Obama, Barney Frank, Fannie Mae, Freddie Mac

EXC
atheist
EXC's picture
Posts: 3123
Joined: 2008-01-17
User is offlineOffline
Obama, Barney Frank, Fannie Mae, Freddie Mac

 

http://citizenwells.wordpress.com/2008/09/17/obama-barney-frank-fannie-mae-freddie-mac-campaign-contributions-democrats-lobbyists-truth-about-obama-more-obama-lies-mccain-reformer/

 

The Poverty Pimps created this mess with their "It's unfair that some people can't afford a nice home crap." So they had the government via freddy and fannie(appropriatly named) guarantee loans so people could live above their means. All this did was create an artificial demand and the housing bubble. Now that the bubble bursts who gets stuck with the bill?

I guess the only bright spot is that the government now is completely broke, so if Obama is elected, he won't have a budget to pass out any of his "hope"(aka free handouts to whoever votes for him).

 

 

“Religion is regarded by the common people as true, by the wise as false, and by the rulers as useful.” Seneca


MattShizzle
Posts: 7966
Joined: 2006-03-31
User is offlineOffline
Fucking right wing morons.

Fucking right wing morons. They'd rather let the greedy rich fucks buy more houses, planes and limos while the poor die in the street and the middle class slips into poverty. Maybe if the rethuglicans hadn't deregulated everything our economy would be in better shape.

Matt Shizzle has been banned from the Rational Response Squad website. This event shall provide an atmosphere more conducive to social growth. - Majority of the mod team


JillSwift
Superfan
JillSwift's picture
Posts: 1758
Joined: 2008-01-13
User is offlineOffline
Let's see:The guaranteed

Let's see:

The guaranteed loans were proffered as a means to give the economy a boost, not as presents to impoverished people. In effect, it was a big government gift to the housing market, not the homeowners. Those same loans were being paid properly with a fairly small percentage being "slow" until the economy shifted after the supposed end of the Iraq war. Then lots of folks found themselves with less income than they expected.

So now they're giving another big gift to the housing market.

You do so love to blame everything on "those darned liberals!" Has it anything to do with reality, or are you just blame-shifting away from the neo-conservative tendancy to be a great big good-ol-boy network?

"Anyone can repress a woman, but you need 'dictated' scriptures to feel you're really right in repressing her. In the same way, homophobes thrive everywhere. But you must feel you've got scripture on your side to come up with the tedious 'Adam and Eve not Adam and Steve' style arguments instead of just recognising that some people are different." - Douglas Murray


Dray
Posts: 68
Joined: 2008-01-25
User is offlineOffline
I always thought Citizen

I always thought Citizen Wells was a spoof site.  Like for the right-wing versions of Luminon and other republican "truthers".

I could be wrong.


JillSwift
Superfan
JillSwift's picture
Posts: 1758
Joined: 2008-01-13
User is offlineOffline
Dray wrote:I always thought

Dray wrote:
I always thought Citizen Wells was a spoof site.  Like for the right-wing versions of Luminon and other republican "truthers".

I could be wrong.

There's a Poe's law corrolary there, I'm sure of it.

"Anyone can repress a woman, but you need 'dictated' scriptures to feel you're really right in repressing her. In the same way, homophobes thrive everywhere. But you must feel you've got scripture on your side to come up with the tedious 'Adam and Eve not Adam and Steve' style arguments instead of just recognising that some people are different." - Douglas Murray


MattShizzle
Posts: 7966
Joined: 2006-03-31
User is offlineOffline
Calling McInsane a reformer

Calling McInsane a reformer is like calling Hitler an icon of tolerance. Maybe if there were more liberals in charge there wouldn't see so much and so severe poverty in the first place. You don't see the level of poverty there is in the US in the rest of the western world.

Matt Shizzle has been banned from the Rational Response Squad website. This event shall provide an atmosphere more conducive to social growth. - Majority of the mod team


aiia
Superfan
aiia's picture
Posts: 1923
Joined: 2006-09-12
User is offlineOffline
EXC

EXC wrote:

 http://citizenwells.wordpress.com/2008/09/17/obama-barney-frank-fannie-mae-freddie-mac-campaign-contributions-democrats-lobbyists-truth-about-obama-more-obama-lies-mccain-reformer/

 

The Poverty Pimps created this mess with their "It's unfair that some people can't afford a nice home crap." So they had the government via freddy and fannie(appropriatly named) guarantee loans so people could live above their means. All this did was create an artificial demand and the housing bubble. Now that the bubble bursts who gets stuck with the bill?

I guess the only bright spot is that the government now is completely broke, so if Obama is elected, he won't have a budget to pass out any of his "hope"(aka free handouts to whoever votes for him).

 

I am puzzled.

If you used reason to conjoin atheism, are you using the same method to evaluate this post on the citizenwells blog? You seem to be blindly accepting this half-assed dissection on faith.

 

People who think there is something they refer to as god don't ask enough questions.


Jormungander
atheistScience Freak
Jormungander's picture
Posts: 938
Joined: 2008-07-15
User is offlineOffline
MattShizzle wrote:Calling

MattShizzle wrote:

Calling McInsane a reformer is like calling Hitler an icon of tolerance. Maybe if there were more liberals in charge there wouldn't see so much and so severe poverty in the first place. You don't see the level of poverty there is in the US in the rest of the western world.

Godwin strikes again. I think that Matt has just lost the thread thanks to a needless Hitler comparison.

"You say that it is your custom to burn widows. Very well. We also have a custom: when men burn a woman alive, we tie a rope around their necks and we hang them. Build your funeral pyre; beside it, my carpenters will build a gallows. You may follow your custom. And then we will follow ours."
British General Charles Napier while in India


anniet
Silver Member
Posts: 325
Joined: 2008-08-06
User is offlineOffline
EXC wrote: The Poverty

EXC wrote:
 

The Poverty Pimps created this mess with their "It's unfair that some people can't afford a nice home crap." So they had the government via freddy and fannie(appropriatly named) guarantee loans so people could live above their means. All this did was create an artificial demand and the housing bubble. Now that the bubble bursts who gets stuck with the bill?

Freddie and Fannie guaranteed subprime loans because other players in the market were making a killing from mortgages.  Unfortunately, short-sighted policies focused more on bonuses linked to stock prices and short-term revenue by so many major financial players led us to where we are now. 

There is no reason not to try to help people obtain home loans.  Yes, those loaning need to have requirements in place to make sure these loans get paid back.  A lot of companies did not care to do this responsibly.  Why?  Large investors saw mortgages as stable and did not care to investigate the nature of the loans as long as the loan originators kept them coming.  The credit rating agencies (Moody's, Standard & Poor's,etc.) did not care to accurately evaluate the credit worthiness of the mortgage bundles and no one pressed for good evaluations.  Institutional investors are often not allowed to hold debt below a certain grade and those bundling the mortgages certainly did not want to have below investment grade assets to sell.  Then deregulation allowed Bear Sterns, AIG, Lehman Brothers, and many others to use their mortgage assets as collateral to borrow money to invest in more mortgages.  This gambling threw a ton of money into the mortgage market and further pushed down controls on loans as the sizable demand for mortgage loans by investors (mainly institutional investors) grew. 

We absolutely would not be in the mess we are in now if deregulation had not allowed for mortgage based gambling that encouraged companies to lower lending standards further and give away mortgages to any old Joe Schmo.  The root of the problem is the deregulation that led to gambling, not trying to get people into homes.  Make sure you are blaming greedy, short-sighted Wall Street financial executives and traders for this mess.  They are the ones to blame.  The mistake of the government was to allow for deregulation.  (Thank you Phil Gramm.)  Financial institutions are directly responsible for this mess.

"I am that I am." - Proof that the writers of the bible were beyond stoned.


Sinphanius
Sinphanius's picture
Posts: 284
Joined: 2008-06-12
User is offlineOffline
Not necessarily. Matt did

@Jormungander:
Not necessarily. Matt did not compare his opponents or even McCain to Hitler, he merely made an analogy, namely that McCain is about as much of a Reformer as Hitler was a Tolerant Man. Nowhere does he actually say 'McCain is like Hitler' in any sort of a derogatory sense.

Observe; "Hambydammit is as Rational as Hitler was Insane." This line follows the same format as the statement by MattShizzle, however it is not insulting, it is actually a complement. This is because the insult in Matt's original statement did not come directly from the reference to Hitler, but only through the knowledge that Hitler was not tolerant, and therefore since McCain is as much of a Reformer as Hitler was Tolerant, McCain is not a reformer, and since he has claimed to be a reformer when he is not, the statement becomes insulting.

See? If Matt had said "McCain is as intolerant as Hitler!!!!!" Then it would be worthy of an invocation of Godwin's Law.

When you say it like that you make it sound so Sinister...


D-cubed
Rational VIP!
D-cubed's picture
Posts: 715
Joined: 2007-01-04
User is offlineOffline
How is this supposed to be

How is this supposed to be Obama's fault?  First he's criticized for not being experienced but now he has extensive Senate experience that he went way back into time and served in Congressin 1999 when Phil Gramm and John McCain deregulated the banking industry.  Or did he go farther back into the Nixon administration when Fannie and Freddie were privatized?

Republicans have been running Congress since 1994, that's when the deregulation mess started.  Blaming the Democrats is like blaming a guy who just started his shift as dogcatcher for not catching all the dogs the previous shift released.

No surprise the media is really catching onto the financial mess once it starts hurting rich shareholders. Funny how the "free market" capitalists love socialism when they need to be bailed out.  They'll beg for a trillion dollar bailout but decry universal health care as too expensive.


D-cubed
Rational VIP!
D-cubed's picture
Posts: 715
Joined: 2007-01-04
User is offlineOffline
EXC wrote:The Poverty Pimps

EXC wrote:

The Poverty Pimps created this mess with their "It's unfair that some people can't afford a nice home crap." So they had the government via freddy and fannie(appropriatly named) guarantee loans so people could live above their means. All this did was create an artificial demand and the housing bubble. Now that the bubble bursts who gets stuck with the bill?

Alan Greenspan is a poverty pimp?  I suppose so.  His "free market" policies has helped to expand the amount of poverty and decrease wages for the sake of short term economic gains for the wealthy.  Alas, even he recognized his faults and gained enough wisdom in a short amount of time to realize that McCain's economic policy (which no economist endorses) will create a larger problem.

Thankfully the system will be socialized again.  When Fannie Mae was under governmental control before there weren't any problems.  However the conservatives simply insisted privatization and deregulation would be the best system.  Once again reality proves them wrong.

Funny how free marketers like Treasury Secretary Paulson become instant converts to the benefits of socialism when facing a global economic depression due to the failed policies of laissez-faire capitalism.  You'd think they would have learned after Enron.

 


I AM GOD AS YOU
Superfan
Posts: 4793
Joined: 2007-09-29
User is offlineOffline
D-cubed, yeah, and the

D-cubed

, yeah, and the "grand old idiot party" kept saying Clinton economics was shit, which put us in the black, from the Reagan, Bush 1 red deficit. Modern era Republicans are statistically economically the worse of the 2 party system evils, and the most socially oppressive. The voting public is deaf, dumb and blind .... umm, why?

 

 


mohammed
mohammed's picture
Posts: 119
Joined: 2008-08-20
User is offlineOffline
 hmm it's ok to spend

 hmm it's ok to spend hundreds of billions on a war blowing shit up but it isnt ok to spend billions on building our society which create things of value (houses etc).. things that will help our economy. how fucking stupid they are...  


EXC
atheist
EXC's picture
Posts: 3123
Joined: 2008-01-17
User is offlineOffline
anniet wrote:Freddie and

anniet wrote:

Freddie and Fannie guaranteed subprime loans because other players in the market were making a killing from mortgages.  Unfortunately, short-sighted policies focused more on bonuses linked to stock prices and short-term revenue by so many major financial players led us to where we are now. 

They created the housing bubble because the poverty pimps started whining that that some people couldn't afford homes. So we had to have F&F guarantee loans to unqualified borrowers. The players on wall street knew this government intervention created this artificial demand, they profited when the government encourage risky home buying, they got out before the bubble burst. The fed loaned money to banks at low interest rates and let them lend the money with no money down and no collateral.

Mortgages and home ownership had always been a conservative investment. When the only loans were 20% down, 30-year fixed, home prices never fluctuated much. Middle class people could build equity steadily, banks could lend at a reasonable rate because the loan was low risk. But the poverty pimps decided this was unfair that people had to get and education, work hard to save up 20% and they couldn't live in a mansion. Give the poor a mansion with no money down, because you care and economic conservatives don't.

The home mortgage interest deduction has been a disaster as well. Leave the free market alone. If you want to help the poor and middle class educated them to be more productive and entrepreneurial.

They government decided that economic progress was to be measured in terms of percentage of home ownership. Wealth was to be measured in terms of home values. Anyone that knows economics knows this is wrong. Economic progress and wealth must be measured in terms of productivity. Encouraging people to live above their means is a recipe for economic disaster.

Greenspan was not a poverty pimp but political john. The politicians pressured him to measure economic progress in terms of consumption(home ownership, SUV ownership, oil consumption) instead of worker productivity, he gave into to the political pressure.

 

“Religion is regarded by the common people as true, by the wise as false, and by the rulers as useful.” Seneca


MattShizzle
Posts: 7966
Joined: 2006-03-31
User is offlineOffline
Stop that idiotic thinking

Stop that idiotic thinking that hard work and education = wealth. It's getting old. How about letting everyone have a place to live (not a mansion) ? You've obviously never struggled to get by. Try puting yourself in someone else's shoes. Again, stop being 100% brainwashed by Rush Limbaugh and Anne Coulter.

Matt Shizzle has been banned from the Rational Response Squad website. This event shall provide an atmosphere more conducive to social growth. - Majority of the mod team


anniet
Silver Member
Posts: 325
Joined: 2008-08-06
User is offlineOffline
EXC wrote:They created the

EXC wrote:

They created the housing bubble because the poverty pimps started whining that that some people couldn't afford homes. So we had to have F&F guarantee loans to unqualified borrowers. The players on wall street knew this government intervention created this artificial demand, they profited when the government encourage risky home buying, they got out before the bubble burst.

No.  Absolutely not.  I'm sorry, but you do not understand how our financial institutions work.  I don't know of any news articles or other links to give you here.  You're just going to have to go do some research on your own if you really want to understand this topic.

Several years ago I began to work for a spin-off of Barclay's doing mutual fund accounting.  I was in the bond division and saw 1st hand the take-off of investing in mortgages and gambling via swaps.  PMs (portfolio managers) saw others making great returns from both the underlying mortgages and the swaps and wanted those same returns.  Loan originators gave out loans to people, bundled the loans, and then sold the bundles to mainly institutional investors.  Demand was high, so loan originators kept pushing to originate more loans.  The players on Wall Street created the demand, and are now suffering for it as they have unpricable assets on their books or have failed.  They did not get out before the bubble burst.  They still have not gotten out.  That is why we have a credit crisis and Paulson is talking about a $500-700 million bailout to take these loans off private sector balance sheets.  Banks simply do not want to lend to each other as they don't know how to evaluate the credit worthiness of the banks they are lending to due to mortgage backed assets on the books. 

The government did not create this mess by pushing for home ownership.  I will agree that some members of Congress likely did not investigate the mortgage situation as early as they might otherwise have due to liking a situation that allowed more people to get into homes.  That's as far as you can take the argument though.  This mess was absolutely created by greedy speculation - on the part of loan originators who wanted their commissions, and on the part of investors who wanted to make a killing off a thriving sector of the economy that they wanted to believe was solid.  Deregulation by the government allowed for this speculation (pretty word for gambling) and that is the place where the government is at fault in this mess. 

"I am that I am." - Proof that the writers of the bible were beyond stoned.


EXC
atheist
EXC's picture
Posts: 3123
Joined: 2008-01-17
User is offlineOffline
anniet wrote:The government

anniet wrote:

The government did not create this mess by pushing for home ownership.  I will agree that some members of Congress likely did not investigate the mortgage situation as early as they might otherwise have due to liking a situation that allowed more people to get into homes.  That's as far as you can take the argument though.  This mess was absolutely created by greedy speculation - on the part of loan originators who wanted their commissions, and on the part of investors who wanted to make a killing off a thriving sector of the economy that they wanted to believe was solid.  Deregulation by the government allowed for this speculation (pretty word for gambling) and that is the place where the government is at fault in this mess. 

Yes they did. Of couse loan agents, appraisers, real estate agents, mortgage brokers, etc.. all pushed for people to buy homes they couldn't afford. They're salesmen that make a commision.

What happend was the mortgages were always considered safe bets. Easy credit created a bubble, which caused mortages to be high risk. Except half of wall street never got the news that mortgages where now high risk bets. So mortgages were sold as safe investments instead of a high risk gamble.

This is the problem, we have all these programs to help the poor and middle class. But then noone considers the secondary effects of things like no money down mortgages, minimum wage and health coverage mandates.

Clinton, Bush and congress all measured economic progress in terms of home ownership levels(Even though the mortgage companies really owned the homes).

But in a sane world, no one lends money to people that aren't qualifed or have no collateral. Also the government's job should be to prevent fraud in the system. Their was fraud at every level for the agents, appraiser to the wall street CEOs.

The government's role should be to prevent and prosecute fraud, not manipulate the free market with easy credit to unqualified people.

 

“Religion is regarded by the common people as true, by the wise as false, and by the rulers as useful.” Seneca


EXC
atheist
EXC's picture
Posts: 3123
Joined: 2008-01-17
User is offlineOffline
MattShizzle wrote:Stop that

MattShizzle wrote:

Stop that idiotic thinking that hard work and education = wealth. It's getting old. How about letting everyone have a place to live (not a mansion) ? You've obviously never struggled to get by. Try puting yourself in someone else's shoes. Again, stop being 100% brainwashed by Rush Limbaugh and Anne Coulter.

It's pretty clear you don't want to have a system where "hard work and education = wealth". You'd rather just have a system where everyone is equal in misery. Sorry, but I'm not joining the pity party.

 

“Religion is regarded by the common people as true, by the wise as false, and by the rulers as useful.” Seneca


MattShizzle
Posts: 7966
Joined: 2006-03-31
User is offlineOffline
You do know that the poor

You do know that the poor usually work extremely hard and the wealthy sit on their ass and have everything handed to them on a silver platter (investments, inheritance, etc. ) I want to live in a world where health care and a relatively comfortable living are considered a right and those that have pay their fair share. I 100% agree with "from each according to their ability, to each according to their needs. "

Matt Shizzle has been banned from the Rational Response Squad website. This event shall provide an atmosphere more conducive to social growth. - Majority of the mod team


D-cubed
Rational VIP!
D-cubed's picture
Posts: 715
Joined: 2007-01-04
User is offlineOffline
EXC wrote:Yes they did. Of

EXC wrote:

Yes they did. Of couse loan agents, appraisers, real estate agents, mortgage brokers, etc.. all pushed for people to buy homes they couldn't afford. They're salesmen that make a commision.

What happend was the mortgages were always considered safe bets. Easy credit created a bubble, which caused mortages to be high risk. Except half of wall street never got the news that mortgages where now high risk bets. So mortgages were sold as safe investments instead of a high risk gamble.

This is the problem, we have all these programs to help the poor and middle class. But then noone considers the secondary effects of things like no money down mortgages, minimum wage and health coverage mandates.

The program worked just fine for many years until Republicans deregulated the industry.  The problem started with Greenspan who greatly lowered the federal reserve interest rate.  That made it cheaper for banks to loan money so they could provide loans at a low cost.  Nothing terribly wrong with that but Greenspan's intent was to create job insecurity and reduce wages by increasing unemployment.  So people went out and found a bunch of people and convinced them that the subprime loans were a good bet and didn't bother to worry about things such as income.  They then sold these risky loans in bundles to a third party so the people selling the mortgage to the risky home buyer didn't have to worry about any consequences.  The packaged mortgages were sold as bonds.  The bonds were rated by the ones selling them therefore inflating their safety value.  And there you go, a lovely ponzi scheme that any of us would go to prison for but multi-million CEOs get a golden umbrella and retire with a huge severance package and stock options.

The original system set up by Roosevelt worked fine.  By inventing the 30 year mortgage loans the interest payments became affordable to lower income people.  People became wealthier due to the increased market for new homes.  With reliable credit assessment people wouldn't get loans out of their means, so the mortgages were largely considered safe.  But some guy named Nixon had the brilliant idea to privatize the system so there would be a profit motive which encourages more risk.  Throw in more and more deregulation and the risks grow until eventually we get what we have now.  But you and I get to pay for that while those who made millions just sit in their lounge chair by the beach and sip on a Mai Tai.


anniet
Silver Member
Posts: 325
Joined: 2008-08-06
User is offlineOffline
EXC wrote:What happend was

EXC wrote:

What happend was the mortgages were always considered safe bets. Easy credit created a bubble, which caused mortages to be high risk. Except half of wall street never got the news that mortgages where now high risk bets. So mortgages were sold as safe investments instead of a high risk gamble.

It's not a matter of not getting the news, they didn't care to get the news.  PMs were creating good rates of return for their funds and corporate traders were boosting the quarterly bottom line.  Do you seriously think that people who do this for a living didn't know that the underlying mortgages were often risky?  These are folks who have MSNBC on in the background all day.  The Wall Street Journal starts their day and the research builds from there.  They simply didn't care.  As long as the rating agencies were still classifying the mortgages as investment grade they could hold them and bet on them. 

Your posts show a blindness in regard to capitalism.  Financial players are as human as the rest of us.  They give into ambition, greed, and insecurities.  And they make mistakes.  Subprime loans continued to be originated at high levels because there was a market for repackaging and selling these loans.  As long as traders wanted to buy the loans, originators were more than happy to supply the loans.  The loans got riskier as they starting looking for just about anyone they could give a loan to.  Why?  Again, they made money selling off the loans to investors.  Everyone was making money in the short-term and would worry about possible long-term fallout later.  We see this fallout now in the collapse of Bear Sterns, Lehman Brothers, AIG, maybe WaMu, etc.

Investor demand is a huge reason for the run-up in subprime loans.  I have not seen evidence of any change in government policy since 2000 that could be pointed to as a reason for the increasing levels of subprime loans.  If you would like to provide that, great.  I will definitely take a look as I am not an economic expert.  However, I do know about the market created for buying subprime loans and its affect on the overall system. 

EXC wrote:
The government's role should be to prevent and prosecute fraud, not manipulate the free market with easy credit to unqualified people.

I agree, which is why the deregulation the Republicans and Libertarians cry for is such a colossal mistake.  The government did not give easy credit to unqualified people, financial institutions did.  And they did so because the government allowed them to - the government did not ask them to, it allowed them to do so.

"I am that I am." - Proof that the writers of the bible were beyond stoned.


jcgadfly
SuperfanBronze Member
Posts: 6789
Joined: 2006-07-18
User is offlineOffline
EXC wrote:MattShizzle

EXC wrote:

MattShizzle wrote:

Stop that idiotic thinking that hard work and education = wealth. It's getting old. How about letting everyone have a place to live (not a mansion) ? You've obviously never struggled to get by. Try puting yourself in someone else's shoes. Again, stop being 100% brainwashed by Rush Limbaugh and Anne Coulter.

It's pretty clear you don't want to have a system where "hard work and education = wealth". You'd rather just have a system where everyone is equal in misery. Sorry, but I'm not joining the pity party.

 

Personally, I haven't got a problem with "hard work+education =wealth". I'd just like to see a system where those who got their wealth by relatives dying or giving them gifts wouldn't impede those who want to work and be educated from doing so.

Case in point Bush's "no child left behind" program - A pampered rich kid who thinks that teaching to a standardized test is a substitute for education, resulting in the slow death of the system.

"I do this real moron thing, and it's called thinking. And apparently I'm not a very good American because I like to form my own opinions."
— George Carlin


MattShizzle
Posts: 7966
Joined: 2006-03-31
User is offlineOffline
Right now in the US success

Right now in the US success is less than 1% work, maybe 10% education and all the rest luck.


nigelTheBold
atheist
nigelTheBold's picture
Posts: 1868
Joined: 2008-01-25
User is offlineOffline
Not just luck

MattShizzle wrote:

Right now in the US success is less than 1% work, maybe 10% education and all the rest luck.

Not just luck: birth plays a huge part.

Also, the willingness to fuck over other people for your own gain helps.

"Yes, I seriously believe that consciousness is a product of a natural process. I find that the neuroscientists, psychologists, and philosophers who proceed from that premise are the ones who are actually making useful contributions to our understanding of the mind." - PZ Myers


D-cubed
Rational VIP!
D-cubed's picture
Posts: 715
Joined: 2007-01-04
User is offlineOffline
If hard work equalled being

If hard work equalled being rich then the richest people would be the immigrants we give shit jobs to for lousy pay.  In some cases, as in Florida, they are shackled up and used as slave labor.  Funny how we don't hear about rich slaves.


MattShizzle
Posts: 7966
Joined: 2006-03-31
User is offlineOffline
I actually considered birth

I actually considered birth part of luck - ie the luck to be born to succesful parents. Your success in life can be nearly 100% determined by your parents' success in life.

Matt Shizzle has been banned from the Rational Response Squad website. This event shall provide an atmosphere more conducive to social growth. - Majority of the mod team


nigelTheBold
atheist
nigelTheBold's picture
Posts: 1868
Joined: 2008-01-25
User is offlineOffline
MattShizzle wrote:I actually

MattShizzle wrote:

I actually considered birth part of luck - ie the luck to be born to succesful parents. Your success in life can be nearly 100% determined by your parents' success in life.

Gotcha. I just figured it was worth calling out, as there is a direct, strong correlation between the success of the parents, and success of the children. Take a look at our current President; there's no fucking way he could've become President, except his diddy was President before him. Hell, if it wasn't for his being born into a politically-powerful family, he would've had to stand on his own merit; and by the past indications (read, epic fails), he wouldn't've risen past the rank of junior manager at a Chuck E. Cheeze.

Then the Bush Doctrine would be, "Them little fuckers are out to get me. I hate fuckin' kids! I'm gonna flick a booger into this pizza. Hehe."

Anyway.

We've got a long way to go before "hard work + education + intelligence = success." When CEOs can run a company into the ground and still get a multi-million-dollar golden parachute, success is not based on performance or hard work. When CEOs earn more than 1000 times the amount of the lowest paid worker, and more than 300 times the average worker, success is not based on performance or hard work.

When mortgage lenders can give bad loans because it gives good short-term returns (not  because "the government forced them to," but because deregulation allowed them to) and still make bank, success is not based on performance or good judgement.

This whole, "The liberals forced them to!" is just a bunch of Rovian bullshit. The bill in question merely stated that if you give good terms on a loan to one person, you can't deny another person the same deal, if they have the same credit history. This was partly in response to The Keating Five (of which McCain was a proud member). The real issue is deregulation, which allowed regular banks to lend like they are speculative investment banks.

"Yes, I seriously believe that consciousness is a product of a natural process. I find that the neuroscientists, psychologists, and philosophers who proceed from that premise are the ones who are actually making useful contributions to our understanding of the mind." - PZ Myers


EXC
atheist
EXC's picture
Posts: 3123
Joined: 2008-01-17
User is offlineOffline
anniet wrote:  Do you

anniet wrote:

  Do you seriously think that people who do this for a living didn't know that the underlying mortgages were often risky? 

I think the sellers of mortgages certainly knew, that's why they tried to dump them. Many buyers may have known, but it wasn't their money they put at risk. They worked for a corporation that bought stocks for other people's money. Their job was to buy "safe" investments with the tons of cash they get from 401Ks, money markets, etc... Their job was to invest not to just sit on cash. 

Mortgages had always been rated safe investments because until about 3 years ago, because people had to put up 20%. But now, people with no down just walk away from houses cause they don't have any money in their homes.

anniet wrote:

Financial players are as human as the rest of us.  They give into ambition, greed, and insecurities.  And they make mistakes.

Yes, so the only people who should be players in this high stakes gambling world are people who can afford to loose. Government and Wall street created this illusion that capitialism can be made safe for middle class people. We need a rich class to make high stakes investments. The low and middle class need to stay out of the casino if they can't afford to loose. The government just needs to make sure the rich boy's games aren't rigged.

The reason we need a government bail out is because low and middle class people's money is a risk. Their retirements are at risk. If wall street was left to rich gamblers, they would be the only one's loosing in a down market. The government has to stop encouraging wall street investment for the working middle class. They are like a casino that encourages people to start gambling with "free" chips.

anniet wrote:
I agree, which is why the deregulation the Republicans and Libertarians cry for is such a colossal mistake.  The government did not give easy credit to unqualified people, financial institutions did.  And they did so because the government allowed them to - the government did not ask them to, it allowed them to do so.

Fannie and Freddies role was pretty much to guarantee loans for people who would otherwise no qualify for a mortgage. The government supported these instutions. All they did was artificially inflate home prices and get loans to unqualified people with little money down.

Regulation actually forced banks and investment institutions to buy a lot of "safe" investments like mortgages. A market without fraud should determine what is safe and what is not safe.

“Religion is regarded by the common people as true, by the wise as false, and by the rulers as useful.” Seneca


ZoltanKemeny
Posts: 9
Joined: 2008-03-02
User is offlineOffline
D-cubed wrote:The program

D-cubed wrote:

The program worked just fine for many years until Republicans deregulated the industry.  The problem started with Greenspan who greatly lowered the federal reserve interest rate.  That made it cheaper for banks to loan money so they could provide loans at a low cost.  Nothing terribly wrong with that but Greenspan's intent was to create job insecurity and reduce wages by increasing unemployment.  So people went out and found a bunch of people and convinced them that the subprime loans were a good bet and didn't bother to worry about things such as income.  They then sold these risky loans in bundles to a third party so the people selling the mortgage to the risky home buyer didn't have to worry about any consequences.  The packaged mortgages were sold as bonds.  The bonds were rated by the ones selling them therefore inflating their safety value.  And there you go, a lovely ponzi scheme that any of us would go to prison for but multi-million CEOs get a golden umbrella and retire with a huge severance package and stock options.

The original system set up by Roosevelt worked fine.  By inventing the 30 year mortgage loans the interest payments became affordable to lower income people.  People became wealthier due to the increased market for new homes.  With reliable credit assessment people wouldn't get loans out of their means, so the mortgages were largely considered safe.  But some guy named Nixon had the brilliant idea to privatize the system so there would be a profit motive which encourages more risk.  Throw in more and more deregulation and the risks grow until eventually we get what we have now.  But you and I get to pay for that while those who made millions just sit in their lounge chair by the beach and sip on a Mai Tai.

 

You do understand the first two sentences you wrote directly contradict each other?  To say the industry was "deregulated" and then go on to say that the Chairman of the Federal Reserve, an organization directly responsible for <i>regulating the industry</i> enacted even more "deregulation" is preposterous.  The fact that there is an institution that can set interest rates at will indicates the lack of deregulation.  The problem with the system in the first place is that Greenspan, or any one man or organization, had the power to increase the money supply and lower interest rates, which devalued the dollar.  That in itself is regulation that is one of the primary causes of the <i>size</i> of this bubble.

As to saying people were "convinced" that sub-prime loans were a good thing, well, let those people fail.  When I gamble at a casino I don't expect someone to bail me out when I lose a lot of money.  People who actually took out those sub-prime loans--it's difficult to have pity for them.  No money down loans, loans 105% of the worth of the home?  It's not like it's just poor people either, I've seen supposed sob stories about people buying million-dollar McMansions they're getting foreclosed out of.  For the people who are getting foreclosed on and who aren't that rich--they're called apartments, I live in one too.  The housing market needs to fall, the exorbitant prices of homes does too. 

CEOs are getting the golden parachute because Democrats and Republicans, our elected officials in Congress and our candidates for President, think they deserve it.  Don't bail out companies who made risky decisions--let them fail.  They'll learn their lesson the next time they want to make irresponsible decisions; so, hopefully, will people who want to own homes.  Maybe now they won't skip over the many pages they blindly signed without knowing what they were signing for.  When people, and especially companies, are punished for their decisions it lessens the chance it may happen next time.  With the legislation going through Congress now, we're telling companies they can screw over whoever they wish and the taxpayers will bail them out of it.


D-cubed
Rational VIP!
D-cubed's picture
Posts: 715
Joined: 2007-01-04
User is offlineOffline
ZoltanKemeny wrote:You do

ZoltanKemeny wrote:


You do understand the first two sentences you wrote directly contradict each other?  To say the industry was "deregulated" and then go on to say that the Chairman of the Federal Reserve, an organization directly responsible for <i>regulating the industry</i> enacted even more "deregulation" is preposterous.  The fact that there is an institution that can set interest rates at will indicates the lack of deregulation.  The problem with the system in the first place is that Greenspan, or any one man or organization, had the power to increase the money supply and lower interest rates, which devalued the dollar.  That in itself is regulation that is one of the primary causes of the <i>size</i> of this bubble.

No, they don't contradict.  They would if there was only one regulation.  However there are many and deregulation doesn't necessarily mean complete deregulation.  Since you demostrated a complete lack of understanding of the Federal Reserve System, and I don't want to give basic high school lectures that will probably be ignored anyway, I won't waste my time explaining it.


anniet
Silver Member
Posts: 325
Joined: 2008-08-06
User is offlineOffline
 ZoltanKemeny wrote: You do

 

ZoltanKemeny wrote:

You do understand the first two sentences you wrote directly contradict each other?  To say the industry was "deregulated" and then go on to say that the Chairman of the Federal Reserve, an organization directly responsible for <i>regulating the industry</i> enacted even more "deregulation" is preposterous.  The fact that there is an institution that can set interest rates at will indicates the lack of deregulation. 

You’re confused here.  Deregulation led to banks leveraging their assets and then gambling with the credit.  That is a separate issue from interest rate controls.  Lower interest rates at the Fed usually means that banks also lower their interest rates.  That did lead to more loans as interest rates were at a historic low, but that has nothing to do with the deregulation that allowed gambling on home loans by institutional investors.  Please understand that you are talking about 2 very separate topics that do both relate to the current crisis, but not to each other.

 

ZoltanKemeny wrote:

The problem with the system in the first place is that Greenspan, or any one man or organization, had the power to increase the money supply and lower interest rates, which devalued the dollar.  That in itself is regulation that is one of the primary causes of the <i>size</i> of this bubble.

WTF?  Ok.  Explain yourself.  You do realize that the dollar dropped in value as a reaction to the crisis and oil (and other commodity) prices, right?

ZoltanKemeny wrote:
 Don't bail out companies who made risky decisions--let them fail.  They'll learn their lesson the next time they want to make irresponsible decisions; so, hopefully, will people who want to own homes.  With the legislation going through Congress now, we're telling companies they can screw over whoever they wish and the taxpayers will bail them out of it.

Your last sentence has some merit.  As to the rest, what do you propose should be done to unfreeze the credit markets?  The whole reason for this bailout is to get illiquid assets off books in order to restore the ability to assess creditworthiness and get financial institutions to lend to each other in the ways we need for our economy to smoothly function.

 

"I am that I am." - Proof that the writers of the bible were beyond stoned.


anniet
Silver Member
Posts: 325
Joined: 2008-08-06
User is offlineOffline
EXC,I guess I'm not sure

EXC,

I guess I'm not sure what your point is anymore.  You were saying that the government created this mess by encouraging home loans for the poor and middle class.  Are you now saying maybe that wasn't so? 

I'm interested in what you think lower and middle income folks should do with their money if they shouldn't be allowed to invest?  Personally, I like big tattoos and lots of pretty books, but don't think spending a lot on those items makes good economic policy for supplementing my retirement.  Should I be barred from contributing to my IRA?

You do realize that the majority of the subprime loans out there did not originate with Fannie Mae and Freddie Mac, right?  This crisis originated in the private sector.  The private sector is responsible for originating the loans that the financial institutions are holding. 

I am glad to see that you support regulation of the markets.  Unfettered capitalism just causes way too many problems for the general populace as the rich do cheat.  They're human and they do like money.  Regulations are there to keep them thinking long-term and playing nice.

"I am that I am." - Proof that the writers of the bible were beyond stoned.


ZoltanKemeny
Posts: 9
Joined: 2008-03-02
User is offlineOffline
D-cubed wrote:No, they don't

D-cubed wrote:

No, they don't contradict.  They would if there was only one regulation.  However there are many and deregulation doesn't necessarily mean complete deregulation.  Since you demostrated a complete lack of understanding of the Federal Reserve System, and I don't want to give basic high school lectures that will probably be ignored anyway, I won't waste my time explaining it.

 

Yes, they do contradict.  You said Republicans deregulated the industry which was a problem that started with Greenspan lowering the federal interest rate.  That in itself is a contradiction in that you mistake that the deregulation the Republicans enacted (I assume you refer to the repeal of Glass-Steagall) is somehow connected to Greenspan's action.  Please demonstrate my lack of understanding of the Fed--does it not control interest rates and the amount of money in circulation, which in turn affects inflation and demands for loans?  What is it in my first statement that shows a lack of understanding of how the Federal Reserve works?  Please be a little more considerate instead of assuming the person you're talking to is an idiot and administering an ad hominem attack instead of actually engaging in debate and proving your point with evidence.


ZoltanKemeny
Posts: 9
Joined: 2008-03-02
User is offlineOffline
anniet wrote: You&rsquo;re

anniet wrote:

 You’re confused here.  Deregulation led to banks leveraging their assets and then gambling with the credit.  That is a separate issue from interest rate controls.  Lower interest rates at the Fed usually means that banks also lower their interest rates.  That did lead to more loans as interest rates were at a historic low, but that has nothing to do with the deregulation that allowed gambling on home loans by institutional investors.  Please understand that you are talking about 2 very separate topics that do both relate to the current crisis, but not to each other.

 

I am aware of the difference between the Fed's regulatory measures and the deregulation that allowed banks to merge with insurance companies.  I was responding that the Federal Reserve keeping interest rates artificially low, lower than the market rate, had a huge impact on the housing bubble and the subprime mortgage crisis.  The deregulation enacted by Gramm-Leach-Bliley is partially responsible, but only because the deregulation was partial.  Then again, GLB also allowed for the companies that currently exist as Citigroup, Shearson and Primerica.  Bear Stearns and Merrill Lynch would not even have been allowed to have been bought by JP Morgan Chase and Bank of America, respectively, though I have to wonder if those two companies would still do so if they weren't getting a handout from the government for it. 

 

 

 

 

anniet wrote:

 

WTF?  Ok.  Explain yourself.  You do realize that the dollar dropped in value as a reaction to the crisis and oil (and other commodity) prices, right?

 

 

 

The dollar has been falling since a little after the start of this millenium though the mortgage crisis and other commodity prices have had a more compressed and therefore more intense effect.

 

anniet wrote:
As to the rest, what do you propose should be done to unfreeze the credit markets?  The whole reason for this bailout is to get illiquid assets off books in order to restore the ability to assess creditworthiness and get financial institutions to lend to each other in the ways we need for our economy to smoothly function.

I would suggest that everyone involved face the losses.  Sadly, those who were not involved will feel it as well though it's more fair that the responsible people not be punished for their decisions by forcing a bailout on them.  Repeal the CRA, privatize FNMA/FHLMC, allow more credit rating agencies instead of the ones that failed in their present and past assessments.  Harsh laws against and penalties for the fraud which some mortgage lenders and "liar loan" borrowers engaged in.  Eliminate restrictive zoning, land-use rules and other growth management planning laws that drive up the cost of homes.  End fractional reserve banking--fraud.  And finally, ask the Fed really nicely not to keep interest rates so artificially low; there's no way it's going anywhere or letting the market determine them. 


I AM GOD AS YOU
Superfan
Posts: 4793
Joined: 2007-09-29
User is offlineOffline
EXT, Trust the educated ,

EXC, Trust the educated , the clever, the magic money inventers of now a 700 BILLION bail out by the educated design, stealing from the poor ? ..... as they still live in mansions?

   Explain educated .... as the working educated so very NEEDED truck drivers are fucked yet again. My fucking rent is up from $900 to $1350.  The treadmill is a lie of the educated rich. You seem to think the poor are the enemy , as I say "EAT THE RICH", the real consumers of welfare , and dismantle the tread mill of all low wage work .....

Work should be equal pay per hour, as all strive to find their positions, and the more hours, okay, the more toys, but this should be a personal choice of enthusiasm. What is my share, and if I should be born to be but a worker. Why not a a 35 hour work week NOW,  to happily survive and spend time with nature ?  Those that created the treadmill suck .....

   


EXC
atheist
EXC's picture
Posts: 3123
Joined: 2008-01-17
User is offlineOffline
I AM GOD AS YOU wrote:Work

I AM GOD AS YOU wrote:

Work should be equal pay per hour, as all strive to find their positions, and the more hours, okay, the more toys, but this should be a personal choice of enthusiasm. What is my share, and if I should be born to be but a worker. Why not a a 35 hour work week NOW,  to happily survive and spend time with nature ?  Those that created the treadmill suck .....

Great system. We can just pick whatever profession we want, the government pays us all the same. I'm going to be porn star. I'm pretty enthusiastic about having sex with lots of attractive women. The female porn stars make more money now, so under your system, I should expect to get about $10,000 per movie? Where do I sign up? Unfortunately so will about 100 million other men.

Maybe a rock star too, who cares if my music sucks, you'll be force to listen to it.

“Religion is regarded by the common people as true, by the wise as false, and by the rulers as useful.” Seneca


jcgadfly
SuperfanBronze Member
Posts: 6789
Joined: 2006-07-18
User is offlineOffline
EXC wrote:I AM GOD AS YOU

EXC wrote:

I AM GOD AS YOU wrote:

Work should be equal pay per hour, as all strive to find their positions, and the more hours, okay, the more toys, but this should be a personal choice of enthusiasm. What is my share, and if I should be born to be but a worker. Why not a a 35 hour work week NOW,  to happily survive and spend time with nature ?  Those that created the treadmill suck .....

Great system. We can just pick whatever profession we want, the government pays us all the same. I'm going to be porn star. I'm pretty enthusiastic about having sex with lots of attractive women. The female porn stars make more money now, so under your system, I should expect to get about $10,000 per movie? Where do I sign up? Unfortunately so will about 100 million other men.

Maybe a rock star too, who cares if my music sucks, you'll be force to listen to it.

You like working for next to nothing as those above you get richer for doing less while holding onto the dream of "If I just work harder and put in more hours, maybe I'll get where my boss is now"?

You don't need to be a porn star - you're already being screwed like one.

Nothing wrong with reaching for what you really want out of life. The only good thing about bitching about the current system is that it's easier than trying to fix it.

"I do this real moron thing, and it's called thinking. And apparently I'm not a very good American because I like to form my own opinions."
— George Carlin


EXC
atheist
EXC's picture
Posts: 3123
Joined: 2008-01-17
User is offlineOffline
anniet wrote: You were

anniet wrote:

 You were saying that the government created this mess by encouraging home loans for the poor and middle class.  Are you now saying maybe that wasn't so? 

They created this mess with "compassion" for the poor, i.e. using  FM&FM to guarantee loans, instead of having the free market decide what was a good loan.

anniet wrote:

I'm interested in what you think lower and middle income folks should do with their money if they shouldn't be allowed to invest? 

 

Never said any such thing. They should be free to do whatever they want with their hard earned money. But, we don't need the government encouraging anyone to do anything with their money.

I think 401Ks suck too. This mess was also caused by too much money chasing too few good stocks, thanks to retirement savings incentives. The money would have been better invested in local communities rebuilding roads, sewer, private schools, etc... If we had a pay a you go system, citizens could invest in local infrastructure instead of trusting their retirement with greedy wall street crooks.

That's why we need to privatize most government services and have the government just concentrate on preventing fraud. The government's only role should be the referee.

 

“Religion is regarded by the common people as true, by the wise as false, and by the rulers as useful.” Seneca


MattShizzle
Posts: 7966
Joined: 2006-03-31
User is offlineOffline
That's a horrible idea.

That's a horrible idea. Letting for profit motherfuckers screw people over in everything. We need to get rid of free markets in anything essential (power, food, health care, etc. ) Let an agency not doing it for profit do it then it will be better. If that's not possible, regulate the hell out of it. The free market sucks. It's a system to keep the rich rich and the poor poor. Socialism is what allowed there to be a middle class in the first place. With a true free market there'd be huge numbers of poor and a few rich.

Matt Shizzle has been banned from the Rational Response Squad website. This event shall provide an atmosphere more conducive to social growth. - Majority of the mod team


ZoltanKemeny
Posts: 9
Joined: 2008-03-02
User is offlineOffline
MattShizzle wrote:That's a

MattShizzle wrote:

That's a horrible idea. Letting for profit motherfuckers screw people over in everything. We need to get rid of free markets in anything essential (power, food, health care, etc. ) Let an agency not doing it for profit do it then it will be better. If that's not possible, regulate the hell out of it. The free market sucks. It's a system to keep the rich rich and the poor poor. Socialism is what allowed there to be a middle class in the first place. With a true free market there'd be huge numbers of poor and a few rich.

 

"Socialistic" policies are the reason we're looking at more than a trillion dollars for a bailout in the first place.  They are the bailout.  Regulation from the Federal Reserve and "do-gooder" Congress actions, combined with the handouts all these good ol' boys want to give their friends=not free markets. 

Whatever the result of the system is, it is the morality of the thing that counts, hence "the ends do not justify the means".  Otherwise basing morality on utility as opposed to what is right gets you prohibition, war, government handouts, etc. 


I AM GOD AS YOU
Superfan
Posts: 4793
Joined: 2007-09-29
User is offlineOffline
No EXC. A more natural

No EXC. A more natural regulated system based on fairness, necessity, competition, and personal talent would dictate job availability and markets. All are free to spend their excess money as they wish so unwanted paid musicians won't exist, just as now. If you are a talented appreciated stud then sure you might work in the self limiting sex industry.  

A big menace is inflation created by the mega rich, which keeps the majority on a never ending tread mill.

We who are not economists, still have the right and need to bitch. I appreciate the threads and ideas you've posted as a learning device. I see the poor, the uneducated, no universal health care, the massive military, outrageous housing costs, as a sign of the systems failure due to the allowing of the controlling super rich vacuum cleaners.

Education is only part of the solution, denied by the rich, while receiving the majority of welfare and benefits of society built on the backs of the common worker. We need REVOLUTION.

How can allowing, a relative small number of rich people, owning the majority of the U.S. wealth, be natural and some how productive?  The 'real' natural world, as you seem to say .... ???

http://www.google.com/search?hl=en&q=who+owns+the+wealth%3F&btnG=Search

Who Owns America's Wealth? - 1 min

http://www.youtube.com/watch?v=8VHNXTBwj80

http://www.worldvotenow.com/html/who_owns_the_wealth_i.htm

   ETC, etc ....

         


MattShizzle
Posts: 7966
Joined: 2006-03-31
User is offlineOffline
Have you read anything? It

Have you read anything? It was deregulation, the opposite of socialistic policies that did this. I personally would like to get rid of free markets altogether but the best we're likely to achieve is a regulated one - the more regulated and the fewer essential services given to a free market the better.

Matt Shizzle has been banned from the Rational Response Squad website. This event shall provide an atmosphere more conducive to social growth. - Majority of the mod team


I AM GOD AS YOU
Superfan
Posts: 4793
Joined: 2007-09-29
User is offlineOffline
I've enjoyed your posts

I've enjoyed your posts Zoltan, but what does "socialism" have to do with bailing out the rich or promoting free anything? I'm uneducated, dazed and confused. Think maybe that pissed off, good and bad, Ralph Nader guy messed up my little insecure head?    LOL

   Ralph Nader quotes

http://www.google.com/search?hl=en&q=ralph+nader+quotes&revid=2128726221&sa=X&oi=revisions_inline&resnum=0&ct=broad-revision&cd=6


anniet
Silver Member
Posts: 325
Joined: 2008-08-06
User is offlineOffline
ZoltanKemeny wrote: I am

ZoltanKemeny wrote:

I am aware of the difference between the Fed's regulatory measures and the deregulation that allowed banks to merge with insurance companies.  I was responding that the Federal Reserve keeping interest rates artificially low, lower than the market rate, had a huge impact on the housing bubble and the subprime mortgage crisis.

 

 

It is true that historically low interest rates did help fuel the housing crisis.  Do you want the Fed to then calculate the federal funds rate based on prevailing market rates, whether or not that is in the best interest of the federal government?  Why should private business that does not care about the economy of the country as a whole, but rather their own bottom line, determine governmental lending rates rather than the government itself?

 

ZoltanKemeny wrote:

Bear Stearns and Merrill Lynch would not even have been allowed to have been bought by JP Morgan Chase and Bank of America, respectively, though I have to wonder if those two companies would still do so if they weren't getting a handout from the government for it.  

You can bet they would have.  There are still a lot of good underlying income-generating assets within all of the companies going under.  The problems are just with the divisions of the companies that used leverage to gamble on the housing market.  Get rid of the debt from that gambling and you still have a NICE basket of assets that you can pick-up on the cheap.  This is what the acquiring companies are doing.  If they can’t get rid of enough of the debt, they just let ‘em fall.

 

 

ZoltanKemeny wrote:
The dollar has been falling since a little after the start of this millenium though the mortgage crisis and other commodity prices have had a more compressed and therefore more intense effect.
 

Do you have any graphs to show the fall of the dollar versus the major currencies since 2000?  The research services I used only go back 5 years, so I can’t comment on 2000-early 2003.  Comparing USD to CAD, EUR, YEN, GBP, CHF, and AUD gives mixed results for 2004-2006.  Overall, I would say the dollar held fairly steady during that time frame.  In 2006-2007 you start to see a steep decline in the dollar, depending on the currency you are comparing this to.  I see the effect on the dollar from the mortgage crisis and commodity prices.   

 

 

ZoltanKemeny wrote:
I would suggest that everyone involved face the losses.  Sadly, those who were not involved will feel it as well (emphasis added) though it's more fair that the responsible people not be punished for their decisions by forcing a bailout on them.  Repeal the CRA, privatize FNMA/FHLMC, allow more credit rating agencies instead of the ones that failed in their present and past assessments.  Harsh laws against and penalties for the fraud which some mortgage lenders and "liar loan" borrowers engaged in.  Eliminate restrictive zoning, land-use rules and other growth management planning laws that drive up the cost of homes.  End fractional reserve banking--fraud.  And finally, ask the Fed really nicely not to keep interest rates so artificially low; there's no way it's going anywhere or letting the market determine them. 

So you want to keep frozen credit markets for years, causing the ordinary consumer to have escalating problems obtaining home loans, car loans, business loans, and any other type of credit?  Do you realize that a modern economy is highly dependent on credit?  Our economy cannot function in usable manner without credit between lenders and between lenders and consumers.  Those who were not involved will feel the brunt of doing nothing.

 

"I am that I am." - Proof that the writers of the bible were beyond stoned.


anniet
Silver Member
Posts: 325
Joined: 2008-08-06
User is offlineOffline
EXC wrote:  They created

EXC wrote:
 

They created this mess with "compassion" for the poor, i.e. using  FM&FM to guarantee loans, instead of having the free market decide what was a good loan.

Fannie Mae repackages home loans and sells these MBS bundles to – guess who? – private companies.http://www.fanniemae.com/aboutfm/industry/index.jhtml?p=About+Fannie+Mae&s=The+Industry

The free market decided $0 down jumbo mortgages to debtors with solely stated income was a good idea.  These types of mortgages did not originate with Fannie Mae and Freddie Mac.

 

EXC wrote:
  Never said any such thing. They should be free to do whatever they want with their hard earned money. But, we don't need the government encouraging anyone to do anything with their money.I think 401Ks suck too. This mess was also caused by too much money chasing too few good stocks, thanks to retirement savings incentives. The money would have been better invested in local communities rebuilding roads, sewer, private schools, etc... If we had a pay a you go system, citizens could invest in local infrastructure instead of trusting their retirement with greedy wall street crooks.That's why we need to privatize most government services and have the government just concentrate on preventing fraud. The government's only role should be the referee.

“The reason we need a government bail out is because low and middle class people's money is a risk. Their retirements are at risk. If wall street was left to rich gamblers, they would be the only one's loosing in a down market. The government has to stop encouraging wall street investment for the working middle class.”  From post #28

So, again, I ask where should I be putting my savings for retirement.I’ve lived in a country where citizens pay as they go – toll roads, school fees, etc.  Go live in Mexico for 6 months.  Then come back and tell me if you really want pay as you go.  It does not work.  Government is there to do what we as individuals cannot.  There is power to government that can easily be abused.  The question is how much abuse do we allow before we are willing to stand up and demand accountability.  Doing nothing, having no government, gets us nowhere.  There are too many people in this country to individualize what government does. 

 

Oh, and Zoltan, there is no limit to the number of credit rating agencies that can exist.  They are private companies.  The problem with credit rating agencies is that their funding comes from those they regulate.  That gives them incentive to “overlook” issues.

 

"I am that I am." - Proof that the writers of the bible were beyond stoned.


EXC
atheist
EXC's picture
Posts: 3123
Joined: 2008-01-17
User is offlineOffline
anniet wrote: Fannie Mae

anniet wrote:

Fannie Mae repackages home loans and sells these MBS bundles to – guess who? – private companies.


From what I understand, F&F underwrote the initial loans and signed off the the borrowers were qualified. Then they sold them as high grade investments. Then Wall street had so much money pouring in from 401Ks and foreign investors they had to put the money somewhere that was "safe". The public is duped into thinking the "professional" on wall street new what they were doing.


anniet wrote:

The free market decided $0 down jumbo mortgages to debtors with solely stated income was a good idea. These types of mortgages did not originate with Fannie Mae and Freddie Mac.

Foreigners put their money into the USA because they believed the government would back it up so this was not a free market. Also 401K investment encouragement is not a free market either. When we had a free market, no one got a loan unless they put down 20% and had a good income.
 

anniet wrote:

So, again, I ask where should I be putting my savings for retirement.I’ve lived in a country where citizens pay as they go – toll roads, school fees, etc.  Go live in Mexico for 6 months.


I have lived in Mexico, it was a hell of a lot cheaper. But I did spend a lot of time camping on the beach being pretty self-sufficient. The problems of Mexico have to do with the corruption. Pay as you go or any system won't work if you have corruption and fraud, the government should be the referee only. You also have little enforcement than environmental protection. The other problem of course is religion. Many poor uneducated people believing Mary, Jesus and all the saints are going to take care of them, having large families then passing this absurdity to the next generation.
 

The present problem with violence is mostly cause by US drug policy, which is not a free market. Religion is the drug of choice for the unwashed masses in the USA and it's monopoly must be protected. Despite all this, Mexico is still a better investment than the USA.

As far a retirement, here's my strategy. The world may descend into chaos, war and economic turmoil due to terrorism, religion, class warfare, communist revolutionists and government debt. Put at least 50% into buying land you could farm if worse comes to worse. Make sure the land has adequate water and other resources necessary to be self sufficient.

With the rest, look to invest in technologies you think the world will need such as alternative energy, technology to lower the costs of education and medical services. Avoid companies that are public and bought by 401K investment firms. We know these stocks are all way overvalued because too much money is chasing very few good companies. Get to know the technology and the people running the companies before you invest.

Look globally for investments because we know that real estate stocks in the USA are still way overvalued because we don't have a free market.

 

“Religion is regarded by the common people as true, by the wise as false, and by the rulers as useful.” Seneca


anniet
Silver Member
Posts: 325
Joined: 2008-08-06
User is offlineOffline
EXC wrote:From what I

EXC wrote:

From what I understand, F&F underwrote the initial loans and signed off the the borrowers were qualified. Then they sold them as high grade investments. Then Wall street had so much money pouring in from 401Ks and foreign investors they had to put the money somewhere that was "safe". The public is duped into thinking the "professional" on wall street new what they were doing.

http://www.investopedia.com/terms/f/fanniemae.asp

http://www.investopedia.com/terms/f/freddiemac.asp

Maybe this link will help you better understand the roles of F&F in the mortgage market.  Both purchase loans from private sector loan originators.  They do not originate loans themselves.  They are part of the MBS secondary market.  Loans are priginated by lenders in the private sector.  I remember F&F being criticized by the private lenders for not taking on jumbo subprime loans.  The limits and oversight that some pushed F&F to keep is the only thing that kept themfrom more exposure and worse problems.  The deregulation that "free market" advocates champion "Get government out of the markets!" is what caused problems here.

I've worked in the financial sector for several years now, 1st as a mutual fund accountant, now as an investment advisor representative.  I'm no expert (who is?) but do know a fair amount about the MBS market as most of my accounting work dealt with MBS funds.  When PMs would trade bundles they would look at underlying criteria such as zip codes, payment history, etc.  They get into all the details of the mortgages.  Whether or not the mortgage was subprime - and what exactly that means - was absolutely known.  Performance incentives just made it so that many didn't really care.  Besides, everyone was leveraging assets based on MBS pools, so how could it fail?

EXC wrote:
I have lived in Mexico, it was a hell of a lot cheaper. But I did spend a lot of time camping on the beach being pretty self-sufficient. The problems of Mexico have to do with the corruption. Pay as you go or any system won't work if you have corruption and fraud, the government should be the referee only. You also have little enforcement than environmental protection. The other problem of course is religion. Many poor uneducated people believing Mary, Jesus and all the saints are going to take care of them, having large families then passing this absurdity to the next generation.
 

As far a retirement, here's my strategy. The world may descend into chaos, war and economic turmoil due to terrorism, religion, class warfare, communist revolutionists and government debt. Put at least 50% into buying land you could farm if worse comes to worse. Make sure the land has adequate water and other resources necessary to be self sufficient.

You're right about corruption being a problem in Mexico, but miss a large part of the problem.  The pay as you go system effectively bars lower income people from starting businesses and making a go of it.  When you are at the bottom starting out and have to pay for toll roads, basic education, and other services that we take for granted, it simply becomes too expensive to start anything.  People still do start businesses and try, but fewer succeed there because of the greater number of hurdles, some of which are linked to the lack of governmental services.

As to the rest of what you say about Mexico. . . that's enough for a couple more threads, so I'm not going to get into it here.  I'm assuming you'll understand.

Interesting idea for retirement, but it relies on the apocalypse coming into being and assumes someone better armed than you isn't going to come along and just take over your land.

 

I think I see part of what it is that you're missing here in your analysis.  Society has gotten very complicated compared to anytime in the past.  We are highly integrated.  To make this work, there does have to be central co-ordination.  Otherwise, you have to look at entirely dismantling the system that we have.  Most people don't want this.  You can certainly head for the hills and try and make a go of it on your own, but given the luxuries (running water, electricity, mass produced goods, reliable information on any topic, etc.) that we have come expect in life, it doesn't work very well.  If you want to disengage from society, that is certainly your right.  Most people are more interested in making our system better rather than dismantling it.

"I am that I am." - Proof that the writers of the bible were beyond stoned.