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View Full Version : What caused the economic crisis in the U.S.?


harveyc
09-29-2008, 06:58 PM
This may not be popular with some people, but it's a story I've tried telling and I think this YouTube video does a better job than I can.

It is very fast-faced so drink something to pep you up before watching!!!


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Richard
09-29-2008, 08:32 PM
:goteam: Palin for Pope! :0489:

buzzwinder
09-29-2008, 08:57 PM
Wouldn't Popette be more correct, not sure!:bananas_b

harveyc
09-30-2008, 12:12 AM
I was discussing this subject with a lady last night and asked her if she thought those people that sold their homes at inflated prices were in the wrong for gouging people trying to buy a home and partly to blame for the crisis. She said "well, not really, that's supply and demand". I asked how come the general public doesn't apply the same principle for those big oil companies that just happen to be benefitting from a supply and demand environment that works out for them. I just got a disgusted look from her! ;) Hey, I don't like paying the high prices either but I figure I'm part of the problem as I'm on the demand side of the equation. I don't feel any guilt from selling a home at an inflated price. I sold my last home in 1993 at a loss.

harveyc
09-30-2008, 01:00 AM
By the way, I'm very happy with the pope I already have! I dropped by Washington, D.C. back in April to say "hi" to him! :)

Chironex
09-30-2008, 03:20 AM
Harvey, I couldn't get it to run.

harveyc
09-30-2008, 10:10 AM
Scot, it just played for me again in the window above. You can try the direct link at YouTube - Burning Down The House: What Caused Our Economic Crisis? V2 (http://www.youtube.com/watch?v=NU6fuFrdCJY) to see if that works better for you.

JCDerrick
09-30-2008, 11:39 AM
Personally I think the more partisan bickering that's done on this the worse it's going to get. While I think this particular video is clearly biased, I think both sides are to blame for this mess and for the first time I really could care less WHO fixes it or WHO broke it - just fix the darn mess already. And furthermore, make sure it doesn't happen again.

Richard
09-30-2008, 12:24 PM
Personally I think the more partisan bickering that's done on this the worse it's going to get.

Exactly. The video is a classic "us vs. them" tactic that is so unlike John McCain (unless he's being sarcastic). I really admire John McCain and was considering voting for him until the Palin incident. She is deep in the pockets of the old guard that runs the GOP central committee. Her debate on Oct. 3rd with Joe Biden ought to be interesting.

damaclese
09-30-2008, 02:27 PM
This video is no longer available due to a copyright claim by Universal Music Publishing

turtile
09-30-2008, 02:56 PM
Personally I think the more partisan bickering that's done on this the worse it's going to get. While I think this particular video is clearly biased, I think both sides are to blame for this mess and for the first time I really could care less WHO fixes it or WHO broke it - just fix the darn mess already. And furthermore, make sure it doesn't happen again.

The only problem is that both canidates clearly have no idea how to fix it.

damaclese
09-30-2008, 03:14 PM
I think the simplest and easiest way to fix this is to have each Bank refinance the loans put the back payments on the back side of the loan and take all balloon payments and stick them on the back side NO More foreclosures and the banks get to count all that as income and can show a profit on there financial statements problem salved and guess what know tax payers have to spend a sent on it as soon as there monthlys come in to line then there fir which is whats driving the lake of available credit will dissipate how ever they are going to have to start loaning in a more responsible manner and no more Fanima or fredymac shenanigans the goves going to have to finally after 236 years regulate the financial industries thees greed based businesses are a threat to are national security !

JCDerrick
09-30-2008, 03:15 PM
The only problem is that both canidates clearly have no idea how to fix it.

No argument here on that. Quite frankly I am worried we've seen but the tip of the iceberg on this. I doubt many of us were completely surprised by this turn of events. The media acts like this is some huge shock. The private sector has been hurting for a while now - shame it takes THIS to wake up the politicians and get them moving.

This year we've seen a crisis in Big Banks and Big Oil. And Big Insurance isn't far behind. Plus Big Government under Bush is ridiculous. Don't even get me started on Big Lobbying. I don't know about the rest of you, but I'm tired of getting pushed around by these types.

fishman0422
09-30-2008, 10:59 PM
I think It's really messed up how somebody goes through all the trouble to make this video and then people like Harveyc put it right in front of other people's faces and yet some of them still will not get it. Ultimately it's about responsibility. Not about who can fix it, but who was willing to fix it before it happened. It's about not allowing things like this to happen again. It's about a hell of alot more! It's about this election year. It's about who's not willing to take the blame yet still point fingers at others. It's about who got screwed and who benefitted. I am so sick and tired of the Bush bashing too, he tried to stop this and the democrats insisted nothing was wrong. NOW they blame his administation for the economy and the main stream media is right on board. It is a disgrace! And yes one party is more corrupt than the other and more to blame than the other. It is not an opinion. Some people simply need to open their eyes


THANKYOU harveyc...let's hope alot of people "get it"

harveyc
09-30-2008, 11:32 PM
Yeah, I think it would have been more effective if it had been so politically-oriented, but I guess that's hard to do when politics are involved in all of these things.

Pauly, you're talking of forcing a bank to re-write a bad loan that hasn't been paid and making it slightly larger even though the borrowers have shown in inability to pay. In the meantime, the collateral for many of these loans is worth less than the loan balance and the lender must write these loans down to what they can actually expect to recover. There's not profits to be reported when this happens!!! Somebody suggested that we remove the accounting regulations that force businesses to "mark to market" (write down assets to what their market value really is). That's just a shell game, trying to cover up losses. The problem is that bad loans have been made to people that should not have borrowed that much money nor paid that much for a house.

Google "Tulip Mania" and see if this seems similar to the housing bubble.

I've got about $300 in dead Ae Ae corms that I'd like to find someone to buy, even at a big discount! Nah, I'll take responsibility for trying too much in winter. At least I've been successful with one so far (14' total height, repotted in a 35 gallon pot yesterday).

Come on, Richard. Palin is okay, really. And she's a lot more pleasant to look at than the bums we've been watching up to now. :)

tophersmith
10-01-2008, 07:35 AM
Elizabeth Edwards just anounced that the current econimic crisis was caused by our health care system. Boy the Dem's needd to get a clue, anything that goes wrong they point there finger to Bush, as Pulousy did on Sunday.

momoese
10-01-2008, 09:39 AM
Come on, Richard. Palin is okay, really. And she's a lot more pleasant to look at than the bums we've been watching up to now. :)

This mentality scares me.

harveyc
10-01-2008, 10:27 AM
Mitchel, that should have had a ;) in it, so that you could tell I was joking about that in reply to Richard's comment. Though I personally think Palin is hands down better than Obama (he's got big promises, though!). I'm trying to keep the discussion focused on the economic crisis itself, though, instead of making criticisms of specific politicians.

mskitty38583
10-01-2008, 10:34 AM
here is an easy solution...and im sure its gonna make some people a little angry...but i think its time we put our country first instead of everyone elses first. we need to stop all the forign aid that goes out of our country to other countries EXCEPT for our allies. these countries hate us so much then they dont need our money or our help. as for the innocent women and children.....what about the ones we have here in our own country who work a low paying job, are not getting child support, and are living in these slums??? or the single mom who cant find a job ( because they are all overseas?) and is raising her children on nothing more then peanutbutter? or the single dad who is raising his children and pays more out for daycare then he actually makes? we need to bring back the jobs that have gone oveseas because of "HUGE TAX-CREDITS" and cheap labor and put them back into the hands of AMERICANS. we need to close our borders and get it back to MADE IN AMERICA BY AMERICANS. im all for helping other people but when we as a people suffer to make it better for someone else it needs to stop here and now. im so tired of hearing and seeing the fingers pointed at my president, and the nasty comments about him and the " crappy job he has done", when i have heard nothing and seen nothing productive come from the other side of the fence! im not really happy about some of palins "ideals" like the way the native alaskians have been treated( with their hunting lands and the way they are shunned in society by the government), and by her ideals of hunting an animal to extinction( alaskian wolves) but she is the lesser of two evils, and i will back JOHN MACAIN 100%. here we have freedom of choice and i choose to exercise my rights wheather it be freedom of speech or my rights to bear arms. to hunt for food or as a sport( which i do not agree with but to each his own, as long as a species is not wiped out of existance and that includes the human animal).

fishman0422
10-01-2008, 10:35 AM
This mentality scares me.What Harvey was doing was injecting a little humor, it wasn't a mentality. Though it is true she's a bit cuter than Biden. The FACT is she has the highest approval rating of any governor in the nation. She must have been doing something right. I really think people who don't care for the idea of her in the whitehouse don't like her because she doesn't fit their idea of a politician. She's not a liberal.....translation: she's perfect! Personally I knew of her and was glad when McCain picked her. I just wonder HOW you think she could be better.

bepah
10-01-2008, 12:01 PM
Actually, there is a solution that will fix this with little risk to the taxpayers, but it will never happen, because politics always (and I mean, ALWAYS) gets in the way. This solution will not save all financial institutions but will keep valid homeowners in thier homes and provide the necessary liquidity to the lenders.

1) Mortgage holders borrow on their 'toxic mortgages' to the Feds for the face value of the principle still owed on them.

2) The bank now renegotiates the loan with the homeowner, if it is possible. All payments go directly back to the Feds as repayment to the taxpayer, including interest (the bank now has recaptured thier capital and i secures free to loan it out, at normal rates). If the loan cannot be renegotiated, then foreclose, as these people probably could not pay a loan for anything. Any loan secured for this property must be a conforming loan so as to be resold by the lender, with the proceeds to go to the Feds, again to recover taxpayer money.

3) The securities created by the financial institutions may or may not have value, but the whether investment banks are secure or not, let them fall as they may.

4) With the 'mortgage meltdown' now squelched, the economy will have excess capital in the system, allowed for growth. Prices will have stabilzied, and thing will be better.

Do I like it? No. But I do not see a better way out. But it will never happen. Wall Street has too many Washington connections (Paulsen being the #1 relationship).

And pray that Obama is not President...Franklin Raines will be the Treasury Secretary.

CookieCows
10-01-2008, 12:28 PM
What Harvey was doing was injecting a little humor, it wasn't a mentality. Though it is true she's a bit cuter than Biden. The FACT is she has the highest approval rating of any governor in the nation. She must have been doing something right. I really think people who don't care for the idea of her in the whitehouse don't like her because she doesn't fit their idea of a politician. She's not a liberal.....translation: she's perfect! Personally I knew of her and was glad when McCain picked her. I just wonder HOW you think she could be better.


Maybe we have a Republican version of Ann Richards emerging? :lurk:

mskitty38583
10-01-2008, 12:54 PM
Maybe we have a Republican version of Ann Richards emerging? :lurk:

even though ann richards was a democrat i liked her. she became gov of texas the first year i moved there. she did a lot of great things for the state of texas! and if palin can do it...let her.

CookieCows
10-01-2008, 01:18 PM
Me too, I thought she was awesome!

momoese
10-01-2008, 03:21 PM
What Harvey was doing was injecting a little humor, it wasn't a mentality. Though it is true she's a bit cuter than Biden. The FACT is she has the highest approval rating of any governor in the nation. She must have been doing something right. I really think people who don't care for the idea of her in the whitehouse don't like her because she doesn't fit their idea of a politician. She's not a liberal.....translation: she's perfect! Personally I knew of her and was glad when McCain picked her. I just wonder HOW you think she could be better.

BTW, her approval rate is plummeting in her own state, you know that one that gives her foreign policy experience based on it's proximity to Russia.

How could she be better? Well there is this little thing called separation of church and state and I for one am a big proponent of it. She should be too.

Sorry folks but I don't think this is the person that should be one heart attack away from being in charge of this country. I feel was totally irresponsible for the McCain camp to choose her when there are so many other qualified choices including some great women candidates.

http://i104.photobucket.com/albums/m161/momoese/unknown.jpg

Harvey, I could probably list a hundred things that McCain has done to hurt this country, but alas it's a waste of time because let's face it, we know who we're voting for and nothing said here is going to change that. It's a waste of finger power.

Bottom line is our political system sucks, it needs a complete rebuild, from the ground up.

I'm out of this conversation, it really just brings me down.

fishman0422
10-01-2008, 04:07 PM
BTW, her approval rate is plummeting in her own state, you know that one that gives her foreign policy experience based on it's proximity to Russia.

How could she be better? Well there is this little thing called separation of church and state and I for one am a big proponent of it. She should be too.

Sorry folks but I don't think this is the person that should be one heart attack away from being in charge of this country. I feel was totally irresponsible for the McCain camp to choose her when there are so many other qualified choices including some great women candidates.

http://i104.photobucket.com/albums/m161/momoese/unknown.jpg

Harvey, I could probably list a hundred things that McCain has done to hurt this country, but alas it's a waste of time because let's face it, we know who we're voting for and nothing said here is going to change that. It's a waste of finger power.

Bottom line is our political system sucks, it needs a complete rebuild, from the ground up.

I'm out of this conversation, it really just brings me down.sigh :(

modenacart
10-01-2008, 06:19 PM
BTW, her approval rate is plummeting in her own state, you know that one that gives her foreign policy experience based on it's proximity to Russia.

How could she be better? Well there is this little thing called separation of church and state and I for one am a big proponent of it. She should be too.

Harvey, I could probably list a hundred things that McCain has done to hurt this country, but alas it's a waste of time because let's face it, we know who we're voting for and nothing said here is going to change that. It's a waste of finger power.



I am a proponent of seperation of chuch and state, but that is not in the consitution. It is amazing what is not in it that people say is.

A list of things Obama did to hurt the country can be made just the same and especially about Biden.

modenacart
10-01-2008, 06:22 PM
Nothing should be done about it by the government, companies should be allowed to go out of business. It will cause businesses to tighten up their policies.

If any president is to "blame" its Bill Clinton, he was the one that made it really easy for people who couldn't afford homes to be able to get government backed loans.

Richard
10-01-2008, 08:11 PM
Nothing should be done about it by the government, companies should be allowed to go out of business. It will cause businesses to tighten up their policies.

Yup. $700 billion is about $2300 per taxpayer which Congress proposes to borrow from overseas. I don't like that last part, but it would be o.k. if they sent me a check for $2300.

For those of you who own shares in a mutual fund for Grade A commercial paper: check it out! The money supply has been so tight that some funds are posting 3% to 5% gains per day.

modenacart
10-01-2008, 08:12 PM
For those of you who own shares in a mutual fund for Grade A commercial paper: check it out! The money supply has been so tight that some funds are posting 3% to 5% gains per day.

specific funds?

Richard
10-01-2008, 08:31 PM
specific funds?

Mine is a private fund I bought over a decade ago from Integral. It is low-risk and usually low "rule of 7" return, but in times of tight money it is where you'd like half of your portfolio. If it ever does tank, we'll all have much worse things to worry about.

harveyc
10-01-2008, 10:26 PM
Mitchel, we've had this discussion before but you've brought up abortion rights even though it is off the subject of this discussion, though I could argue that our social security system would be in better shape if we had the additional 45-50 million people paying into the system. That's the number of unborn children have been killed through what some people claim is a "right". There was once the right to own slaves also. The law was wrong about that and the law needs to be changed again to stop this moral crime. I know that you've argued before that the unborn child is just part of the woman's body but that isn't supported by the facts since the unborn child has its own DNA, has a heartbeat at 20 days after conception, and brain waves after about 40 days. All well before abortions are normally performed. There is a YouTube video where Obama says he would not want his daughters to be punished with a child for making a mistake. On the other hand, Palin is helping her daughter learn what love is really about. Love usually involves sacrifices.

I read a while back that about the only thing Obama was in charge of in his position as a senator was a committee that never met. I think he should stay in that position for a while to see what he can really get done before moving onto something bigger.

Richard, I don't want the government sending me a check for $2,300 whether it's coming from foreign debt or otherwise. I'd be willing to pay my share of the national debt right now if our government would just commit to living within its means.

Regarding Jimmy Carter's administration - I don't remember the details on who in his administration came up with the idea, but it was ridiculous that his administration enacted a credit freeze in 1980. Money is tight enough as it is right now. Just thing what would happen in our economy today if companies could no longer borrow for their projects, etc. I was coming out of college at that time and had already been assured of a job that never materialized because of that ridiculous policy. I ended up with a better job in lending anyways but eventually got hired by the company that wanted me in the first place, so it all worked out to my advantage (the best way of getting ahead for most folks is to jump around between companies, getting paid for the varied experience one has developed).

On my way to one of my chestnut orchards I am amazed at the number of for sale signs in this one stretch of country road. I would guess that a little over half of the rural homes are for sale (not farms, just rural residences with lots of 2-5 acres). It's not the most desirable area but it has a lot of "potential"! ;)

magicgreen
10-01-2008, 11:09 PM
i DON'T know about anybody else!! :waving:
But they can send me a check for $2,300 dollars, and you can bet Im gonna cash it!! :waving: And spend it to!!!! :waving:
And as far as human rights, everyone has their own opinion!!!
And, until you have to carry a child in your OWN BODY, and care for it by yourself ~ForEVER~~~ (SEems like it) Then you might need to step back, and re-examine the situation as it is ---- NOW !!!
iAM NOT TRYing to step on toes, but lets be real.....
Ya'll voiced your opinion, I voiced mine. Lets move on.

Richard
10-02-2008, 02:04 AM
The first bank crisis in the U.S. was about 1815, is that correct?

harveyc
10-02-2008, 11:16 AM
I don't remember, Richard, fill us in. You must be older than me....

damaclese
10-02-2008, 12:07 PM
Yup. $700 billion is about $2300 per taxpayer which Congress proposes to borrow from overseas. I don't like that last part, but it would be o.k. if they sent me a check for $2300.

For those of you who own shares in a mutual fund for Grade A commercial paper: check it out! The money supply has been so tight that some funds are posting 3% to 5% gains per day.

i lost 27% of the mony in my 401K this last week !

modenacart
10-02-2008, 03:03 PM
i lost 27% of the mony in my 401K this last week !

Alot of us did, but even counting the Great Depression, the market averages 11%, and we are nothing close to the great depression.

mike
10-02-2008, 07:40 PM
It is amazing to me how the same things can be looked at so differently by everyone. It's amazing that it's about me and not us. The thinking is if I am not affected then everything is OK and shame on the ones having problems. My job can never be out sourced. If anything the demand will go up in a bad economy giving me good job security. I bought a lot less house than I was able to and got a mortgage that I can work almost anywhere and pay.

Should I look down at everyone who's jobs are no longer here or felt that they were going to live the American dream and buy a nice home that they thought they could afford but should had known they could not? Remember a lot of jobs had been out sourced and they are usually good paying jobs. A lot of the employees that held these jobs owned homes, some will blame these people for loosing their homes also. These employees should had known that a job they held for ten, twenty, thirty years was going to be gone. Right?

I don't care about a party. I care about the best and the brightest person running my country. I guest that is why I can see the truth. I really don't understand how people overlook the problems in candidates for a party. I believe we have witnessed what happens when actions are taken with the two things between your leg's and not the thing on your shoulder. Some people do not have the ability to think beyond the here and now and some are blessed to be able to. God or whoever you believe in (God for me) blessed all us differently.

To me it looks like it is a cult mentality with these party's. Remember these people are politicians they are not friends or just like you unless you are one to. I am picking the one that has the ability to talk with others and get things done and not blow up when things don't go their way. I guest when you have one hundred million dollars not many people stop you from having your way but I will never know that like he will never know what's going on with you or me. I guess I should say me because I don't know you.

We see by recent events what happens when no one you work with likes you (ex. Bush trying to get the Bailout Bill passed) so McCain and Palin go and shake things up and see what you get accomplished in a government full of egos. I am picking the one who will only put our troops in harms way as a last result and not bomb bomb bomb bomb bomb Iran unless necessary. I want the class president not the school bully. Come on get real who can't be a tough guy when you are the most powerful man in the world. Not everyone can be smart.

I quit! Just remember your talk show host (radio t.v.) get paid good money to say what they say regardless to how they really feel if they were not able to convince you to believe them and get a following they would be unemployed so pay attention and stop letting others tell you how you should think. Vote for the best person for ooooouuuuurrrrr country not a party whoever you feel that is.

I was going to say I agree with Momoes and I am finish.

:2722:

modenacart
10-02-2008, 07:57 PM
It is amazing to me how the same things can be looked at so differently by everyone. It's amazing that it's about me and not us. The thinking is if I am not affected then everything is OK and shame on the ones having problems. My job can never be out sourced. If anything the demand will go up in a bad economy giving me good job security. I bought a lot less house than I was able to and got a mortgage that I can work almost anywhere and pay.

Should I look down at everyone who's jobs are no longer here or felt that they were going to live the American dream and buy a nice home that they thought they could afford but should had known they could not? Remember a lot of jobs had been out sourced and they are usually good paying jobs. A lot of the employees that held these jobs owned homes, some will blame these people for loosing their homes also. These employees should had known that a job they held for ten, twenty, thirty years was going to be gone. Right?

:2722:

I believe you have taken a lot out of contexts. The vast majority of the people losing their homes are people who borrowed way too much at the income level they had at the time. People losing their jobs is a problem and when it happens to you it doesn't seem like a statistic but it is a very small percent of the people losing their homes. To want to be bailed out when people think they should have two new cars in their driveway, to have a mortgage of 400k when they only make 60k, to have a flat screen in every room, well sorry, you shouldn't have one. People need to save their money and pay cash. If people did that, then it would be much easier to weather the hic-ups the economy suffers. This isn't the first time its happened and won't be the last. We will be ok, even with the great depression the market grows an average of 11% annual.

The fact that the average credit card debt per person in this country is 16k is embarrassing for the country and should be for the person too. People need to get over it and take responsibility for their decisions.

Its a real shame people don't hear what Ron Paul has to say, I think he was by far the most qualified person for the job.

harveyc
10-02-2008, 08:08 PM
Mike, I agree it is odd how people see things so differently and sad also how candidate followings come close to a cult. I also agree that you have to be careful who you listen to when it comes to what a particular candidate believes in and will do.

On the other hand, I don't believe you have much in the way of facts to support that Obama would not quickly go to war. In fact, it's hard to say what he would do because he has not much of a track record other than promises. What exactly has he done? At the same time, people like to point the finger at Bush as being all too eager to go to war. I believe we have probably been too quick to go to war but short memory of many people simply amazes me. Based on what some of these folks are saying today, it's hard to believe they made made these comments: snopes.com: Weapons of Mass Destruction Quotes (http://www.snopes.com/politics/war/wmdquotes.asp).

Mitchel wrote earlier that he could name 100 things McCain has done wrong for out country but he didn't bother to say one good thing Obama had done. When you do something, some decisions will turn out to be bad ones.

The current bailout has sometimes been labeled "Bush's bailout" but it is a bi-partisan effort going against the will of the majority of voters. It might actually be necessary, but we sure haven't been given enough support by are representatives of either party.

As far as jobs being outsourced, that is a very small portion of the problem which has created the current economic crisis. ARM financing to people that bought more than they should have has a big part of it, along with 100% financing, etc. If credit problems were just due to unenployment, the housing crisis would be nowhere near as severe as it currently is.

harveyc
10-02-2008, 08:11 PM
Its a real shame people don't hear what Ron Paul has to say, I think he was by far the most qualified person for the job.

I think you're right there, he just didn't play to enough special interests to get any traction! :(

modenacart
10-02-2008, 09:46 PM
The current bailout has sometimes been labeled "Bush's bailout" but it is a bi-partisan effort going against the will of the majority of voters. It might actually be necessary, but we sure haven't been given enough support by are representatives of either party.



Its funny people say that because the Bush administration said we need to get FannieMae under control back in 2001. It was the Bill Clinton Policies that losened the lending criterias to allow for people who couldn't afford homes to be able to get mortgages in the first place.

tophersmith
10-03-2008, 09:38 AM
HOW did America wind up in its worst financial crisis in decades? Sen. Barack Obama explained it this way last week: "When sub-prime-mortgage lending took a reckless and unsustainable turn, a patchwork of regulators systematically and deliberately eliminated the regulations protecting the American people." That's exactly backward. Mortgage lending took that "reckless and unsustainable turn" because of regulation - regulation driven by liberals and progressives, not free-market "deregulators." Pushed hard by politicians and community activists, the regulators systematically and deliberately altered financially sound lending practices. The mortgage market was humming along just fine when, in the late 1980s, progressives decided that it needed to be "fixed." Their complaint: Some ethnic groups got approved for mortgages at lower rates than others. In reality, mortgage lenders were simply being prudent - taking care to provide mortgages to those who could best afford to make the payments.
The shift began in 1989, when Congress amended the Home Mortgage Disclosure Act to force banks to collect racial data on mortgage applicants. By 1991, critics were using that data to paint lenders as racist by showing that minority applicants were approved at far lower rates. Banks were "Shamed By Publicity," as one 1993 New York Times headline put it. In fact, they found a racial disparity only by ignoring relevant data on applicants' ability to make mortgage payments - such as their assets and credit history. But the political pressure was intense - with few in politics or media eager to speak the truth. And then, in 1992, came a study from four researchers at the Boston Fed, which seemed to bear out the critics' contentions. That study was, in fact, based on quite flawed data - but the authors' political, media and academic protectors stifled most serious criticism, smearing the reputation of one whistleblower and allowing the Boston authors to avoid answering serious academic challenges (mine included) to their work. Other studies with different conclusions were ignored.
The very next year, the Boston Fed announced new requirements for banks - rules that have now turned out to be monumentally catastrophic: Adopt "relaxed lending standards" or risk being labeled as racists, and face serious penalties under the federal Community Reinvestment Act. Gone (as "arbitrary" and "outdated") were traditional lending requirements such as requiring a down payment or limiting mortgage payments to 28 percent of income. (Of course, the loosened lending standards weren't limited to poor and minority applicants - that would be discriminatory.)
The new standards performed as intended: Home- ownership rates, stagnant for 25 years, began a rapid 10-year ascent in 1995, with many new homeowners being lower-income and/or minority families. The large rise in demand for houses, however, fed a run-up in prices starting in 1997 - the infamous housing bubble. And rising prices hid the great vulnerability of these loans to defaults and foreclosures, because refinancing or selling at a profit was the easy alternative. Soon, these loans began to be sold in the secondary market. Fannie Mae and Freddie Mac were enthusiastic proponents of relaxed lending standards and purchased large swaths of these loans. Time after time, Fannie and Freddie trumped criticism by pointing to how they were helping broaden homeownership. Because of the subject's racial overtones, they beat back calls for reform even after financial irregularities were found.
Rating agencies such as Standard & Poor's had no experience with such loans - and imprudently used the misleading bubble-induced performance to incorrectly judge the likely performance of financial instruments based on such loans. In 2002, the "reformers" declared victory. In a Fannie report, four academic supporters of relaxed standards crowed how these changes were "fundamentally altering the terms upon which mortgage credit had been offered in the United States from the 1960s through the 1980s . . . These changes in lending herald what we refer to as mortgage innovation."
Lucky us. Now that the popped bubble has left us swimming in foreclosures, the supporters of loosened credit standards seem shy about taking credit for their "mortgage innovations." Instead, they blame subprime lenders for becoming "predatory" - when they were simply taking the Boston Fed rules to their logical conclusion while broadening the mortgage market. Investors holding mortgage-based assets now want out. Perhaps they deserve a $700 billion refund - since they were sold a bill of goods by "progressive" politicians, academics and government officials who, in the hope of remaking society, insisted that loans based on relaxed underwriting standards were sound.
Stan Liebowitz is the Ashbel Smith professor of economics at the Business School at the University of Texas at Dallas.

Richard
10-03-2008, 06:12 PM
Regardless of your political persuasion, I believe almost everyone here will find the articles in this week's (October 4-10) Economist magazine of interest.

momoese
10-04-2008, 07:55 PM
Mitchel wrote earlier that he could name 100 things McCain has done wrong for out country but he didn't bother to say one good thing Obama had done. When you do something, some decisions will turn out to be bad ones.



Wow Harvey, you post a video bashing Obama, and say nothing positive in that post about McCain, but when I merely claim that I can provide a laundry list of bad things McCain has done you look down on me for not posting something positive about Obama! That's a little hypocritical.

Richard
10-04-2008, 10:58 PM
Here's an interesting perspective on the vice-presidential debate. Also, the guy selling T-shirts is an excellent entrepreneur!

http://www.nytimes.com/2008/10/04/opinion/04blow.html

chong
10-04-2008, 11:14 PM
Here's an interesting perspective on the vice-presidential debate. Also, the guy selling T-shirts is an excellent entrepreneur!

http://www.nytimes.com/2008/10/04/opinion/04blow.html

Gee, what a surprise! Was that from the New York times??

harveyc
10-05-2008, 12:49 AM
Wow Harvey, you post a video bashing Obama, and say nothing positive in that post about McCain, but when I merely claim that I can provide a laundry list of bad things McCain has done you look down on me for not posting something positive about Obama! That's a little hypocritical.

Mitchel, you are mistaken, my friend. Glad to see you back, though! :)

That video criticized many politicians, not only Obama, for things that they did wrong that contributed to poor lending practices. And the video did, in fact, mention bills that McClain tried to get through congress to reform Fannie Mae, etc. So what has Obama done to try to remedy the poor lending practices?

The point in posting the video to begin with is that it contained more than political bashing but how providing more credit to risky borrowers under the plan to increase home ownership among the less wealthy really was not such a wise idea.

Okay?

And, I did not call you any names. Lets stay civil in our discussions, okay?

harveyc
10-05-2008, 01:02 AM
Isn't it a little funny how that article in the NYT makes fun of Palin for use of "misplaced also’s and there’s — gibberish" when his column needs to be revised because of several mistakes he made himself. Doesn't he have time to review his column a bit better before publishing it? Someone in a debate doesn't have the same opportunity, obviously.

Richard
10-05-2008, 01:19 AM
Isn't it a little funny how that article in the NYT makes fun of Palin for use of "misplaced also’s and there’s — gibberish" when his column needs to be revised because of several mistakes he made himself. Doesn't he have time to review his column a bit better before publishing it? Someone in a debate doesn't have the same opportunity, obviously.

Harvey, it is true that Sarah Palin has her own communication style and that the writer didn't care for it. What I found interesting was the absolute bigotry he observed in the young Republicans. This kind of divisiveness is unhealthy.

harveyc
10-05-2008, 01:37 AM
"absolute bigotry" ??? Honestly, I don't know what you are referring to, was there something in that opinion piece before that isn't there now? Or do you mean because one guy referred to his grandmother as a pinko socialist? That is only one individual and there is nothing in that short piece to indicate that was the predominant attitude of the young Republicans. Also, it seems that the comment was made in jest, from what I can tell. Also, to be fair, passions run deep on both sides. Also, it's easy to find slanderous comments about others. Also, politics is ugly. (the also's were added just to keep in the spirit of the discussion!)

momoese
10-05-2008, 02:21 AM
Well I don't really enjoy talking about a system that is not working for my country, but I refuse to have you drag me through the mud and try to make me look like the bad guy. No way pal.

And, I did not call you any names. I never said you did. Guilt much?

Lets stay civil in our discussions, okay?

That's just more of the same hypocrisy from you with your backhanded comments.

You know very well why you posted the video that almost exclusively and might I point out incorrectly puts most of the blame square on Obama when McCain and his deregulations and lobbying are just as much or more to fault.

BTW, your "Maverick" who won't sign any more pork spending just signed over 130 billion. Yeahhhh

McCain is a traitor to our country and the men who served in Vietnam, a blatant liar, a flip flopper extraordinaire who is in league with the worst of the worst when it comes to lobbying, economic policy, stealing old folks life savings, etc etc, and has an idiot as a running mate which you seem to think is pretty so that makes her qualified. Oh that's right, you were just being sarcastic.......yeah ok.

Did you know that your buddy McCain owns the website called VoteForTheMilf.com along with about 25 other anti Obama websites? What a great guy he is!

Well, his numbers are slipping even further, so maybe there is still hope for us Americans.

harveyc
10-05-2008, 02:34 AM
Mitchel, you're being very rude and unfair in your comments.

I am not a hypocrite and not making any "backhanded comments". You mis-characterize the video to justify your bashing and when I point that out, you claim I'm trying to drag you into the mud. You are being the hypocrite.

McCain is not my "buddy". Is Obama your "boy"??? What's with all of these cute names you are coming up with?

I think McCain is a much better choice than Obama who has very limited experience in doing anything besides making promises.

And there is some hope for Democrats after all! Democrats for McCain - Home (http://www.democratsformccain.com/)

Mitchel, you seem very violent in your attitude with these comments, not like the person I truly believe you are. I have nothing against you for having views different than me and there is no reason for you to come out with such attacks like this.

harveyc
10-05-2008, 02:40 AM
More, with quote from President Clinton

<object width="425" height="344"><param name="movie" value="http://www.youtube.com/v/r2RZ0sUcVcE&hl=en&fs=1"></param><param name="allowFullScreen" value="true"></param><embed src="http://www.youtube.com/v/r2RZ0sUcVcE&hl=en&fs=1" type="application/x-shockwave-flash" allowfullscreen="true" width="425" height="344"></embed></object>

chong
10-05-2008, 02:41 AM
Harvey, it is true that Sarah Palin has her own communication style and that the writer didn't care for it. What I found interesting was the absolute bigotry he observed in the young Republicans. This kind of divisiveness is unhealthy.

I don't know if I read the same article. Was it the one entitled "The Joe Biden Show"? If so, I cannot find the observation that you are referring to. As one who has experienced and was object of bigotry, many times in my career, I would be interested in learning what the telltale signs I missed in the writer's observation, which made you think they were bigots. Can you enlighten me?

momoese
10-05-2008, 09:58 AM
I guess we can agree to disagree on what I see as your hypocrisy.

Yes, you can call Obama my boy, I'm fine with that even though as you already know he's not my first choice.

Maybe it's time to start showing you just exactly who you are planning to vote for. I'll start another thread.

modenacart
10-05-2008, 10:03 AM
Well I don't really enjoy talking about a system that is not working for my country, but I refuse to have you drag me through the mud and try to make me look like the bad guy. No way pal.

I never said you did. Guilt much?



That's just more of the same hypocrisy from you with your backhanded comments.

You know very well why you posted the video that almost exclusively and might I point out incorrectly puts most of the blame square on Obama when McCain and his deregulations and lobbying are just as much or more to fault.

BTW, your "Maverick" who won't sign any more pork spending just signed over 130 billion. Yeahhhh

McCain is a traitor to our country and the men who served in Vietnam, a blatant liar, a flip flopper extraordinaire who is in league with the worst of the worst when it comes to lobbying, economic policy, stealing old folks life savings, etc etc, and has an idiot as a running mate which you seem to think is pretty so that makes her qualified. Oh that's right, you were just being sarcastic.......yeah ok.

Did you know that your buddy McCain owns the website called VoteForTheMilf.com along with about 25 other anti Obama websites? What a great guy he is!

Well, his numbers are slipping even further, so maybe there is still hope for us Americans.

I think you are taking this way to personal. I didn't see any personal attacks from Harvy.

Both canidates are liers and cheaters, Obama included and to think otherwise is just plain nieve.

momoese
10-09-2008, 12:00 AM
I think you are taking this way to personal. I didn't see any personal attacks from Harvy.

Both canidates are liers and cheaters, Obama included and to think otherwise is just plain nieve.

I agree it would be naive but how does that fit into this conversation? Did someone make a false claim?

Richard
10-09-2008, 11:42 PM
I agree it would be naive but how does that fit into this conversation? Did someone make a false claim?

Did anyone else read the 20 page analysis of the candidates in this week's The Economist ?

harveyc
10-10-2008, 01:38 AM
No, I haven't been more than a few miles from my farm in a week or so, and haven't seen it yet. I don't subscribe to it though I used to read it some of the time in one of the offices I used to work at. I'm just to busy with chestnuts now, just finished sorting chestnuts and bagging chestnuts into the cooler 20 minutes ago and then processed more orders. I'm sure not seeing any slowdown in my sales, fwiw.

harveyc
10-10-2008, 01:44 AM
Okay, it just dawned on me that they might actually have this published on the Internet and I see some of it there, but need to look more in the morning when I'm half awake.

I don't believe that the one statement of economists being objective is actually a very objective comment, though.

Going Bananas
09-26-2015, 01:40 PM
I think we need another classic thread like this
for the current presidential election.

Richard we need you and your
political top hat and bow tie again!
Where are you?