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I hate to break it to you, skippy, but the housing bubble was caused more from private lenders than public ones.Petition the government? Dude, Clinton went around talking about housing being the American Dream, then his administration threatened the CEOs of all the major financial institution to lower credit standards or he'd have their asses hauled into endless Congressional investigations. The Fed followed it up by flooding the market with endless ultra low interest loans and underwriting. This is on top of how the mortgage deduction skews prices and doesn't actually make housing more affordable. To say that was driven by the market is just a flagrant rewriting of history.
The default rate for private lenders was 6 times that of public lenders.
The loans to borrowers with lower credit scores which the GSEs bought up fared much better than did similar privately-securitized loans. (Six times better, according to the Center for American Progress). A Federal Reserve report using different methodology "found no evidence" that government policies designed to encourage lending to lower-income borrowers had contributed to the subprime bubble.
There's nothing wrong about MM.MediaNatters? That's lame even for you.
Pinto's claim has been thoroughly debunked by the The Financial Crisis Inquiry Commission's report.Of course many private lenders worked in subprime, which naturally has a much higher default rate. SO it's an unfair comparison. Looking at the plain vanilla market the private lenders will have exactly the same default rate because they underwrote the loans to FAn/Fred standards.
There's nothing wrong about MM.MediaNatters? That's lame even for you.
I challenge anyone to show me one of their articles that wasn't true.
Pinto's claim has been thoroughly debunked by the The Financial Crisis Inquiry Commission's report.Of course many private lenders worked in subprime, which naturally has a much higher default rate. SO it's an unfair comparison. Looking at the plain vanilla market the private lenders will have exactly the same default rate because they underwrote the loans to FAn/Fred standards.
I hate to break it to you, skippy, but the housing bubble was caused more from private lenders than public ones.
Unless you can explain what that is based on, don't count on a high SAT score.You're really not very bright and not what we'd call a "critical thinker", ya know?
The fallacy should be obvious here.
I do believe I provided a link and corroborative evidence to back up that claim, which you've chosen not to address.Well zippy, you have no idea what you're talking about. That you would say such a thing demonstrates your dearth of knowledge of capital markets. They would not have been capable of causing such a catastrophe without government. Some would have failed, sure. But markets collapse when the field is tilted, and only government can do that.
1939-1980 - American capital tied to American labor. Capital investment used American Labor to manufacture products. Government policies/programs ensured high wages/benefits. The result was that that the father could support entire family on just his wages, so the mother could stay home and raise the kids. This is when Reagan bragged about having the highest paid middle class workers in the world. The high wages paid to the middle class meant that the American consumer had tons of spending money for consumption. This lead to massive capital investment: when there is a high demand, capital must innovate and invest and add jobs to capture that demand. (Don't try to explain this to a "talk radio Republican" - they have been kept ignorant of the relationship between high wages = high demand = economic growth)
1980 - Capitalist saw how cheaply goods were being made in Asia and Global south. The capitalist realizes that he could have his goods made by workers who made pennies a day and lived in hovels beneath dictators. Capitalists begin to offshore their production to Communist China, Taiwan, Korea as well as Latin and South America. The capitalist sees his profits rise as he ships jobs away from the American middle class to ultra-cheap labor markets. The American middle class begins to die, and must be saved by a massive expansion of credit: debt based consumption > Morning in American brought to you by Master Card, American Express and Visa. Don't take my word for it: research what happen to household debt since Reagan and the birth of offshore capitalism)
Cheaper Labor costs provide higher return on investment = Pure Capitalism - Capitalism is known for getting incentives right. Cheaper labor costs means higher profits. Higher profits IS the primary incentive for sound investment. Therefore, getting rid of the high cost of American Labor is the essence of capitalist logic, which is driven by a higher rate of return. Nike investors make more when each shoe is made for pennies, as opposed to having to support the expensive living standards of the American Middle Class.
Since workers make so much less (in order to give capitalist higher rate of return), what follows? Answer: workers have less money for consumption. Because workers can no longer afford to consume as much, the USA, since Reagan, required a credit economy to finance consumption. So, starting in 1980, to make up for the shift of jobs to low cost labor markets, the USA grew a massive debt economy where individuals started receiving 3 credit card offers a week. Starting in 1980 American Families went on an unprecedented borrowing binge.
By 2000, Americans were so in debt that they could no longer borrow as much to consume and keep the economy afloat.
So how did they keep the economy afloat? Where did the USA find its stimulus, if not through traditional credit based consumption?
Answer: housing bubble. The financial industry turned to the last thing left with any value: the home. So the Bush administration made it easier for each American to leverage their home's value to borrow enough to keep consuming. They created a conveyor belt where each new mortgage was turned into a financial product that they could sell around the globe. (Wall Street sold Europe over a trillion dollars of mortgage backed securities and derivatives. Through rate manipulation, Greenspan made the housing sector the only game in town, promising the best returns available. So money flowed into the US economy to create one of the most fraudulent bubbles in history.
When the bubble burst, the government bailed out the wealthy Wall Street private sector, and then foreclosed on the poor.
It was a wealth transfer from the middle class to John Galt . . . as per usual.
And "no" - to answers the OPs question - we have not learned a thing. The predators who profited from the bubble and it's popping have paid generously into the Conservative Message Machine to convince America that the falt lies with the poor middle class who got foreclosed on, and not the wealthy private sector who made money on the way up, then on the way down, then after being bailed out.
Welcome to predatory capitalism.
American swallowed poison in 1980 when it freed capital to get its manufacturing from cheap labor markets in Communist China. It sold the middle class down river, requiring the use of credit, debt and bubbles to sustain the American economy (to make up for the shift of jobs to cheap labor climates in dictator lead nations).
(the average Republican voter knows none of this. Ask a GOP voter where Walmart gets most of its manufacturing, and they look at you with a blank stare. They are the useful idiots of predatory offshore capitalism).
Unless you can explain what that is based on, don't count on a high SAT score.You're really not very bright and not what we'd call a "critical thinker", ya know?
The fallacy should be obvious here.
"Brevity is the soul of wit."
Londoner doesn't get it.
I do believe I provided a link and corroborative evidence to back up that claim, which you've chosen not to address.Well zippy, you have no idea what you're talking about. That you would say such a thing demonstrates your dearth of knowledge of capital markets. They would not have been capable of causing such a catastrophe without government. Some would have failed, sure. But markets collapse when the field is tilted, and only government can do that.
And until you do, you're not qualified to draw the conclusions you stated above.
The government is all over the lending approval and funding process
Proprietary trading has been significantly curtailed.
Not yet
Volcker Rule may be in for another delay - MarketWatch
No, it's happening right now. The banks are shedding their prop desks.
There's the brilliant rhetorical skills of the Poo we all know and love! Why, the manner in which you dissect an argument, and how your respond with such specificity, such logic and reason...it's really quite impressive...
And thanks for once again proving my point that you are incapable of any discourse beyond ad hominem attacks, red herrings and non sequiturs. Much appreciated...
You aren't making an argument. You're stringing together words and phrases you heard somewhere that sound important to you in a pathetic attempt to make it look like you have a clue about what's going on.
If true, then it should be all the much easier for you to respond with specificity...but you don't, because you can't. Fail.
yes we did learn something.we learned that even when the overwhelming evidence point to liberal policies for a disaster libbs still blame the right.We've been getting a lot of refi offers lately. A lot of ARM's, they always emphasize in bold letters we'll be able to skip up to two payments, and they always encourage us to consume the difference on our note rather than save it.
I ask of the loan industry and government - did we not learn anything from the housing bubble? Its like it never happened! These guys are ready to do it all over again.
So the fact that dems kicked this off with clinton, and are doing it again under obama, actually is over your head.
you're pathetic.
Your stating that everything is Clinton's fault doesn't make it true it only makes you look like a fucking idiot.
You can't be illiterate, so you must be intentionally remaining ignorant of all the facts.
oh and
I didn't say it was all clintons fault
I said clinton took carters shitty idea, everyone else let the crap keep going, it's buffoons like you that can't admit that clinton did it, did it on purpose and obama is doing it again KNOWING the results will be the same.
No, loaning money to people who couldn't afford to pay it back, simpleton. Does everything have to be about race to you people?What "shitty idea" was that? Loaning money to people regardless of race? Because that's all the CRA does. So unless you're suggesting loaning to blacks is the cause of the recession I don't know what it is you're even talking about.
The catastrophe was caused when the industry was de-regulated.They would not have been capable of causing such a catastrophe without government.
Your impression of what is implied, does not prove a flawed link.Your link was flawed because the implication is that private lenders make private decisions with private money and public lenders make public decisions with public money.
Then how does it work? Explain it.That isn't how the process works.
That's not addressing the point. That's just repeating something said.Furthermore, I did already address what happened. Here's a quote from your left spin Media Matters link. "The government-sponsored entities Fannie Mae and Freddie Mac, commonly called the GSEs, didn't lead private financial institutions into the subprime market and the complex financial instruments that made the bubble so toxic. Instead, they followed Wall Street there."
No one in the government told the banks to abandon standard banking procedures in reviewing loan applications.Clinton threatened banks and provided them with unending low interest loans to fund them.
For GSE's, yes. For privately-securitized loans, no.The government is all over the lending approval and funding process. The banks made decisions based on a landscape defined, driven and funded by government.
I think it's safe to say investment fraud = evil capitalism.Then when the mess got too big government bailed and pointed fingers. And the left dutifully followed and made it an evil capitalism argument.
This story has been reported by more media outlets than just MM.Media Matters being a pawn in that.
No, bundling and inflating those mortgages to 100 times their value and selling them to unsuspecting buyers caused all the pain.
