Bond Market Braces For $ 1 Trillion Tsunami Of Treasuries This Year

[Toddsterpatriot]

The GSEs set the industry standard, known as "conforming loans". Rigid underwriting rules which had been learned the hard way over centuries.

The borrower had to be a good credit risk, and provide a down payment. Basel capital reserve guidelines had to be observed.

This tied up a lot of capital the financial services industry wanted to put to work. They were forced to set aside capital to cover losses incurred by defaults.

In a subprime loan, the borrower was charged a higher interest rate because they were a higher risk.

Companies like Ameriquest and Countrywide began teasing their low risk customers into non-conforming loans. They actually bragged about this sleazy practice in the literature they provided to their investors.

Profits soared.

With a non-conforming loan, you could get a middle class suburbanite into a much bigger loan then he normally would have with a conforming loan. The more you can get someone to borrow, the more profit you can make from them.

Credit derivatives made it possible to do just that. If person is a good risk when they borrow $200,000 but a bad risk if they borrow a more profitable principal of $400,000, you could eliminate that risk with credit derivatives.

Or so the banking industry believed. They never stopped to think of just how insane that actually is.

When someone did ask them about that insanity, which is exactly what I did way back in 2003, the talking point response was that the borrower could always sell their house to pay off the loan and walk away with a profit since housing prices were going to go up forever.

Insanity squared.

The GSEs set the industry standard, known as "conforming loans". Rigid underwriting rules which had been learned the hard way over centuries.

And then, under Clinton, HUD required them to make 50% of their mortgage purchases from subprime borrowers. Later, under Bush, the requirement rose to 55%. Insanity!

Nope. That's totally false.

What was the HUD requirement under Clinton? Under Bush? Link?

You made the claim. Prove it.

At first, this quota was 30%; that is, of all the loans they bought, 30% had to be made to people at or below the median income in their communities. HUD, however, was given authority to administer these quotas, and between 1992 and 2007, the quotas were raised from 30% to 50% under Clinton in 2000 and to 55% under Bush in 2007. Despite Frank's effort to make this seem like a partisan issue, it isn't. The Bush administration was just as guilty of this error as the Clinton administration. And Frank is right to say that he eventually saw his error and corrected it when he got the power to do so in 2007, but by then it was too late.

Hey, Barney Frank: The Government Did Cause the Housing Crisis

 

[g5000]

Anywayyyyy...

The point of this topic is that Trump and the GOP's massive borrowing binge could trigger higher interest rates which could, in turn, have severe ripple effects in the bond and stock markets.

 

[g5000]

The GSEs set the industry standard, known as "conforming loans". Rigid underwriting rules which had been learned the hard way over centuries.

The borrower had to be a good credit risk, and provide a down payment. Basel capital reserve guidelines had to be observed.

This tied up a lot of capital the financial services industry wanted to put to work. They were forced to set aside capital to cover losses incurred by defaults.

In a subprime loan, the borrower was charged a higher interest rate because they were a higher risk.

Companies like Ameriquest and Countrywide began teasing their low risk customers into non-conforming loans. They actually bragged about this sleazy practice in the literature they provided to their investors.

Profits soared.

With a non-conforming loan, you could get a middle class suburbanite into a much bigger loan then he normally would have with a conforming loan. The more you can get someone to borrow, the more profit you can make from them.

Credit derivatives made it possible to do just that. If person is a good risk when they borrow $200,000 but a bad risk if they borrow a more profitable principal of $400,000, you could eliminate that risk with credit derivatives.

Or so the banking industry believed. They never stopped to think of just how insane that actually is.

When someone did ask them about that insanity, which is exactly what I did way back in 2003, the talking point response was that the borrower could always sell their house to pay off the loan and walk away with a profit since housing prices were going to go up forever.

Insanity squared.

The GSEs set the industry standard, known as "conforming loans". Rigid underwriting rules which had been learned the hard way over centuries.

And then, under Clinton, HUD required them to make 50% of their mortgage purchases from subprime borrowers. Later, under Bush, the requirement rose to 55%. Insanity!

Nope. That's totally false.

What was the HUD requirement under Clinton? Under Bush? Link?

You made the claim. Prove it.

At first, this quota was 30%; that is, of all the loans they bought, 30% had to be made to people at or below the median income in their communities. HUD, however, was given authority to administer these quotas, and between 1992 and 2007, the quotas were raised from 30% to 50% under Clinton in 2000 and to 55% under Bush in 2007. Despite Frank's effort to make this seem like a partisan issue, it isn't. The Bush administration was just as guilty of this error as the Clinton administration. And Frank is right to say that he eventually saw his error and corrected it when he got the power to do so in 2007, but by then it was too late.

Hey, Barney Frank: The Government Did Cause the Housing Crisis

That shit has been debunked countless times.

Here: The FCIC Investigation, Wallison on the GSEs and the Conservative Echo Chamber

More: https://www.google.com/search?q=fan...&sitesearch=http://economistsview.typepad.com

Here: What caused the financial crisis? The Big Lie goes viral

 

[Toddsterpatriot]

Investors were sold the credit derivative products.

But you can't build a CDO without an underlying asset: loans.

So in order to meet the customer demand for CDO tranches, you had to get more and more people to borrow money.

When you run out of good risk loans, you start making really bad loans. Just to keep the CDO party going.

That's why it is a fucking joke to claim the banks were being forced to make subprime loans. That's a total hoax.

But you can't build a CDO without an underlying asset: loans.

Thanks. For another example of your ignorance.

That's why it is a fucking joke to claim the banks were being forced to make subprime loans.

What do you think the CRA was all about?

And there it is. The CRA. The racist hoax. I knew it.

It's funny how you tards fall for a racist hoax even when the evidence which blows it out of the water is literally right in front of your face.

Tell me something. When you saw all those houses in foreclosure in your neighborhood, did you look at one of them and say, "I had no idea Biff was a negro!"?

Was it the negroes of Iceland and Ireland who took down Landsbanki, the Anglo Irish Bank, Allied Irish Banks, and the Bank of Ireland?

And it appears you do not know that neither Bear Stearns nor Merrill Lynch nor Lehman Brothers nor Goldman Sacs nor JP Morgan nor Morgan Stanley were subjet to the CRA.
​

One of the dumbshit congressmen who was obviously a Fox News consumer asked Dick Fuld how much the CRA had to do with the collapse of Lehman. Fuld responded, "De minimus."

It is astonishing you tards can see all those middle class foreclosures right in front of your faces, and see banks collapsing all over the world, and swallow the fucking piss that it was all the negroes' fault!

Truly astonishing.

And there it is. The CRA. The racist hoax. I knew it.

I see you didn't answer the question.
What do you think the CRA was all about?
Was it to force banks to make conforming loans? DERP!

Tell me something. When you saw all those houses in foreclosure in your neighborhood, did you look at one of them and say, "I had no idea Biff was a negro!"?

Nope. I said, "That's a shame. I thought Biff was doing great. Nice new truck, expensive vacations every year. I hope Biff his wife and kids land on their feet"

Was it the negroes of Iceland and Ireland who took down Landsbanki, the Anglo Irish Bank, Allied Irish Banks, and the Bank of Ireland?

Bubbles are rough.
Lucky for me, Royal Bank of Scotland bought my bank stock for cash, not for their own stock.

And it appears you do not know that neither Bear Stearns nor Merrill Lynch nor Lehman Brothers nor Goldman Sacs nor JP Morgan nor Morgan Stanley were subjet to the CRA.​

Never said they were. Neither was Countrywide, Fannie, Freddie or AIG.
​

asked Dick Fuld how much the CRA had to do with the collapse of Lehman. Fuld responded, "De minimus."​

He bought tons of bonds, lots of it from mortgages, and financed it with overnight loans.
Loss of liquidity will kill you every time. Plus, he was a dick.​

 

[Toddsterpatriot]

The GSEs set the industry standard, known as "conforming loans". Rigid underwriting rules which had been learned the hard way over centuries.

And then, under Clinton, HUD required them to make 50% of their mortgage purchases from subprime borrowers. Later, under Bush, the requirement rose to 55%. Insanity!

Nope. That's totally false.

What was the HUD requirement under Clinton? Under Bush? Link?

You made the claim. Prove it.

At first, this quota was 30%; that is, of all the loans they bought, 30% had to be made to people at or below the median income in their communities. HUD, however, was given authority to administer these quotas, and between 1992 and 2007, the quotas were raised from 30% to 50% under Clinton in 2000 and to 55% under Bush in 2007. Despite Frank's effort to make this seem like a partisan issue, it isn't. The Bush administration was just as guilty of this error as the Clinton administration. And Frank is right to say that he eventually saw his error and corrected it when he got the power to do so in 2007, but by then it was too late.

Hey, Barney Frank: The Government Did Cause the Housing Crisis

That shit has been debunked countless times.

Here: The FCIC Investigation, Wallison on the GSEs and the Conservative Echo Chamber

More: https://www.google.com/search?q=fannie+freddie+cra&btnG=Google+Search&domains=http://economistsview.typepad.com&sitesearch=http://economistsview.typepad.com

Here: What caused the financial crisis? The Big Lie goes viral

What was the HUD requirement under Clinton? Under Bush? Link?

 

[g5000]

Trump preserved $1.5 trillion of government gifts in the corporate tax code. This expense will have to be made up for by our unborn descendants.

In the meantime, Trump is going to have to borrow the money.

This could trigger higher interest rates.

Higher interest rates could trigger all kinds of implosions in the bond and stock markets.

As we can see, the pseudocons will try to blame negroes for all of this.

 

[Toddsterpatriot]

Interest rates never rose in the past. Ever.

TRUMP!!!!!!!

 

[ShootSpeeders]

So interest rates will have to rise to entice our enemies to loan us more money.

Interest rates are rising right now but still they are at historically low levels. Aunt Barry's 8 years of super-low interest destroyed our pensions.