patrick.net

indigenous says

I know you willfully ignorant mutts (you know who you are) will ignore this, despite it is only a 1/2 hour show.

Coming from the willfully ignorant mutt who manages to ignore thousands of pages of contradictory fully documented research because hey you've got a 30 minute podcast. Now that's pretty funny. You are a funny man. I's true because I fell it's true.

But not one of you mutts bothered to listen to this 30 minute video.

The guest dicusses his nuanced book on the subject that is highly documented and shows how the causes of the bank crises are not even controversial unless of course you are talking to ignorant mutts such as yous here on Pat.net

Listen ass wipe if you can't be bothered to listen to a 30 min well documented video I sure as fuck am not going to read your blather.

bgamall4 says

Private, bogus, AAA rated bonds made up of crap loans fueled the housing bubble, indigenous. That is fact. Look at the chart.

Fuck the chart if you mutts would bother to listen to the video you would find out why the sub primes affected the rest of the market.

bob2356 says

30 minute podcast

... from a Confederate Slavery Apologist, Depression Denier, etc. I shit you not:

http://www.amazon.com/Politically-Incorrect-Guide-American-History-ebook/dp/B007NN8FAY/ref=sr_1_1?s=books&ie=UTF8&qid=1407200192&sr=1-1&keywords=politically+incorrect+guide+to+the+american+history

Note who is on the cover.

Also in the "politically incorrect" Series is "The War Between the States" (take a guess about whose side the author is biased for), "Socialism", and "Science" (take a guess about it's stance on pollution, science and religion, and of course Evolution).

Regnery Publishing, of course.

Abraham Lincoln, the Original Gorilla and Tyrant of us all (But shhhhh, don't mention that the South conscripted first!)

thunderlips11 says

... from a Confederate Slavery Apologist, Depression Denier, etc. I shit you not:

The author is a graduate from Harvard and a PhD.

Yet you pull shit out of your ass.

BTW he is not the author i'm referring to.

Like all asset bubbles, the housing bubble and inevitable crash was caused by central banks around the world, led by the Federal Reserve, that devalued their currencies. They did so by making credit too cheap through lowering interest rates and by loosening banks' reserve requirements. Third World sh*tholes do the same thing by merely *printing* more currency, and 1000 years ago the crown would shave coins, but it's all the same thing. The ultimate goal is to "create" more money, when doing so is of course not possible without catastrophic (and highly volatile and unpredictable) inflationary consequences.

FYI, the Federal Reserve is busy right now creating another asset bubble, this time, apparently, in stocks. Don't worry, that will crash also.

Of course, I would agree that the CRA aggravated the housing bubble by compelling banks to lend to social retards, people who can't tie their shoes, much less pay mortgages or for that matter *read* a mortgage note -- anyone doubting this ought to consult the actual and threatened civil suits in the 1990s against banks by the various federal regulatory bodies. Better yet, simply search for "housing advocacy groups" to see who/what the Act was appealing to. Some really loathsome, entitled and not entirely sane people.

But the asset bubble would have existed with or without the CRA. Laws never help anything, but the problem is/was more fundamental than any given piece of legislation.

From Tom Wood's Wikipedia Entry:

Woods is also an associate scholar of the Abbeville Institute, in McClellanville, South Carolina. The Abbeville Institute promotes the cultural inheritance of the American Southern tradition as "a valuable intellectual and spiritual resource for exposing and correcting the errors of American modernity," as opposed to "colleges and universities [which] have come to be dominated by the ideologies of multiculturalism and political correctness.

Abbeville Institute:
http://www.abbevilleinstitute.org

When America was thought of in the 1850s, it was mainly Southerners who came to mind: Washington, Jefferson, Madison, Monroe, Marshall, Jackson, Davy Crockett, Clay, and Calhoun. After the Civil War, America would be identified with Northerners: Lincoln, Webster, Adams, Grant, and Roosevelt. In short, what is called the Civil War was not a conservative act to preserve the Union, it was a violent revolutionary transformation from a federative polity of sovereign States (a kind of Switzerland writ large) into a would-be unitary state. This brought about a shift of political power from the States to the central government and a transformation of American identity.

Consequently, we have inherited two incompatible visions of America: a founding Jeffersonian America based on State and local sovereignty and a Lincolnian America based on centralized bureaucratic national sovereignty.

Flim Flam Goshdang Original Gorilla Lincoln makin' those negroes uppity. I tell you, my Granddaddy Jubal Earl IV fought the Yankees because he was against overpaying 2 dollars more for Ms. Earl's imported British Pink Parasols, not because he would lose 90% of his free farm labor on his 6000 acre Plantation.

Now I ain't sayin' that my Great Grandpoppy fought the Bluecoats for the Nigre, but Slavery is a Positive Good, just look at them rascals now, y'hear? Besides, if you ain't free to own free labor, what kind of freedom d'ye have? It's the Jeffersonian Ideal!

thunderlips11 says

From Tom Wood's Wikipedia Entry:

Woods is also an associate scholar of the Abbeville Institute, in McClellanville, South Carolina. The Abbeville Institute promotes the cultural inheritance of the American Southern tradition as "a valuable intellectual and spiritual resource for exposing and correcting the errors of American modernity," as opposed to "colleges and universities [which] have come to be dominated by the ideologies of multiculturalism and political correctness.

No dumb ass he comes from the Boston area and again is a Harvard graduate with a PhD from Columbia, in other words he is a lot smarter than you.

I don't know anything about the Abbeville Institute and it is a tangent to what I'm talking about. In general I would guess they are protesting the abuse of state rights.

indigenous says

No dumb ass he comes from the Boston area and again is a Harvard graduate with a PhD from Columbia, in other words he is a lot smarter than you.

Where did I say he was a Southerner? I don't know if he is or isn't. I did say he was a Confederate Sympathizer. You don't need to be from somewhere to sympathize.

indigenous says

I don't know anything about the Abbeville Institute and it is a tangent to what I'm talking about. In general I would guess they are protesting the abuse of state rights.

Like the Fugitive Slave Act?

thunderlips11 says

Like the Fugitive Slave Act?

I have heard him say before that slavery would have ended by itself if the government didn't enforce or use a bounty to keep slavery alive. You do know that Lincoln did not free any slaves, under his purview, by the emancipation proclamation?

Like I said his concern is with states rights, in other words the federal government is constitutionally subservient to the states not the other way around.

The Fugitive Slave Act said that if a human is property in Virginia, and goes to Vermont where humans cannot be property, Federal and Virginia officials can go up to Vermont and forcibly seize him, returning him to his "owners", in violation of Vermont Law.

AKA "My State's Laws, in your State, too!"

Upheld by the Supreme Court, then dominated by "Jeffersonian" Southerners who loved States' Rights.

BTW, it was pompous shit like that that riled the North. As well as the terrorist attacks of Plantation-Owner funded border ruffian Terrorists on civilian Kansas freehold small farmers. Arkansas assholes crossed into and terrorized Kansas, not Kansas free settlers into Arkansas.

If you read Journals and Papers from the South, you'll see that Southrons got more militant about keeping slavery as the 19th Century progressed. In Jefferson's day, many expected it to go away, but increased production and the need for slaves changed Southern Minds. The numbers of people in Slavery increased during the 19th Century, and specialty firms arose that bred slaves and sold them internally. Blackbird Smugglers continued to unload their cargo in Southern Ports generally unmolested by local authorities.

For Woods to say slavery was on the wane, it sure doesn't show up by the numbers of Slaves, which reached a peak just prior to the Civil War.

BTW why didn't Lincoln free the northern slaves as well?

Apparently they complied with that law as well?

I don't know about the other.

thunderlips11 says

. The numbers of people in Slavery increased during the 19th Century, and specialty firms arose that bred slaves and sold them internally

Don't know but tractors were being made at that time which would have reduced the need for slaves.

But in any case there would have been fewer slaves if the government didn't have a bounty for returning them.

Says the mutt who claims his graph splains everything.

He talks about too many protections which emboldens banks to take more risks this escalated a lot since the 90s.

He said the biggest reason for the failures in 2008 was that banks had to get permission to merge with other banks in the 90s. They had to prove that they were good citizens to the Fed. They did this by giving money to community groups to testify that you were good citizens. Total money given to these groups was about 2.5 TRILLION Dollars in about 20 yr.

The low income people were not the cause of the crises but Fannie and Freddy could not lower the standards for only subprimes but for everyone.

He talks about this at about 20 minutes of the talk.

http://fragilebydesign.com/

Yup willful ignorance I tell you...

bgamall4 says

You tell me how the subprime lending affected the housing market.

Because the same standards that were used with the subprimes had to be used legally with all the loans so the standards were brought down across the board.

This because of the political nature of banking and the regulators and public interest organizations, who received a total of 2.5 trillion from the banks.

Fuck off, willful ignorance...

"Given how thoroughly the “CRA caused everything” meme has been debunked, you have to wonder why some poor souls are still pushing this discredited political talking point (other than as linkbait).

In reality, the precise opposite of what a CRA-induced collapse should have looked like is what occurred. The 345 mortgage brokers that imploded were non-banks, not covered by the CRA legislation. The vast majority of CRA covered banks are actually healthy.

The biggest foreclosure areas aren’t Harlem or Chicago’s South side or DC slums or inner city Philly; Rather, it hs been non-CRA regions — the Sand States — such as southern California, Las Vegas, Arizona, and South Florida. The closest thing to an inner city foreclosure story is Detroit – and maybe the bankruptcy of GM and Chrysler actually had something to do with that."

http://www.ritholtz.com/blog/2009/06/cra-thought-experiment/

Blurtman says

In reality, the precise opposite of what a CRA-induced collapse should have looked like is what occurred. The 345 mortgage brokers that imploded were non-banks, not covered by the CRA legislation. The vast majority of CRA covered banks are actually healthy.

No because the standards were changed across the board.

Just go to 20 min into the lecture where he says "the most important influence"

bgamall4 says

Standards were changed when a law was passed in the Reagan administration, marching lockstep with Thatcherism, that allowed liar loans. It was not applied until after Reagan died. I wish he had lived to see the havoc it caused.

citation?

Blurtman says

In reality, the precise opposite of what a CRA-induced collapse should have looked like is what occurred. The 345 mortgage brokers that imploded were non-banks, not covered by the CRA legislation. The vast majority of CRA covered banks are actually healthy.

Indignant doesn't believe in "facts" like the results of fully documented careful research. He only believes in "facts" of the he said she said variety. The video makes the totally unsupported supposition that the CRA caused the crash. That's the only "fact" that matters.

The selling of fraudulent securities and the fraudulent ratings of those securities and the music finally stopping caused the crash. Remember investors were buying these things before they were populated by any mortgages whatsoever, chasing what appeared to be a higher yield than equally risk-free and lower yielding alternatives.

bgamall4 says

Alternative Mortgage Transactions Parity Act of 1982

Nope that is not it, they claim that and a bullshit reason.

The reason people defaulted wast they got loans they were not qualified for as explained in the mp3 I linked

bob2356 says

The video makes the totally unsupported supposition that the CRA caused the crash.

Not that you listened to it...

bgamall4 says

The point is, that law allowed non traditional mortgages, which means a Republican president made it possible for non traditional mortgages like liar loans to be offered.

The problem was simply what I said the banks don't care if they can pass the paper to Freddie or Fanny, but they are not going to loan money if they cannot be paid back.

Sirs,

I met some people from Long Beach saving and loans, and also who got loans from Countrywide. There was one mortgage agent who I met who was stressed about the lack of ethics in Southern California mortgage markets. It was like a "Dont Ask Dont Tell" for mortgages.

My gardener who overpaid for a Condo told me his story, and I had to pay his father because of a deal he got with Hamp or Harp.

Whether people used the FHA to get a CRA loan from the government, or if they got it from Countrywide, the adverts for Cwide and LBSL read like the CRA manifesto for easy access to loans. This CRA easy money spirit was blessed by FHA and likely (due to a know visit to FHA by one Mozillo) suggested judging by the adds that ran for Countrywide in 2005/2006.

And, whether the NINJA or other Malinvesting loan was of the FHA/CRA/Private label, the government backed these loans into the tranches of the now well known MBS's.

"mutts"? who is this person??

anyhoo, what was central to the meltdown in '08 was this:

annual home mortgage credit expansion.

That $100B/month of new credit lending was a feedback loop that funded millions and million of jobs.

Not just real estate ladies and home improvement jobs, but all the jobs THEY supported, and all the jobs this second tier supported, plus all the home-equity borrowing that bought just about anything, until all this hot money eventually left the paycheck economy, as it does.

CRA wasn't about suicide lending, it was supposed to just enable people with subpar credit get loans too.

What fueled the trillion-dollar run-up was speculative fever -- people getting into homes at any cost because the prices were going up so it was a sure thing.

CRA had nothing to do with negative-amortization, liar loans, and all the other Alt-A crap (all now explicitly banned by reform legislation) that required actual good credit scores to get.

Another factor in the run-up was the introduction of 80-20% financing and teaser rates. Operators like Wamu and CFC could sell the 80% piece to the GSEs while floating the 20% on Wall Street via their sophisticated financial engineering, cutting up the 20% part into derivatives that were mostly rated AAA since they weren't in first-loss position.

All this loosening up of credit just fueled price appreciation, since when you make something in such limited supply as housing more affordable, all that does is raise the price.

(Home buying is one of the few purchasing events in our life when we generally have to directly bid against other buyers, yet nobody understands this basic dynamic for some reason!)

The crash came when all the suicide lending products -- loans that weren't able to be repaid without recapitalizing them -- started blowing up in 2007. Price appreciation had stopped in 2006, preventing the last round of specuvestors from cashing out, and there was a multi-trillion bolus of bad debt in the system, just waiting to collapse.

And collapse we did. The entire economy of 2004-2007 was a Potemkin Village, but the GOP's gotta blame the blacks, because that's who they are.

You are describing the effect not the cause.

What I find interesting about this is that it is just the tyranny of the majority in action. IOW 2.5 trillion will buy the majority when it comes to lending. The minutiae is not the cause.

APOCALYPSEFUCKisShostikovitch says

Exactly

Then there are those nasty facts about 17 banking crisess to Canada's ZERO.

Or the 2.5 trillion spent to those community groups on board.

To pretend this is not incestuous and wink wink nod nod is truly fabulist.

indigenous says

bob2356 says

The video makes the totally unsupported supposition that the CRA caused the crash.

Not that you listened to it...

That's how I found out it was totally unsupported.

The cause wasn't CRA – it was capitalism's usual fatal flaw, the unregulated market offering profit opportunities of externalities, sticking someone else with the cost while you get the profit.

http://www.huffingtonpost.com/william-k-black/the-two-documents-everyon_b_169813.html

Of the chain -- the liar-loan borrower, the mortgage broker getting paid to close the loan regardless of what rules he bent, the internal underwriters and auditors pressured to look the other away, same with the appraisers getting paid to go along, Wall Street of course totally uninterested in anything other than their billion-dollar take, the ratings agencies getting paid too, the regulators interested in free market laissez faire more than keeping the system honest.

The only people hurt by this systemic control fraud was the people buying the misrated bonds, and the taxpayers on the hook thanks to the Bush bailouts

http://money.usnews.com/money/blogs/capital-commerce/2008/11/20/the-terrible-scare-story-hank-paulson-told-congress

The initials C R A are really nowhere to be found, but because the 2001-2008 era was a conservative experiment, conservatives have to find a scapegoat to explain away their ideological -- faith in the unregulated free market -- failure, they find the black guy in the picture to pin the blame on him.

http://www.ritholtz.com/blog/2011/07/why-wallison-is-wrong-about-the-genesis-of-the-u-s-housing-crisis/

bob2356 says

That's how I found out it was totally unsupported.

The book is foot noted to death with citations galore. WTF are you talking about.

I will say you are the only mutt who actually listened to the tape, so a tip of the hat to you.

Bellingham Bill says

The cause wasn't CRA – it was capitalism's usual fatal flaw, the unregulated market offering profit opportunities of externalities, sticking someone else with the cost while you get the profit.

Yup that is the crap that is typically said about this and it is wrong.

The only thing that was REALLY WRONG was bailing out the TBTFs

Another thing too, was the run-up of 2004-2006:

(more than doubling in some areas)

was not just an "effect" but a "cause" -- driver -- of the boom/bust too.

The early gains of 2001-2003 attracted the multitudes, people getting in the market and buying because it was going up.

That's bubble market behavior. It's the same anywhere; it's what markets do.

http://en.wikipedia.org/wiki/Extraordinary_Popular_Delusions_and_the_Madness_of_Crowds

And unlike stock appreciation, this across-the-board rise in valuations enriched half or more of the economy, anyone who had title, mortgaged or not, to real property.

Feedback city.

Still effect, the cause was what I'm talking about.

APOCALYPSEFUCKisShostikovitch says

There was a CRA manifesto?

Can you send a citation that we can review? I was unaware that the CRA had been reduced to a propaganda vehicle with the power to reforge the underwriting protocols for mortgages in every assessment area in America by every bank and non-bank lender.

This will be a revelation to a number of correspondents in industry and regulatory affairs.

See the following:

http://www.prnewswire.com/news-releases/countrywide-expands-commitment-to-1-trillion-in-home-loans-to-minority-and-lower-income-borrowers-54027497.html

Moz made a trip to FHA, they met. The FHA leader would later worke at Countrywide.