patrick.net

Reality says

The 1980 Depository Institutions Deregulation Act was the center piece of
banking deregulation and how banking deregulation got underway. The 1982 "An Act
to revitalize the housing industry by strengthening the financial stability of
home mortgage lending institutions and ensuring the availability of home
mortgage loans" was only a minor adjustment.

Gain St. Germain deregulated thrifts and allowed adjustable rate loans. It also allowed S&Ls to offer money market accounts and interest bearing checking/savings accounts. S&Ls were permitted to increase commerical and consumer loans, (higher risk, higher yield) vs. historically mortgage-only, fixed rate loans.

In short, it allowed S&Ls a vehicle to better comepte with commercial banks, who benefitted most from the Depository Institutions Deregulation and Monetary Control Act.

Since it was targeted to S&Ls - and S&L's are what failed - I would say it was a fair bit more than "minor adjustment."

tatupu70 says

I know in your cult that everything is caused by either the Federal Government or the Federal Reserve, but in reality, that's not the case. In the housing bubble, for instance, the main cause was abandonment of underwriting standards. Interest rates had very little influence on those standards.

The government and the FED were very much behind the lowering of underwriting standards. Both encouraged the lowering underwriting standards, by:

1. setting precedence for bailouts when loans go bad on a massive scale;

2. all sorts of regulations and government entities to encourage loans to uncredit-worthy borrowers. This is actually on-going.

3. lawmakers suspending FASB accounting rules.

A very good argument can and has been made that it was too little government intervention that caused the issues, not too much...

You are such an idiot still wedded to the idea that "government" is like a God should/could have prevented everything. Did you not realize how vehemently the Congressional members reacted in 1996 when Greenspan merely mentioned "irrational exuberance"? Do you not wonder why crooks like Angelo Mozello still walk free outside of jails? That's how your beloved god government works.

control point says

Gain St. Germain deregulated thrifts and allowed adjustable rate loans. It also allowed S&Ls to offer money market accounts and interest bearing checking/savings accounts. S&Ls were permitted to increase commerical and consumer loans, (higher risk, higher yield) vs. historically mortgage-only, fixed rate loans.

In short, it allowed S&Ls a vehicle to better comepte with commercial banks, who benefitted most from the Depository Institutions Deregulation and Monetary Control Act.

Since it was targeted to S&Ls - and S&L's are what failed - I would say it was a fair bit more than "minor adjustment."

No. The 1980's Act allowed banks into what had previously been S&L space. The 1982 Act was a corollary act balancing the previous act. It's the banks moving into S&L's previously protected space that eventually led to the S&L bust due to competitive pressure.

Obligatory:

It's all Obama's fault!!!

WOW! The UNtrustworthy are certainly in control of what information is apparent to the people!

Say hey! This was in the Wall Street Journal on March 30, 1999. Note "... how much it will buy."

Holy cow/interesting/compelling ...!

And where is it up to date??? Right here ... see the first chart shown in this thread.
Recent Dow day is Monday, February 3, 2014 __ Level is 98.5

WOW! It is hideous that this is hidden! Is there any such "Homes, Inflation Adjusted"? Yes! This was in the New York Times on August 27, 2006:

And up to date (by me) is here:
http://patrick.net/?p=1219038&c=999083#comment-999083

WOW! The UNtrustworthy are certainly in control of what information is apparent to the people!

And http://patrick.net/?p=1230886

Reality says

tatupu70 says

Reality says

You prefer bailouts over letting free market eliminate the incompetents

No, I don't. I prefer that mismanaged companies go bankrupt. Not sure what is so difficult for you to understand.

You are acting like a drug addict in denial. Preference is meaningless in isolation. When presented with a choice of between:

1. letting those mismanaged companies go bankrupt in an economic down turns;

2. letting government bail them out;

You consistently chose to bail them out. Big businesses mostly only go down in economic hard times. Your theorectical "preference" when they are not going out of business is utterly meaningless.

Agreed. I am not hot and fuzzy for businesses that get special deals and such, but compared to the bailed out billion dollar bonus banking cabal running around telling you to go fuck yourself because they are doing the heavenly work and this is why they are richer than you assfuck, and compared to realtors gloating again over selling third-world shit-shacks at super-inflated prices to the gullible American debtor slaves while playing them like violins against the mighty firepower of billionaire chindians in one of the most corrupt and useless "industries" (scams), any producing business (even wal-mart) should be fucking sanctified. Now go and keep on raising taxes on assholes making 200K and more!

Reality says

You are acting like a drug addict in denial. Preference is meaningless in isolation. When presented with a choice of between:

1. letting those mismanaged companies go bankrupt in an economic down turns;

2. letting government bail them out;

You consistently chose to bail them out. Big businesses mostly only go down in economic hard times. Your theorectical "preference" when they are not going out of business is utterly meaningless.

No--I really don't. 999 times out of 1000 I choose to let them fail. Probably more like 9999 times out of 10,000.

Where did you get that I consistently choose to bail them out??

Reality says

Of course taxes do: many companies are delaying hiring or even un-hiring existing workers and cutting back their hours in order to cope with Obamacare, which is a form of tax according to SCOTUS. On top of that, corporate spending and consumer spending are also negatively affected by taxes, reducing demand.

Companies blame Obamacare for political reasons.

You're correct about consumer spending, but that's not what we're talking about. You said companies hire based on their corporate tax rate.

Reality says

You are! You are for forcible bailout of big corporations at taxpayer expense. You are for raising taxes. You are for banning low-productivity workers from working. You are against the freedom and liberty of individuals, especially those barely transitioning from non-working to working.

You can keep saying this, but you're still wrong.

Reality says

The government and the FED were very much behind the lowering of underwriting standards. Both encouraged the lowering underwriting standards, by:

1. setting precedence for bailouts when loans go bad on a massive scale;

2. all sorts of regulations and government entities to encourage loans to uncredit-worthy borrowers. This is actually on-going.

3. lawmakers suspending FASB accounting rules.

Come on--you're smarter than this.

1. Please show me the details on the precedence. I'm assuming it happened BEFORE the underwriting standards were abandoned--otherwise, it can't be a cause, right?

2. I hope you're not going down the CRA road. It has been clearly shown that the GSEs were late to the game and NOT the cause of the poor underwriting.

3. Again--when did lawmakers suspend FASB accounting rules? I'm pretty sure it was AFTER the crash so not sure how that caused the bubble. Unless bankers are psychic...

Reality says

You are such an idiot still wedded to the idea that "government" is like a God should/could have prevented everything. Did you not realize how vehemently the Congressional members reacted in 1996 when Greenspan merely mentioned "irrational exuberance"? Do you not wonder why crooks like Angelo Mozello still walk free outside of jails? That's how your beloved god government works.

Why do you keep building up these strawmen?? How about you let me post what I think, and then you can tell me what YOU think. All you've done today is try to tell me what I believe/think. Thanks for the effort, but I'm well aware of my own opinions.

They will all move to the Bay Area and drive up housing even more.

Bulls make money, bears make money, pigs get slaughtered. Carry on.

sbh says

Looks like RFHTC gets a blowjob! Oh, oh no, that was last week's bet. Doggonit, that was so close.

Money lost is money lost. Last week or this week. The bet is still about everyone having to sit down at the table of consequences. Since 2008 there hasn't been one policy or plan that I have seen that has tried to address the credit bubble problem. Now as they remove the bogus training wheels on the economy we are again faced with the same issues. Good luck to us all. Down is the new Up in the market. There is only one way to play this and that is all cash and shorts. Bonds are stocks are dead money finally. Anyone that thinks different is going to lose their shirts. Enough said.

bgamall4 says

So, zzyzzx, what is the point of the picture of the black kids?

Really? You don't get it? Well, with all the conspiracy theories that you buy into - it doesn't surprise me. I'd explain it to you but it would take too long.

Who needs a job when your SFBA house functions as an ATM machine. Why anyone would want to work for Dell is beyond me anyway.

Once upon a time the promise was, a large chunk of the middle class would be flush with well-paid Tech Jobs. That dream is dead.

Linking/cross-blogging the TBF? The place where end-times, paranoia, and general doom and gloom is dished out many times a day and tries to pass it off as rational thoughts or logical conclusions while making money off of people with legitimate fears and concerns?

I know, just wait till tomorrow, the predictions will happen someday. Has he EVER been right about anything? Never mind, I don't care enough to want to know.

tatupu70 says

Reality says

You are acting like a drug addict in denial. Preference is meaningless in isolation. When presented with a choice of between:

1. letting those mismanaged companies go bankrupt in an economic down turns;

2. letting government bail them out;

You consistently chose to bail them out. Big businesses mostly only go down in economic hard times. Your theorectical "preference" when they are not going out of business is utterly meaningless.

No--I really don't. 999 times out of 1000 I choose to let them fail. Probably more like 9999 times out of 10,000.

Where did you get that I consistently choose to bail them out??

Were you against bailing out AIG? Were you against bailing out GM? Were you against bailing out Citi? Were you against bailout BoA? There are not 40,000 large corporations like those in the whole world for you to make that nonsense 99.99% claim. You are just for the bailing out of the top 0.01% at the expense of the other 99.99%.

tatupu70 says

Reality says

Of course taxes do: many companies are delaying hiring or even un-hiring existing workers and cutting back their hours in order to cope with Obamacare, which is a form of tax according to SCOTUS. On top of that, corporate spending and consumer spending are also negatively affected by taxes, reducing demand.

Companies blame Obamacare for political reasons.

You're correct about consumer spending, but that's not what we're talking about. You said companies hire based on their corporate tax rate.

I did not say corporate tax rate only. Stop crying to create strawman and sidetrack the debate. Taxes get in the way of doing business, regardless what type of tax. No, companies don't just blame Obamacare for political reasons. They are cutting back hours in order to comply with Obamacare mandates.

tatupu70 says

Reality says

You are! You are for forcible bailout of big corporations at taxpayer expense. You are for raising taxes. You are for banning low-productivity workers from working. You are against the freedom and liberty of individuals, especially those barely transitioning from non-working to working.

You can keep saying this, but you're still wrong.

I'm correct. You are just in denial.

tatupu70 says

The government and the FED were very much behind the lowering of underwriting standards. Both encouraged the lowering underwriting standards, by:

1. setting precedence for bailouts when loans go bad on a massive scale;

2. all sorts of regulations and government entities to encourage loans to uncredit-worthy borrowers. This is actually on-going.

3. lawmakers suspending FASB accounting rules.

Come on--you're smarter than this.

1. Please show me the details on the precedence. I'm assuming it happened BEFORE the underwriting standards were abandoned--otherwise, it can't be a cause, right?

The bailout of banks in the early 90's after loans to 3rd world countries went bad. The bailout of banks lending to LTCM when LTCM leveraged bets went bad. The bailout of banks lending to tech companies after the tech bubble burst. Just to name a few in the decade immediately preceding the housing bubble.

tatupu70 says

2. I hope you're not going down the CRA road. It has been clearly shown that the GSEs were late to the game and NOT the cause of the poor underwriting.

CRA was mandating the kind of lending that not even the GSE would accept until the very end. Then near the very end, even the GSE's were pressured by politicians into becoming the dumping ground for the bad loans. GSE's are still underwriting bad loans with parameters predicting high default rate to this day!

tatupu70 says

3. Again--when did lawmakers suspend FASB accounting rules? I'm pretty sure it was AFTER the crash so not sure how that caused the bubble. Unless bankers are psychic...

The suspension of accounting rules is causing the bubble right now!

tatupu70 says

Reality says

You are such an idiot still wedded to the idea that "government" is like a God should/could have prevented everything. Did you not realize how vehemently the Congressional members reacted in 1996 when Greenspan merely mentioned "irrational exuberance"? Do you not wonder why crooks like Angelo Mozello still walk free outside of jails? That's how your beloved god government works.

Why do you keep building up these strawmen?? How about you let me post what I think, and then you can tell me what YOU think. All you've done today is try to tell me what I believe/think. Thanks for the effort, but I'm well aware of my own opinions.

You show what you believe/think in your own writing. I was responding to the following specific quote from you:

"A very good argument can and has been made that it was too little government intervention that caused the issues, not too much..."

The assumption in your statement was of course that too little of the CORRECT KIND of government intervention. The fact of the matter was that there was plenty government intervention: the WRONG KIND. I proceeded to show you two blatant examples of WRONG KIND of government intervention. It's a folly to assume that the government officials would know what the CORRECT KIND of government intervention in the market is before consequences are known. They are far more likely to make the WRONG KIND of interventions.

They'll be back once the world realizes nothing productive can take place on a screen or keyboard smaller than a laptop. The notebook is close but still has too many limitations over the laptop...

Call it Crazy says

Looking for a crash of the stock market??? Here it is. Just captured this image (2/3/14) at 11:18 PM EST from Bloomberg...

That's not a crash:

THIS is a crash!:

Call it Crazy says

WARPED, DISTORTED, MANIPULATED, FLIPPED HOUSING MARKET

or simply investors and savers wisely buying after clear signs of a bottom.

stocks go up and down everyday..

Like this?

bgamall4 says

We are in a mortgage depression.

prodigy says

Like this?

bgamall4 says

We are in a mortgage depression.

Yep! More like prices are going to CRATER!

jesus! this blog is a useless toilet of nonsense and idiots now
i will not donate money again to patrick.
zionists and truther bullshit doesnt get u banned? FUK U PATRICK!

sbh says

RentingForHalfTheCost says

The bet is still about

No, if the bet is paid in blowjobs you have to state an absolute level of price at an absolute time, otherwise you're just jackin' your jaw like the talking heads on CNBC. So, are you feeling lucky? There's four trading days left. Don't you want to feel the duck's lips?

Down day coming again. Looks to me like you are the one that needs to sit there and take your medicine.

http://money.cnn.com/2014/02/03/investing/world-markets/index.html?iid=Lead

Reality says

Were you against bailing out AIG? Were you against bailing out GM? Were you against bailing out Citi? Were you against bailout BoA? There are not 40,000 large corporations like those in the whole world for you to make that nonsense 99.99% claim. You are just for the bailing out of the top 0.01% at the expense of the other 99.99%.

I don't know--I wasn't close enough to the situation at that time to know what the consequences would have been if they were allowed to fail. What I will say is that I would make it impossible for any company to grow to a size where they are TBTF, so there would never be any question about letting even the biggest company fail. They should all be allowed to fail.

Reality says

The bailout of banks in the early 90's after loans to 3rd world countries went bad. The bailout of banks lending to LTCM when LTCM leveraged bets went bad. The bailout of banks lending to tech companies after the tech bubble burst. Just to name a few in the decade immediately preceding the housing bubble.

How did that work out for Lehman? Bear Stearns? Or IndyBank? The whole moral hazard argument just doesn't fly with me. The banks lost HUGE when the bubble burst.

Basically your saying it's moral hazard because the government allowed the banks to lose 90% of their assets, but saved them from losing 100% by LOANING me money that they will have to pay back with interest. Wow--that kind of guarantee would certainly persuade me to make riskier loans. My downside is limited to 90% loss + loans for the last 10% loss.

Reality says

CRA was mandating the kind of lending that not even the GSE would accept until the very end. Then near the very end, even the GSE's were pressured by politicians into becoming the dumping ground for the bad loans. GSE's are still underwriting bad loans with parameters predicting high default rate to this day!

Actually, according to some sources, CRA loans failed at a rate lower than the average loan after the bubble burst. So CRA actualy lessened the impact.

Yes, GSEs got into the game late like you say above. They had a mandate to loan money and they couldn't because private industry was giving away money with no standards. They adjusted so they could keep up.

Reality says

The suspension of accounting rules is causing the bubble right now!

Where is there a bubble now? Certainly not nationwide.

Reality says

The assumption in your statement was of course that too little of the CORRECT KIND of government intervention

Yes, I think that is obvious.Reality says

The fact of the matter was that there was plenty government intervention: the WRONG KIND. I proceeded to show you two blatant examples of WRONG KIND of government intervention. It's a folly to assume that the government officials would know what the CORRECT KIND of government intervention in the market is before consequences are known. They are far more likely to make the WRONG KIND of interventions.

No, actually CRA was a good kind as I just told you. CRA loans did NOT cause nor even contribute to the bubble.

As to whether government knows the CORRECT KIND of intervention--it depends on who you elect. The people I vote for know the correct types of regulation--I suspect the same cannot be said of you.

tatupu70 says

Reality says

Were you against bailing out AIG? Were you against bailing out GM? Were you against bailing out Citi? Were you against bailout BoA? There are not 40,000 large corporations like those in the whole world for you to make that nonsense 99.99% claim. You are just for the bailing out of the top 0.01% at the expense of the other 99.99%.

I don't know--I wasn't close enough to the situation at that time to know what the consequences would have been if they were allowed to fail. What I will say is that I would make it impossible for any company to grow to a size where they are TBTF, so there would never be any question about letting even the biggest company fail. They should all be allowed to fail.

Thank you for dodging the question. The question was not what you'd prefer if you were the creator of the universe from the beginning, but were you against the bailing out of AIG? Were you against the bailing out of GM? Were you against the bailing out of the big banks? No, you were advocating/apologizing for the bailing out of every single one of them!

If you want the TBTF to shrink in size, the simplest solution is STOP THE BAILOUTS. As soon as the bailouts stop, there would be market incentive to break up the unwieldy TBTF. Right now, it is the faithfulness of idiots in the myth of TBTF that is keeping the TBTF as big as TBTF.

He with sick avatar should not hurl pebbles.

PockyClipsNow says

jesus! this blog is a useless toilet of nonsense and idiots now

i will not donate money again to patrick.

zionists and truther bullshit doesnt get u banned? FUK U PATRICK!

when did I ever state that I'm in favor of forciby keeping undeserving businesses in business? I most definitely am not. I hated the bailouts. Or more appropriately--I hated that the bailouts were necessary.

One bad assumption will surely gimmie your whole (faulty) premise. The bailouts were not necessary, so now how do you rationalize them.

Reality says

Thank you for dodging the question. The question was not what you'd prefer if you were the creator of the universe from the beginning, but were you against the bailing out of AIG? Were you against the bailing out of GM? Were you against the bailing out of the big banks? No, you were advocating/apologizing for the bailing out of every single one of them!

You don't read very well, do you? Let me repost my direct answer.

tatupu70 says

I don't know--I wasn't close enough to the situation at that time to know what the consequences would have been if they were allowed to fail.

Reality says

If you want the TBTF to shrink in size, the simplest solution is STOP THE BAILOUTS. As soon as the bailouts stop, there would be market incentive to break up the unwieldy TBTF. Right now, it is the faithfulness of idiots in the myth of TBTF that is keeping the TBTF as big as TBTF.

That is just ridiculous. Bailouts have nothing to do with the incentive for banks to branch out into other areas of finance.

errc says

The bailouts were not necessary, so now how do you rationalize them.

I'm assuming you are writing that to me. And my answer is--how the hell do you know if they were necessary??

tatupu70 says

Reality says

The bailout of banks in the early 90's after loans to 3rd world countries went bad. The bailout of banks lending to LTCM when LTCM leveraged bets went bad. The bailout of banks lending to tech companies after the tech bubble burst. Just to name a few in the decade immediately preceding the housing bubble.

How did that work out for Lehman? Bear Stearns? Or IndyBank? The whole moral hazard argument just doesn't fly with me. The banks lost HUGE when the bubble burst.

It worked out very well for the financial engineers at Lehman, Bear and IndyBank: they went on working for different banks that were "bailed out" and reaped huge bonuses at taxpayer expense. "Banks" don't make decisions; Banksters do!

Basically your saying it's moral hazard because the government allowed the banks to lose 90% of their assets, but saved them from losing 100% by LOANING me money that they will have to pay back with interest. Wow--that kind of guarantee would certainly persuade me to make riskier loans. My downside is limited to 90% loss + loans for the last 10% loss.

No. Your thick skull is still not wrapping around how "bailouts" worked:

1. Neither Goldman nor AIG had $80 Billion cash asset sitting around. When they entered a $80 billion bet, there was 100% certainty that one of them would lose the bet, yet in the absence of government bailouts, that would be a non-enforceable contract. Yet, with government bailouts, the taxpayers are forced to pay the two of them $80 Billion! It doesn't really matter which one of them gets bailed out and which employees work for which company. It's as if the two of us bet $100 Million on the next coin flip when each one of us is worth only $1Mil. With government bailout to fulfill the contract, it is a guarantee that the two of us will make $98Million from the fraud even if one of us will be nominally cleaned out; we can split the $98Mil regardless who loses the $1Mil nominally.

2. With Indymac, the fraud is in pre-selling the bonuses. The bank employees loaned depositors' money to uncreditworthy borrowers (essentially throwing the money out of the window), then collected bonuses on the loans generated / money thrown away. Any wonder why the American work force has lost work ethics but pine for the next get rich quick scheme?