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Incentives to increase employment of Americans by companies.
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2011 Apr 6, 6:06pm 8,656 views 76 comments
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Fed doesn't set mortgage rates.
It sets caps interest rate on savings through setting overnight rate. The artificially low interest rate on savings was the reason why money flooded into the mortgage securitization.
What do you mean by facilitating? They let the free market do what it wanted.
Not in the field of money. The interest rate on savings is capped, and the deposits are insured, and the mortgages were securitized by government sponsored agencies. In other words, the government was giving out free money to companies that would shuffle savings to mortgage (i.e. banks) without much reduced risk than a free market would have.
You've GOT to be kidding. You think private industry wanted higher accounting standards??? Please provide evidence if you have it.
FASB proposed rules that were suppressed by the government.
Well, it would have been nice if they had actually used the powers they had during the early 2000s. And getting Glass Steagall back on the books would certainly have helped, don't you think?
It would have been nice if Stalin and Hitler had used their dictatorial powers for good. LOL
Bringing Glass-Steagall back is essentially shutting the door after the horse has already left the barn.
Captains in the industry?? Stop it. Please.
Why would the captains of the monopoly on violence be any better?
At least with private vendors, if you don't like them, you can shop elsewhere.
tatupu70
2011 Aug 12, 4:01am
It sets caps interest rate on savings through setting overnight rate. The artificially low interest rate on savings was the reason why money flooded into the mortgage securitization.
Wrong. You could have had savings rates 10X what they were and it wouldn't have mattered. Mortgage securitization paid exponentially higher returns while they lasted. The risk adjusted rates were not that high, of course, but nobody understood or, perhaps, cared.
Not in the field of money. The interest rate on savings is capped, and the deposits are insured, and the mortgages were securitized by government sponsored agencies
Who caps savings rates? And I'm assuming you are referring to Freddie and Fannie with your last line there. It's been proven that they were very late to the game and were followers. The securitization was well under way before they decided to play.
Bringing Glass-Steagall back is essentially shutting the door after the horse has already left the barn.
That why I said it would have been good to have had it on the books then. But, we need it now too. Who's to say this couldn't happen again? The Free Market got a taste of money--it will try again.
Â¥
2011 Aug 12, 4:03am
" What caused the bubble and bust was regulations making taxpayers into the patsy on the hook for losses."
More bullshit. There were no losses during the bubble. Again, you're totally and intentionally ignoring the obvious agency problem that exists in private enterprise -- the industry people making milions 2002-2006 didn't need to care what happened 2007-now.
Granted, the casino-like business environment was heightened by existing regulations like non-recourse loans that shifted risk from borrower to the system.
"The entire under water amount on all real estate in this country in 2008 did not amount to $16 trillion. The overwhelming majority of underwater homeowners were still paying back on schedule then"
2008 was just the culmination of unsustainable lending cycle. I was looking at the graphs of the IO and reset/recast schedules and could see the train coming, and was telling everyone to GTFO the market.
http://www.calculatedriskblog.com/2007/10/imf-mortgage-reset-chart.html
"At least with private vendors, if you don't like them, you can shop elsewhere."
aha aha ahah aha aha.
Oh man, there's nothing more entertaining that a right-wing ideologue in the morning.
"and the mortgages were securitized by government sponsored agencies"
No, the feature of the bubble times was the GSEs *losing* market share to private label issuers.
http://www.ritholtz.com/blog/2011/02/fannie-freddie-market-share/
"That" meaning the job offerings available in the mortgage financing industry during the bubble. If even a $30-50/hr couldn't compete against "that," how could just about any manufacturing job. Those job openings were not 3-month only. They were year-round. The particular workers/staffers were still in college getting their BBA degrees; in other words, 19-20yr old kids without even a college degree! I
A straight story would be nice. It's 3 months a year, then full time not 3 months. It's B school students (B school is business school aka mba which is graduate level work), then it's 19-20 year olds without without a college degree. So you are saying these 19-20 year olds were abandoning your 100k a year job that may have been year round or may have been 3 months, whatever that mysterious job might have been, and walking in cold, with no back round or experience to the "mortgage financing industry" what ever that means and doing better than 100k out of the box. I stand by my first statement. BS. This doesn't wash. I would be willing to bet there were NO 19-20 year olds making 50+ per hour in the mortgage industry even at the peak. What were some of the job titles for these entry level jobs paying 50+ per hour?
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I may be naive here, but couldn't there be special tax incentives put in place, but for companies showing a net increase in hiring this year. It has been shown on other posts that companies are flush with cashm but are hesitating to hire new workers. Perhaps a major tax write off for the companies increasing US staff by hiring ... (I need to think this though...)