The federal reserve is going to pull another ONE TRILLION DOLLARS OUT OF THEIR ASS!

[LiberalNut]

I've got enough side comments from people laughing their ass of at you to keep me smiling.

And those brave folks didn't see fit to bitch slap me with facts either. Hmmm. Interesting.

Is that what wingnuts do on the side, PM each other.

Do you hold each other's cranks in the bathroom too?

 

[Big Fitz]

I've got enough side comments from people laughing their ass of at you to keep me smiling.

And those brave folks didn't see fit to bitch slap me with facts either. Hmmm. Interesting.

Is that what wingnuts do on the side, PM each other.

Do you hold each other's cranks in the bathroom too?

You're not worth their time and effort I guess, pussy.

 

[LiberalNut]

Pussy? What, you don't like pussy?

I might have guessed.

 

[Big Fitz]

Yes, that's why I have pictures of them and use them continually to make fun of you. Cats must really suck.

But you know what. Since you have no wits in which to defend yourself, you are really running out of entertainment value here.

 

[LiberalNut]

Why do i think you post pictures of cats?

Hmm, I'm just spitballing here...

Cause you're a fucking dimwit?

 

[Big Fitz]

Why do i think you post pictures of cats?

Hmm, I'm just spitballing here...

Cause you're a fucking dimwit?

Okay.

You're vaporlocked. More pathetic than entertaining now. So on that note, froth away nutjob... froth away.

 

[LiberalNut]

Froth? Is that what you wingnuts feel when you're holding each other's cranks in the bathroom while PMing each other on your cell phones?

 

[LiberalNut]

Ha!

I got the last word.

That's about all you can hope for when dealing with a wingnut.

 

[Paulie]

Paulieeeeeeeee

There's a liberal who needs schooling on the regulations that were inadequately fettering the CDO market. Where are you?

Well, Sarbox really did a hell of a lot to keep Lehman from pulling off repo 105, huh? I mean, what an airtight piece of legislation that was! I realize that isn't specifically related to the CDO market, but I wasn't originally talking about JUST the CDO market. I was talking about the housing collapse as a whole, and Lehman going down was an enormous part of that. Just the counter-party exposure ALONE is enough to make one cringe.

Are you familiar with an obscure regulation called the Recourse Rule?

The Fed, and others, came up with it at Basel. It required banks to maintain 60-80% more capital reserves against loans and bonds than against MBS's.

So a 60-80% increase in incentive to take on that risk.

And it only applied to banks, not funds. Not surprisingly, it was BANKS who ended up fucked, while the funds for the most part still live on. Because they weren't encouraged to take on that risk by having the same capital reserve requirements as the banks.

At Basel 2, the same type of implementation was added to foreign banks.

And the rest is of course, history.

 

[LiberalNut]

It required banks to maintain 60-80% more capital reserves against loans and bonds than against MBS's.

No. Not at all. This is NOT what the rule does. Please quote the section of the rule you are talking about.

The rule sets different reserve requirements for different ratings on securities. So, a bank could abuse the rule by hiding bad loans into a CDO and then paying off the rating agency but this is not the fault of the rule.

 

[Paulie]

It required banks to maintain 60-80% more capital reserves against loans and bonds than against MBS's.

No. Not at all. This is NOT what the rule does. Please quote the section of the rule you are talking about.

The rule sets different reserve requirements for different ratings on securities. So, a bank could abuse the rule by hiding bad loans into a CDO and then paying off the rating agency but this is not the fault of the rule.

Paying off ratings agencies? That's the only scenario you can imagine in this situation? Nevermind the fact that the SEC created an oligopoly in regards to them, with only 3 being considered nationally recognized. It makes a ton of sense to put all that power into the hands of only 3 companies.

What the rule did was effectively steer risk calculation in one specific direction, and then put the trust in your risk in only those 3 companies.

We ended up with a lot of ratings just turning out to be flat out wrong.

And you can only imagine a scenario of banks paying them off for that to happen?

By creating the oligopoly with ratings agencies, you are effectively bypassing traditional competitive capitalism. Not so ironically, the recourse rule led to trusting risk with only those 3 companies, and bypassing competitive capitalism ended up kicking us in the nuts.

As a liberal who I'm sure doesn't place blind trust in big business, I would have to imagine you have a problem with only 3 companies having all the power in rating securities.

Even in your payoff scenario, I'm not sure how you can't still blame the recourse rule. If the only 3 ratings agencies allowed by the SEC are corruptible, than how does steering risk towards an investment that depends on the integrity of those companies make any sense at all?

 

[Reasoning]

[ame]http://www.youtube.com/watch?v=6i4QX67ETTA[/ame]

 

[Paulie]

http://www.youtube.com/watch?v=6i4QX67ETTA

Cavuto's discomfort in having to show Paul some modicum of respect is written all over his face.

 

[Mr.Fitnah]

Ha!

I got the last word.

That's about all you can hope for when dealing with a wingnut.

Um... you iz tha wingnut .

 

[LiberalNut]

The ratings of these securities was a lucrative business for the rating agencies, accounting for just under half of Moody's total ratings revenue in 2007. Through 2007, ratings companies enjoyed record revenue, profits and share prices. The rating companies earned as much as three times more for grading these complex products than corporate bonds, their traditional business. Rating agencies also competed with each other to rate particular MBS and CDO securities issued by investment banks, which critics argued contributed to lower rating standards. Interviews with rating agency senior managers indicate the competitive pressure to rate the CDO's favorably was strong within the firms. This rating business was their "golden goose" (which laid the proverbial golden egg or wealth) in the words of one manager.[4]

Critics claim that conflicts of interest were involved, as rating agencies are paid by the firms that organize and sell the debt to investors, such as investment banks.[8] John C. Bogle wrote in 2005 that there is an inherent conflict of interest when a professional firm is also publicly-traded, as the pressure to grow and increase profits is relatively stronger, which may detract from the quality of work performed.[9] Moody's became a public firm in 2001, while Standard & Poor's is part of the publicly-traded McGraw-Hill Companies.

Credit rating agencies and the subprime crisis - Wikipedia, the free encyclopedia

There you have it bud. Capitalism, unfettered capitalism, at work.

 

[LiberalNut]

can't let this one go to the second page till Paulie or some other wingnut addresses the results of the unfettered capitalism they so dearly love...bump

 

[LiberalNut]

Oh Paulieeeeeeeee, got any answer for reality?

 

[Reasoning]

[ame]http://www.youtube.com/watch?v=Q1B3CXaudCo[/ame]

 

[LiberalNut]

Interviewer: What should be done to get businesss to invest?

Ron Paul: Nothing.

That's pretty much the libertarian dogma. Do nothing. The invisible hand of the market God will cure all! But, it was deregulation and letting the Market God do his thing that got us into this mess. How does Paul respond to that notion?

He doesn't of course.

Ron Paul isn't an economist. Ron Paul isn't an Historian who would actually know anything about what the founders did and didn't think. Ron Paul is a religionist.

 

[Reasoning]

Interviewer: What should be done to get businesss to invest?

Ron Paul: Nothing.

That's pretty much the libertarian dogma. Do nothing. The invisible hand of the market God will cure all! But, it was deregulation and letting the Market God do his thing that got us into this mess. How does Paul respond to that notion?

He doesn't of course.

Ron Paul isn't an economist. Ron Paul isn't an Historian who would actually know anything about what the founders did and didn't think. Ron Paul is a religionist.

You fail to understand what the "market" really is, and fail to understand how it self monitors when corporatism is eliminated.