Dismal earnings reports indicate the start of the Trump downturn

[RealDave]

"Like them, it’s a major derivatives counterparty and on the hook for billions of dollars if derivatives blow up Wall Street again as they did in 2008."

Derivatives didn't blow up shit in 2008.

Derivatives didn't blow up shit in 2008.

Who told you that...

"The real cause of the 2008 financial crisis was the proliferation of unregulated derivatives during that time. These are complicated financial products that derive their value from an underlying asset or index. A good example of a derivative is a mortgage-backed security."

What role did mortgage-backed securities play in creating the Great Recession, Rube?

How Derivatives Could Trigger Another Financial Crisis

The real cause of the 2008 financial crisis was the proliferation of unregulated derivatives during that time.

Bullshit.

Fannie Mae resells the mortgage in a package of other mortgages on the secondary market. This is a mortgage-backed security. Its value is derived by the value of the mortgages in the bundle.

An MBS isn't a derivative, it's a bond.
Turn a pile of mortgages into a pile of MBS, you still have a pile of mortgages.

An MBS isn't a derivative, it's a bond.
Turn a pile of mortgages into a pile of MBS, you still have a pile of mortgages.

Which derive their value from the underlying assets.

How Mortgage-Backed Securities Worked Until They Didn't

"Mortgage-backed securities are investments that are secured by mortgages.

"They’re a type of asset-backed security.

"A security is an investment that is traded on a secondary market.

"It allows investors to benefit from the mortgage business without ever having to buy or sell an actual home loan. Typical buyers of these securities include institutional, corporate or individual investors.

"When you invest in an MBS, you are buying the rights to receive the value of a bundle of mortgages. That includes the monthly payments and the repayment of the principal.

"Since it is a security, you can buy just a part of the mortgage. You receive an equivalent portion of the payments.

"An MBS is a derivative because it derives its value from the underlying asset."

Exactly.

Deregulation allowed the lie that the bundles were safe and A prime rated because some of the loans were traditional loans and not likely to default. The bundles also contained a large amount of sub prime loans which were highly likely to default.

Deregulation allowed the NINJA sub prime loans which were a total disaster and at one time categorized as predatory lending.

Banks in America weren't the only institutions harmed. Countries like Greenland and Greece were harmed.

The deregulation and sub prime loans are back. I don't know if the lending institutions have learned their lesson yet.

Who forces people into mortgages they know they can’t afford?
CRA wasn’t deregulation.

The CRA did not force anyone into a mortgage they could not afford.

Unscrupulous mortgage sellers offered specialty mortgages to people to make them think they could afford it. Nothing down & interest free payments for a few years before a balloon payment came due.

Potential buyers who knew they could not deal with that balloon payment were told basically " No problem, it it comes due, just remortgage".

The seller did not care if the mortgage would fail because he just sold it. Those mortgages were then bundled with good mortgages & bundled in Mortgage Based Securities that were purchased by unsuspecting buyers.

That home owner went to remortgage & found that housing market was slowing & his house was no longer worth as much. They could not remortgage & the mortgage failed. This snowballed & mortgage companies started going bankrupt & then they took others.

The CRA is a piss poor lie told by ignorant fools. The CRA had nothing to do with it.

 

[RealDave]

Despite left wing wishful thinking, the DOW is still around 24,800 and unemployment is still in a historic low. The DOW was around 12,000 this time in Hussein's first term and democrats raved about it.

The DOW rose 258% during "Hussein`s" presidency. Orange Jesus has a lot of catching up to do. If he gets 2 terms the DOW would have to reach 61,000 to match "Hussein`s" accomplishments.

If he gets 2 terms the DOW would have to reach 61,000 to match "Hussein`s" accomplishments.

I don't know if you should call the weakest recovery since WWII an "accomplishment".

Ummmmm, wouldn't the worst economic disaster since WWII have the worst recovery?

Just asking, Mr Expert.

Only if you had the worst President doing the worst job.

Maybe we'd have done better if he added another 100,000 pages of regulations?
Maybe 200,000 pages?

Come on now. The worse the recession, the longer the recovery.

Pile on the housing collapse & near financial meltdown.

To do nothing to prevent another wall street fueled economic meltdown would have been really stupid.

Regulations are basically written to plug loopholes.

 

[Dana7360]

The deregulation and sub prime loans are back. I don't know if the lending institutions have learned their lesson yet.

What lesson is to be learned when they know Democrats and Republicans will run to bail their asses out just like last time?

I was being polite. I don't think they learned anything beyond the fact that our government will let them get away with it over and over again.

We need to apply TR's anti trust laws to the banks again.

We will have to go through the bubbles and burst until we have enough people in our government who will make the necessary changes. Again. FDR did it in the 1930s. It can be done again.

 

[Toddsterpatriot]

Despite left wing wishful thinking, the DOW is still around 24,800 and unemployment is still in a historic low. The DOW was around 12,000 this time in Hussein's first term and democrats raved about it.

The DOW rose 258% during "Hussein`s" presidency. Orange Jesus has a lot of catching up to do. If he gets 2 terms the DOW would have to reach 61,000 to match "Hussein`s" accomplishments.

If he gets 2 terms the DOW would have to reach 61,000 to match "Hussein`s" accomplishments.

I don't know if you should call the weakest recovery since WWII an "accomplishment".

Ummmmm, wouldn't the worst economic disaster since WWII have the worst recovery?

Just asking, Mr Expert.

Only if you had the worst President doing the worst job.

Maybe we'd have done better if he added another 100,000 pages of regulations?
Maybe 200,000 pages?

Come on now. The worse the recession, the longer the recovery.

Pile on the housing collapse & near financial meltdown.

To do nothing to prevent another wall street fueled economic meltdown would have been really stupid.

Regulations are basically written to plug loopholes.

The worse the recession, the longer the recovery.

Especially when new regulations are being piled on.
Capital requirements are raised and raised again.
When banks are being fined hundreds of billions of dollars.

To do nothing to prevent another wall street fueled economic meltdown would have been really stupid.​

I agree, all the requirements to make subprime loans or buy subprime mortgages should have been eliminated.​

​

Regulations are basically written to plug loopholes.​

And when the "loopholes" are previous regulations?​

 

[Toddsterpatriot]

The deregulation and sub prime loans are back. I don't know if the lending institutions have learned their lesson yet.

What lesson is to be learned when they know Democrats and Republicans will run to bail their asses out just like last time?

I was being polite. I don't think they learned anything beyond the fact that our government will let them get away with it over and over again.

We need to apply TR's anti trust laws to the banks again.

We will have to go through the bubbles and burst until we have enough people in our government who will make the necessary changes. Again. FDR did it in the 1930s. It can be done again.

I don't think they learned anything beyond the fact that our government will let them get away with it over and over again.

Let them get away with what?

 

[georgephillip]

Trump's band of thieves is also hard at work on Wall Street "deregulation" as the Foreclosure King regularly demonstrates:

"Prudential Financial Traded as a Clone to the Big Wall Street Banks from October to December of Last Year. Prudential, green line, versus Citi, Goldman Sachs and Deutsche Bank.

"By Pam Martens and Russ Martens: June 3, 2019 ~

"U.S. Treasury Secretary Steve Mnuchin (a/k/a the former foreclosure king) has been attempting to dismantle regulatory restraints on Wall Street’s worst instincts since he took office.

"Making Mnuchin even more dangerous is the fact that, under statute, he simultaneously sits as head of the Financial Stability Oversight Council (F-SOC) even as he appears to be attempting to undermine financial stability in the U.S.

"One of Mnuchin’s most alarming actions on behalf of F-SOC came last
October 17 when the Council announced that it was removing the designation of Prudential Financial as a SIFI – a Systemically Important Financial Institution that required enhanced supervision and prudential standards.

"Mnuchin stated at the time: “The Council’s decision today follows extensive engagement with the company and a detailed analysis showing that there is not a significant risk that the company could pose a threat to financial stability.”

"The chart above shows what happened to Prudential from the date of Mnuchin’s statement to the end of 2018.

"Its stock started sinking like a rock in a pattern that was so close to the trading pattern of Citigroup, Goldman Sachs and Deutsche Bank that they could have been clones of one another.

"What does Prudential have in common with those three banks?

"Like them, it’s a major derivatives counterparty and on the hook for billions of dollars if derivatives blow up Wall Street again as they did in 2008."

Mnuchin’s Dangerous Plan to Deregulate Wall Street Is Captured in this Chart

"Like them, it’s a major derivatives counterparty and on the hook for billions of dollars if derivatives blow up Wall Street again as they did in 2008."

Derivatives didn't blow up shit in 2008.

Derivatives didn't blow up shit in 2008.

Who told you that...

"The real cause of the 2008 financial crisis was the proliferation of unregulated derivatives during that time. These are complicated financial products that derive their value from an underlying asset or index. A good example of a derivative is a mortgage-backed security."

What role did mortgage-backed securities play in creating the Great Recession, Rube?

How Derivatives Could Trigger Another Financial Crisis

The real cause of the 2008 financial crisis was the proliferation of unregulated derivatives during that time.

Bullshit.

Fannie Mae resells the mortgage in a package of other mortgages on the secondary market. This is a mortgage-backed security. Its value is derived by the value of the mortgages in the bundle.

An MBS isn't a derivative, it's a bond.
Turn a pile of mortgages into a pile of MBS, you still have a pile of mortgages.

An MBS isn't a derivative, it's a bond.
Turn a pile of mortgages into a pile of MBS, you still have a pile of mortgages.

Which derive their value from the underlying assets.

How Mortgage-Backed Securities Worked Until They Didn't

"Mortgage-backed securities are investments that are secured by mortgages.

"They’re a type of asset-backed security.

"A security is an investment that is traded on a secondary market.

"It allows investors to benefit from the mortgage business without ever having to buy or sell an actual home loan. Typical buyers of these securities include institutional, corporate or individual investors.

"When you invest in an MBS, you are buying the rights to receive the value of a bundle of mortgages. That includes the monthly payments and the repayment of the principal.

"Since it is a security, you can buy just a part of the mortgage. You receive an equivalent portion of the payments.

"An MBS is a derivative because it derives its value from the underlying asset."

"They’re a type of asset-backed security.

Right. Not a derivative.

"An MBS is a derivative because it derives its value from the underlying asset."

Wrong.

A derivative derives its value from something without actually being that thing.

5000 bushels of corn is not a derivative, it's an asset.
A futures contract on 5000 bushels of corn isn't actually 5000 bushels of corn, it
is a derivative that derives its value from the value of 5000 bushels of corn.

100 shares of IBM is not a derivative, it's an asset.
A call option on 100 shares of IBM isn't actually 100 shares of IBM, it is a derivative
that derives its value from the value of 100 shares of IBM.

A pile of mortgages, or a pile of MBS carved out of a pile of mortgages, is a bond.
Not a derivative.
A credit default swap that derives its value from the value of a pile of mortgages isn't a bond.
It isn't a pile of mortgages or a pile of MBS, it is a derivative.

An MBS is a derivative because it derives its value from the underlying asset."

Wrong.

A derivative derives its value from something without actually being that thing.

Exactly.
A MBS derives its value from a category of assets called mortgages; hence a MBS is a derivative.

Mortgage-backed security - Wikipedia

 

[Toddsterpatriot]

"Like them, it’s a major derivatives counterparty and on the hook for billions of dollars if derivatives blow up Wall Street again as they did in 2008."

Derivatives didn't blow up shit in 2008.

Derivatives didn't blow up shit in 2008.

Who told you that...

"The real cause of the 2008 financial crisis was the proliferation of unregulated derivatives during that time. These are complicated financial products that derive their value from an underlying asset or index. A good example of a derivative is a mortgage-backed security."

What role did mortgage-backed securities play in creating the Great Recession, Rube?

How Derivatives Could Trigger Another Financial Crisis

The real cause of the 2008 financial crisis was the proliferation of unregulated derivatives during that time.

Bullshit.

Fannie Mae resells the mortgage in a package of other mortgages on the secondary market. This is a mortgage-backed security. Its value is derived by the value of the mortgages in the bundle.

An MBS isn't a derivative, it's a bond.
Turn a pile of mortgages into a pile of MBS, you still have a pile of mortgages.

An MBS isn't a derivative, it's a bond.
Turn a pile of mortgages into a pile of MBS, you still have a pile of mortgages.

Which derive their value from the underlying assets.

How Mortgage-Backed Securities Worked Until They Didn't

"Mortgage-backed securities are investments that are secured by mortgages.

"They’re a type of asset-backed security.

"A security is an investment that is traded on a secondary market.

"It allows investors to benefit from the mortgage business without ever having to buy or sell an actual home loan. Typical buyers of these securities include institutional, corporate or individual investors.

"When you invest in an MBS, you are buying the rights to receive the value of a bundle of mortgages. That includes the monthly payments and the repayment of the principal.

"Since it is a security, you can buy just a part of the mortgage. You receive an equivalent portion of the payments.

"An MBS is a derivative because it derives its value from the underlying asset."

"They’re a type of asset-backed security.

Right. Not a derivative.

"An MBS is a derivative because it derives its value from the underlying asset."

Wrong.

A derivative derives its value from something without actually being that thing.

5000 bushels of corn is not a derivative, it's an asset.
A futures contract on 5000 bushels of corn isn't actually 5000 bushels of corn, it
is a derivative that derives its value from the value of 5000 bushels of corn.

100 shares of IBM is not a derivative, it's an asset.
A call option on 100 shares of IBM isn't actually 100 shares of IBM, it is a derivative
that derives its value from the value of 100 shares of IBM.

A pile of mortgages, or a pile of MBS carved out of a pile of mortgages, is a bond.
Not a derivative.
A credit default swap that derives its value from the value of a pile of mortgages isn't a bond.
It isn't a pile of mortgages or a pile of MBS, it is a derivative.

An MBS is a derivative because it derives its value from the underlying asset."

Wrong.

A derivative derives its value from something without actually being that thing.

Exactly.
A MBS derives its value from a category of assets called mortgages; hence a MBS is a derivative.

Mortgage-backed security - Wikipedia

A MBS derives its value from a category of assets called mortgages

No, it's actually those assets shuffled around.

A piece of a bond is a bond.

Interest from an MBS is interest paid by the home buyer on his mortgage.

An options contract or a futures contract on a bond is a derivative.
A synthetic MBS created to mimic a portfolio of mortgages is a derivative.
The portfolio itself, no matter how it is divided, is still a bond.

 

[RoshawnMarkwees]

Who told you that...

"The real cause of the 2008 financial crisis was the proliferation of unregulated derivatives during that time. These are complicated financial products that derive their value from an underlying asset or index. A good example of a derivative is a mortgage-backed security."

What role did mortgage-backed securities play in creating the Great Recession, Rube?

How Derivatives Could Trigger Another Financial Crisis

The real cause of the 2008 financial crisis was the proliferation of unregulated derivatives during that time.

Bullshit.

Fannie Mae resells the mortgage in a package of other mortgages on the secondary market. This is a mortgage-backed security. Its value is derived by the value of the mortgages in the bundle.

An MBS isn't a derivative, it's a bond.
Turn a pile of mortgages into a pile of MBS, you still have a pile of mortgages.

An MBS isn't a derivative, it's a bond.
Turn a pile of mortgages into a pile of MBS, you still have a pile of mortgages.

Which derive their value from the underlying assets.

How Mortgage-Backed Securities Worked Until They Didn't

"Mortgage-backed securities are investments that are secured by mortgages.

"They’re a type of asset-backed security.

"A security is an investment that is traded on a secondary market.

"It allows investors to benefit from the mortgage business without ever having to buy or sell an actual home loan. Typical buyers of these securities include institutional, corporate or individual investors.

"When you invest in an MBS, you are buying the rights to receive the value of a bundle of mortgages. That includes the monthly payments and the repayment of the principal.

"Since it is a security, you can buy just a part of the mortgage. You receive an equivalent portion of the payments.

"An MBS is a derivative because it derives its value from the underlying asset."

Exactly.

Deregulation allowed the lie that the bundles were safe and A prime rated because some of the loans were traditional loans and not likely to default. The bundles also contained a large amount of sub prime loans which were highly likely to default.

Deregulation allowed the NINJA sub prime loans which were a total disaster and at one time categorized as predatory lending.

Banks in America weren't the only institutions harmed. Countries like Greenland and Greece were harmed.

The deregulation and sub prime loans are back. I don't know if the lending institutions have learned their lesson yet.

Who forces people into mortgages they know they can’t afford?
CRA wasn’t deregulation.

The CRA did not force anyone into a mortgage they could not afford.

Unscrupulous mortgage sellers offered specialty mortgages to people to make them think they could afford it. Nothing down & interest free payments for a few years before a balloon payment came due.

Potential buyers who knew they could not deal with that balloon payment were told basically " No problem, it it comes due, just remortgage".

The seller did not care if the mortgage would fail because he just sold it. Those mortgages were then bundled with good mortgages & bundled in Mortgage Based Securities that were purchased by unsuspecting buyers.

That home owner went to remortgage & found that housing market was slowing & his house was no longer worth as much. They could not remortgage & the mortgage failed. This snowballed & mortgage companies started going bankrupt & then they took others.

The CRA is a piss poor lie told by ignorant fools. The CRA had nothing to do with it.

CRA forced lenders into mortgages, not buyers. People should realize that a job at McDonalds probably shouldn’t qualify you for a half-million dollar loan.

 

[georgephillip]

Trump's band of thieves is also hard at work on Wall Street "deregulation" as the Foreclosure King regularly demonstrates:

"Prudential Financial Traded as a Clone to the Big Wall Street Banks from October to December of Last Year. Prudential, green line, versus Citi, Goldman Sachs and Deutsche Bank.

"By Pam Martens and Russ Martens: June 3, 2019 ~

"U.S. Treasury Secretary Steve Mnuchin (a/k/a the former foreclosure king) has been attempting to dismantle regulatory restraints on Wall Street’s worst instincts since he took office.

"Making Mnuchin even more dangerous is the fact that, under statute, he simultaneously sits as head of the Financial Stability Oversight Council (F-SOC) even as he appears to be attempting to undermine financial stability in the U.S.

"One of Mnuchin’s most alarming actions on behalf of F-SOC came last
October 17 when the Council announced that it was removing the designation of Prudential Financial as a SIFI – a Systemically Important Financial Institution that required enhanced supervision and prudential standards.

"Mnuchin stated at the time: “The Council’s decision today follows extensive engagement with the company and a detailed analysis showing that there is not a significant risk that the company could pose a threat to financial stability.”

"The chart above shows what happened to Prudential from the date of Mnuchin’s statement to the end of 2018.

"Its stock started sinking like a rock in a pattern that was so close to the trading pattern of Citigroup, Goldman Sachs and Deutsche Bank that they could have been clones of one another.

"What does Prudential have in common with those three banks?

"Like them, it’s a major derivatives counterparty and on the hook for billions of dollars if derivatives blow up Wall Street again as they did in 2008."

Mnuchin’s Dangerous Plan to Deregulate Wall Street Is Captured in this Chart

"Like them, it’s a major derivatives counterparty and on the hook for billions of dollars if derivatives blow up Wall Street again as they did in 2008."

Derivatives didn't blow up shit in 2008.

Derivatives didn't blow up shit in 2008.

Who told you that...

"The real cause of the 2008 financial crisis was the proliferation of unregulated derivatives during that time. These are complicated financial products that derive their value from an underlying asset or index. A good example of a derivative is a mortgage-backed security."

What role did mortgage-backed securities play in creating the Great Recession, Rube?

How Derivatives Could Trigger Another Financial Crisis

The real cause of the 2008 financial crisis was the proliferation of unregulated derivatives during that time.

Bullshit.

Fannie Mae resells the mortgage in a package of other mortgages on the secondary market. This is a mortgage-backed security. Its value is derived by the value of the mortgages in the bundle.

An MBS isn't a derivative, it's a bond.
Turn a pile of mortgages into a pile of MBS, you still have a pile of mortgages.

An MBS isn't a derivative, it's a bond.
Turn a pile of mortgages into a pile of MBS, you still have a pile of mortgages.

Which derive their value from the underlying assets.

How Mortgage-Backed Securities Worked Until They Didn't

"Mortgage-backed securities are investments that are secured by mortgages.

"They’re a type of asset-backed security.

"A security is an investment that is traded on a secondary market.

"It allows investors to benefit from the mortgage business without ever having to buy or sell an actual home loan. Typical buyers of these securities include institutional, corporate or individual investors.

"When you invest in an MBS, you are buying the rights to receive the value of a bundle of mortgages. That includes the monthly payments and the repayment of the principal.

"Since it is a security, you can buy just a part of the mortgage. You receive an equivalent portion of the payments.

"An MBS is a derivative because it derives its value from the underlying asset."

Exactly.

Deregulation allowed the lie that the bundles were safe and A prime rated because some of the loans were traditional loans and not likely to default. The bundles also contained a large amount of sub prime loans which were highly likely to default.

Deregulation allowed the NINJA sub prime loans which were a total disaster and at one time categorized as predatory lending.

Banks in America weren't the only institutions harmed. Countries like Greenland and Greece were harmed.

The deregulation and sub prime loans are back. I don't know if the lending institutions have learned their lesson yet.

The deregulation and sub prime loans are back. I don't know if the lending institutions have learned their lesson yet.

Judging by how much larger the "too big to fail/jail" institutions have grown since the "end" of the Great Recession, I suspect the biggest lesson learned by those behemoths has been they will find new ways to tap the government piggy bank when the next inevitable crash comes?

MR Online | The Great Recession and Its Aftermath: Causes vs. Symptoms

Causes of the 2008 Global Financial Crisis

"The financial crisis was primarily caused by deregulation in the financial industry.

"That permitted banks to engage in hedge fund trading with derivatives.

"Banks then demanded more mortgages to support the profitable sale of these derivatives.

"They created interest-only loans that became affordable to subprime borrowers.


"In 2004, the Federal Reserve raised the fed funds rate just as the interest rates on these new mortgages reset.

"Housing prices started falling as supply outpaced demand.

"That trapped homeowners who couldn't afford the payments, but couldn't sell their house.

"When the values of the derivatives crumbled, banks stopped lending to each other.

"That created the financial crisis that led to the Great Recession."

 

[Fort Fun Indiana]

Who forces people into mortgages they know they can’t afford?

Nobody, and that's a stupid way of looking at it anyway. Many could afford their mortgages, before the downturn. And many defaults were 10 and 15 year old mortgages. Many of these borrowers fell victim to job loss and loss of value, 2 things that could have been completely out of their control.

 

[Fort Fun Indiana]

CRA forced lenders into mortgages, not buyers.

A drop in the bucket, regarding losses during the crash. You are barking up the wrong tree.

 

[georgephillip]

"Like them, it’s a major derivatives counterparty and on the hook for billions of dollars if derivatives blow up Wall Street again as they did in 2008."

Derivatives didn't blow up shit in 2008.

Derivatives didn't blow up shit in 2008.

Who told you that...

"The real cause of the 2008 financial crisis was the proliferation of unregulated derivatives during that time. These are complicated financial products that derive their value from an underlying asset or index. A good example of a derivative is a mortgage-backed security."

What role did mortgage-backed securities play in creating the Great Recession, Rube?

How Derivatives Could Trigger Another Financial Crisis

The real cause of the 2008 financial crisis was the proliferation of unregulated derivatives during that time.

Bullshit.

Fannie Mae resells the mortgage in a package of other mortgages on the secondary market. This is a mortgage-backed security. Its value is derived by the value of the mortgages in the bundle.

An MBS isn't a derivative, it's a bond.
Turn a pile of mortgages into a pile of MBS, you still have a pile of mortgages.

An MBS isn't a derivative, it's a bond.
Turn a pile of mortgages into a pile of MBS, you still have a pile of mortgages.

Which derive their value from the underlying assets.

How Mortgage-Backed Securities Worked Until They Didn't

"Mortgage-backed securities are investments that are secured by mortgages.

"They’re a type of asset-backed security.

"A security is an investment that is traded on a secondary market.

"It allows investors to benefit from the mortgage business without ever having to buy or sell an actual home loan. Typical buyers of these securities include institutional, corporate or individual investors.

"When you invest in an MBS, you are buying the rights to receive the value of a bundle of mortgages. That includes the monthly payments and the repayment of the principal.

"Since it is a security, you can buy just a part of the mortgage. You receive an equivalent portion of the payments.

"An MBS is a derivative because it derives its value from the underlying asset."

Exactly.

Deregulation allowed the lie that the bundles were safe and A prime rated because some of the loans were traditional loans and not likely to default. The bundles also contained a large amount of sub prime loans which were highly likely to default.

Deregulation allowed the NINJA sub prime loans which were a total disaster and at one time categorized as predatory lending.

Banks in America weren't the only institutions harmed. Countries like Greenland and Greece were harmed.

The deregulation and sub prime loans are back. I don't know if the lending institutions have learned their lesson yet.

Who forces people into mortgages they know they can’t afford?
CRA wasn’t deregulation.

Who forces people into mortgages they know they can’t afford?
CRA wasn’t deregulation.

CRA was a largely ineffective response to previous regulations designed to prevent black families from acquiring wealth in the same ways whites did:

The black-white wealth gap is unchanged after half a century

"American history is replete with horrific episodes that prevented the accumulation of black wealth for centuries: first slavery, then indentured servitude under Jim Crow, segregated housing and schooling, seizure of property and racial discrimination.

"The result was that in 1962, two years before the passage of landmark civil-rights legislation and the Great Society programme, the average wealth of white households was seven times greater than that of black households.

"Yet after decades of declining discrimination and the construction of a modern welfare state, that ratio remains the same.

"The mean of black household wealth is $138,200—for whites, that number is $933,700."

 

[SassyIrishLass]

DOW up 512 today


Pffft at this thread lol

 

[Fort Fun Indiana]

DOW up 512 today


Pffft at this thread lol

Wow, 2%!!!!

And back to where it was one year ago!

 

[RoshawnMarkwees]

Who forces people into mortgages they know they can’t afford?

Nobody, and that's a stupid way of looking at it anyway. Many could afford their mortgages, before the downturn. And many defaults were 10 and 15 year old mortgages. Many of these borrowers fell victim to job loss and loss of value, 2 things that could have been completely out of their control.

But that wasn’t the driver. And many re-fi’d with ARMs.

 

[georgephillip]

Who told you that...

"The real cause of the 2008 financial crisis was the proliferation of unregulated derivatives during that time. These are complicated financial products that derive their value from an underlying asset or index. A good example of a derivative is a mortgage-backed security."

What role did mortgage-backed securities play in creating the Great Recession, Rube?

How Derivatives Could Trigger Another Financial Crisis

The real cause of the 2008 financial crisis was the proliferation of unregulated derivatives during that time.

Bullshit.

Fannie Mae resells the mortgage in a package of other mortgages on the secondary market. This is a mortgage-backed security. Its value is derived by the value of the mortgages in the bundle.

An MBS isn't a derivative, it's a bond.
Turn a pile of mortgages into a pile of MBS, you still have a pile of mortgages.

An MBS isn't a derivative, it's a bond.
Turn a pile of mortgages into a pile of MBS, you still have a pile of mortgages.

Which derive their value from the underlying assets.

How Mortgage-Backed Securities Worked Until They Didn't

"Mortgage-backed securities are investments that are secured by mortgages.

"They’re a type of asset-backed security.

"A security is an investment that is traded on a secondary market.

"It allows investors to benefit from the mortgage business without ever having to buy or sell an actual home loan. Typical buyers of these securities include institutional, corporate or individual investors.

"When you invest in an MBS, you are buying the rights to receive the value of a bundle of mortgages. That includes the monthly payments and the repayment of the principal.

"Since it is a security, you can buy just a part of the mortgage. You receive an equivalent portion of the payments.

"An MBS is a derivative because it derives its value from the underlying asset."

"They’re a type of asset-backed security.

Right. Not a derivative.

"An MBS is a derivative because it derives its value from the underlying asset."

Wrong.

A derivative derives its value from something without actually being that thing.

5000 bushels of corn is not a derivative, it's an asset.
A futures contract on 5000 bushels of corn isn't actually 5000 bushels of corn, it
is a derivative that derives its value from the value of 5000 bushels of corn.

100 shares of IBM is not a derivative, it's an asset.
A call option on 100 shares of IBM isn't actually 100 shares of IBM, it is a derivative
that derives its value from the value of 100 shares of IBM.

A pile of mortgages, or a pile of MBS carved out of a pile of mortgages, is a bond.
Not a derivative.
A credit default swap that derives its value from the value of a pile of mortgages isn't a bond.
It isn't a pile of mortgages or a pile of MBS, it is a derivative.

An MBS is a derivative because it derives its value from the underlying asset."

Wrong.

A derivative derives its value from something without actually being that thing.

Exactly.
A MBS derives its value from a category of assets called mortgages; hence a MBS is a derivative.

Mortgage-backed security - Wikipedia

A MBS derives its value from a category of assets called mortgages

No, it's actually those assets shuffled around.

A piece of a bond is a bond.

Interest from an MBS is interest paid by the home buyer on his mortgage.

An options contract or a futures contract on a bond is a derivative.
A synthetic MBS created to mimic a portfolio of mortgages is a derivative.
The portfolio itself, no matter how it is divided, is still a bond.

The value of a derivative depends upon another underlying asset which in the case of a MBS is a pool of either CRE loans or residential loans.

 

[RoshawnMarkwees]

CRA forced lenders into mortgages, not buyers.

A drop in the bucket, regarding losses during the crash. You are barking up the wrong tree.

True. But many irresponsibly attempted to outreach their grasp. Shouldn’t have been allured in the first place. CRA led the way.

 

[SassyIrishLass]

DOW up 512 today


Pffft at this thread lol

Wow, 2%!!!!

And back to where it was one year ago!

Oh look another market illiterate. Gfy clownshoes yer one of the most ignorant( and disgusting) individuals on this forum

Yesterday it was OMG the downturn begins!!! Today the DOW shoots up 512.

Think hard

 

[Faun]

Who forces people into mortgages they know they can’t afford?

Nobody, and that's a stupid way of looking at it anyway. Many could afford their mortgages, before the downturn. And many defaults were 10 and 15 year old mortgages. Many of these borrowers fell victim to job loss and loss of value, 2 things that could have been completely out of their control.

Not to mention there were millions of people who could have afforded their mortgage but opted to walk away after market values fell through the floor and suddenly, their property was valued at far less than their mortgage.

 

[Faun]

CRA forced lenders into mortgages, not buyers.

A drop in the bucket, regarding losses during the crash. You are barking up the wrong tree.

That's the only tree with branches leading to Democrats, so don't expect the herd to stop baying at it.