Capitalism Guarantees Rising Inequality

[Contumacious]

So congress perpetrated the fraud?

Congress rubber-stamped the fraud.
Remember martial law?
That was Hank.

Congress created TARP, numskull. If TARP was fraud, then Congress committed fraud.

Of course they did. They operate the continuing criminal enterprise known as the US of A.

.

 

[crisismangement]

So congress perpetrated the fraud?

Congress rubber-stamped the fraud.
Remember martial law?
That was Hank.

It is my opinion, that conspiracy theorists are all bonkers.

Right on brother! Especially those who trust the government over private enterprise.

 

[bripat9643]

Congress rubber-stamped the fraud.
Remember martial law?
That was Hank.

Congress created TARP, numskull. If TARP was fraud, then Congress committed fraud.

Of course they did. They operate the continuing criminal enterprise known as the US of A.

.

I wouldn't call the USA a criminal enterprise, but the US government certainly is. Al Capone had more scruples than your typical member of Congress.

 

[georgephillip]

Congress created TARP, numskull. If TARP was fraud, then Congress committed fraud.

Of course they did. They operate the continuing criminal enterprise known as the US of A.

.

I wouldn't call the USA a criminal enterprise, but the US government certainly is. Al Capone had more scruples than your typical member of Congress.

Which 1% of US voters does the typical member of congress primarily serve?
Big Government serves Big Business.
Blame both and those who get rich from their crimes.

 

[georgephillip]

Yeah, all those words to mean nothing. Had there actually have been FRAUD OF CONSEQUENCE people would have been procecuted. I have read those allegations and that is all they are, allegations without proof. Do you intend to pass on incrimination without there being actual incrimination.

Bill Black has the opinion that thousands of bankers should have been prosecuted for their latest crimes. Possibly the 900,000 dollars that Goldman Sachs contributed to Obama's 2008 campaign explain why Obama picked Eric Holder for his Attorney General? The crimes are there; what's lacking is the political will to prosecute.

Bah humbug!

Did you feel the same way about the Savings and Loan Crisis?

"(Bill) Black was a central figure in exposing Congressional corruption during the Savings and Loan Crisis.

"He took the notes during the Keating Five meeting that were later published in the press, and brought the event to national attention and a congressional investigation.

"According to Bill Moyers,

"'The former Director of the Institute for Fraud Prevention now teaches Economics and Law at the University of Missouri, Kansas City. During the savings and loan crisis, it was Black who accused then-house speaker Jim Wright and five US Senators, including John Glenn and John McCain, of doing favors for the S&L's in exchange for contributions and other perks.

"'The senators got off with a slap on the wrist, but so enraged was one of those bankers, Charles Keating — after whom the senate's so-called 'Keating Five' were named — he sent a memo that read, in part, "get Black — kill him dead." Metaphorically, of course. Of course.'"[4]

William K. Black - Wikipedia, the free encyclopedia

Black often makes the claim the S&L looting was about 1/70th the size of the housing/ credit frauds. Over a thousand bankers were charged after the S&L episode and over 800 were convicted.

Compare those numbers to 0 indicted and 0 conviction from the Great Recession.

 

[dnsmith35]

Black often makes the claim the S&L looting was about 1/70th the size of the housing/ credit frauds. Over a thousand bankers were charged after the S&L episode and over 800 were convicted.

Compare those numbers to 0 indicted and 0 conviction from the Great Recession.

Like I said, if there were crimes, there would be trials and convictions. I still don't buy your "fraud conspiracy theory." What fraud there MIGHT HAVE BEEN was an after the fact attempt to mediate some losses incurred when GOVERNMENT FISCAL AND MONETARY POLICY caused the housing balloon and subsequent crash.

 

[georgephillip]

Black often makes the claim the S&L looting was about 1/70th the size of the housing/ credit frauds. Over a thousand bankers were charged after the S&L episode and over 800 were convicted.

Compare those numbers to 0 indicted and 0 conviction from the Great Recession.

Like I said, if there were crimes, there would be trials and convictions. I still don't buy your "fraud conspiracy theory." What fraud there MIGHT HAVE BEEN was an after the fact attempt to mediate some losses incurred when GOVERNMENT FISCAL AND MONETARY POLICY caused the housing balloon and subsequent crash.

What caused a parallel bubble in commercial real estate at the same time as residential properties?
It's hard to see how the former can be blamed on government:

"Two parallel real estate bubbles emerged in the United States between 2004 and 2008, one in residential real estate, the other in commercial real estate. The residential real estate bubble has received a great deal of popular, scholarly, and policy attention.

"The commercial real estate bubble, in contrast, has largely been ignored.

"This Article shows that the commercial real estate price bubble was accompanied by a change in the source of commercial real estate financing. Starting around 1998, securitization became an increasingly significant part of commercial real estate financing.

"The commercial mortgage securitization market underwent a major shift in 2004, however, as the traditional buyers of subordinated commercial real estate debt were outbid by collateralized debt obligations (CDOs).

"Savvy, sophisticated, experienced commercial mortgage securitization investors were replaced by investors who merely wanted 'product' to securitize.

"The result was a decline in underwriting standards in commercial mortgage backed securities (CMBS).

"The commercial real estate bubble holds important lessons for understanding the residential real estate bubble.

"Unlike the residential market, there is almost no government involvement in commercial real estate.

"The existence of the parallel commercial real estate bubble presents a strong challenge to explanations of the residential bubble that focus on government affordable housing policy, the Community Reinvestment Act, and the role of Fannie Mae and Freddie Mac."

The Commercial Real Estate Bubble by Adam J. Levitin, Susan M. Wachter :: SSRN

 

[Andylusion]

Black often makes the claim the S&L looting was about 1/70th the size of the housing/ credit frauds. Over a thousand bankers were charged after the S&L episode and over 800 were convicted.

Compare those numbers to 0 indicted and 0 conviction from the Great Recession.

Like I said, if there were crimes, there would be trials and convictions. I still don't buy your "fraud conspiracy theory." What fraud there MIGHT HAVE BEEN was an after the fact attempt to mediate some losses incurred when GOVERNMENT FISCAL AND MONETARY POLICY caused the housing balloon and subsequent crash.

What caused a parallel bubble in commercial real estate at the same time as residential properties?
It's hard to see how the former can be blamed on government:

"Two parallel real estate bubbles emerged in the United States between 2004 and 2008, one in residential real estate, the other in commercial real estate. The residential real estate bubble has received a great deal of popular, scholarly, and policy attention.

"The commercial real estate bubble, in contrast, has largely been ignored.

"This Article shows that the commercial real estate price bubble was accompanied by a change in the source of commercial real estate financing. Starting around 1998, securitization became an increasingly significant part of commercial real estate financing.

"The commercial mortgage securitization market underwent a major shift in 2004, however, as the traditional buyers of subordinated commercial real estate debt were outbid by collateralized debt obligations (CDOs).

"Savvy, sophisticated, experienced commercial mortgage securitization investors were replaced by investors who merely wanted 'product' to securitize.

"The result was a decline in underwriting standards in commercial mortgage backed securities (CMBS).

"The commercial real estate bubble holds important lessons for understanding the residential real estate bubble.

"Unlike the residential market, there is almost no government involvement in commercial real estate.

"The existence of the parallel commercial real estate bubble presents a strong challenge to explanations of the residential bubble that focus on government affordable housing policy, the Community Reinvestment Act, and the role of Fannie Mae and Freddie Mac."

The Commercial Real Estate Bubble by Adam J. Levitin, Susan M. Wachter :: SSRN

We've already covered this. You are like a broken record for failed arguments.

Both Commercial and Retail Real Estate are dependent on the same underlining resource, that being land. When developers buy up land and make residential housing instead of commercial buildings.... the reduces the supply of commercial buildings. Supply down, demand stays the same, price goes up.

Economics 101, that anyone intelligent should know.

Once again, in yet another of dozens of posts, you prove Thomas Sowell right.

“I don’t mind debating smart people. They know the limitations of their position. It’s debating stupid people that’s hard.”

In fact, I'm going to make that quote my sig from now on, in memory of the biggest absolute fool on this forum.

 

[georgephillip]

Like I said, if there were crimes, there would be trials and convictions. I still don't buy your "fraud conspiracy theory." What fraud there MIGHT HAVE BEEN was an after the fact attempt to mediate some losses incurred when GOVERNMENT FISCAL AND MONETARY POLICY caused the housing balloon and subsequent crash.

What caused a parallel bubble in commercial real estate at the same time as residential properties?
It's hard to see how the former can be blamed on government:

"Two parallel real estate bubbles emerged in the United States between 2004 and 2008, one in residential real estate, the other in commercial real estate. The residential real estate bubble has received a great deal of popular, scholarly, and policy attention.

"The commercial real estate bubble, in contrast, has largely been ignored.

"This Article shows that the commercial real estate price bubble was accompanied by a change in the source of commercial real estate financing. Starting around 1998, securitization became an increasingly significant part of commercial real estate financing.

"The commercial mortgage securitization market underwent a major shift in 2004, however, as the traditional buyers of subordinated commercial real estate debt were outbid by collateralized debt obligations (CDOs).

"Savvy, sophisticated, experienced commercial mortgage securitization investors were replaced by investors who merely wanted 'product' to securitize.

"The result was a decline in underwriting standards in commercial mortgage backed securities (CMBS).

"The commercial real estate bubble holds important lessons for understanding the residential real estate bubble.

"Unlike the residential market, there is almost no government involvement in commercial real estate.

"The existence of the parallel commercial real estate bubble presents a strong challenge to explanations of the residential bubble that focus on government affordable housing policy, the Community Reinvestment Act, and the role of Fannie Mae and Freddie Mac."

The Commercial Real Estate Bubble by Adam J. Levitin, Susan M. Wachter :: SSRN

We've already covered this. You are like a broken record for failed arguments.

Both Commercial and Retail Real Estate are dependent on the same underlining resource, that being land. When developers buy up land and make residential housing instead of commercial buildings.... the reduces the supply of commercial buildings. Supply down, demand stays the same, price goes up.

Economics 101, that anyone intelligent should know.

Once again, in yet another of dozens of posts, you prove Thomas Sowell right.

“I don’t mind debating smart people. They know the limitations of their position. It’s debating stupid people that’s hard.”

In fact, I'm going to make that quote my sig from now on, in memory of the biggest absolute fool on this forum.

Did you bother to read my link, Uncle Tom?

 

[Toddsterpatriot]

Bill Black has the opinion that thousands of bankers should have been prosecuted for their latest crimes. Possibly the 900,000 dollars that Goldman Sachs contributed to Obama's 2008 campaign explain why Obama picked Eric Holder for his Attorney General? The crimes are there; what's lacking is the political will to prosecute.

Bah humbug!

Did you feel the same way about the Savings and Loan Crisis?

"(Bill) Black was a central figure in exposing Congressional corruption during the Savings and Loan Crisis.

"He took the notes during the Keating Five meeting that were later published in the press, and brought the event to national attention and a congressional investigation.

"According to Bill Moyers,

"'The former Director of the Institute for Fraud Prevention now teaches Economics and Law at the University of Missouri, Kansas City. During the savings and loan crisis, it was Black who accused then-house speaker Jim Wright and five US Senators, including John Glenn and John McCain, of doing favors for the S&L's in exchange for contributions and other perks.

"'The senators got off with a slap on the wrist, but so enraged was one of those bankers, Charles Keating — after whom the senate's so-called 'Keating Five' were named — he sent a memo that read, in part, "get Black — kill him dead." Metaphorically, of course. Of course.'"[4]

William K. Black - Wikipedia, the free encyclopedia

Black often makes the claim the S&L looting was about 1/70th the size of the housing/ credit frauds. Over a thousand bankers were charged after the S&L episode and over 800 were convicted.

Compare those numbers to 0 indicted and 0 conviction from the Great Recession.

Black often makes the claim the S&L looting was about 1/70th the size of the housing/ credit frauds.

Let's look back at the S&L looting.
Idiots and crooks bought an S&L, accepted deposits and then borrowed the bank's money themselves or lent it to crooked, or stupid, family and friends. Huge losses occurred.
Remember Jim McDougal?

Was that what happened in the housing/credit fraud you're talking about?
Did bank insiders make self-dealing loans that led to huge losses for their banks.
Or did they, in part because of the CRA, make loans to less qualified buyers?
When prices fell, adjustables spiked and borrowers defaulted, banks took huge losses.

Thanks to Congressional orders to Fannie and Freddie, the taxpayer ended up on the hook for hundereds of billions of these losses.
So where is the jail-worthy fraud? I mean besides the cooking of the books at Fannie and Freddie?

 

[georgephillip]

Bah humbug!

Did you feel the same way about the Savings and Loan Crisis?

"(Bill) Black was a central figure in exposing Congressional corruption during the Savings and Loan Crisis.

"He took the notes during the Keating Five meeting that were later published in the press, and brought the event to national attention and a congressional investigation.

"According to Bill Moyers,

"'The former Director of the Institute for Fraud Prevention now teaches Economics and Law at the University of Missouri, Kansas City. During the savings and loan crisis, it was Black who accused then-house speaker Jim Wright and five US Senators, including John Glenn and John McCain, of doing favors for the S&L's in exchange for contributions and other perks.

"'The senators got off with a slap on the wrist, but so enraged was one of those bankers, Charles Keating — after whom the senate's so-called 'Keating Five' were named — he sent a memo that read, in part, "get Black — kill him dead." Metaphorically, of course. Of course.'"[4]

William K. Black - Wikipedia, the free encyclopedia

Black often makes the claim the S&L looting was about 1/70th the size of the housing/ credit frauds. Over a thousand bankers were charged after the S&L episode and over 800 were convicted.

Compare those numbers to 0 indicted and 0 conviction from the Great Recession.

Black often makes the claim the S&L looting was about 1/70th the size of the housing/ credit frauds.

Let's look back at the S&L looting.
Idiots and crooks bought an S&L, accepted deposits and then borrowed the bank's money themselves or lent it to crooked, or stupid, family and friends. Huge losses occurred.
Remember Jim McDougal?

Was that what happened in the housing/credit fraud you're talking about?
Did bank insiders make self-dealing loans that led to huge losses for their banks.
Or did they, in part because of the CRA, make loans to less qualified buyers?
When prices fell, adjustables spiked and borrowers defaulted, banks took huge losses.

Thanks to Congressional orders to Fannie and Freddie, the taxpayer ended up on the hook for hundereds of billions of these losses.
So where is the jail-worthy fraud? I mean besides the cooking of the books at Fannie and Freddie?

Angelo Mozilo seems like a good candidate:

"The son of a butcher, Mozilo co-founded Countrywide in 1969 and built it into the largest mortgage lender in the U.S. Countrywide wasn't the first to offer exotic mortgages to borrowers with a questionable ability to repay them.

"In its all-out embrace of such sales, however, it did legitimize the notion that practically any adult could handle a big fat mortgage. In the wake of the housing bust, which toppled Countrywide and IndyMac Bank (another company Mozilo started), the executive's lavish pay package was criticized by many, including Congress.

"Mozilo left Countrywide last summer after its rescue-sale to Bank of America.

"A few months later, BofA said it would spend up to $8.7 billion to settle predatory lending charges against Countrywide filed by 11 state attorneys general."

Angelo Mozilo - 25 People to Blame for the Financial Crisis - TIME

 

[Toddsterpatriot]

Did you feel the same way about the Savings and Loan Crisis?

"(Bill) Black was a central figure in exposing Congressional corruption during the Savings and Loan Crisis.

"He took the notes during the Keating Five meeting that were later published in the press, and brought the event to national attention and a congressional investigation.

"According to Bill Moyers,

"'The former Director of the Institute for Fraud Prevention now teaches Economics and Law at the University of Missouri, Kansas City. During the savings and loan crisis, it was Black who accused then-house speaker Jim Wright and five US Senators, including John Glenn and John McCain, of doing favors for the S&L's in exchange for contributions and other perks.

"'The senators got off with a slap on the wrist, but so enraged was one of those bankers, Charles Keating — after whom the senate's so-called 'Keating Five' were named — he sent a memo that read, in part, "get Black — kill him dead." Metaphorically, of course. Of course.'"[4]

William K. Black - Wikipedia, the free encyclopedia

Black often makes the claim the S&L looting was about 1/70th the size of the housing/ credit frauds. Over a thousand bankers were charged after the S&L episode and over 800 were convicted.

Compare those numbers to 0 indicted and 0 conviction from the Great Recession.

Black often makes the claim the S&L looting was about 1/70th the size of the housing/ credit frauds.

Let's look back at the S&L looting.
Idiots and crooks bought an S&L, accepted deposits and then borrowed the bank's money themselves or lent it to crooked, or stupid, family and friends. Huge losses occurred.
Remember Jim McDougal?

Was that what happened in the housing/credit fraud you're talking about?
Did bank insiders make self-dealing loans that led to huge losses for their banks.
Or did they, in part because of the CRA, make loans to less qualified buyers?
When prices fell, adjustables spiked and borrowers defaulted, banks took huge losses.

Thanks to Congressional orders to Fannie and Freddie, the taxpayer ended up on the hook for hundereds of billions of these losses.
So where is the jail-worthy fraud? I mean besides the cooking of the books at Fannie and Freddie?

Angelo Mozilo seems like a good candidate:

"The son of a butcher, Mozilo co-founded Countrywide in 1969 and built it into the largest mortgage lender in the U.S. Countrywide wasn't the first to offer exotic mortgages to borrowers with a questionable ability to repay them.

"In its all-out embrace of such sales, however, it did legitimize the notion that practically any adult could handle a big fat mortgage. In the wake of the housing bust, which toppled Countrywide and IndyMac Bank (another company Mozilo started), the executive's lavish pay package was criticized by many, including Congress.

"Mozilo left Countrywide last summer after its rescue-sale to Bank of America.

"A few months later, BofA said it would spend up to $8.7 billion to settle predatory lending charges against Countrywide filed by 11 state attorneys general."

Angelo Mozilo - 25 People to Blame for the Financial Crisis - TIME

What is a predatory loan?

What did he do that was fraudulent?

 

[georgephillip]

Black often makes the claim the S&L looting was about 1/70th the size of the housing/ credit frauds.

Let's look back at the S&L looting.
Idiots and crooks bought an S&L, accepted deposits and then borrowed the bank's money themselves or lent it to crooked, or stupid, family and friends. Huge losses occurred.
Remember Jim McDougal?

Was that what happened in the housing/credit fraud you're talking about?
Did bank insiders make self-dealing loans that led to huge losses for their banks.
Or did they, in part because of the CRA, make loans to less qualified buyers?
When prices fell, adjustables spiked and borrowers defaulted, banks took huge losses.

Thanks to Congressional orders to Fannie and Freddie, the taxpayer ended up on the hook for hundereds of billions of these losses.
So where is the jail-worthy fraud? I mean besides the cooking of the books at Fannie and Freddie?

Angelo Mozilo seems like a good candidate:

"The son of a butcher, Mozilo co-founded Countrywide in 1969 and built it into the largest mortgage lender in the U.S. Countrywide wasn't the first to offer exotic mortgages to borrowers with a questionable ability to repay them.

"In its all-out embrace of such sales, however, it did legitimize the notion that practically any adult could handle a big fat mortgage. In the wake of the housing bust, which toppled Countrywide and IndyMac Bank (another company Mozilo started), the executive's lavish pay package was criticized by many, including Congress.

"Mozilo left Countrywide last summer after its rescue-sale to Bank of America.

"A few months later, BofA said it would spend up to $8.7 billion to settle predatory lending charges against Countrywide filed by 11 state attorneys general."

Angelo Mozilo - 25 People to Blame for the Financial Crisis - TIME

What is a predatory loan?

What did he do that was fraudulent?

Predatory lending is imposing unfair and abusive loan terms on borrowers.
Angelo's specific contributions would require a trial.
Maybe that's what makes the rich different

 

[Toddsterpatriot]

Angelo Mozilo seems like a good candidate:

"The son of a butcher, Mozilo co-founded Countrywide in 1969 and built it into the largest mortgage lender in the U.S. Countrywide wasn't the first to offer exotic mortgages to borrowers with a questionable ability to repay them.

"In its all-out embrace of such sales, however, it did legitimize the notion that practically any adult could handle a big fat mortgage. In the wake of the housing bust, which toppled Countrywide and IndyMac Bank (another company Mozilo started), the executive's lavish pay package was criticized by many, including Congress.

"Mozilo left Countrywide last summer after its rescue-sale to Bank of America.

"A few months later, BofA said it would spend up to $8.7 billion to settle predatory lending charges against Countrywide filed by 11 state attorneys general."

Angelo Mozilo - 25 People to Blame for the Financial Crisis - TIME

What is a predatory loan?

What did he do that was fraudulent?

Predatory lending is imposing unfair and abusive loan terms on borrowers.
Angelo's specific contributions would require a trial.
Maybe that's what makes the rich different

Predatory lending is imposing unfair and abusive loan terms on borrowers.

There are laws which mandate the information that must be provided to borrowers.
So what is "unfair and abusive loan terms"? Any specifics?

Or is it whatever Jesse Jackson decides is wrong?

Angelo's specific contributions would require a trial.

You made a claim and can't back it up? That's surprising.

 

[georgephillip]

What is a predatory loan?

What did he do that was fraudulent?

Predatory lending is imposing unfair and abusive loan terms on borrowers.
Angelo's specific contributions would require a trial.
Maybe that's what makes the rich different

Predatory lending is imposing unfair and abusive loan terms on borrowers.

There are laws which mandate the information that must be provided to borrowers.
So what is "unfair and abusive loan terms"? Any specifics?

Or is it whatever Jesse Jackson decides is wrong?

Angelo's specific contributions would require a trial.

You made a claim and can't back it up? That's surprising.

"In 2009, Time magazine named him one of the '25 people to blame for the financial crisis.'

"Last fall, he settled a lawsuit levied by the Securities and Exchange Commission over allegations that he misled investors. Mozilo paid a fine of $67.5 million — the largest-ever financial penalty against a public company’s senior executive, according to the SEC."

Rich people don't go to jail (or even trial)

https://www.opensecrets.org/news/2011/02/ex-countrywide-chairman-angelo-mozilo/

 

[Andylusion]

What caused a parallel bubble in commercial real estate at the same time as residential properties?
It's hard to see how the former can be blamed on government:

"Two parallel real estate bubbles emerged in the United States between 2004 and 2008, one in residential real estate, the other in commercial real estate. The residential real estate bubble has received a great deal of popular, scholarly, and policy attention.

"The commercial real estate bubble, in contrast, has largely been ignored.

"This Article shows that the commercial real estate price bubble was accompanied by a change in the source of commercial real estate financing. Starting around 1998, securitization became an increasingly significant part of commercial real estate financing.

"The commercial mortgage securitization market underwent a major shift in 2004, however, as the traditional buyers of subordinated commercial real estate debt were outbid by collateralized debt obligations (CDOs).

"Savvy, sophisticated, experienced commercial mortgage securitization investors were replaced by investors who merely wanted 'product' to securitize.

"The result was a decline in underwriting standards in commercial mortgage backed securities (CMBS).

"The commercial real estate bubble holds important lessons for understanding the residential real estate bubble.

"Unlike the residential market, there is almost no government involvement in commercial real estate.

"The existence of the parallel commercial real estate bubble presents a strong challenge to explanations of the residential bubble that focus on government affordable housing policy, the Community Reinvestment Act, and the role of Fannie Mae and Freddie Mac."

The Commercial Real Estate Bubble by Adam J. Levitin, Susan M. Wachter :: SSRN

We've already covered this. You are like a broken record for failed arguments.

Both Commercial and Retail Real Estate are dependent on the same underlining resource, that being land. When developers buy up land and make residential housing instead of commercial buildings.... the reduces the supply of commercial buildings. Supply down, demand stays the same, price goes up.

Economics 101, that anyone intelligent should know.

Once again, in yet another of dozens of posts, you prove Thomas Sowell right.

“I don’t mind debating smart people. They know the limitations of their position. It’s debating stupid people that’s hard.”

In fact, I'm going to make that quote my sig from now on, in memory of the biggest absolute fool on this forum.

Did you bother to read my link, Uncle Tom?

Well see, I can actually think for myself. I have the intellectual ability to consider the statements given, weight them against the facts, connect them to known fundamental laws of economics, and come to a logical rational conclusion.

Commercial real estate, is directly connected to residential real estate.

Both occupy the same underlining resource, called "land".

If one of those two, starts taking larger and larger shares of the "land", then logically the other must be reduced relative to the first.

Further, it is also very logical that the bubble in the commercial real estate would be delayed behind that of the residential bubble, because of something know as "zoning law". The process to have a commercial zoned land, rezoned for residential, takes years. Beyond that, the zoning process of new land, also takes years.

Thus the move away from commercial property, towards residential, would have a delayed action of lowering supply and increasing value, over a period of years. Much like exactly what we see in the data.

Lastly, it isn't surprising to me that lending standards were lowered across the board. Remember, before 1997, sub-prime mortgages were considered risky, and where a niche market.

Fannie and Freddie convinced the entire industry, that these loans were safe, because they were willing to securitize them.

If they were safe for residential, why not commercial? It's the same thing, a mortgage on a property that has increasing value.

Again, you just don't seem to know enough about this topic, to discuss it intelligently. Why else to you routinely rely on someone else who wrote their opinion that you agree with? All you do is post other people's opinion.

"The existence of the parallel commercial real estate bubble presents a strong challenge to explanations of the residential bubble that focus on government affordable housing policy, the Community Reinvestment Act, and the role of Fannie Mae and Freddie Mac"

That bold right there, is the fact. There was a parallel commercial real estate bubble.

"The existence of the parallel commercial real estate bubble presents a strong challenge to explanations of the residential bubble that focus on government affordable housing policy, the Community Reinvestment Act, and the role of Fannie Mae and Freddie Mac"

That bold there, is opinion. It is that authors opinion, that it presents a strong challenge to the explanation.

You posted this as if it was a fact. It is not a fact. That is an opinion.

You should know this. The fact you don't seem to, is why I have that Thomas Sowell quote in my sig.

 

[Andylusion]

Predatory lending is imposing unfair and abusive loan terms on borrowers.
Angelo's specific contributions would require a trial.
Maybe that's what makes the rich different

Predatory lending is imposing unfair and abusive loan terms on borrowers.

There are laws which mandate the information that must be provided to borrowers.
So what is "unfair and abusive loan terms"? Any specifics?

Or is it whatever Jesse Jackson decides is wrong?

Angelo's specific contributions would require a trial.

You made a claim and can't back it up? That's surprising.

"In 2009, Time magazine named him one of the '25 people to blame for the financial crisis.'

"Last fall, he settled a lawsuit levied by the Securities and Exchange Commission over allegations that he misled investors. Mozilo paid a fine of $67.5 million — the largest-ever financial penalty against a public company’s senior executive, according to the SEC."

Rich people don't go to jail (or even trial)

https://www.opensecrets.org/news/2011/02/ex-countrywide-chairman-angelo-mozilo/

Jeffrey Skilling.

Just proved you wrong, and required a massive 17 key strokes. Idiot. When you say stuff this dumb, you are just being an idiot. Bernard Madoff. Idiot.

 

[dnsmith35]

Black often makes the claim the S&L looting was about 1/70th the size of the housing/ credit frauds. Over a thousand bankers were charged after the S&L episode and over 800 were convicted.

Compare those numbers to 0 indicted and 0 conviction from the Great Recession.

Like I said, if there were crimes, there would be trials and convictions. I still don't buy your "fraud conspiracy theory." What fraud there MIGHT HAVE BEEN was an after the fact attempt to mediate some losses incurred when GOVERNMENT FISCAL AND MONETARY POLICY caused the housing balloon and subsequent crash.

What caused a parallel bubble in commercial real estate at the same time as residential properties?
It's hard to see how the former can be blamed on government:

"Two parallel real estate bubbles emerged in the United States between 2004 and 2008, one in residential real estate, the other in commercial real estate. The residential real estate bubble has received a great deal of popular, scholarly, and policy attention.

"The commercial real estate bubble, in contrast, has largely been ignored.

"This Article shows that the commercial real estate price bubble was accompanied by a change in the source of commercial real estate financing. Starting around 1998, securitization became an increasingly significant part of commercial real estate financing.

"The commercial mortgage securitization market underwent a major shift in 2004, however, as the traditional buyers of subordinated commercial real estate debt were outbid by collateralized debt obligations (CDOs).

"Savvy, sophisticated, experienced commercial mortgage securitization investors were replaced by investors who merely wanted 'product' to securitize.

"The result was a decline in underwriting standards in commercial mortgage backed securities (CMBS).

"The commercial real estate bubble holds important lessons for understanding the residential real estate bubble.

"Unlike the residential market, there is almost no government involvement in commercial real estate.

"The existence of the parallel commercial real estate bubble presents a strong challenge to explanations of the residential bubble that focus on government affordable housing policy, the Community Reinvestment Act, and the role of Fannie Mae and Freddie Mac."

The Commercial Real Estate Bubble by Adam J. Levitin, Susan M. Wachter :: SSRN

So tell me again the relevance of this abstract?

Isn't it obvious that when loans have poor securitization there is a tendency to more wildly invest?

The question really is, how bad was the commercial real estate bubble and what was the subsequent result of that bubble?

Real estate professionals were all interested in selling real estate, and investors were ready to buy. Which brings me to Androw's logical statement, when there is more competition to buy finite resources those resources tend to go up in price. In both RRE and CRE land was there was more competition for the land, there was inflation in both types of real estate, and we all know that government fiscal and monetary policies were the most important cause of the RRE balloon and crash.

Does it come to mind that when the financial business was inundated with paper, much of it bad, and that heating up both the residential and the commercial caused both to inflate? Has it come to mind that when the Residential mortgage banks started buying up paper that it pushed commercial real estate buyers to other sources?

If you look at page 85 of the study you quoted, you will see that the commercial real estate bubble did not peak until Dec 2007/Jan 2008, almost 2 years after the residential bubble peaked. At about that time financial institutions were about to fall apart because of sub prime, low interest residential loans, and well into the great recession.

I would have found it strange had the commercial market not taken a nose dive. Both markets were severely inflated, even though the same identical issue many not have caused both deflations.

The closely synchronous parallels between the CRE and residential real
estate (RRE) bubbles present a conundrum. Despite some shared fundamentals
(and market overlap in the area of multi-family residential housing),
CRE and RRE have historically been separate markets.15 Thus, theories of
the RRE bubble that point to government intervention in the housing market
as the source of the bubble, be it through the Community Reinvestment Act
or through affordable housing goals for Fannie Mae and Freddie Mac (the
government-sponsored enterprises or GSE),16 founder on the CRE bubble.
There is almost no government involvement in the CRE market, yet a parallel
bubble emerged.​

So what happened?

The most extensive exploration of the CRE bubble,
a Congressional Oversight Panel (COP) report, concluded that “faulty”
and “dramatically weakened” underwriting standards resulted in “riskier”
commercial real estate loans during the mid-2000s.

While there are many common characteristics to all real estate lending,
there are important distinctions between residential and commercial real estate
finance. First, any financing must look at the source of repayment. This
varies significantly between RRE and CRE.

Thus, whereas voluntary payments on RRE loans come first from the
personal income and assets of the owner unrelated to the property, a CRE
loan is typically financed based on the rents from the property.

The option is only “in the money” if the property is worth less
than the amount owed on the loan (the LTV>100%), meaning that the property
is “upside down” or “underwater” or that there is “negative equity.”
​

So here comes the next question, why would the rents from the property dry up? Has it come to mind that the RRE collapse led to a recession? Do you see the possibility that the CRE rents were no longer available to pay the mortgage? Has it occurred to you that if a property is no longer worth as much as the loan owed that a CRE customer is more likely to walk away from a property in which he only has an interest in that property as a profit maker?

So parallel bubble? Close, but not totally. Yet the one, the RRE bubble put lots of people out of work, so consider that at least part of the CRE crash was caused by the RRE bubble which goes back to bad government fiscal and monetary policies.

I could go on George, but look at the whole study, not just the abstract. Maybe if you try real hard you might be able to answer your own questions.

 

[dnsmith35]

Did you feel the same way about the Savings and Loan Crisis?

"(Bill) Black was a central figure in exposing Congressional corruption during the Savings and Loan Crisis.

"He took the notes during the Keating Five meeting that were later published in the press, and brought the event to national attention and a congressional investigation.

"According to Bill Moyers,

"'The former Director of the Institute for Fraud Prevention now teaches Economics and Law at the University of Missouri, Kansas City. During the savings and loan crisis, it was Black who accused then-house speaker Jim Wright and five US Senators, including John Glenn and John McCain, of doing favors for the S&L's in exchange for contributions and other perks.

"'The senators got off with a slap on the wrist, but so enraged was one of those bankers, Charles Keating — after whom the senate's so-called 'Keating Five' were named — he sent a memo that read, in part, "get Black — kill him dead." Metaphorically, of course. Of course.'"[4]

William K. Black - Wikipedia, the free encyclopedia

Black often makes the claim the S&L looting was about 1/70th the size of the housing/ credit frauds. Over a thousand bankers were charged after the S&L episode and over 800 were convicted.

Compare those numbers to 0 indicted and 0 conviction from the Great Recession.

Black often makes the claim the S&L looting was about 1/70th the size of the housing/ credit frauds.

Let's look back at the S&L looting.
Idiots and crooks bought an S&L, accepted deposits and then borrowed the bank's money themselves or lent it to crooked, or stupid, family and friends. Huge losses occurred.
Remember Jim McDougal?

Was that what happened in the housing/credit fraud you're talking about?
Did bank insiders make self-dealing loans that led to huge losses for their banks.
Or did they, in part because of the CRA, make loans to less qualified buyers?
When prices fell, adjustables spiked and borrowers defaulted, banks took huge losses.

Thanks to Congressional orders to Fannie and Freddie, the taxpayer ended up on the hook for hundereds of billions of these losses.
So where is the jail-worthy fraud? I mean besides the cooking of the books at Fannie and Freddie?

Angelo Mozilo seems like a good candidate:

"The son of a butcher, Mozilo co-founded Countrywide in 1969 and built it into the largest mortgage lender in the U.S. Countrywide wasn't the first to offer exotic mortgages to borrowers with a questionable ability to repay them.

"In its all-out embrace of such sales, however, it did legitimize the notion that practically any adult could handle a big fat mortgage. In the wake of the housing bust, which toppled Countrywide and IndyMac Bank (another company Mozilo started), the executive's lavish pay package was criticized by many, including Congress.

"Mozilo left Countrywide last summer after its rescue-sale to Bank of America.

"A few months later, BofA said it would spend up to $8.7 billion to settle predatory lending charges against Countrywide filed by 11 state attorneys general."

Angelo Mozilo - 25 People to Blame for the Financial Crisis - TIME

Everyone criticizes big pay packages when an entity fails and leaves lots of people in the hole. The question is, DID HE BREAK THE LAW. And if he did, is he in jail? Does settling out of court automatically make one guilty? Or does it reduce the potential risk?

 

[dnsmith35]

Angelo Mozilo seems like a good candidate:

"The son of a butcher, Mozilo co-founded Countrywide in 1969 and built it into the largest mortgage lender in the U.S. Countrywide wasn't the first to offer exotic mortgages to borrowers with a questionable ability to repay them.

"In its all-out embrace of such sales, however, it did legitimize the notion that practically any adult could handle a big fat mortgage. In the wake of the housing bust, which toppled Countrywide and IndyMac Bank (another company Mozilo started), the executive's lavish pay package was criticized by many, including Congress.

"Mozilo left Countrywide last summer after its rescue-sale to Bank of America.

"A few months later, BofA said it would spend up to $8.7 billion to settle predatory lending charges against Countrywide filed by 11 state attorneys general."

Angelo Mozilo - 25 People to Blame for the Financial Crisis - TIME

What is a predatory loan?

What did he do that was fraudulent?

Predatory lending is imposing unfair and abusive loan terms on borrowers.
Angelo's specific contributions would require a trial.
Maybe that's what makes the rich different

So you are saying that lending money at artificially low rates abuses them? Are you saying that the contract on an ARM which specifies when the rates may be increased and how much is abusing them?