Toddsterpatriot
Diamond Member
destroys your entire premise; that the GSE loans were responsible for the bubble.
I didn't say they were responsible. I said their huge purchases contributed to the bubble.
To which you are wrong. The mortgages that caused the bubble were the ones that went delinquent. GSE-backed loans had delinquency rates the same throughout the bubble years. You ignore GSE loan performance because it's the only way your bullshit argument makes sense.
Your claim that they didn't buy crappy mortgages, despite all the links, yours included, that show they were forced to buy 50%-56% subprimes is silly.
So here's more of your sophistry on display. Not every subprime loan was crappy. A subprime loan only became crappy when the borrower failed to repay (delinquency). From 2004-7, the delinquency rates for GSE-backed subprime loans remained at the levels prior to 2004, whereas delinquency and default rates for private labels skyrocketed. So you are trying to lump in all subprimes together as part of a guilt-by-association argument, but you're being knowingly dishonest when you do that. A "garbage loan" in this context is a loan that defaults or goes into delinquency. Risk isn't what we're talking about. Not now, when we know the actual figures and facts.
The problems were in the subprimes issued by private labels and backed by private labels.
The problem was both private and GSE purchases feeding the bubble.
No, you have failed to pin GSE's because you ignore loan performance. GSE-backed loans performed at the same rates they did before the bubble. Private label loans didn't. Fact.
The bubble popped 2008-2009. Your chart shows delinquencies rising across the board then. DURR.