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All kinds of blame to spread around! But very few of them are owning up to it.
Banks don't make bad loans to make money. They do make a mistake now and again. However until they were forced to make bad loans by BAD government policy it wasn't the rule. Forcing banks to give out bad loans is financial affirmative action!
Again we find that socialism doesn't work. Only this time it's right here in our own house.
What REALLY ticks me off is that they haven't bothered to FIX the problem and repealed the CRA.
ed
~"Watch your thoughts; they become your words. Watch your words they become your actions.
Watch your actions; they become your habits. Watch your habits; they become your character.
Watch your character; it becomes your destiny."
-Frank Outlaw.
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Not fixing the problem is a problem that crosses party lines - just like the porous Mexican border. Both have adjendas that were and are well served.
But here's a point of interest that no one has noted:
1 - Fannie Mae / Freddie Mac only account for about 20% of the loans in the country. That's huge. But it's not everything.
2 - Giving loans to those that are relatively poor is the problem per se. If one gets in touch with reality, one sees that people of all financial levels were encouraged to take loans far beyond their means and and bit of common sense. As soon as interest rates increased AND energy cost took away any cushin they may have had left, they defaulted.\
It's more GOP Smoke and Mirror to blame the Fannie & Freddy - they contributed but a fraction to this. As did the law. The the root cause is far from this.
The root: an mortgage industry making (read that encouraging) loans that they knew were bad business sense, but did give them easy profits. The mortgage writers sold them to banks and other investors (after some creative book-keeping of sorts) - all of whom were cashing in big-time on this. Profits were huge. Bigger loans = bigger commissions.
The law may have said to give loans to poor people - and we can debate about how far that should go. And the comment that not everyone can have everything? I fully agree. That's how life works. BUT, the fact is that deregulation and calling off the actual auditor oversite are primarily to blame. These auditors, etc., are Federal employees under the Executive Branch. That means the watchers were under the control of those who didn't want business interfered with: and guess who was (and is) in charge of the Executive Branch (Hint: His father also enjoyed massive real-estate based banking failures due to deregulation).
The loans that were made were rediculous. A real true fact: The police detective family that moved in across from my home only a few months ago has that For-Sale sign up - because they were convinced to buy a house that took every spare cent they had. They were the poor that are used in GOP-based excuses. They were part the Majority of those losing there homes. Given loans they couldn't afford by mortgage brokers who didn't care about what happens next, and encouraged (by the repurchase of the loans) by banks.
NO ONE MADE THEM DO THIS - BUT MORE IMPORTANTLY - NO ONE STOPPED THEM!
The borrowers signed the dotted line - but it's already been shown they were encouraged to over-borrow. They may not be innoncent, but it's the mortgage industry that's supposed to evaluate the max loan size for a given income.
The Federal government was supposed to be guaranteeing sensible loans. The Money to guarantee the loans was, indeed, to help the lower income. Common sense was still supposed to take party. The loans to be given weren't proscribe in the law as ' must be impossibly large'. The law doesn't make the impossible-sized loans. A greed real estate market did. The Building boom and help to the economy were exactly what the administration would want. Everyone was happy.
Centering the argument on Fannie Mae and Freddie Mac? It's liking making sure you flush the toilet on the Titanic before heading for the life boats.
<small></small>
"The difference between genius and stupidity is that genius has its limits." - Albert Einstein
"How do you find out if you're unwanted if everyone you try to ask tells you to stop bothering them and just go away?" - Balboos HaGadol
"It's a sad state of affairs, indeed, when you start reading my tag lines for some sort of enlightenment?" - Balboos HaGadol
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Banks DON'T loan money to people who can't pay them back unless REQUIRED to by the government. They weren't doing it prior being regulated to by the government. ALL loans that were shaky had to be offset by other holdings. That was the regulations back then. Then the affirmative action took over and banks were REQUIRED to make bad loans. The BAD loans are the ones that are causing the problems. NOT ones made to the those that could afford it. With the requirements to make bad loans the regulations were changed enabling companies like Countrywide to come into play. They didn't have to offset loans anymore. The regulations were changed. (Clinton administration) Now Countrywide could come in, make a bunch of shaky loans, sell them quickly (FM & FM) and go sell some more.
FM & FM bought them up to inflate their 'holdings' which is how they 'fixed' their bonuses. (Clinton administration) It wasn't them specifically that created the problem as you say. It was the financial affirmative action that started and then steamrolled the whole mess. Real profits weren't huge...they were accounting profits based on value which weren't there. But the folks that created the wave just rode that wave. And not one of them is being held responsible. When the republicans tried to introduce legislation to stop it.. it was blocked by democrats. Funny that republicans are still being blamed for something they tried to stop from the start then tried to fix after democrats pushed it thru. And now we are letting democrats try to fix it!
Back when the whole thing started if you stood against the CRA you were labeled racist. See where that got us now!
ed
~"Watch your thoughts; they become your words. Watch your words they become your actions.
Watch your actions; they become your habits. Watch your habits; they become your character.
Watch your character; it becomes your destiny."
-Frank Outlaw.
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Perhaps it’s different where you live, but my mortgage was originally brokered by just that – a mortgage broker. It was resold to CitiBank.
The banks make mortgages – but so do lots of other business.
Similarly, the buying up of loans by FM & FM - how, exactly does that relate to the Europeans buy up these loans, too. And the Asian nations? Maybe they thougth this paper was a good investment? Or did they want to go broke?
Ed K wrote: The BAD loans are the ones that are causing the problems. NOT ones made to the those that could afford it.
We're really not making much progress on this point, but I'll say it one last time: borrowers were encouraged to take loans beyond their means due to some very creative financing. Regulations were loosened and worse: no one was checking up (i.e., auditing). This is incredibly like the S&L disaster, and for the same reason: cutting regulations only works with honest and ethical people.
We're talking about big business - (say Enron five times in eight seconds). They have one and only one motive. Maximize profits. That's there job. Ethics are an inconvenience that must be dealt with, gotten around, bought off, or, if all else fails, accepted.
Those making loans were being allowed to behave like used-car-dealers. They found a way to finance a $675,000 home for a $50,000 yr detective. No some poor slob - that is, until he had to put his home up for sale before he was in it a year. This was never the intent of any laws. The (deliberate) confusion of admittedly questionable legislation to put home ownership into the hands of the poor as the cause of this disaster is a load of crap.
A financial house of cards built with an unregulated loan industry and encouraged by the (temporary) short term boom it caused in real estate, construction, and the other related industries collapsed. It had to. The % of loans made by the FM & FM just plain can't account for it.
Grab a Computer. Do the Math.
(to the relief of many of you, this is my last round in this particular hamster cage).
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Balboos wrote: The banks make mortgages – but so do lots of other business.
Balboos wrote: Similarly, the buying up of loans by FM & FM - how, exactly does that relate to the Europeans buy up these loans, too. And the Asian nations? Maybe they thougth this paper was a good investment? Or did they want to go broke?
You are showing your ignorance here. You should make that your last point because you still don't understand what's going on. You need to understand monetary policy plus understand banking regulations before you go and start trying to tell me what's going on.
ed
~"Watch your thoughts; they become your words. Watch your words they become your actions.
Watch your actions; they become your habits. Watch your habits; they become your character.
Watch your character; it becomes your destiny."
-Frank Outlaw.
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Keep that damn government off the backs of business.
I do understand how it works.
Business
Profits: Private - keep your government fingers off<br />
Losses: Socialism - oh how they want the government money now!
Thank goodness we've your banking expertise in our midst.
If only you'd just stay informed about reality, instead of what you would like to have as reality, we'd all be much enlightened.
In the meantime, keep blaming the mess on FM&FM and the law to make housing avialable to the lower classes.
BUT,
Most important of all -
Continue to Ignore anything to the contrary - such as entire developments of huge homes with pools, etc., in foreclosure. Those don't count in your reckoning. Just close your eyes, click your heels together three times, and they'll disappear from Fox News
For myself? I don't have the luxury of going through life cherry-picking data to make me feel all warm and cozy. My taxes are going to be raised to pay the $10 Trillion GOP debt.
"The difference between genius and stupidity is that genius has its limits." - Albert Einstein
"How do you find out if you're unwanted if everyone you try to ask tells you to stop bothering them and just go away?" - Balboos HaGadol
"It's a sad state of affairs, indeed, when you start reading my tag lines for some sort of enlightenment?" - Balboos HaGadol
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Get a clue!
Balboos wrote: In the meantime, keep blaming the mess on FM&FM and the law to make housing avialable to the lower classes.
I haven't said they were to blame. They aren't. They added to the problem (corruption)... in a huge way!
Look...after working for Countrywide and banks for the last several years I've seen what's going on. I've been in the middle of it. It wasn't the GOP. I know you want to hate businesses but the businesses did what they had to. They were required by government to make bad loans. That is the bottom line. There is NO other entity to blame other than the government forcing banks to make bad loans. PERIOD. It just so happens that the democrats were the ones who, with all good intentions, created the regulations.
ed
~"Watch your thoughts; they become your words. Watch your words they become your actions.
Watch your actions; they become your habits. Watch your habits; they become your character.
Watch your character; it becomes your destiny."
-Frank Outlaw.
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Source: http://en.wikipedia.org/wiki/Fannie_Mae">http://en.wikipedia.org/wiki/Fannie_Mae
"In 1999, Fannie Mae came under pressure from the Clinton administration to expand mortgage loans to low and moderate income borrowers. <u>At the same time, institutions in the primary mortgage market pressed Fannie Mae to ease credit requirements on the mortgages it was willing to purchase, enabling them to make loans to subprime borrowers at interest rates higher than conventional loans.</u> Shareholders also pressured Fannie Mae to maintain its record profits.[7]
"In 2000, due to a re-assessment of the housing market by HUD, anti-predatory lending rules were put into place that disallowed risky, high-cost loans from being credited toward affordable housing goals. <b>In <big>2004</big>, these rules were dropped and high-risk loans were again counted toward affordable housing goals.</b>[8]
And who was minding the store when the 2004 rules were dropped? For that matter, who was running the congress and senate during 1999, when this was put into effect?
U.S. Gov't Lesson 1: The Legislative Branch makes the laws - NOT the executive branch. So what party was running the Legislative branch . . .
"The difference between genius and stupidity is that genius has its limits." - Albert Einstein
"How do you find out if you're unwanted if everyone you try to ask tells you to stop bothering them and just go away?" - Balboos HaGadol
"It's a sad state of affairs, indeed, when you start reading my tag lines for some sort of enlightenment?" - Balboos HaGadol
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LOL LOL LOL LOL LOL
You criticize citations from respected newspapers and then refer me to a right-wing shill?
Doesn't surprise me in the least.
You still don't get it - and I'm afraid never will.
These people have been picking your pockets while waving the flag.
Why don't you look at the homes being forclosed? (www.foreclosurestore.com) Let's try something neutral, like McCains Home State (Las Vegas Zip = 89191). Scan through a few pages of listings. These aren't homes for the poor. This is nation wide. It's not socialism that got us into the mess; it's deregulation. Don't bother looking under the bed for Stalin and his boogy-men.
Redistribution of wealth? Take a look at federal spending: the industrial states pay, the rural states collect. For Palin's Alaska, it's $33K Federal dollars per person. Price supports and subsidies to farmers. Ranchers grazing on government land for a tiny fraction of the cost of grazing rights. Socialism? Where've you been? Why not call in to Levin (or Rush Limbaugh) and ask them about the traditional socialist welfare "state" of rural America, the very heart of "conservatism".
Most of all: Who had 2000 - 2006 to FIX IT and didn't do squat?
Then ask why.
Ask that last questions over and over until you figure out the answer.
"The difference between genius and stupidity is that genius has its limits." - Albert Einstein
"How do you find out if you're unwanted if everyone you try to ask tells you to stop bothering them and just go away?" - Balboos HaGadol
"It's a sad state of affairs, indeed, when you start reading my tag lines for some sort of enlightenment?" - Balboos HaGadol
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Hi Sam,
Thanks for the reply. When you say, "The republicans have treated the cream of corporate america like a socialist state for 8 years and done little for the small business owner and average person that the vast majority of U.S. people here would fall into."
Since you didn't specify any "facts" in your post, here are a few:
- The top 1% of wage earners in America (the evil rich), pay 39% of the total income tax.
- The top 5% of wage earners in America (still pretty evil), pay 59%.
- The top 10% of wage earners in America (still rich), pay more than 70% of the taxes.
A word about "the rich." How many people making $20,000 or less ever gave you a job? Instead of begrudging the rich that create jobs, we should be thanking them.
Question: In your opinion, what percentage of your income would you think is "fair" for the government to take from you?
If 10% was fair, a person making $30,000 per year would pay $3,000 in tax and a person making $90,000 would pay $9,000. Sounds reasonable right? But, as it stands today in America, a person making $30,000 per year pays $4,500 (15%), but a person making $358,000 pays $125,300 (35%). Is that fair?
Who do you think will invest in innovation, start a new business, hire people, etc.? The evil rich guy or $30,000 guy?
Anyone want to guess what Senator Obama's proposed tax "changes" and new proposed spending will do to all of us -- especially the guy considering hiring a few more programmers?
Cheers,
Calvin
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I wasn't referring to *people* I was referring to corporations getting assistance they clearly don't need. Corporate wellfare. I'm president of a corporation, no one ever gave me a handout, I've had to work hard to build this business to where it is today and I think it only fair that every business have a level playing field.
I think it's all academic anyway, I can't imagine any scenario under which Obama is not the next president at this point. I used to really like McCain back a couple of years ago when he was tough and honest and decent and seemed like a not bad guy to be running a country. The intervening time and a *lot* of compromises really changed him into just another candidate.
It's unfortunate that you guys have so few choices to vote for, the two party system is a disservice to the populace, lot's of good ideas can come from libertarians, even greens etc. I guess I'm a libertarian at heart, unfortunately we don't have those here in Canada. 
"It's so simple to be wise. Just think of something stupid to say and then don't say it."
-Sam Levenson
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John C wrote: It's unfortunate that you guys have so few choices to vote for, the two party system
Now, that I fully agree with.
John
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John M. Drescher wrote: Now, that I fully agree with.
Ditto. I think the party system just distracts us from what we should be looking at. And that's what the people stand for/do rather than what party they belong to. God only knows sometimes both Dems and Republicans can be right or wrong. But to dismiss the wrong because they're in your "group" is a lot of high school clicks. We should be past that at this level of the game I'd like to think.
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John C wrote: I wasn't referring to *people* I was referring to corporations getting assistance they clearly don't need. Corporate wellfare. I'm president of a corporation, no one ever gave me a handout, I've had to work hard to build this business to where it is today and I think it only fair that every business have a level playing field.
Exactly what handouts do we get over here do you think are so excessive that businesses deserve to loose money for during a recession?
John C wrote: I think it's all academic anyway, I can't imagine any scenario under which Obama is not the next president at this point.
Um, more people could vote for McCain. Yeah, I can imagine that; not sure why you can't. Don't be fooled by one or two skewed polls. Unless you already forgot about 4 years ago when people swore Kerry would win too.
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Jeremy Falcon wrote: Um, more people could vote for McCain. Yeah, I can imagine that; not sure why you can't. Don't be fooled by one or two skewed polls. Unless you already forgot about 4 years ago when people swore Kerry would win too.
It all goes down to the electoral college and the fact that there are less than 10 states out of 50 that are actually in play. If McCain looses Virgina or Florida the election is over.
John
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John C wrote: I used to really like McCain back a couple of years ago when he was tough and honest and decent and seemed like a not bad guy to be running a country.
Thats so true - that McCain died in about 2002.
"The difference between genius and stupidity is that genius has its limits." - Albert Einstein
"How do you find out if you're unwanted if everyone you try to ask tells you to stop bothering them and just go away?" - Balboos HaGadol
"It's a sad state of affairs, indeed, when you start reading my tag lines for some sort of enlightenment?" - Balboos HaGadol
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Yeah, vote for President Palin instead. 
“It behooves every man to remember that the work of the critic, is of altogether secondary importance, and that, in the end, progress is accomplished by the man who does things.”
–Theodore Roosevelt
{o,o}.oO( Check out my blog! )
|)””’) http://pihole.org/
-”-”-
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And this kind of argument belongs there.
Here, we prefer to bash technologies.
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Nemanja Trifunovic wrote: Here, we prefer to bash technologies.
I was starting to think that too.
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And I was involved, sorry. So easy to get into this type of discussion. Its only a few weeks away so this will be all over soon. I will sure be happy to watch TV and not have to mute every single commercial break to avoid getting so angry that I throw the remote through the TV set.
John
modified on Monday, October 20, 2008 7:07 PM
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John M. Drescher wrote: Its only a few weeks away so this will be all over soon
Amen to that.
Fortunately, the sound of one half or the other of the electorate crying doesn't make much of a noise.
"The difference between genius and stupidity is that genius has its limits." - Albert Einstein
"How do you find out if you're unwanted if everyone you try to ask tells you to stop bothering them and just go away?" - Balboos HaGadol
"It's a sad state of affairs, indeed, when you start reading my tag lines for some sort of enlightenment?" - Balboos HaGadol
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Calvin Fabre wrote: ...we live in the greatest country in the world
I am glad to hear it. So you will pay for the free range that your banks were enjoying over the last speculation boom, and other countries like mine will help to cover your banks losses. 
But what was it supposed to mean in realtion to the poll question?
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dmitri_sps wrote: But what was it supposed to mean in realtion to the poll question?
I know this is soapbox however you don't think jobs and politics have a connection?
John
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You will have to see the other threads for the reason for the banks' problems.
In relation to the poll question, my point was, as long as hard work is rewarded, you like what you do, you work hard, then you will always have a job. The American Dream of having some say in your own prosperity is still alive, but threatened by the socialists (Obama and the democrats) that want wealth redistribution.
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