so Fannie and Freddie gave $200 million away in political donations, to candidates and partisan organizations, a majority of those being Democrats. Barack Obama and Banking Committee Chairman Chris Dodd were the two biggest recipients of this money in the Senate. Fannie and Freddie had become the money train for the corrupt. The regulators who reported to Congress warned what was going on but members of the banking committee who were getting paid didn’t want to hear it.
President Bush tried to put an end to this in 2003 and John McCain tried to stop this in 2005-6. Congressional Banking leaders Chris Dodd and barney Frank said that everything was just fine and no reforms were needed.
These attempts to fix the system were blocked by Democrats.
Where is this evidence of Clinton "leaning on banks"? What legislation did Bush and McCain produce that couldn't get by a Democratic minority?
You think Clinton was going to be able to "strongarm" banks with their massive lobbies and massive capacity to contribute to campaigns, DURING a republican majority in congress? Seriously?
You know, I could almost buy your story had you said that Clinton caved to the banks, but not the other way around. The notion that some massive "poor people lobby" under Bubba threatened those poor defenseless bankers into subservience is a bit laughable.
Read little and get out of the liberal mindset
LINK
Where is this evidence of Clinton "leaning on banks"? What legislation did Bush and McCain produce that couldn't get by a Democratic minority?
You think Clinton was going to be able to "strongarm" banks with their massive lobbies and massive capacity to contribute to campaigns, DURING a republican majority in congress? Seriously?
You know, I could almost buy your story had you said that Clinton caved to the banks, but not the other way around. The notion that some massive "poor people lobby" under Bubba threatened those poor defenseless bankers into subservience is a bit laughable.
Read little and get out of the liberal mindset
LINK
"The law emphasizes that an institution's CRA activities should be undertaken in a safe and sound manner, and does not require institutions to make high-risk loans that may bring losses to the institution.[2][9] An institution's CRA compliance record is taken into account by the banking regulatory agencies when the institution seeks to expand through merger, acquisition or branching. The law does not mandate any other penalties for non-compliance with the CRA."
Read your own links, and get out of the Limbaugh mindset. Here's more:
"According to Ben Bernanke, this law greatly increased the ability of advocacy groups, researchers, and other analysts to "perform more-sophisticated, quantitative analyses of banks' records," thereby influencing the lending policies of banks. Over time, community groups and nonprofit organizations established "more-formalized and more-productive partnerships with banks."
That's right. Ben Bernanke... appointed by YOUR GUY. Here's more:
"Responding to concerns that the CRA would lower bank profitability, a 1997 research paper by economists at the Federal Reserve found that "[CRA] lenders active in lower-income neighborhoods and with lower-income borrowers appear to be as profitable as other mortgage-oriented commercial banks".[27] Speaking in 2007, Federal Reserve Chair Ben Bernanke noted that, "managers of financial institutions found that these loan portfolios, if properly underwritten and managed, could be profitable" and that the loans "usually did not involve disproportionately higher levels of default".[9]"
So, smooth sailing, right?
But here's the beginning of the end:
"In 1999 the Congress enacted and President Clinton signed into law the Gramm-Leach-Bliley Act, also known as the "Financial Services Modernization Act," which repealed the part of the Glass-Steagall Act, which prohibited a bank from offering a full range of investment, commercial banking, and insurance services. "
Mixing investment banking with commercial... dumb dumb dumb. Clinton WRONG, FDR and the GS act were right. You don't crap where you eat.
More tidbits:
"Economists and financial people writing a Federal Reserve report, including Jeffrey W. Gunther, who also wrote a report on CRA for the Cato Institute, have wondered if the CRA was – or at least had become – irrelevant, because it was not needed to force banks to make profitable loans to a variety of borrowers.[42][43] In a 2003 research paper, economists at the Federal Reserve could not find clear evidence that the CRA increased lending and home ownership more in low income neighborhoods than in higher income ones.[44] A 2008 Competitive Enterprise Institute study resulted in a similar finding.[45] Federal Reserve chair Ben Bernanke has stated that an underlying assumption of the CRA – that more lending equals better outcomes for local communities – may not always be true. However, he also notes that at least in some instances, "the CRA has served as a catalyst, inducing banks to enter under-served markets that they might otherwise have ignored".[9]"
If you find any more stuff out on the web that makes your argument irrelevent, feel free to post.
I suppose you skipped over all that and read:
"In an article for the New York Post, economist Stan Liebowitz wrote that community activists intervention at yearly bank reviews resulted in their obtaining large amounts of money from banks, since poor reviews could lead to frustrated merger plans and even legal challenges by the Justice Department.[51] Michelle Minton noted that Chase Manhattan and J.P. Morgan donated hundreds of thousands of dollars to ACORN at about the same time they were to apply for permission to merge and needed to comply with CRA regulations.[45]"
An alarming claim if true. Remember, this is the New York Post. Onward...
"According to the New York Times, some of these housing advocacy groups provided early warnings about the potential impact of lowered credit standards and the resulting unsupportable increase in real estate values they were causing in low to moderate income communities. Ballooning mortgages on rental properties threatened to require large rent increases from low and moderate income tenants that could ill afford them. [52]
Housing advocacy groups were also leaders in the fight against subprime lending in low- and moderate-income communities, "In fact, community advocates had been telling the Federal Reserve about the dangers of subprime lending since the 1990s", according to Inner City Press. "For example, Bronx-based Fair Finance Watch commented to the Federal Reserve about the practices of now-defunct non-bank subprime lender New Century, when U.S. Bancorp bought warrants for 24% of New Century's stock. The Fed, rather than take any action on New Century, merely waited until U.S. Bancorp sold off some of the warrants, and then said the issue was moot." However, subprime loans were so profitable, that they were aggressively marketed in low-and moderate-income communities, even over the objections and warnings of housing advocacy groups like ACORN.[53]
[edit] Predatory Lending
In a 2002 study exploring the relationship between the CRA and lending looked at as predatory, Kathleen C. Engel and Patricia A. McCoy noted that banks could receive CRA credit by lending or brokering loans in lower-income areas that would be considered a risk for ordinary lending practices. CRA regulated banks may also inadvertently facilitate these lending practices by financing lenders. They also noted that CRA regulations as it was then administered and carried out by Fannie Mae and Freddie MAC, did not penalize banks that engaged in in these lending practices. They recommended that the federal agencies use the CRA to sanction behavior that either directly or indirectly increased predatory lending practices by lowering the CRA rating of any bank that facilitated in these lending practices.[54]"
...which illustrates that a program that worked well pre-1999, that helped people get affordable low income fixed rate mortgages was soon after used to prey on the poor through confusing adjustable income and balloon loans. Yet another program that worked fine for 22 years, destroyed under Bush's watch. And yes, admittedly, Clinton was flat out DUMB to repeal Glass-Steagal. Positive thing is, THAT's the bit that made ALL of us take the hit, rather than just the poor. Otherwise we'd have probably ignored it.
What's the problem with payday loans?
It's legal loan sharking.
Ask Dave Ramsey.
I'm going to ignore the ad homniem attacks of your left but still comment on one thing on that. (The "you don't belong in my version of the US" comments)
I don't use a radio and only use books/TV/internet as forms of media. (Lou Dobbs in TV too) Also if we're going to be lumped like that then you're lumped into barrackobama.com (infomercial propaganda at its worst), NBC/MSNBC (Obama headquarters), and newshounds. (Where the slogan is "We Watch Fox News So You Don't Have To")
To futher fight your stereotype I'm a former Democrat and now a Republican with reservations towards independence when necessary. (conservative though)
Why don't you drop all that though while ahead? At least I'd stop the word for word style of this aggressive rebuttal. You're not praticing what you're preaching anyway.
I'm still curious if you're going to answer the Alexis Glick quote about how to value something if you can't form a current history high/low history with no bottom to judge the low.
Sabiancym in page 6 of this thread started the WWII bit but I digress.
Anyway I'm glad to see you admit policies in FDR's era were beginning the slope towards socialism. Something my side opposed as they felt what was coming. (Conservative Coalition)
In the Repeal of the Act the foundations are laid out why to oppose it anyway.
For the earlier history of the US the Civil War devastated the South economically and that was a result from the breakdown of goverment forcing policy without compromise. The same ruin can come from not listening to debate and thought for that matter.
Sure I can disagree with Bush just as you stated this bill is not exactly how you wanted it/go down. You're the only one who can disagree with your own side? You want to promote that double standard? Come on! To have money to allocate Congress had to vote in the first place in any case.
Besides you bringing up how the bank bailout money is being used just demonstrates why goverment shouldn't be further intruding.
My point with the hurricane relief fiasco and bailouts are there is an expansion of dependance. The auto bailout is just another further evidence of dependance.
Enigma lists on page 3 what the bill does. The major part I'll agree with is pursuing alternative energy. That's a noble path any side should agree on.
So for me it is a physc play. More so there when are those who won't question it.
I'll let you have the last word. Till I have something further to add.
AC2 Player RIP Final Death Jan 31st 2017
Refugee of Auberean
Refugee of Dereth
It's a loan of one months salary.
Seems pretty standard fare for a high street bank.
Isn't the problem with Fannie Mae and Freddy Mac that all those sub prime mortgages defaluted and the government is now stuck a 5 trillion dollar insurance bill?
If I understand it right, FHA loan insurance is what the Bailout is paying for.
The government insured it, and now it's got to pay it.
But I see what you are saying about low income buyers. The only problem is FHA loans haven't been so widely taken up since 1990 when housing price inflation went up. The problem years.
And lenders are only insured against the current value of the houses not the amount of money they originally loaned out. So in the current depreciating market they are still getting stuffed.
The insurance doesn't cover their loses. They still go bankrupt as their assets are now worth up to 25% less than they paid for them.
With our example of Fannie Mae and Freddy Mac that combined write down could be up to the outside region of 1 Trillion dollars lost to FHA insured low income borrowers alone.
Even a fraction of that figure is bank breaking numbers. Multiple banks.
Published: September 30, 1999
The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.
Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.
query.nytimes.com/gst/fullpage.html
Thank god it's not the middle of the day.