So they not only fail to lead, they fail to look like they are leading. Clowns on all sides.
George W. Bush is completely out of juice, having squandered his influence with Republicans as well as Democrats. Treasury Secretary Henry Paulson is a smart moneyman, but an inept legislator. He was told time and time again that House Republicans would not support his bill, and his response was to get down on bended knee before House Speaker Nancy Pelosi.
House leaders of both parties got wrapped up in their own negotiations, but did it occur to any of them that it might be hard to pass a bill fairly described as a bailout to Wall Street? Was the media darling Barney Frank too busy to notice the 95 Democrats who opposed his bill? Pelosi’s fiery speech at the crucial moment didn’t actually kill this bill, but did she have to act like a Democratic fund-raiser at the most important moment of her career?
And let us recognize above all the 228 who voted no — the authors of this revolt of the nihilists...
Posts
157 comments:
Our leaders have projected that they are worried about their political image and shown themselves to be clowns. And its just jarring to actually see the truth, how pathetic the political leadership has become.
Pelosi's speech was fairly tame. It's a false meme that it was overly partisan.
Anyway, I think its time for a grownup in Washington. Only Obama fits that bill. I'll take his tax hike if it means I get to keep my job and the stock market starts going up again.
Bush doesn't done anything about inarticulateness in eight years.
It's claimed that he's great in person, by various people feeling an urge to mention the difference.
I think he talks down to the public in public, which somebody has to tell him is criminally ineffective.
So now that the science is in on McPalin; the meme starting is both candidates are bad now. Almost the same even. No difference!
Our elite NYT columnist, laughably described by the left as "conservative," has failed utterly and catastrophically to project any sense of knowledge or understanding of the outside NY and Beltway real world.
Why does anyone bother to read him? Even to comment on what he foolishly has said today?
They haven't even bothered to try to explain why this is necessary beyond a few extremely vague, devoid of facts or evidence assertions of impending doom. And the doom just doesn't seem to be happening.
They haven't tried to explain to us why people who made fake millions should continue to make fake millions off of our backs.
Seems to me like the market needs rectifying and the sooner the better. I think it's more likely that the incompetents that created this mess (both the politicians and the money grubbers on Wall Street) are just as wrong now as they were when they made the decisions that got us in this mess. Further meddling by these people will only make things worse.
It's been Bush's hallmark that he never seems to feel a need to convince anyone of the rightness of his plans. It seems the congress has adopted this trait of his.
Brooks is a Republican supporter dumping on Repubs. Such people always dump on Dems at the same time. It's always been thus.
Barney Frank watered down provisions Dems wanted to bring Repubs on board. But Repubs couldn't deliver votes.
The idea that Pelosi was supposed to be mum after Republicans have been running around for weeks scapegoating minorities and housing policies is obnoxious. Another simple repeat of the "Republicans [and their policies, apparently] should never be criticized meme" used with Palin.
Laissez faire economics failed. Again. We need to deal with this, not practice denial.
Those who voted against the monstrosity, most of them anyway, are not only not nihilists, they are trying to save America from our utterly corrupt ruling caste. No wonder Brooks is the progressive's house conservative.
The stock market is up +228.75. Don't change anything, just get out of the way.
While I don't often agree with Brooks, I think he has it right. Blame enough to go around IMO, starting with President Bush. President Bush has failed to articulate the impact of the liquidity crisis to the American people. "The sky is falling" doesnt get it. It appears he also surrendered leadership to Bernanke and Paulson. Even by lame duck standards, not a good show.
The Congressional leaders, on both sides of the aisle, and particularly in the House, failed in both leadership (arm twisting) and parliamentary ability (counting votes). The Senate was partially spared only because the bill didn't get there.
You cannot have leadership and partisanship. Leaders do not blame others, they accept blame and find solutions. Something our politicians are not very good at; especially when campaign contributions are at stake during an election season.
To the extent Brooks is saying no more than that the House acted unwisely - fair enough. I think the most jarring thing is the way that some people are piling on the House as though it had no right to stop this bill - preposterously labeling it a coup d'etat or saying it shows we are in a banana republic. (And then there's Sandy Levinson, seizing the moment to misrepresent events as proving his misbegotten thesis about the Constitution.) The people's house considered a measure that is deeply unpopular with the people (even if the people are wrong), as the Constitution says it will, and reached a decision. The Constitution worked just fine, Sandy. Moreover, for years moderates and centrists have complained that there's not enough bipartisanship - and now they bemoan the fruit of bipartisanship. The ad hoc coalition that defeated the bill was both ideologically and geographically diverse. This was exactly how the system is supposed to work; that it produced a result that some don't like is by the by.
Come on rhhardin-
Bush doesn't done anything about inarticulateness in eight years.
There is a certain poetic justice-you've just been served-by yourself!
I'm out the pages here are taking forever to load.
Clowns to the left of me, jokers to the right.
Brooks has been pushing a technocratic view of politics for a while now. He'll pick up a factoid -- like social networking research -- and hypothesize the need for national service or some similar top-down solution.
This column is typical. It is Brooks' humble request that we turn tough problems over to the experts he admires.
As I wrote in the Dinosaur thread, the financial failure we are witnessing is not a regulation problem; it is an expert problem.
Banks took on far too much risk because their experts, using complex financial tools and impressive mathematical forecasts, were convinced the risks were manageable.
Now another set of experts, with Paulson and Bernanke in the lead, assure us that their complex financial tools and impressive mathematical forecasts are the real deal.
I'm not impressed anymore.
Ann omitted Brooks dumping on Repubs:
House Republicans led the way and will get most of the blame. It has been interesting to watch them on their single-minded mission to destroy the Republican Party. Not long ago, they led an anti-immigration crusade that drove away Hispanic support. Then, too, they listened to the loudest and angriest voices in their party, oblivious to the complicated anxieties that lurk in most American minds.
Now they have once again confused talk radio with reality. If this economy slides, they will go down in history as the Smoot-Hawleys of the 21st century. With this vote, they’ve taken responsibility for this economy, and they will be held accountable. The short-term blows will fall on John McCain, the long-term stress on the existence of the G.O.P. as we know it.
I’ve spoken with several House Republicans over the past few days and most admirably believe in free-market principles. What’s sad is that they still think it’s 1984. They still think the biggest threat comes from socialism and Walter Mondale liberalism. They seem not to have noticed how global capital flows have transformed our political economy.
BTW, the exec compensation limits added to the bill were a complete joke.
Pelosi's speech was fairly tame. It's a false meme that it was overly partisan.
Pelosi's speech was a disaster, not so much in its content, but in its timing. She should have given the speech after the vote. But, some people are so full of hate they can not help themselves and shoot themselves in the foot. She is not a leader.
BTW, the exec compensation limits added to the bill were a complete joke.
The biggest joke is the glaring omission; there is nothing that forbids these financial entities from contributing to political campaigns or lobbying. I guess Barney Frank, Chris Dood, and Company do not want the gravey train to end.
Only AlphaTroll could say that Pelosi's speech was tame and should have been ignored by GOPers. More crazy-talk.
I have to be honest, I find it delightful that the American streak of anti-authorianism seems to be alive and well.
Ann has supported EVERY single economic policy that this President has undertaken. She has NOT ONCE criticized his economic policies. Until maybe this week. And if I'm wrong, please provide a link.
She is one of the 28 percenters (well - 27% according to the latest poll).
Can we please start putting the blame where it belongs - with the 27 percenters who still support this moron of a President.
The Congressional leaders, on both sides of the aisle, and particularly in the House, failed in both leadership (arm twisting) and parliamentary ability (counting votes).
There is no real leadership in Congress. You cannot have leadership when people are selected by seniority versus ability.
Anyway, I think its time for a grownup in Washington. Only Obama fits that bill.
Ba HA HA HA HA
I guess grownups in your world vote present.
The house republicans could have thrown Boehner out after the last election in favor of some newer blood; and there were some good fiscal conservatives and anti-pork candidates; instead they went with the old leadership whose only accomplishment was leading them to disaster in the first place. The Republicans will be probably spending the next four years in the political wilderness. Perhaps they can learn from this shabby show.
Well if Pelosi's speech stopped the bailout, it was politically brilliant. Because its going to help Democrats win the election. Totally Machiavellian.
Unfortunately, it's an urban myth.
Blame enough to go around IMO, starting with President Bush...
The Congressional leaders, on both sides of the aisle, and particularly in the House, failed in both leadership (arm twisting) and parliamentary ability (counting votes).
That is a fair statement. Also to be included are many on both Wall and Main Street whose greed as well as outright fraud helped propel this meltdown. This isn't just about Wall Street execs making big bucks but also some average and below average John and Jane Does who bought more home than they could afford or tried to play the home flipping game and ended up on the short end.
On the other hand there is 90-95% of the American public out there paying their bills and mortgages on time yet are being asked to fund a bail out of individuals whose greed and stupidity created this problem and provide the political cover to elected officials who not only facilitated it but pretended nothing was wrong until the devil came to collect his bill.
It would be heartening to see a cleansing in Congress but if the partisan blame gaming that is on display here is indicative of what the electorate is doing, I doubt there will be much change regardless of who the next President is.
Downtown,
Your protestations re Pelosi are ridiculous. The bottom line is that a responsible leader, knowing the vote was close, would not have given a speech, no matter how mild, blaming anyone for the current mess. You know that as well as I do.
The bail-out was a hedge to betting that there would be financial meltdown. Well. This hasn't come to pass.
Now it looks like the bail out may be dead.
House Republicans are concerned that the bail-out would become a cash machine for liberal activism under an Obama presidency. Maybe they were smart to oppose it. For example, the first sign the gov tried to make money by foreclosing on loans as they should, the liberals would be crying for social justice and the bail-out would become the big liberal give-away.
Obama's tax policy is a giant transfer of wealth from from the rich to the poor. t is a massive spending and tax increase.
Under Clinton, we had higher taxes, free trade, and lower government spending. This leads to less debt but also less growth.
Under Bush we had lower taxes, free trade and lots of government spending. This has lots of growth, but produces lots of debt.
Under Obama we are going to get, higher taxes, no free trade, and more government spending. This is the european model, which will cause an economic disaster of low growth and lots of debt. This will result in high unemployement.
Obama is a fool. And we will all suffer for it if get gets elected.
Interesting that Brooks says that if the "economy slides, the[ dissenters] will go down in history as the Smoot-Hawleys of the 21st century." Of course, Smoot-Hawley is a poor analog: there, Congress acted and made the situation worse. Here, the naysayers have prevented Congress from acting. Whether that action would have made matters better or worse than doing nothing has passed into the realm of eternal speculation.
No less speculative is DTL's conclusion that the GOP is going to lose seats because they voted against a measure opposed by, when last I looked, about two thirds of the country. Voting against massively unpopular proposals - mmm, that's a fast track out of the house!
"Ann omitted..."
Jeesh. I can't reprint the entire column, and I really don't appreciate your copying additional blocks of text. People can go to the link. Don't portray me as covering something up when it is obvious that all I'm doing is trying to avoid copying too much.
I am going to start deleting comments that do what Alpha Liberal just did. It's deceitful and disrespectful. It's unfair to me and it's unfair to the website you're taking from. People should go to the link.
Roger J. said...
"The house republicans could have thrown Boehner out after the last election in favor of some newer blood; and there were some good fiscal conservatives and anti-pork candidates; instead they went with the old leadership whose only accomplishment was leading them to disaster in the first place."
Yeah, and some of us were furious about it at the time.
Can we please start putting the blame where it belongs - with the 27 percenters who still support this moron of a President.
Why don't any of the resident leftists ever address the administration's attempts to create a regulatory agency to monitor Fred/Fan yet were jumped on by Barney Frank and others who insisted that both were sound and Bush was only out to undermine them?
That was in 2003 BTW.
The key graf of Brooks' article is not his tepid assignments of blame, but his cry for extra-governmental institutions to take over:
What we need in this situation is authority...
Like Alan Greenspan wasn't enough?
It's a recursive agenda. We need some technocrats to save us from ourselves. And when those technocrats fail, we need a new set of technocrats, with more powers.
Why does anyone bother to read [Brooks]?
Today, Brooks modeled a kinder, gentler neutrality.
Today is Rosh Hashanah. Is there a Congressional Jewish Caucus? Could they meet during breaks from shul today, and discuss the bailout?
Under Obama we are going to get, higher taxes, no free trade, and more government spending. This is the european model, which will cause an economic disaster of low growth and lots of debt. This will result in high unemployement.
Even Europe agrees with this dire prediction. Their markets are falling as well as they try to unload investments tied to the American markets.
Oil futures are down. Sounds good? No. Because the smart bets are on decreased demand because of an impending global slow down in the economy caused by this liquidity crunch.
The problem could be solved without a huge bail out or creating yet another giant government agency. Remove or suspend the mark to market rules and this would free up a lot of capital in banks that is now forced to be held in reserves because of the temporary drop in market prices of securities and assets held by banks.
So let me try to get Brooks straight here: More than 40 percent of the house democrats thought this bailout was a crap sandwich and voted against it, and also against Pelosi. She couldn't convince 11 more of her friends to vote with her. And Brooks wants us to remember the "228 who voted no". What a tool. What a fool.
The repubs were irrelevant. The democrats "sabotaged" the bill (or maybe just voted according to their constituents wishes, what a concept).
BTW, the Dow is up 256 points. Theo buy hi sell lo Boem timed the market perfectly yesterday.
Notice each of the psychological tropes within this column, each based upon his surmise about the others he doesn't know are thinking. The column is gibberish.
The ridiculous focusing on the stock market as a barometer of financial crisis is not a good thing. And the hysterical, and largely uninformed reporting in the media is not helping. In fact, one of CNNs reporters opined on the cable news yesterday, that she wasnt sure your debit cards would work tomorrow.
This is not the great depression where 33% of the work force was unemployed at its depth, and 20 % still unemployed at the start of WWII.
Why don't any of the resident leftists ever address the administration's attempts to create a regulatory agency to monitor Fred/Fan
Fine. The Republican-controlled Senate Banking Committee in the Republican-controlled Senate in the Republican-controlled 109th Congress could not get even an inadequate* bill out of committee, despite McCain's Johnnie-come-lately co-sponsorship a year-and-a-half after it was introduced.
Failure to move the bill can be laid directly at the feet of Committee Chairman Richard Shelby.
The Republicans had the votes; they didn't need Democrats to cross the aisle.
*The Housing Finance Reform bill was criticized by both the Heritage Foundation and the American Enterprise Institute.
Could be that yesterday's stock market was the buying opportunity of the decade. I wish I had some extra cash to throw into it. I wish I could time travel.
Market +300.59 +2.90%.
Keep the politicians home for 2 months and the market would be around 14,000.
So how does blaming someone help here?
Assuming that a bail out is necessary, an assumption I do not buy, the task at hand for our political leadership is to produce a bill that injects liquidity into the system, provides for accountability, and has absolutely no other riders, pet projects, handouts or other added pork attached. In theory, a simple task, but our elected leadership will be unable to do that.
If the President wanted demonstrate some leadership he should demand what I suggested in my 11:12 above of congress and promise to veto any bail out that doesnt meet those criteria. But he seems to MIA in this whole sordid affair.
That Levinson really is a piece of work. Is there anything more banana-republic-like than tossing your constitution every time something goes wrong?
The market is rising, because investors think there will be a revised bill.
Intrade puts the odds on a deal by oct 31st at around 75%. That is now being priced into the market.
The lack of a bill doesn't mean a crash either, but failing to address the issue will lead to continue slow bleeding.
I am not in a position to know if the failure to support the bill was wise or not. I do not know enough about the economic details to provide a useful opinion. However, this wasn't a failure in partisanship. This vote reflected the reality that those in positions of power (political, media, financial) have lost credibility with the American people due to their lies, disrespect for those in the outgroup, and irresponsibility. The political blogosphere has done its share to contribute to this state of affairs. The American people have no one in leadership positions to believe in. It reminds me of those kids caught in the middle of their parents divorces. Not only do their parents incessantly tell their kids the absolute worst about the other parent, they take no responsibility for their own contributions to a bad situation. Many of these kids develop distorted views of both parents and end up distrusting, losing respect for and despising them and everyone in positions of authority. Read the many of the political blogs (including this one) and their comment sections for proof of this phenomenon.
Most of you liberals will enjoy this. Honestly, you will.
The weird part about the banana republic comment is that it's exactly backward. Banana republics are run by a dictator or small cadre strong men who use the creation of money to "solve" all their problems. The proposed bailout was, in fact, exactly what banana republics do all the time.
The real point that the president and congress aren't serious is that all their proposals are BIG IDEAS. They pointedly refuse to do a myriad of small things--like suspend mark-to-market rules and reduce capital gains tax. I believe the answer is obvious--it doesn't result in a huge banana republic power grab of the economy.
Do we really want a moron like Paulson to be in charge of the economy.
I'm still puzzled as to how Bush and Paulson are suddenly credible to people who repeatedly have called both walking disasters. Both men are embarrassing idiots. They're running around hysterically, throwing gasoline on the proverbial economic fire while shouting it's getting worse.
Remove or suspend the mark to market rules and this would free up a lot of capital in banks that is now forced to be held in reserves because of the temporary drop in market prices of securities and assets held by banks.
I think it is probably good to change these rules in the long run, but it won't help in the short term. Everyone will want to know what the mark is regardless of whether or not you are required to do it.
I think a better short term solution would be for the Fed to step in as a counter party in the cash repo market. The fed would become an intermediary guarantor between banks. This would unlock the short term debt market and lower short term rates such as libor back to a more natural level.
Yesterday, John Kerry used the 60 vote excuse why the dems have been unable to pass anything concerning this situation out of the senate. Of course, he blamed the rule on the founders and the constitution. I do not remember language in the constitution which requires this. Pelosi blames Bush, nobody is at fault. This behavior is clearly the reason that the public does not trust these clowns. Why couldn't she put the blame where it belongs, with everyone, government, Wall St. and Main St. and then ask the body to to what they need to do. If it works, the screaming constituents will forgive them. If not, they get unelected next time anyway. Our leaders refuse to lead
The market is rising, because investors think there will be a revised bill.
Intrade puts the odds on a deal by oct 31st at around 75%. That is now being priced into the market.
I think the bill in its current form is dead unless Pelosi wants to pass it with her majority. Republicans won't agree to a bill that gives the Treasury ownership of these mortgage assets. There is too much room for abuse for the potential give-away by the Treasury either to banks or for "social justice" causes. If Obama gets elected, he will give the money away to liberal causes.
(nto John Lynch)
Is "failure to lead" the same as having your leadership rejected?
My take: there has been leadership, and legitimate differences of opinion, and partisanship.
There is also a sense that there is inadequate diagnosis of the problem. It is insufficient to say there is a "crisis in credit." What caused it? Is the fix ignoring the problem and treating only the symptom? For this we should blow what is likely a one-shot deal? For this we should use our own money to give our mortgages to the government? For this we should penalize the sensible to protect the foolish?
Why is it a failure of leadership when such real doubts exist? Is it now the task of the leader to push through half-baked ideas and stampede us to what appears an ill-thought out solution? Is it the task of government leaders to lead us around necessary pain in recovering from over-inflated home prices and overly easy credit policies?
I'm still puzzled as to how Bush and Paulson are suddenly credible to people who repeatedly have called both walking disasters. Both men are embarrassing idiots.
I think the Paulson plan is still a good idea. But, it is only a good idea if Paulson is administering it. Under an Obama Administration, the Paulson plan would become a give-away by liberals for social justice causes. This is partly why the bill failed among the republicans.
Paul, thanks for the link. MR is my second favorite blog. This comment paraphrases well most statements I have heard from Pres Bush:
"Something must be done. This is something. Therefore this must be done."
Is it true that both Krugman and Reich opposed the bill? I don't follow either very closely, but I would appreciate a link to recent columns.
Has it occurred to anyone that one reason for the tight money supply is precisely because Wall Street wants to force a bailout AND they want to cash in. If there is a bailout, Wall Street will repackage all their securities and sell the truly awful shit to the US government at massively overinflated prices, keep the good stuff and walk away.
PS. The market went back up because it's highly undervalued right now and bargain hunters are taking advantage. This is how the market works--among other things drops frighten away the non-serious speculators.
The failure of leadership is to come up with a worthwhile plan to begin with
downtownlad said...
Ann has supported EVERY single economic policy that this President has undertaken. She has NOT ONCE criticized his economic policies. Until maybe this week. And if I'm wrong, please provide a link.
She is one of the 28 percenters (well - 27% according to the latest poll).
Can we please start putting the blame where it belongs - with the 27 percenters who still support this moron of a President.
The failure of leadership has been going on for 8 years.
It is extraordinarily hard for older white people to admit what they have done to the country with their votes for Bush. They really have a sense of entitlement that makes minorities look like pishers(I think that's the word). They are white, their ancestors built the place(in their opinion) and they feel they can and will do whatever they want and never accept responsibilty or admit to being wrong. Unfathomable arrogance to a cold realist's eye.
Althouse will never own her vote, or rather the consequences of her vote. She is in a loop where she must keep doing the wrong thing lest the empty, corrupt and murderous squalor of the last 8 years be revealed. She does not have a choice but to vote McCain, any other choice represents self obliteration. The Limbaugh worship is the tell.
The republican financial theology they have supported is a disaster that they will delay a few months with the bailout. But don't EVER expect Althouse or any other right-wing radical to admit what they have done to the country. It won't happen, they are entitled after all.
Althouse actually supported Roberts and Alito, she is super radical right-wing. Uber radical, and free to be uber radical.
This should be required reading:
http://biz.yahoo.com/ap/080930/credit_markets.html
People are clueless if they think this is just going to affect "Wall Street".
Fine. The Republican-controlled Senate Banking Committee in the Republican-controlled Senate in the Republican-controlled 109th Congress could not get even an inadequate* bill out of committee, despite McCain's Johnnie-come-lately co-sponsorship a year-and-a-half after it was introduced.
Oh ok. My mistake. I thought this comment might have had something to do with it too.
''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''
But I forgot with you fault only lies with one side.
This should be required viewing:
falling
People are clueless if they think this is just going to affect "Wall Street".
(DTL thanks for the heads up.)
You know I find it ironic that the last time Bush was declaring a crisis, an immiment threat to the nation so to speak and that we had to ACT NOW! it also cost us $700 billion dollars. Yet the usual suspects denouncing Bush then think he has it right this time that we should gleefully fork over another $700 billion.
Oh, good grief, Alpha Liberal. This is certainly a failure, but under no stretch of logic can this be deemed a failure of laissez faire capitalism.
Laissez faire capitalism does not include government subsidizing business. It doesn't include government forcing banks to give loans to high risk borrowers.
This is a failure of socialism. Anyone who thinks our socialist economy is laissez faire really doesn't understand the term. I suggest you go read a few books about the term, or maybe just a wikipedia entry.
SCOTUS nominees should only be opposed on qualification, not ideology. At least that is how those radical wingnut republicans treated the liberal judges Clinton appointed.
Financial "theology" is merely political theology. It is the amount of interference the government injects into the market and where which is the crux of the problem. Such as fining banks who don't make loans to unqualified minorities....
Is it true that both Krugman and Reich opposed the bill?
http://krugman.blogs.nytimes.com/
Krugman was one used the term "Banana Republic" to characterize the Bush/Paulson pitch, and again to characterize the Republican Caucus when the plan went down.
In this column Krugman asserts that a) yes he reluctantly supports the bailout and b) the Democrats can't really do any better.
Krugman's b) is rather comical in that he tells us that if he was Barney Frank's shoes, he'd want a Paul Krugman type of plan, but alas, that would be too ambitious.
I make a proposal to ban AlphaTroll, MichaelTroll, UWSTroll, FLSTroll and so on. They provide nothing to the conversation but lies and smears.
Integrity said...
"Althouse actually supported Roberts and Alito, she is super radical right-wing. Uber radical, and free to be uber radical."
Alito, perhaps - but supporting Roberts makes one a "super radical right-wing[er]"? Just keep telling yourself that.
I thought this comment might have had something to do with it too... the ranking Democrat on the Financial Services Committee
Thanks for reinforcing my point, Hoosier: Once again, a Republican-controlled committee, in a Republican-controlled House, in a Republican-controlled Congress, couldn't pass any meaningful reform, because one Democrat misread the situation, and so the Republicans swallowed his statement, hook, line, and sinker.
make a proposal to ban AlphaTroll, MichaelTroll, UWSTroll, FLSTroll and so on. They provide nothing to the conversation but lies and smears
If your assertions can't survive a challenge, there are plenty of blogs in the right-wing echo chamber on which to comment.
Thanks for reinforcing my point, Hoosier: Once again, a Republican-controlled committee, in a Republican-controlled House, in a Republican-controlled Congress, couldn't pass any meaningful reform, because one Democrat misread the situation, and so the Republicans swallowed his statement, hook, line, and sinker.
I see you didn't read the article.
Surprise, surprise.
We got it, Integrity, you hate whites.
Thanks Henry. Actually Krugman isn't so different than the rest of us, including me. I blame the dems for sabotaging the bailout, then I wisper my thanks to the repubs for voting against the crap sandwich. The leftists can thank Nancy for giving Bush that sharp stick in the eye and blame the rebubs for sabotaging their retirement pension.
I tell you it's win-win. We all need to pat ourselves on the back. (Except of course for Theo: Dow's + 302)
Republicans: Forget what we said yesterday blaming Pelosi:
– Rep. Michele Bachmann (R-MN): “We are not babies who suck their thumbs.”
– Minority Whip Roy Blunt (R-MO): “I think you don’t want to give too much blame to that speech.”
– Rep. John Shadegg (R-AZ): “It was embarrassing for leadership on both parties to lose the bill, so they went out and made a stupid claim.”
– Rep. Marsha Blackburn (R-TN): “That speech was not the reason I voted against the bill.” [MSNBC, 9/30/08]
http://thinkprogress.org/2008/09/30/gop-blame-pelosi/
You guys must be awfully busy trying to keep track of which talking points to regurgitate.
But, whichever ones they are, it's all the Democrats fault, right?
Maybe somebody here can explain something to me.
The reason everything crashed in 1929 was a lack of regulation and government oversight, right?
So, to correct that we created the government bodies that regulate the financial companies.
Yet, inspite of this regulation and oversight, the financial companies (and their government overlords) have brought us to the brink of a second Great Depression in less than 100 years, unless we, as taxpayers, prop up the entities 'too big to fail'.
In order to save the larger economy, and probabaly my own ass, I am willing to let the Federal government put my grandchildren in debt.
Why did the regulators fail us?
I'm willing to do what we need to avert a crisis. And I am sure we are facing a crisis; anybody with their ear to the ground in banking or finance will agree to that.
But I want blood money.
I want the leadership of ANY entity we bail out broke and in jail.
I want the regulators of those entities broke and in jail.
I want the Congresscritters who sat on their fat asses and allowed this to happen broke and in jail.
Will the bail out happen? I am praying it does- reluctantly.
Will the punishment happen? Yeah- right after Satan throws his first snowball.
From DTL's article:
"In a good case scenario, the economy is slow. In a bad case scenario, there are massive bankruptcies," said Axel Merk, portfolio manager at Merk Funds.
Hold it; didn't all the poobas tell us the entire economy would melt down without the bailout. That there would be a depression to rival that of the 1930s?
(Actually, during his recent testimony, Bernake warned of a possible recession. He was ignored since it didn't go with the "collapse of civilization as we know it theme".)
This only proves that it's largely hysteria driven. The greedy bastards are making a last ditch effort to scare everyone into believing that the impact will be deeper than they claim. The payroll thing is especially absurd--I've never worked for a company that took out short term loans (hell, they had a painful time getting any loans at all and a few never did.) Most companies don't.
The chicken littles need to get their damn story straight. Is this a liquidity crisis? Is it a short term money supply crisis? They won't answer because if they did, we could address those issues using very simple market driven methods.
Just out of curiosity after all this is said and done, will any of the left agree that loaning money to people who are poor credit risks is a bad idea regardless of their 'ahem' unfortunate ecomonic situation?
In other words, will any leftists support legislation that bans subprime mortgages, demands full disclosure of income and that the buyer have at least 10% of the downpayment to demonstrate an ownership committment?
Any takers? Bueller?
Alpha - so your theory is that we should trust the motivations ascribed to the naysayers by the very leaders who the naysayers' no votes embarrassed and repudiated over and above the naysayers' own stated reasons?
Comedy.
Why did the regulators fail us?
a) They were corrupt
b) They thought they knew more than the market.
c) They believed that their regulations had no negative effect on the market.
d) They believed that the recent bubbles weren't bubbles. (In short, they refused to see the derivatives bubble--a bubble in a market that already had no intrinsic value.)
I am going to start deleting comments that do what Alpha Liberal just did. It's deceitful and disrespectful. It's unfair to me and it's unfair to the website you're taking from. People should go to the link.
Deceitful? WTF? That makes no sense. So it's deceitful and wrong to post text from the article you cite. But you have nothing to say about the de rigeur personal insults flung around here. Hmmmm....
I guess you want to pick and choose what people will pay attention to.
It's the web, Ann. Users have power to post content others may not like. Citing a couple paragraphs is all legal and shit.
But, hey, if you want your ideologically cleansed little blog, go nuts.
http://www.webofdebt.com/articles/its_the_derivatives.php
Important points:
"The point everyone misses," wrote economist Robert Chapman a decade ago, "is that buying derivatives is not investing. It is gambling, insurance and high stakes bookmaking. Derivatives create nothing." They not only create nothing, but they serve to enrich non-producers at the expense of the people who do create real goods and services.
....
Credit default swaps (CDS) are the most widely traded form of credit derivative. CDS are bets between two parties on whether or not a company will default on its bonds. In a typical default swap, the “protection buyer” gets a large payoff from the “protection seller” if the company defaults within a certain period of time, while the “protection seller” collects periodic payments from the “protection buyer” for assuming the risk of default. CDS thus resemble insurance policies, but there is no requirement to actually hold any asset or suffer any loss, so CDS are widely used just to increase profits by gambling on market changes. In one blogger’s example, a hedge fund could sit back and collect $320,000 a year in premiums just for selling “protection” on a risky BBB junk bond. The premiums are “free” money – free until the bond actually goes into default, when the hedge fund could be on the hook for $100 million in claims.
And there’s the catch: what if the hedge fund doesn’t have the $100 million?....
And there’s the catch: what if the hedge fund doesn’t have the $100 million?...
Does anyone remember day trading back in the Clinton boom times?
Same thing just on a smaller scale.
oil is down and the dollar is up because our government put off taking on 700bn in debt for a couple more days
So they not only fail to lead, they fail to look like they are leading. Clowns on all sides.
Ugh, clowns is right -- I'm so disgusted. Just vote all the bums out already.
and [Paulson's] response was to get down on bended knee before House Speaker Nancy Pelosi.
I blogged about this today.
Can anyone remember another powerful figure 'begging on bended knee historical moment' in recent memory?
I've been scouring my historical memory banks.
The closest event I can think of is when the beautiful Queen Luise of Prussia approached Napoleon, debased herself before him by pleading on her knees to spare her country from his conquering wrath.
This seized the feverish public imagination, and leaflets showing this scene flew off the printer's press.
I've never heard of a man begging a woman on bended knee for mercy. It may be an historical first.
Nice going there, Queen Nancy.
Cheers,
Victoria
Hoosier Daddy said...
Just out of curiosity after all this is said and done, will any of the left agree that loaning money to people who are poor credit risks is a bad idea regardless of their 'ahem' unfortunate ecomonic situation?
In other words, will any leftists support legislation that bans subprime mortgages, demands full disclosure of income and that the buyer have at least 10% of the downpayment to demonstrate an ownership committment?
Any takers? Bueller?
the problem wasn't subprime mortgages per se, it was the fraud, the volume, the lack of diligence, the fake ratings.
I see you didn't read the article.
FSL's point is that Republicans are to blame because they failed to stop Democrats from fucking up the credit industry. Therefore we should trust the Democrats.
I didn't say his point made SENSE... but that is his point.
the problem wasn't subprime mortgages per se, it was the fraud, the volume, the lack of diligence, the fake ratings.
All of which would be addressed by banning them outright, demanding at least a 10% downpayment and requiring full disclosure and accountability by both lender AND borrower.
I'm sorry getting a sub-prime to buy a stereo is one thing, a house is another. The nonsense that it wasn't fair that poor credit risk folks couldn't get home loans is what got us here.
I didn't say his point made SENSE... but that is his point.
Of course. I'm perfectly willing to lay the blame on all sides as it so richly deserved but it is tiresome to see the constant Bush/GOP is the root of all evil.
the problem wasn't subprime mortgages, per se...
Ya see, Hoosier?
They can't, they...just...can't...quite...say...it.
Constipated liberals would rather stay all blocked up than take the conservative laxative.
So, here's a question I'm curious about.
How much has the weakened presidency affected all of this?
I read about how Europe is desperate for a show of American leadership, but at the same time the single leader who could seemingly push through something like this has been so undermined and attacked on war issues that he has utterly no pull whatsoever.
How has previous disagreements affected the leadership status now? Would a popular president have made a difference?
I honestly don't know, so I'm asking.
Asking, not declaring, how utterly untrollish of me.
It's hard to decipher what Brooks is saying. Why is "project[ing] any sense of authority" the key, and what exactly is this "authority" he wants to see "projected"? Later in the same article he takes a shot at explaining: "Not heavy-handed government regulation, but the steady and powerful hand of some public institutions that can guard against the corrupting influences of sloppy money and then prevent destructive contagions when the credit dries up."
What? That strikes me as a lot of words in search of an idea. It sounds deep and thoughtful but says nothing --- punditry at its vacuous best.
Markets require transparency, clear rules and confidence in the future to function; "authority" not so much. The point of Paulson's plan (in all of its versions) was to stop the dominos from falling, by buying up unmarketable mortgage-backed securities that are currently sitting on the balance sheets of a lot of institutions and have the potential to drag them into insolvency. Notice that the solution (buying up unmarketable but valuable assets) has a logical connection to the problem (avoiding insolvencies that will lead lots of institutions to fail). What is the connection between Brooks' solution (projecting a sense of authority) and the problem? Beats me.
As for the doom and gloom stuff, even without new legislation, the Treasury and the Fed have been doing indirectly what the Paulson plan proposed to do in a more straightforward manner. The current approach involves lending to the same institutions and taking a secured interest in their assets (e.g. the AIG deal). There are enough clever lawyers and bankers in NYC to make the loan/security interest approach work if the Congress can't muster the votes to approve a more direct approach. After all, those same clever lawyers and bankers came up with all of the securitized products and derivatives that are now the source of the problem.
I think it definitely makes sense to adopt some version of the Paulson plan. But the hype is getting a bit over the top.
Don't know if this was posted before but...
September 30, 2008 09:31 AM
Former House Speaker Newt Gingrich was working aggressively behind the scenes to defeat the Wall Street rescue plan minutes before he himself released a public statement in support of the package, NBC's Andrea Mitchell reported on Tuesday.
Gingrich was whipping up votes for the opposition, Mitchell said, apparently without the knowledge of the current GOP leader, John Boehner, who was responsible for recruiting enough support from his caucus to help ensure the bill's passage. Ultimately, the GOP was only able to rally roughly a third of its members.
"Newt Gingrich," she said on MSNBC, "I am told reliably by leading Republicans who are close to him, he was whipping against this up until the last minute, when he issued that face-saving statement.
Newt Gingrich was telling people in the strongest possible language that this was a terrible deal, not only that it was a terrible deal, it was a disaster, it was the end of democracy as we know, it was socialism --
...and then at the last minute comes out with a statement when the vote is already in place."
In other words, will any leftists support legislation that bans subprime mortgages, demands full disclosure of income and that the buyer have at least 10% of the downpayment to demonstrate an ownership committment?
Absolutely not! They believe that everyone has a mandated human right to home ownership. That is why they legislated things like HUD, FHA, FAN/FRED and all the other nonsense.
That is why they penalized banks who would accept mortgages from ACORN, La Raza, and other community groups- like the ones Obama organized for.
They shoved these bad mortgages down the banks throats and now they want to blame the Conservatives for lack of oversight. Typical.
Mikey is back with his lies.
I read about how Europe is desperate for a show of American leadership,
I would interpret that to mean they're desperate for a President who will see and do things more 'their way'.
but at the same time the single leader who could seemingly push through something like this has been so undermined and attacked on war issues that he has utterly no pull whatsoever.
No doubt and having a few months left in office doesn't help. Lame duck and all that. Bush demonstrated leadership after 9/11 and somewhere along the line showed he couldn't lead a dying horse to water. By all rights he should have been a one-term President but for the stellar Democratic decision to nominate J.F. Kerry which left the electorate with Tweedledee and Tweedledum.
How has previous disagreements affected the leadership status now? Would a popular president have made a difference?
Probably. Reagan was pretty successful in getting is way despite a Democratic Congress, like it or not, because he was popular and persuasive.
Sub-prime loans were certainly a big part of this, but hedge funds taking advantage bundling and banks taking advantage of predatory lending also played a huge part.
Right now it's impossible to know the underlying value of many of the mortgages that are out there, and that creates a great deal of angst relating to the bailout.
Hedge funds moved operations overseas to avoid laws that prohibit specific practices here, some of the mortgages are bundled with up to 30 bonds that are insured, uninsured, fairly valued, unfairly valued, etc.
Right now it's the lack of liquidity of the banks that will bring our economy to a screeching halt. If they do not have access to funds for everything from bank to bank transactions, loans to businesses, and loans to individual customers...we're in big trouble.
When banks can't borrow money they don't make loans. When businesses can't borrow money, they lay off workers.
Arturius said..."I would interpret that to mean they're desperate for a President who will see and do things more 'their way'."
Would you like to expound upon that theory?
What exactly is "their way?"
Peter says this about the "leftists"??
"They shoved these bad mortgages down the banks throats and now they want to blame the Conservatives for lack of oversight. Typical."
No conservatives bought property, or accepted sub-prime loans, none of them created sub-prime loans, none of them flipped properties, none of them own or work for banks, mortgage companies or hedge funds.
The "leftists" did it all.
Reagan was pretty successful in getting is way despite a Democratic Congress, like it or not, because he was popular and persuasive.
Tip O'neil was speaker of the house. Unlike today, he did not permit hatred in his chamber. He was a gentleman and collegial. He also respected the Office of the President. Something that has been lacking in politics fir too long.
you could reduce car accidents by banning all teen drivers
doesn't mean its the efficient thing to do
btw, blaming the mess on this "acorn" legislation reveals a lack of understanding as to how securitizations and ratings agencies operate
any credit problems arising from the legislation would have been accounted for. if they weren't because of wishful thinking/negligence/fraud/fee seeking, that isn't the fault of the legislation. and, notably, not a single shred of factual support has been produced to pin the mess on the legislation.
also, you might do to understand that the housing asset bubble exploded after the demise of the tech bubble, not after the acorn legislation.
but who likes facts anyway.
ps: mean ol' pelosi seems not to be the reason:
Rep. Michele Bachmann (R-Minn.) threw cold water on a key rationale House Republican leaders have been employing this afternoon to explain why they couldn't deliver more GOP votes for the Wall Street bailout package.
At a Monday afternoon press conference, GOP leaders argued that Speaker Nancy Pelosi (D-Calif.) cost the measure a dozen Republican votes by delivering an overly partisan floor speech in support of it.
But Bachmann, speaking at a Republican Study Committee press conference, told reporters, "I want to assure you that was not the case. We are not babies who suck our thumbs. We have very principled reasons for voting no."
Arturius said..."I would interpret that to mean they're desperate for a President who will see and do things more 'their way'."
Would you like to expound upon that theory
I think it speaks for itself.
Why is it the leftists who are insisting we toss Bush our wallets in order to bail out Wall Street?
Does this not strike anyone else as odd?
Why is no one calling for hearings, investigations, and perp walks? Or are Democrats too afraid that they'd be the ones being perp-walked?
Is that why they want us to toss Bush our wallets, to make this problem go away, before anyone starts asking how we got here, and who is responsible?
Or do they need to funnel some more taxpayer dollars to ACORN to buy Obama some more fraudulent votes?
Arturius said..."I think it speaks for itself."
Oh, that clears it up.
Funny.
you could reduce car accidents by banning all teen drivers
doesn't mean its the efficient thing to do
No doubt you feel the same way about banning handguns.
There is nothing efficient about loaning someone who is a poor credit risk, tens of thousands of dollars with a better than average chance they'll default.
It seems to me you simply want to ensure that there is an avenue for people who have demonstrated an inability to pay their bills yet still have the opportunity own a home without actually meeting the responsibility of paying the mortgage.
Michael The Magnificent said...
"Why is it the leftists who are insisting we toss Bush our wallets in order to bail out Wall Street?"
So we now have 65 "leftists," including Newt an George W. Bush who are screaming for our wallets?
Interesting slant.
"Or do they need to funnel some more taxpayer dollars to ACORN to buy Obama some more."
There nothing in the final bailout agreement that includes Acorn.
Arturius said..."I think it speaks for itself."
Oh, that clears it up.
Michael, I would prefer if you saw and did things my way.
Now, what would you interpret that to mean? It's quite simple.
An in the closet "leftist??"
Newt Gingrich was telling people in the strongest possible language that this was a terrible deal, not only that it was a terrible deal, it was a disaster, it was the end of democracy as we know, it was socialism --
...and then at the last minute comes out with a statement when the vote is already in place."
i could care less who owns a home
it was bush crowing about the highest levels of home ownership in the nation's history, not me
but if all parties enter into the transaction with their eyes open and with adequate information, then i don't see the problem.
the lender charges a higher rate because the loan is riskier. if the lender's model shows that no rate is enough to compensate for that risk, then he doesn't extend the loan. end of story.
the issue here was inadequate information and both sides had their eyes closed.
Arturius - you make a rather inane charge, then, the only thing you can come up to support your premise is that you "think it speaks for itself?"
No, YOU spoke for it.
Support it.
One of the biggest problems in this entire mess resides with the "over valuation" of the properties that were being bought and sold.
Rep. Baker's Secondary Market Mortgage Reform could not get out of committee in the Republican-dominated 108th Congress
House Committee on Financial Services, Republicans
Rep. Michael Oxley (R-OH), Chairman
1. Bachus (R-AL)
2. Baker (R-LA)
3. Barrett (R-SC)
4. Bereuter (R-NE)
5. Biggert (R-IL)
6. Brown-Waite (R-FL)
7. Moore Capito (R-WVa)
8. Castle (R-DE)
9. Feeney (R-FL)
10. Fossella (R-NY)
11. Garrett (R-NJ)
12. Gerlach (R-PA)
13. Gillmor (R-OH)
14. Green (R-Wis)
15. Harris (R-FL)
16. Hart (R-PA)
17. Hensarling (R-TX)
18. Jones Jr. (R-NC)
19. Kelly (R-NY)
20. Kennedy (R-Minn)
21. King (R-NY)
22. LaTourette (R-OH)
23. Leach (R-IA)
24. Lucas (R-OK)
25. Manzullo (R-IL)
26. Miller (R-CA)
27. Murphy (R-PA)
28. Ney (R-OH)
29. Ose (R-CA)
30. Paul (R-TX)
31. Renzi (R-AZ)
32. Royce (R-CA)
33. Ryun (R-KA)
34. Shadegg (R-AZ)
35. Shays (R-CT)
36. Tiberi (R-OH)
37. Toomey (R-PA)
House Committee on Financial Services, Democrats
Rep. Barney Frank (D-MA), Ranking Democrat
1. Gary Ackerman (D-NY)
2. Baca (D-CA)
3. Bell (D-TX)
4. Capuano (D-MA)
5. Carson (D-IN)
6. Clay Jr. (D-MO)
7. Crowley (D-NY)
8. Davis (D-AL)
9. Emanuel (D-IL)
10. Ford Jr (D-TN)
11. Gutierrez (D-IL)
12. Hinojosa (D-TX)
13. Hooley (D-OR)
14. Inslee (D-WA)
15. Israel (D-NY)
16. KAjorski (D-PA)
17. Lee (D-CA)
18. Lucas (D-KY)
19. Lynch (D-MA)
20. Maloney (D-NY)
21. Matheson (D-Utah)
22. McCarthy (D-NY)
23. Meeks (D-NY)
24. Miller (D-NC)
25. Moore (D-KA)
26. Ross (D-AR)
27. Scott (D-GA)
28. Sherman (D-CA)
29. Velazquez (D-NY)
30. Waters (D-CA)
31. Watt (D-NC)
House Committee on Financial Services, Independents
1. Bernie Sanders (I-VT)
One of the biggest problems in this entire mess resides with the "over valuation" of the properties that were being bought and sold.
Many of which are no longer worth that valuation. Many have devalued to a point they are worth less than the mortgage on the piece.
the main issue is not that the houses were overvalued, which they were, but that the *unexpected* correction of the overvaluation led to *unexpected* higher rates of default/foreclosure which led to catastrophic consequences for the value of RMBS and CMBS backed derivatives
"unexpected" in quotes, because of course it was expected by some, like GS and the shortsellers.
Arturius - you make a rather inane charge, then, the only thing you can come up to support your premise is that you "think it speaks for itself?"
No, YOU spoke for it.
Support it.
Michael, you asked that I expound on my 'theory' I attempted to do that through an example although it appears you failed to comprehend it.
Note that a bill providing Fannie/Freddie oversight did pass this year, under a Democratic Congress. The bill(Public Law 110-289) was introduced by (da-ta-da) Nancy Pelosi!
Or do they need to funnel some more taxpayer dollars to ACORN to buy Obama some more fraudulent votes?
Funny, the article I found at that link mentioned
1. One fraudulent employee,
2. Who worked for the Community Voters Project, not ACORN,
3. Who was actually turned into the Milwaukee elections office by the Community Voters Project, who smelled a rat with her registrations.
In Adams’ case, the complaint states, Voters Project officials flagged 28 problematic names for city election officials.
So, not ACORN fraud, not organizational fraud, but one rogue employee, turned into the authorities by a conscientious employer.
But, whichever ones they are, it's all the Democrats fault, right?
What part of Democrats are the majority party don't you understand? Pelosi could not even muster enough Democrat votes to pass this. Some powerhouse she is. BTW, some of the powerful Democrat committe chairmen voted no.
i could care less who owns a home
Me neither.
but if all parties enter into the transaction with their eyes open and with adequate information, then i don't see the problem.
There isn't.
the lender charges a higher rate because the loan is riskier. if the lender's model shows that no rate is enough to compensate for that risk, then he doesn't extend the loan. end of story.
Does that mean that there won't be any blowback on the lender for refusing a loan to someone who has a bad credit history? Because that's how the whole subprime issue was born. Poor folks weren't allowed the opportunity to get loans they had no business getting from day one.
That's the issue.
I find it incredible that after all this, people still don't think sub-primes should be banned.
But, hey, if you want your ideologically cleansed little blog, go nuts.
LOL.. Make your own blog. Go nuts yourself.
Does that mean that there won't be any blowback on the lender for refusing a loan to someone who has a bad credit history? Because that's how the whole subprime issue was born. Poor folks weren't allowed the opportunity to get loans they had no business getting from day one.
thats wrong. the crisis-inducing subprime loans were made, in tremendous and accelerating volume, not because banks were "forced." they were made because they mistakenly thought they would be profitable in their own right. they were made because they could be spun off into securitizations for a profit.
if you doubt this, ask why subprime issuances exploded in the past 7 years.
there wasn't a gun to the banks' heads. that is false mythology seeking for dem culpability.
and no, there is not blowback for refusing bad credit histories. it happens every day. do you know anyone who worked in mortgage origination? i do. or did, anyhow.
Peter and others...Speaking of "leftists" being the crux of the current economic crisis...does this ring a bell?
"We're creating... an ownership society in this country, where more Americans than ever will be able to open up their door where they live and say, welcome to my house, welcome to my piece of property."
President George W. Bush, October 2004.
Arturius said..."Michael, you asked that I expound on my 'theory' I attempted to do that through an example although it appears you failed to comprehend it."
You provided no such "example."
If you can't defend your position, what's the point of throwing it out?
"One of the biggest problems in this entire mess resides with the "over valuation" of the properties that were being bought and sold."
Add to this the fact that the properties being sold were over-built, too many built, too quickly, and dependent on a credit situation where people could get into a house that far outdistances their income.
How much of relative income did a house cost in the 1960s? A lot less than now. How big were the houses built in the 1960s? A lot smaller than now.
Greed abounded, with contractors and banks both feeding into each other, dependent the other wouldn't stumble, pushing until everything broke.
Leaving banks collapsed, and in this area at least, large swaths of once beautiful forest torn up, and only the grading for new, never to be built, homes left in its place.
ricpic said...
We got it, Integrity, you hate whites.
I am white(not bi-racial, white) and if you notice I am always very careful to specifically criticize older whites. I think the damage they have inflicted is horrendous and has little to do with their skin color. My theory is that their minds were damaged permanently by all of the fraudulent imagery presented to them during the 1950's era. They are not a well adjusted generation, as all of the cultural and financial disasters they have left behind prove(something Pat Buchanan finally wrote about last week). There will never be another generation that is propagandized the way these folks were, so things will only get better once their political clout diminishes and they can no longer damage everything they put their friggin' hands on.
I'm just impatient.
thats wrong. the crisis-inducing subprime loans were made, in tremendous and accelerating volume, not because banks were "forced." they were made because they mistakenly thought they would be profitable in their own right. they were made because they could be spun off into securitizations for a profit.
Ok so we go back to my original position, no more sub-primes, mandatory 10% downpayment, full disclosure by lender and borrower.
That should solve the problem yes?
Or are you still cool with allowing sub-primes to be issued?
Hoosier, right now a 5-yr ARM interest rate is about the same as a 30-yr fixed.
Sub-prime days are over...for now anyway.
the crisis-inducing subprime loans were made, in tremendous and accelerating volume, not because banks were "forced.".
Bull. The banks WERE forced to make CRA loans in a certain percentage based upon the population they served or face stiff fines. In the beginning of CRA it was a fairly mild program and often included more commercial business type loans, but when Clinton increased the regulations to expand coverage and allowed sub-prime, zero down payment housing loans the banks were forced to make bad loans, whether they wanted to or not. Loans at 100% or better LTV in an inflated real estate market to people who should never have been given credit to buy dog food much less a house.
Previously, the borrower had 20% down and had to indicate the source of the down payment. The bank made the loan and then sold it at 80% to a packager. Thus the bank was made whole and had money to lend again. The property was able to sustain a 20% drop in value before the borrower was 'upside down' in the mortgage. Everything worked out just fine until some asshole got the idea that not giving credit to people who were unable to pay back their loans was somehow racist.
And don't dare tell me this isn't the case. I was a commercial lender and was FORCED to make bad loans. This pissed me off because my compensation/bonuses/promotions were based on the performance of my loan portfolio. When I was forced to make a CRA business loan that I knew would be bad and then got a bad review because of it.....that's when I switched careers.
maybe the government should save the banks from themselves and impose onerous downpayment floors like 30% for subprime, and i'm all for your full disclosure requirement, but i am not for restricting the rights of equally situated parties to freely contract.
maybe the government should save the banks from themselves and impose onerous downpayment floors like 30% for subprime, and i'm all for your full disclosure requirement, but i am not for restricting the rights of equally situated parties to freely contract.
Well then we can agree.
I'm not certain that I was advocating restricting anyone's right to contract. I was simply stating that sub-primes are detrimental. If one way to counter that detriment is a substantial downpayment, by all means.
Hoosier, right now a 5-yr ARM interest rate is about the same as a 30-yr fixed.
Sub-prime days are over...for now anyway.
Despite my oath of never engaging you on this forum again, I couldn't resist.
ARM's are not necessarily sub-primes and someone who can qualify for a standard ARM isn't necessarily a sub-prime borrower.
Sub-primes are for people who have lousy credit and can't qualify for a standard prime rate loan, hence the term.
Adjustable Rate Mortgages are for people who desire a smaller interest rate but are willing to risk it going up after a certain period (5-7 years). The problem is when the rate rises and along with it the mortgage payment beyond what the borrower can pay. You don't have to be a sub-prime borrower for that to happen.
In other words, two different things. Regardless of where ARM rates are now, a sub-prime borrower will be stuck with a sub-prime rate.
Thus endeth the lesson.
queen, the executive summary on the profitability of CRA-related lending as reported by the Federal Reserve in 1999:
Survey responses indicate that home purchase and refinance lending is profitable or
marginally profitable for most institutions on a per institution basis (figure 1). CRA-related home
purchase and refinance lending is either profitable or marginally profitable for 82 percent of
survey respondents (chart 1a). For about one-sixth of the respondents, such lending is either
marginally unprofitable or unprofitable. This pattern holds generally across banking institutions of
different asset size, although a greater proportion of large banking institutions report their CRArelated
home purchase and refinance lending is either marginally unprofitable or unprofitable than
medium- or smaller-sized institutions.
so CRA-related loans were profitable for 82% of institutions in 1999. is it your position that post 1999, aka almost entirely when george w. bush was president, clinton somehow FORCED banks to take unproductive actions? please.
but i am not for restricting the rights of equally situated parties to freely contract.
No one has a right to contract for a loan if both parties don't agree to the contract. When the lenders are forced to agree under threat of penalty, this is hardly freely contracting.
it happens every day. do you know anyone who worked in mortgage origination?
There Exalted, DBQ has supported the assertion that lenders were forced.
Now I don't know her personally but I have been trying to hunt down her stupid Horde character on Alterac Valley.
I think she's dodging me.
clinton somehow FORCED banks to take unproductive actions? please
read it and weep
You might try a little education about things of which you obviously know nothing.
Now I don't know her personally but I have been trying to hunt down her stupid Horde character on Alterac Valley.
I think she's dodging me..
Ridiculous. A giant male Tauren hunter named Nimrod in PVP gear is pretty hard to hide. You must not be trying. :-)
Ridiculous. A giant male Tauren hunter named Nimrod in PVP gear is pretty hard to hide. You must not be trying. :-)
Of course I'm not trying. I have a priest. What do you think I am crazy?
Don't answer that. ;-)
Kill the healers first.
For the Horde!!!
(lol)
Sorry Ann....momentary thread hijack
Ann Althouse said...
"Ann omitted..."
Jeesh. I can't reprint the entire column, and I really don't appreciate your copying additional blocks of text. People can go to the link. Don't portray me as covering something up when it is obvious that all I'm doing is trying to avoid copying too much.
She doth protest too much.
Michael: ...and then at the last minute comes out with a statement when the vote is already in place."
According to Andrea Mitchell? Bwaaahaha! What a tool!
nice attack piece, but it doesn't substantiate what you are saying, that CRA-forced lending caused the crisis. rather, it says that Fannie Mae and Freddie Mac helped fuel the crisis. shocker.
it does seem to say, however, that clinton made it harder to achieve a passing CRA score around 1995, which apparently encouraged banks to issue more subprime loans. i'd be interested in more information on this, from a non-hit piece. note that there was not a subprime problem, or a housing asset bubble, anywhere near 1995. note also the Federal Reserve issued CRA executive summary i posted, which you ignored, that established that 82% of CRA-related loans were profitable as of 1999.
and any unproductive CRA legislation/rules, of course, could have been changed at any point after clinton left.
another point: mortgage originators were encouraged through higher commissions to issue subprime loans because that is what the investment banks wanted for their securitizations. this was a development that occurred post-2000 with the securitization explosion.
this is why there were so many subprime loans. ok? securitization demand.
Anybody remember the thread dedicated to Obama talking about the bracelet given to him by a soldier's mother...and how HORRIBLE it was that me mentioned it in the debate:
Well, this was in the paper yesterday:
"The mother of a Wisconsin soldier who died in Iraq said she was 'ecstatic' when Barack Obama mentioned during Friday's debate the bracelet she gave him in honor of her son.
Tracy Jopek of Merrill, WI said Sunday she was honored that the Democratic nominee remembered Sgt. Ryan D. Jopek, 20, who was killed in 2006 by a roadside bomb.
She said Obama's mention on Friday was appropriate because he was responding after John McCain aid a soldier's mother gave him a bracelet."
So much for the headline: "About that bracelet..."
Michael The Magnificent said...
"According to Andrea Mitchell? Bwaaahaha! What a tool!"
Translation: I don't want to believe it so I'll trash the messenger.
Standard wingnut strategy.
Hoosier Daddy said..."ARM's are not necessarily sub-primes and someone who can qualify for a standard ARM isn't necessarily a sub-prime borrower."
I never said they were.
I merely said the 5-year ARMs were at about the same rate as 30-year fixed. And, that sub-prime days are over...for now.
As for whether you ever engage me again: I think I can live without discussing politics with right wing redneck from Indiana.
I lived in Indiana for a few years...and that was plenty.
"that established that 82% of CRA-related loans were profitable as of 1999."
The flip side is that 18% were unprofitable, loser loans and the rest were "marginally profitable". Obviously you have never been in business. When 18% of your product is losing you money and you are barely making a profit on the rest of your business, you have several options.
1. Make more of the product (shit loans) and hope that volume will make up the difference.
2. Cut overhead drastically. Lay off people, close branches.
3. Increase fees and revenue elsewhere. ATM fees, Checking account fees, commercial loan rates and rates on credit cards etc.
4. Do both 2 and 3 at the same time. Decrease overhead and increase revenue elsewhere.
5. Cut back on the shit loans.....oh wait....you can't because you are forced to make those shit loans.
BTW. 1999 was a long time ago bucko. A lot has changed since then and over time. Interest rates for one. Reserve requirements via the Mark to Market accounting method.
I never said they were.
I merely said the 5-year ARMs were at about the same rate as 30-year fixed. And, that sub-prime days are over...for now.
That was your implication otherwise your comment to me was irrelevant based upon the discussion I was having with Exalted. You just got schooled boyo.
I think I can live without discussing politics with right wing redneck from Indiana.
Coming from a leftwing socialist that's actually kinda funny . Maybe one day you actually discuss an issue versus flinging feces in a room and accusing everyone who disagrees with you as a rightwing redneck. Until then....
/ignore
Dust Bunny Queen - I have two questions for you: Who's been President of the United States for approximately eight years...and who's been the majority in the House and the Senate for six and a half of the past eight years?
Start there...then you can whine about the Democrats.
Hoosier, you basically "assumed" something that was not true.
I love the "leftwing socialist" tripe.
Nobody in your family and none of your right wing redneck friends takes advantage of the services provided via the veteran's administration / medical and of course, mortgages, medicaid, medicare, social security, etc.
Are they also left wing socialists...or do they just get the benefits, but not the label?
Nobody in your family and none of your right wing redneck friends takes advantage of the services provided via the veteran's administration / medical and of course, mortgages, medicaid, medicare, social security, etc.
Michael, you set them up so easy it's like punting a chiuaua.
Lets see, Vet Admin. See most right wing rednecks like myself don't see providing services to people who served their country in war and peace as socialist. I guess you can call that part of the benefit package veterans get for their sacrifice. Medicare and Social Security? Well lets see, most rightwing rednecks don't see getting services that WE paid into and continue to pay into in the forms of Part B premiums as socialist. Mortgages? My mortgage is with a bank. I send a check to the bank, not the government.
Now, welfare checks for people who don't work? Socialist. Medical benefits for people who don't work and have no plans to work, socialist. Taking my money in taxes and in turn given to people who don't pay taxes in the form of services and benefits is socialist. Paying welfare benefits to illegal aliens is socialist as well as stupid and probably illegal.
Now, you may wish to take a look at the definition of socialist. I have taken the liberty of providing you a link which has multiple definitions. You will note that your examples do not meet any of the criteria.
Again, you have been schooled. Keep this up and I'll expect you to bring me an apple next time.
Coming from a leftwing socialist that's actually kinda funny . Maybe one day you actually discuss an issue versus flinging feces in a room and accusing everyone who disagrees with you as a rightwing redneck.
HD,
Take four deep breaths through your nose. Exhale each one slowly through your mouth.
When you are calm, repeat the following four times:
Never argue with an idiot. They bring you down to their level and beat you with experience every time.
Henry said... Brooks has been pushing a technocratic view of politics for a while now. He'll pick up a factoid -- like social networking research -- and hypothesize the need for national service or some similar top-down solution.
This column is typical. It is Brooks' humble request that we turn tough problems over to the experts he admires.
----
Exactly. Brooks long ago lost the distinction between sociology and political philosophy. He now has them hopelessly muddled in what used to be his keen mind.
Michael: Translation: I don't want to believe it so I'll trash the messenger.
Translation: I keep repeating that Newt lobbied AGAINST this bill, somehow thinking this supports my position that conservatives were NOT AGAINST this bill.
queen,
i understand the flipside is 18% marginally unprofitable or unprofitable. the question is how does that compare to non CRA-related loans? do you know? if it was killing banks they would get the GOP to reverse it the second a GOP president came in? (keep in mind the house had been GOP since 1994)
and as to this:
BTW. 1999 was a long time ago bucko. A lot has changed since then and over time.
welcome to the thread, thats part of my point
The Exalted: and any unproductive CRA legislation/rules, of course, could have been changed at any point after clinton left.
So it's Republican's fault they didn't undo a Democratic fsckup?
And someone else earlier claimed that it was Republican's fault for not overcoming a threatened Democratic filibuster against increasing regulations on Freddy and Fanny.
So I guess being a Democrat means never having to take responsibility for anything. Pass the buck and point the finger at the Republicans for not preventing the Democrats from running our economy into the ground.
Michael,
It means you fail common sense.
Post a Comment