patrick.net

sbourg says

I can’t post the 7/1/95 Regulations cuz it wasn’t easy to find in ‘09

It's linked from wikipedia:

http://frwebgate.access.gpo.gov/cgi-bin/getpage.cgi?position=all&page=22156&dbname=1995_register

But it was a house of cards.

We're not denying that. We're saying CRA and subprime wasn't a major driver of that.

CRA/subprime refers to borrowers with subpar credit scores and histories.

The lending boom got out of hand from too much leverage and the introduction and popularization of suicide lending, much if not most of which going to PRIME borrowers and RICH people.

The fancy word for suicide lending is basically "Alt A" -- it was the rise of Alt A lending -- largely 2001-2006 and not subprime that caused the overextension, since rising valuations allowed borrowers to take cash out of their places to support their borrowing, a horrific feedback loop.

Stated income and negative amortization loans to the masses were the things that enabled the system to go out of whack, and these got rolling AFTER Clinton.

Of course, COMMERCIAL valuations zoomed up more and crashed more than the housing market during the Bush Bubble, and CRA didn't have anything to do with that. Commercial loans often explicitly included a little extra to cover interest payments for two years, a wonderful way for speculators to leverage up.

A generally falling interest rate environment of the 1990s, skyrocketing employment set up the bubble in 2000, but it was deregulation and laissez faire-enabled control fraud among the real estate industry that blew things up 2003-2005. By 4Q05 the market topped out and for all of 2006 and 1H07 the market was just running scared.

We'd done screwed up.

sbourg says

Clinton/Frank/Cisneros/Cuomo edict by the govt 7/1/95 took on a life of its own

It must have been a hell of a life, it managed to cause a world wide housing bubble and bust. How did the CRA regulations manage to jump over international borders? Pretty strong stuff. Even more amazing was that the vast majority of the subprime lending and bust was in CA, FL, AZ, and NV in area's that don't even come close to being subject to the CRA. Don't let pesky facts stand in the way of a good opinion.

to terriDeaner - Dude or Dudette I can view a site many times without having to make a comment. Duh

For starters, you should read theaffordablemortgagedepression.com more slowly. That policy of Clinton and Cisneros his HUD director, to want 10 million more homeowners starting in 1995 was frightening as an actionable federal policy -- and yes folks GSEs Fannie & Freddie were an important part of it. Still being used by the way. If we don't default on the national debt, our children will be paying for that crap, plus Obama/Reid/Pelosi's overspending for decades. Guess you all would rather think about taxing the 'rich' though. That's an obsession for you folks. I'm not saying the 'rich' shouldn't be taxed a bit more, but it's a spit in the ocean to close-up the $1.7T/year deficit we have now. It's not a means to actually fix it, OR to do any good for the economy. Period.

sbourg says

It’s not a means to actually fix it, OR to do any good for the economy. Period.

Actually, not period. We had a very good economy when the top marginal rate was 90%. You don't have the facts or logic on your side, just wishful thinking.

Raising rates on the top 2%, won't, in fact, close the deficit. But if we're not going to cut spending we're going to need to raise taxes on people, and the top 2% are the only ones with rising real incomes these days.

and yes folks GSEs Fannie & Freddie were an important part of it.

No they weren't. The bubble went far above the conforming limit, and it was the loans the GSEs WEREN'T making that was causing much of the bubble valuation increase 2002-2003 -- the stated income loans to flippers and the pay-option loans that let them and everyone else lever up, and the cash-out refis that bled out into the wider economy giving us a feedback loop of fake prosperity until the credit ran out.

Cisneros had nothing to do with this, though, since you like conspiracy theory, you should in fact read this:

http://www.vdare.com/sailer/080928_rove.htm

Should be right up your alley, assuming you're just racist and not a Republican partisan.

plus Obama/Reid/Pelosi’s overspending for decades

LOL, Pelosi only controlled 2 Obama budgets, and much of that deficit spending served to keep the system together and turn things around in 2009 -- TARP ($25B or so) and the ARRA ($300B in tax cuts and $500B in spending).

If we were looking for overspending, we'd have to look at the Bush crew, with their $1.2T war, plus increase of the defense budget from $366B in 2001 to $800B/yr in his last budget -- more than $5T in total on defense the previous decade. Talk about overspending! At least will get some bridges, infrastructure, and new trains for the ARRA.

Plus $66B for Medicare Part D this year alone, a simple transfer payment from the US Treasury to big pharma, which already is into us for tens of billions of profit each year.

It's really amazing how clownishly reality-challenged your partisan attempts at argument here are. You fit right in with the other conservatives here. Wish we could find some actual intelligent conservatives. Or honest ones, for that matter.

sbourg says

If we don’t default on the national debt, our children will be paying for that crap

Our debt is not "crap". It is the money we spent on government services. We were irresponsible to run it up like we did 2002-now and we're going to need to find the maturity to buckle down and start getting our house in order.

This largely means much higher taxes, but if you've got any spending cuts to propose to Congress they'd love to learn what you think about that too I bet.

At the peak of the capitalism, you need to pay to breath.
This will move GDP to a new level !

shrekgrinch says

So what?
That’s poll is meaningless.
The only thing that matters is how people poll in EACH congressional district. We don’t fill up the seats of Congress via national elections…we do it with nationally coordinated elections at the state and district levels.

You may find this hard to believe--but there seems to be a correlation between national polls and local polls.

tatupu70 says

What freedom did you lose exactly?

We are loosing our freedom of choice Comrade Tatupu70, are one step closer to a fascist dictatorship corporatocracy.

What is really behind all this is the move to control information that is on the internet through the back door. The free flow of information is the death knell to all governments that wish to rule rather than simply govern. Powerful governments operate best under the cloak of secrecy. There was a time when American’s access to information was limited to the three major networks and the major print media. It was very difficult back then to verify what was being promulgated to us as “news & facts.” The internet has dramatically changed all that, and much of what government is doing and how it operates is being exposed for all to see. This is anathema to politicians that are addicted to power. I look for an increased effort by the government to continue along these lines in an attempt to drastically limit access to uninhibited information.

How about increase the capital gain tax from 15% to a higher rate? This is where the meat is. Famous Buffet's line, not the exact, "My secretary pays more tax than I do!". He fails to mention his secretary does not have millions or billions in capital gain. Raising income tax will solve only small part of the revenue issue, congress should take a serious look at the capital gain tax rate. I guess Republicans in congress will jump off the bench if this is mentioned.

The government should sell all these bank and GM stocks, reserved gold and oil, CA lands, and green cards to corrupted Chinese/Indian government officers.

Problem solved.

Tenouncetrout says

tatupu70 says

What freedom did you lose exactly?

We are loosing our freedom of choice Comrade Tatupu70, are one step closer to a fascist dictatorship corporatocracy.

Again--what choice did you lose?

"We are loosing our freedom of choice"

You mean freedom of choice whether to have an abortion? I agree. We are losing our freedoms. Someone should tell the Communist bug government loving Republicans to keep their hands off our healthcare!

kimtitu says

How about increase the capital gain tax from 15% to a higher rate?

I'm all for having capital gains income be taxed at the same rate as regular income. Otherwise this simply directs a lot of money off into stock market. Housing and stocks should not have preferential treatment compared to someone trading labor for a living.

clambo says

Those who shorted microsoft a while ago were the right ones.

Thats completely unrelated.

If you walk into the Apple store today it will be packed, their products are flying off the shelves.

On the other hand Steve Balmer at MSCorp has been struggling to come up with any revolutionary ideas. I think windows phone and cloud computing will be interesting few years down the line, but ultimately Microsoft for whatever the reason does not invent, they just embrace and extend.

Life would be so exciting if the debt ceiling is not raised. No government! No taxes! No police! Food riots will start within 48 hours. Mansions and expensive cars will be torched by angry mobs.

Chris, that's what I have seen also. I have written my positive opinion of Apple above. Presently I think it is a juggernaut. I love making fun of Microsoft since Ballmer was on record making fun of the iPhone, etc.
Under Ballmer microsoft stock nav has been flat or falling. I wonder if they will kick Ballmer to the curb soon.
Apple rocks.

World ends may 21 anyhow

I look at Jobs and Ballmer and I see two totally different personalities. Former is an engineer who can really lead, and latter is more of a politician.

To me it was interesting when several days ago Microsoft acquired Skype, knowing Ballmer there is something big being planned, but I'm really not sure what it is.

Sarcasm noted.

HousingWatcher says

Food riots will start within 48 hours

More like 1,920 hours (give or take a few...). August 2nd is a ways off. Even Bill McBride agrees on this:

More on Debt Ceiling Charade
http://www.calculatedriskblog.com/2011/05/more-on-debt-ceiling-charade.html

First, even though the U.S. will hit the debt ceiling on Monday, there are games that Treasury can play - so Congress has until August 2nd. And there might even be some more tricks that can delay the date further - like promising to pay defense contractors sometime in the future.

I'm not sure I'd call Jobs an engineer. He has way more tech chops than most people give him credit for, but his real skills are imagination, vision, and hiring and motivating super-talented people who share (or will internalize) those ideas to make them happen.

I see Ballmer as a bombastic B-school guy of totally unknown talent.. All of the years of MSFT success could easily be attributed to Gates' leadership (with Ballmer's presence but contribution unclear), and the last decade of MSFT stagnation attributed to Ballmer's direction or lack thereof. Gates stumbled frequently on the vision thing, and arguably held back the industry as a whole, but he still channeled a fair amount of that exogenous force (moore's law, etc) into products.

I totally disagree about the Skype thing. I think the "something big" is integration with MSFT's existing services that people don't use or care about. That acquisition was a defensive thing. I don't believe that MSFT knows what to do with Skype, nor how to value it...just that Skype has a popular consumer service that they don't know how to build themselves, and don't realize how close it is to being commoditized.

terriDeaner says

More like 1,920 hours (give or take a few…). August 2nd is a ways off.

Can the Fed just forgive some or all of the US treasury debt of ~1.5 T that it holds?
That would lower the outstanding debt by same amount and allow another 1 year of borrowing at the same clip. And then the Fed can buy more T-bills and forgive them again, I guess.

Not just the Fed, btw. Various agencies (the Social Sec. system, Mil. retirement board, etc.) hold another ~3T of US debt is "special book" non-marketable securities. Could they just forgive some of that as well?
Never underestimate what the govt. could do!

Woz was the genius engineer.

Jobs will always be famous to me for one quote, while hiring Scully from Coke he asked him:

Do you want to "sell sugar water for the rest of your life or come with me and change the world?

I think this was Jobs in a nutshell, he's the passionate vision guy.

And an updated story about APPL price manipulation:

As we saw in Thursday's post, Apple's (AAPL) share price tends to gravitate with uncanny accuracy toward the closing price that causes "max pain" to option buyers and maximum profit to option sellers -- often in a burst of last-minute trading.

In that respect, Friday's close was picture-perfect.

http://tech.fortune.cnn.com/2011/05/15/how-the-market-in-apple-weeklys-is-rigged/?iid=HP_LN

Good point. It would be nice to get a better sense for how dependent states and local governments are on SLGS financing right now. I suspect dependency is not uniform across all users.

Does that mean we should buy guns and canned food?

Troy says

Every $50,000 you cut is going to be somebody’s government job gone.

You figure is overtly optimistic. The bill rate as a contractor to the FAA is between $80 to $120 an hour. That's between $160k to $240k per employee. While i of course no not see that kind of money in my paycheck, this is the rate the contracting company charges the FAA per worker.

Interesting enough, the average Federal Government employee makes somewhere around 80k a year, add in benefits and it costs about 120k per federal employee. By making all employees federal contractors, the government could save 40 to 120k per employee. By transitioning 1 million contractors into Federal employees, the government could save 40 to 120 billion dollars without any loss of services.

Schizlor says

The irony here is that she’ll probably go into the binder for NAr’s next “ethics” seminar, as a case-study in “what not to do”.

The realtor gig is a lot like the Catholic church. Somebody is busted for doing something they shouldn't and they are shuffled around. Not to compare misdeeds of realtors to those of priests (I think that the majority of priests are not child molesters), but they almost always get to continue their "profession" far away from wherever they last soiled their names. An agent with a revoked RE license can just go to another state and get another license. There's very little in terms of reciprocity or communication from one RE board to another.

As for termination from NAR, I can't imagine what would compel them to drop a member and forgo their yearly dues. They're like Amway, and just want the money flow kicking back up.

It's May 16th.

Vicente says

And an updated story about APPL price manipulation:

There were quite a few whistles blown lately about silver/gold price manipulation. This is the first one I see on apple. I guess anything is possible.

TechGromit says

Interesting enough, the average Federal Government employee makes somewhere around 80k a year, add in benefits and it costs about 120k per federal employee. By making all employees federal contractors, the government could save 40 to 120k per employee. By transitioning 1 million contractors into Federal employees, the government could save 40 to 120 billion dollars without any loss of services.

TG, your suggestion will agitate those who do nothing but have connection in FAA so they can make a few millions by shuffling paperwork to place some contractors to work for FAA. The real contractors probably get less than 50% of what FAA pays to the staffing companies. This is just my speculation but I believe this is how it works in real life.

TechGromit says

You figure is overtly optimistic.

yeah, I need to reword that since $5.0T in non-pension spending would be ONE HUNDRED MILLION jobs at $50,000 pr, or 5/6ths the workforce.

joshuatrio says

It’s May 16th.

The fun will last all summer long, don't worry.

Nice hit

What do you think about wfc current price? Who will make it into the teens first, citi or wells?

shrekgrinch says

You may find this hard to believe, but since you don’t supply proof of such correlation and you’ve responded to me with unbacked bullshit anyway in the past, I don’t choose to believe YOU.

Go ahead and stick your head in the sand. Let me know how that works out for you NEXT November.

HousingWatcher says

You mean freedom of choice whether to have an abortion?

If you think allowing 14 year old little girls the freedom to have a surgical procedure without parental consent is "freedom of choice", you need to have your head examined. Can we at least agree that underage children should at least have their parents notified prior to having surgery? Is that too much to ask? How about notifying parents when their kid wants to take hormone-based birth control? Is that too much to ask? Somehow we have taken a womans right to choose terminating the life of their unborn child and transformed that into allowing kids to make adult decisions - who is taking the rights away from whom in this case? Oh yeah, parents are stupid and shouldn't have a choice when it comes to their underage children...

MarkInSF says

Ah, yes, cite the libertarian economic theory, and ignore the reality.

People have had this choice not to insure for about, I don’t know… forever? And they still do. And what’s happened to the price of health insurance?

Mark the problem with insurance was never that everyone did not buy it, the problems are the way our system healthcare is structured. Forcing everyone to buy it changes no fundamentals, there is no reason to drive the price down.

Take yourself into the shoes of a provider network CEO, as long as your customers are paying and you are used to the 11% increases every year (thats the official trend) than why reduce the price? They are in business to make money, not provide affordable healthcare.

Using same reasoning as Obamacare we should force everyone to buy a cell phone because that would make the prices magically go down. When in reality it would mean exact opposite.

The way healthcare reform is made it's really dumb, and it will really really explode the prices in the future. Might as well buy healthcare stocks because thats where all the money will be.

Just like the Pros!

Wall Street used all our pensions for hookers & blow slush fund. Nothing new here.