Obama's Regulatory Tsunami

[bripat9643]

Fannie and Freddie didn't write one single bad loan.

No, they just bought over $200 billion worth of bad loans.

 

[Raoul_Duke]

Much of what you wrote was clear BUT one point remains unproven and that is Bush somehow changed when the loans were resold (and hence the risk moved) to another entity. THAT combined with the deregulation would put far more blame on Bush's shoulders.

Banks used to hold a percentage of their loans to maturity so that they had some skin in the game and wouldn't go hog wild writing bad loans and selling them on. Over the years they could either keep actual mortgage paper or buy securities constructed out of the mortgages they'd written, it depended on the agreements individual banks had with (normally) Fannie and Freddie. Over a long period of time, decades, mortgage lending standards were gradually relaxed but they were basically suspended altogether around 2002 when the Fed and other regulators effectively stopped enforcing them. Banks and other mortgage originators no longer had to worry whether the debt they were writing would be repaid. All they had to do was make sure the mortgagee made the monthly payment for the first three or six months, then the mortgage was the problem of whoever they'd sold it on to.

Which leads me right back to my earlier - and unaddressed - point that is was not the deregulation that was the problem. It was the fact that the government was taking the risk that was the underlying problem. To me, that created more problems and was a bad idea from the get go BUT it was only when it was coupled with the deregulations that it became such a large financial mess.

You cite the fact that the market was deregulated that caused the bad loans but in reality those loans would not have been written had the actual companies writing them been exposed to the risk. That was the underlying problem. They deregulated the market while conveniently forgetting that the government was taking the risks. If the government simply got out of the way to include NOT TAKING THE RISK then the deregulation would not have been a problem as the companies would create their own standards so they would not be defaulted on themselves.

Certainly - this is a rather simplified version but the core of the point still stands - companies do not need to be over regulated if they are exposed to the risk of their decisions. If we take that risk upon the public and remove it from the company creating the loans in the first place, deregulation is disastrous. So obviously disastrous that I have no idea how our government fell for it...

Governments have almost always bailed the banks out when they've fucked up for nearly two centuries now. Banks definitely take advantage of that, they know they'll get bailed out. And they've bought off the politicians so that they can basically do what they want. What would have been the best thing in 2008 was for the government to have guaranteed the actual financial system but let the banks go bust. Convert as much of their debt as possible into equity and sell them to new investors. Then put the ex-bankers who fucked things up on trial on RICO charges. But if they did that they'd have to indict half of Washington too. Like Michael Corleone said, they're all part of the same hypocrisy.

 

[Raoul_Duke]

Fannie and Freddie didn't write one single bad loan.

No, they just bought over $200 billion worth of bad loans.

They bought a lot more than that.

 

[Raoul_Duke]

Deliberately vague and noncommittal, I love it.

Do you agree with it then?

Do I agree that those actions can be said to be the consequence of Bush's desire to deregulate? Yes, but I would also agree they can be said to be the consequence of Barney Frank running a bordello in his apartment.

Agree about Bush. Disagree about barney Frank.

 

[Toddsterpatriot]

I said that banks no longer had to hold mortgages to maturity, I didn't say all mortgages.

What was the old regulatory requirement? 90%? 80%? 70%?
What was the new requirement when Bush "deregulated"?
50%? 40%? 0%?

Or were you mistaken? Lying?

It depended on the individual circumstances of the bank. Then this happened ;

During a five year period (2002-07), the basis for making mortgages was NOT the borrowers ability to pay – rather, it was the lender's ability to sell a mortgage to firms that securitized them.

This represented an enormous change from the past.

These new unregulated mortgage brokers no longer cared about a standard 30 year mortgage being repaid over time. In the new world of repackaged loans, all that mattered was that the loan did not come back to the originator. By contract, this was typically 90 or 180 days. As long as the borrower did not default in that period of time, it could not be put back to the originator.

The Big Picture

Stop changing the subject.

What was the old regulatory requirement? 90%? 80%? 70%?
What was the new requirement when Bush "deregulated"?
50%? 40%? 0%?

Or were you mistaken? Lying?

 

[Raoul_Duke]

What was the old regulatory requirement? 90%? 80%? 70%?
What was the new requirement when Bush "deregulated"?
50%? 40%? 0%?

Or were you mistaken? Lying?

It depended on the individual circumstances of the bank. Then this happened ;

During a five year period (2002-07), the basis for making mortgages was NOT the borrowers ability to pay – rather, it was the lender's ability to sell a mortgage to firms that securitized them.

This represented an enormous change from the past.

These new unregulated mortgage brokers no longer cared about a standard 30 year mortgage being repaid over time. In the new world of repackaged loans, all that mattered was that the loan did not come back to the originator. By contract, this was typically 90 or 180 days. As long as the borrower did not default in that period of time, it could not be put back to the originator.

The Big Picture

Stop changing the subject.

What was the old regulatory requirement? 90%? 80%? 70%?
What was the new requirement when Bush "deregulated"?
50%? 40%? 0%?

Or were you mistaken? Lying?

It depended on the individual circumstances of the bank.

 

[pete]

One aspect of Obamanomics that has been overshadowed by the spending and tax discussions is the vast increase in regulations which are suffocating the recovery.

219 regulations costing a minimum of $100M/year each are in the queue for implementation. When the private sector is forced to absorb more than $200B of increased over ten years, jobs are Not Created.

And Obama these are on top of the estimated $380B that Obama has already been enacted.

The report by the House Oversight and Government Reform Committee headed by Rep. Darrell Issa, R-Calif., took aim at Obama's "regulatory tsunami" and concluded that the pace and scale of new regulations threatens the ability of the government to fulfill even its most basic regulatory functions. Here's how the congressional panel summarized its conclusions:

"The Obama Administration has created a regulatory environment that is suffocating America's entrepreneurs' ability to create jobs and grow businesses, ... This regulatory tsunami has caused job creators to lock down at a time when we need them to expand. The committee has found that the problems created by this regulatory tsunami goes far beyond the cost of the regulations themselves, but also include breakdowns in the regulatory process itself that is having a severe impact on large and small businesses alike."

Specifically, the panel found at least 219 "economically significant regulations in the pipeline, which if finalized, will impose costs of $100 million or more annually on the economy." That's a minimum of $219 billion in added costs to do business in this country over the next decade. Even worse, the panel found the Obama bureaucrats have already imposed 75 major new regulations that are projected to add another $380 billion in costs.

The Issa panel concluded that, as a result of this flood of new rules, "the regulatory process is broken" and that it is "being manipulated and exploited in an effort to reward allies of the Obama administration such as environmental groups, trial lawyers and unions."

Why the U.S. economy is headed for a double dip | Examiner Editorial | Opinion | Washington Examiner

Yep. Couple that with the tax uncertaintly and Obamacare and is it any wonder that the private sector is sitting on billions and won't hire or expand??

Anyone as smart as Barry thinks he is would have caught a fucking clue by now.

Guess he ain't that smart or everything he's doing is for a purpose.

Exactly!!

 

[FA_Q2]

Governments have almost always bailed the banks out when they've fucked up for nearly two centuries now. Banks definitely take advantage of that, they know they'll get bailed out. And they've bought off the politicians so that they can basically do what they want. What would have been the best thing in 2008 was for the government to have guaranteed the actual financial system but let the banks go bust. Convert as much of their debt as possible into equity and sell them to new investors. Then put the ex-bankers who fucked things up on trial on RICO charges. But if they did that they'd have to indict half of Washington too. Like Michael Corleone said, they're all part of the same hypocrisy.

Thank you, I have been saying that for a long time. I keep getting told that if we did not bail them out our country would have fallen yet no one can come to terms that we could have covered the people and not the banks. Bailouts are one of the most corrupt forms that our government has taken.

 

[Raoul_Duke]

Governments have almost always bailed the banks out when they've fucked up for nearly two centuries now. Banks definitely take advantage of that, they know they'll get bailed out. And they've bought off the politicians so that they can basically do what they want. What would have been the best thing in 2008 was for the government to have guaranteed the actual financial system but let the banks go bust. Convert as much of their debt as possible into equity and sell them to new investors. Then put the ex-bankers who fucked things up on trial on RICO charges. But if they did that they'd have to indict half of Washington too. Like Michael Corleone said, they're all part of the same hypocrisy.

Thank you, I have been saying that for a long time. I keep getting told that if we did not bail them out our country would have fallen yet no one can come to terms that we could have covered the people and not the banks. Bailouts are one of the most corrupt forms that our government has taken.

When foreign countries fuck up, when it happened in Russia, Japan, Argentina, other Asian countries the World Bank and the IMF go in and tell them they have to sort their banks out, that debt be converted to equity and the banks be sold on, that existing shareholders lose their money. They tell the governments they must not bail out the banks and basically cover the losses of the elite people in the country who own them. The governments are not allowed to extend and pretend with bank losses, keeping zombie banks going for decades while they try to make back their losses like Japan. In America, we've done everything that we've told other countries they can't do.

 

[Quantum Windbag]

Do you agree with it then?

Do I agree that those actions can be said to be the consequence of Bush's desire to deregulate? Yes, but I would also agree they can be said to be the consequence of Barney Frank running a bordello in his apartment.

Agree about Bush. Disagree about barney Frank.

You missed my point.

I agree it can be said, I do not agree it is true.

 

[Toddsterpatriot]

It depended on the individual circumstances of the bank. Then this happened ;

During a five year period (2002-07), the basis for making mortgages was NOT the borrowers ability to pay – rather, it was the lender's ability to sell a mortgage to firms that securitized them.

This represented an enormous change from the past.

These new unregulated mortgage brokers no longer cared about a standard 30 year mortgage being repaid over time. In the new world of repackaged loans, all that mattered was that the loan did not come back to the originator. By contract, this was typically 90 or 180 days. As long as the borrower did not default in that period of time, it could not be put back to the originator.

The Big Picture

Stop changing the subject.

What was the old regulatory requirement? 90%? 80%? 70%?
What was the new requirement when Bush "deregulated"?
50%? 40%? 0%?

Or were you mistaken? Lying?

It depended on the individual circumstances of the bank.

The Bush regulatory change varied bank to bank?
Show me.
Or admit you lied.

 

[Raoul_Duke]

Stop changing the subject.

What was the old regulatory requirement? 90%? 80%? 70%?
What was the new requirement when Bush "deregulated"?
50%? 40%? 0%?

Or were you mistaken? Lying?

It depended on the individual circumstances of the bank.

The Bush regulatory change varied bank to bank?
Show me.
Or admit you lied.

The Bush regulatory burden didn't vary from bank to bank. The Bush administration regulators didn't regulate anybody.

Show me they did or admit you lied!

 

[bripat9643]

The Bush regulatory burden didn't vary from bank to bank. The Bush administration regulators didn't regulate anybody.

Show me they did or admit you lied!

There are thousands of pages in the Federal Register that regulate banks, and they have been there for decades. They laim that any industry in this economy is "unregulated" is absurd.

 

[Raoul_Duke]

The Bush regulatory change varied bank to bank?
Show me.
Or admit you lied.

The Bush regulatory burden didn't vary from bank to bank. The Bush administration regulators didn't regulate anybody.

Show me they did or admit you lied!

There are thousands of pages in the Federal Register that regulate banks, and they have been there for decades. They claim that any industry in this economy is "unregulated" is absurd.

You need regulators who actually enforce the regulations though. Regulators who don't take a chainsaw to them :

 

[bripat9643]

You need regulators who actually enforce the regulations though. Regulators who don't take a chainsaw to them :

You mean like the way the Obama Administration chooses to not enforce voter intimidation regulations or immigration regulations?

Do you have any proof that the Bush administration did not enforce banking regulations?

 

[Raoul_Duke]

You need regulators who actually enforce the regulations though. Regulators who don't take a chainsaw to them :

You mean like the way the Obama Administration chooses to not enforce voter intimidation regulations or immigration regulations?

Do you have any proof that the Bush administration did not enforce banking regulations?

Other than a motherfucker taking a chainsaw to a stack of banking regulations?

 

[Toddsterpatriot]

It depended on the individual circumstances of the bank.

The Bush regulatory change varied bank to bank?
Show me.
Or admit you lied.

The Bush regulatory burden didn't vary from bank to bank. The Bush administration regulators didn't regulate anybody.

Show me they did or admit you lied!

First you say it depended on the bank now you say it didn't? Wow!

Sill no proof Bush allowed banks to sell mortgages for the first time?

 

[Raoul_Duke]

The Bush regulatory change varied bank to bank?
Show me.
Or admit you lied.

The Bush regulatory burden didn't vary from bank to bank. The Bush administration regulators didn't regulate anybody.

Show me they did or admit you lied!

First you say it depended on the bank now you say it didn't? Wow!

Sill no proof Bush allowed banks to sell mortgages for the first time?

I don't know if you're intentionally being this dumb or whether you're actually this dumb but it's getting tiring.

 

[Toddsterpatriot]

The Bush regulatory burden didn't vary from bank to bank. The Bush administration regulators didn't regulate anybody.

Show me they did or admit you lied!

First you say it depended on the bank now you say it didn't? Wow!

Sill no proof Bush allowed banks to sell mortgages for the first time?

I don't know if you're intentionally being this dumb or whether you're actually this dumb but it's getting tiring.

Yes, I'm getting tired of asking you to provide proof for your claim.

That's okay, I know you're stupid, or a liar, most likely both.

 

[Raoul_Duke]

First you say it depended on the bank now you say it didn't? Wow!

Sill no proof Bush allowed banks to sell mortgages for the first time?

I don't know if you're intentionally being this dumb or whether you're actually this dumb but it's getting tiring.

Yes, I'm getting tired of asking you to provide proof for your claim.

That's okay, I know you're stupid, or a liar, most likely both.

Over the past couple of days I've schooled you on a variety of subjects including mark-to-mark accounting and its suspension, the costs of the bailout to the taxpayer, losses incurred by Citibank and BOA, the amount of meltdown-related debt the US government has guaranteed, the difference between total Federal taxes and income taxes, and so on. I don't think you want to get into a stupid competition here.