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Sounds like the slapping scene from Chinatown.
"It was the Government"
Slap
"It was the Banks!"
Slap
"It was the Government!"
Slap
"It was the Bank and the Government!"
Slap, Slap,Slap
This the most succinct/best explanation I have heard.
Yes, I'm sure it sounds great to someone who wants to believe it was somehow the government's fault. The only problem is that it's been shown over and over again that it was private industry that led the charge into subprime and alt-a mortgages. Fannie and Freddie joined the game very late.
DieBankOfAmericaPhukkingDie says
They left out the CRA!
At least you watched it.
Now go back to :58 where he states:
"The reality is that government housing policies led to a general deterioration in all mortgage underwriting standards, to the mortgage meltdown."
Still gov't policy and parallel to the CRA. It has Clinton's fingerprints all over it and congress from the early 90s.
Anyway it sure beats your "I asked the guru in my industry about the CRA" trope.
Allowing government to meddle with the economy is tantamount to allowing Rhesus monkeys to play with atomic bombs and reactors.
The only problem is that it's been shown over and over again that it was private industry that led the charge into subprime and alt-a mortgages. Fannie and Freddie joined the game very late.
No, it was repeated over and over is not the same as it has been shown.
No, it was repeated over and over is not the same as it has been shown.
No, it HAS been shown--over and over. Here is another article for you to ponder:
"This paper shows that the increase in mortgage originations was shared across the whole distribution of borrowers, and that middle- and high-income borrowers made up the majority of originations even at the peak of the boom. Compared to prior years, middle- and high-income borrowers (not the poor), as well as those with medium and high credit scores, made up a much larger share of delinquencies in the crisis relative to earlier years. We show that the relation between individual mortgage size and income growth during the housing boom was always strongly positive, also in line with previous periods (and independent of how income is measured)."
http://www.nber.org/papers/w20848
If it was government mandating loans to the poor that caused the crisis, why did middle and high income borrowers make up the majority of originations and a much larger share of the delinquencies? The narrative the video provides just doesn't fit the facts.
why did middle and high income borrowers make up the majority of originations and a much larger share of the delinquencies?
"The reality is that government housing policies led to a general deterioration in all mortgage underwriting standards, to the mortgage meltdown."
why did middle and high income borrowers make up the majority of originations and a much larger share of the delinquencies?
"The reality is that government housing policies led to a general deterioration in all mortgage underwriting standards, to the mortgage meltdown."
OK--help me out then. Explain the logic for how a governmental program requiring Freddie and Fannie to write more loans to people with less than median income causes private industry to write crappy loans to people with higher than median incomes? How does that follow?
OK--help me out then. Explain the logic for how a governmental program requiring Freddie and Fannie to write mo
"The reality is that government housing policies led to a general deterioration in all mortgage underwriting standards, to the mortgage meltdown."
DieBankOfAmericaPhukkingDie says
Yes, I can remember all the conferences in which bankers were screaming and yelling that they were grossly under-regulated and the scarlet whores of SEC, OCC, FDIC were all insane with deregulatory lust and howling for Freddie and Fannie to loosen up standards for buying mortgages that terrified these icons of probity and prudent lending that are the guardians of Wall Street.
Nope that is when congress made Freddie and Fanny responsible for any paper the lenders could throw at them.
Allowing government to meddle with the economy is tantamount to allowing Rhesus monkeys to play with atomic bombs and reactors.
And the gubberment made Moody's and S&P rate that crap as Triple AAA, the bastards!
Fannie and Freddie joined the game very late.
Amen to that!. Not only did Fanny and Freddie join the subprime market very late at the end of the housing game because they were losing so much market share of the mortgage market, their subprime loans that they did hold never comprised more than 15% of their entire holdings. At least that was my experience with 30 plus years in the secondary mortgage market.
Translation--I don't care what the truth is, I'm going to stick to this bullshit until I die.
Projecting
All on their own? Bullshit
OK, read the chart again. Look at 2003 when the crap started. It was ALL private lenders. Fannie and Freddie weren't doing any of it.
OK, read the chart again. Look at 2003 when the crap started. It was ALL private lenders. Fannie and Freddie weren't doing any of it.
Watch the video again
It's Clinton's fault!
"In 1969, Raines first worked in national politics, preparing a report for the Nixon administration on the causes and patterns of youth unrest around the country related to the Vietnam War.[2] He served in the Carter Administration as associate director for economics and government in the Office of Management and Budget and assistant director of the White House Domestic Policy Staff from 1977 to 1979. Then he joined Lazard Freres and Co., where he worked for 11 years and became a general partner. In 1991 he became Fannie's Mae's Vice Chairman, a post he left in 1996 in order to join the Clinton Administration as the Director of the U.S. Office of Management and Budget, where he served until 1998. In 1999, he returned to Fannie Mae as CEO.
On December 21, 2004, Raines accepted what he called "early retirement"[3] from his position as CEO while U.S. Securities and Exchange Commission investigators continued to investigate alleged accounting irregularities. He was accused by The Office of Federal Housing Enterprise Oversight (OFHEO), the regulating body of Fannie Mae, of abetting widespread accounting errors, which included the shifting of losses so senior executives, such as himself, could earn large bonuses.[4]'
You are saying that bankers willingly fell on their swords. Sell crazy somewhere else
Sad but true, but would have been different if no bailouts, as it should have been
Once again you're time traveling? How do bailouts in 2009 cause lending in 2003-2006?
And in the mean time, while the market was starting to self correct, the hedgies opined "MOAR mezzanine tranches". These guys are really the unsung heroes of the bubble. Without them, it's doubtful money markets would have broke the buck.. As they say, the rest is history...
The OP is comedy gold.
As is your conjecture
As is your conjecture that a far right wing conservative think tank like the american enterprise institute would be objective. Most of the top people at aei were part of the revolving door between industry and the bush adminstration. The aei have been hawking that the meltdown was all the governments fault since 2008.
You do realize the narrator peter j wallison is the same peter j wallison who in 2003 criticized the GSE's for not doing a "better job of providing affordable home financing to a neglected portion of the mortgage market." This neglected portion consisted of "African-American ... Hispanic", and "low-income borrowers". calling it a sad fact and scandalous. In 2004 he criticized HUD for not forcing fannie/freddie to purchase more sub prime loans. https://www.creditwritedowns.com/2011/02/wallison-on-fannie-mae-and-freddie-mac.html
Hypocrisy? Just a tiny little bit.
Still the banking industry did not go crazy without government influence.
Still the banking industry did not go crazy without government influence.
Of course they did. They would screw over you and every other member of the public if it made them an extra $100.
Do you really think otherwise?
Still the banking industry did not go crazy without government influence.
No of course not. That's why there was so much off the books financial sleight of hand. That's why banks were fighting successfully against regulation of the markets. That's why mortgage brokers were unregulated. That's why ratings agencies were unregulated. That's why derivatives were unregulated. That's why the 5 big investment banks successfully lobbied the bush administration for reduce their capital requirements to joke level. Because the government was busy so influencing things.
Banks are pure as the driven snow, everyone knows that. Banks have never gotten ahead of regulators with financially unsound practices causing a major economic crisis. Except for all the times that they did since banks were invented 2500 years ago. Read oratio Trapezitica by Isocrates (bc 393),(the only english translation I know of is in the The Antiquities of Greece by Forgotten Books) which has the first known documentation of bank fraud.
yea yea, but the banks are not going to sign off on loans that are obvious losers, that would be suicide. Banks always pull Goldman Sachs shit and they always will investment banks more than commercial banks. the diff this time was the Barney and Chris shit show. i.e. the banks did not change the regulations did.
yea yea, but the banks are not going to sign off on loans that are obvious losers, that would be suicide. Banks always pull Goldman Sachs shit and they always will investment banks more than commercial banks. the diff this time was the Barney and Chris shit show. i.e. the banks did not change the regulations did.
yea,yea except the banks signed off on thousands of loans that were obvious losers, then sold them into cdo's. It was suicide, for the investors buying the cdo's. It was party time for the banks. Where do you think all the lhalf million dollar loans to strippers and pool guys went to? The banks' portfolio?
Where do you think all the lhalf million dollar loans to strippers and pool guys went to?
Then why did the banks need to be bailed out?
The consensus is that the Fed made too much money available via Greenspan and it made it's way into the market.
www.youtube.com/embed/XMKKHUIwmNw