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QuoteIf VISA decides to lower their standards and raises my credit limit from the current $24,500 to $75,000 on my credit card. And I then go and spend it all, can I blame VISA for increasing my credit limit and blame them when I make stupid decisions?
To me, this whole crisis proves that pure capitalism doesn't work.
It proves capitalism doesn't work perfectly. Neither does any other type of economy, though the definition of perfect is open to interpretation. Some people's definition of perfect might include no risk. Not mine. Risk is part of capitalism. So is speculation. Bubbles are and will always be a part of any market economy.
If VISA gave you a credit line beyond your means and you got in trouble; yes, you are to blame for your personal demise. If they give millions of people credit beyond their limit and they abuse it and bring down the national or global economy, then VISA shares blame.
" . . . the lust for power can be just as completely satisfied by suggesting people into loving their servitude as by flogging them and kicking them into obedience." -- Aldous Huxley
SkyDekker 1,465
QuoteIf VISA gave you a credit line beyond your means and you got in trouble; yes, you are to blame for your personal demise. If they give millions of people credit beyond their limit and they abuse it and bring down the national or global economy, then VISA shares blame.
To me that contradicts eachother. If one person is to blame for spending more than they can afford, then millions of people should be to blame too.
chuckakers 425
QuoteQuoteIt's not hard to understand. You just won't accept the answer. The housing bubble is the primary cause of the current overall economic situation, and the housing bubble was caused by ludicrous decisions in Washington at the hands of Clinton, Dodd, Frank, and their buddies.
So what happened to personal responsibility. Isn't that what, specially republicans and conservatives, matters?
If VISA decides to lower their standards and raises my credit limit from the current $24,500 to $75,000 on my credit card. And I then go and spend it all, can I blame VISA for increasing my credit limit and blame them when I make stupid decisions?
No argument, there. I have thought - and said, when asked - all along that the FIRST category of people to blame are those who bought homes they couldn't afford. The libs don't want to hear that, though. They insist on blaming "predatory lenders".
Doesn't the same hold true for Fannie and Freddy. Yes, I agree that they lowered the lending standards (which I think was a big mistake). However, it was still the banks and mortgage brokers that decided to approve mortgages. Nobody forced banks and financial institutions to invest in ABCP or engage in default swaps.
Those banks and brokers were encouraged to make the loans, often my means of ACORN protests outside their front doors (not that that matters to your point that they could've turned away those loans - and faced more of said protesting). More importantly, the banks and mortgage companies had no stake in the borrowers, because Fannie and Freddie ALSO decided to back any mortgage that failed! And all at the hands of the same guys I've mentioned numerous times, and all under the banner of "affordable housing".
To me, this whole crisis proves that pure capitalism doesn't work. People will not make decisions based in their own self interest and forms of regulations and protections have to be in place. (Before people start screaming, I also don't believe that communism works, funny enough for the same reason.....greed)
To me it proves - once again - that the government f*cks up everything it touches, with the exception of the military.
The mantra that we should not stand in the way of companies making money is simply not valid. That is exactly what has lead to this recession.
If you mean because of the housing bubble, I refer you to my original point that it was the dem lawmakers that forced moronically low lending standards upon the industry through Fannie and Freddie. If you mean something else, you'll need to explain. Companies making money did not cause the recession.
Solely blaming Freddy and Fannie is like me blaming VISA for my credit card debt. It's silly.
I didn't blame them at all. They were guided by laws. Laws written by Dodd an Frank, as encouraged by Clinton.
Chuck Akers
D-10855
Houston, TX
D-10855
Houston, TX
chuckakers 425
Quote>I contend that it caused the bulk of the problems in the housing market by
>creating false demand that could never be self-sustaining.
Your premise seems to be that the CRA encouraged banks to make risky subprime loans to people who otherwise could not afford housing, and these risky loans led to defaults which led to the current crisis. Had the CRA not existed, these banks would not have made these risky subprime loans, thus reducing their risk.
Let's look at the data:
Subprime loans made by banks with nothing to do with the CRA: 50%
Subprime loans made by banks with some part (but not all) of their company regulated by CRA: 25%
Subprime loans made by banks that were regulated by CRA: 25%
Afraid the facts aren't with you there.
A few other tidbits:
Fully regulated CRA banks were less likely to make subprime loans overall - and when they did, their overall interest rates were, on average, lower (from a Traiger and Hinckley study)
Independent banks made high-risk subprime loans at more than twice the rate of CRA-regulated banks (per Janet L. Yellen, president of the Federal Reserve Bank of San Francisco.)
There's no empirical evidence to support the claim that the law pushed banking institutions to undertake high-risk mortgage lending. (per Randall Kroszner of the San Francisco Federal Reserve Bank.)
Bill - how many tmes to I have to say the same thing? I'm NOT talking about the CRA. We're talking about the lowered standards of the 1990's and early 2000's through Freddie and Fannie. It's not the same thing. Look at the attached pdf document from the OP. THAT's what this thread is about.
Chuck Akers
D-10855
Houston, TX
D-10855
Houston, TX
chuckakers 425
QuoteQuoteThe way it works is we go further into debt to try to generate commerce that will stimulate the economy, create jobs, get back on track, and eventually pay off said debt.
It has been shown to work (usually), but does not reduce the total pain.
When has it worked? Details. please.
USA following the Great Depression and Japan in the 80's are 2 prime examples of governments injecting big money to create commerce to alleviate short term catastrophic pain.
Remember, I didn't say it fixed things by completely eliminating all problems and pain; just that it is one option to reduce the level of short term pain. That reduction is paid for by having to endure lower levels of pain long term.
There will be some pain no matter what. It is impossible to fool a contracting economy just by printing more money.
While I can't comment on the Japan thing with no real knowledge of the specifics, I can tell you the injection of money during the great depression didn't do squat. The country remained in very bad shape for nearly 10 years until the war factories went up for WWII. Most economists looking back at it agree that it was the war - and not the spending - that pulled the nation out of the GD.
Chuck Akers
D-10855
Houston, TX
D-10855
Houston, TX
chuckakers 425
QuoteQuoteWhen I say "well established" I mean the details have been widely published and never refuted, even by the very people the stories are about. Short of an all out thesis, I don't know what else to give you.
Greenspan has even admitted his errors in thinking. I've not seen anybody from any angle dispute the source of the problem.
Some on here sure have.
Chuck Akers
D-10855
Houston, TX
D-10855
Houston, TX
QuoteQuoteWhy do people keep posting the same thing over and over again? Is this what passes for debate and discussion here?
I grant you that minimum lending standards were changed. That is really not in contention. What was the effect of those changes on the overall economy? What was the impact of those changes versus other things that were happening at the same time? Why is this question so hard to understand?
It's not hard to understand. You just won't accept the answer. The housing bubble is the primary cause of the current overall economic situation, and the housing bubble was caused by ludicrous decisions in Washington at the hands of Clinton, Dodd, Frank, and their buddies.
This is all well established. You just keep looking for an answer you like.
Irony score 10/10.
Plenty of data has been presented (as opposed to opinion pieces which you present) and you refuse to accept.
You have not presented a single item that proves that CRA, Dodds or Frank, fannie, or Freddie CAUSED the banks to behave in the irresponsible way that lead to the crisis.
If any congressional action encouraged bad behavior by banks, look to Gramm (R), Leach(R) and Bliley(R).
If you can't fix it with a hammer, the problem's electrical.
chuckakers 425
QuoteQuoteQuoteWhy do people keep posting the same thing over and over again? Is this what passes for debate and discussion here?
I grant you that minimum lending standards were changed. That is really not in contention. What was the effect of those changes on the overall economy? What was the impact of those changes versus other things that were happening at the same time? Why is this question so hard to understand?
It's not hard to understand. You just won't accept the answer. The housing bubble is the primary cause of the current overall economic situation, and the housing bubble was caused by ludicrous decisions in Washington at the hands of Clinton, Dodd, Frank, and their buddies.
This is all well established. You just keep looking for an answer you like.
Irony score 10/10.
Plenty of data has been presented (as opposed to opinion pieces which you present) and you refuse to accept.
You have not presented a single item that proves that CRA, Dodds or Frank, fannie, or Freddie CAUSED the banks to behave in the irresponsible way that lead to the crisis.
If any congressional action encouraged bad behavior by banks, look to Gramm (R), Leach(R) and Bliley(R).
So you are completely discounting the New York Times article attached to the OP's post? How many more noteworthy news sources do you want that are simply reporting what is part of the public record? I'm sure there are others, I just don't wish to spend my time doing the research. You can easily find it too, if you care to see the other side of things.
More importantly, none of the players involved have denied what they did. They just deny that it caused the problem.
Not good enough? Hit youtube. There's plenty of taped proceedings with those in question saying exactly what I and others here say they said. Read what economists say too. Let that be your proof. It has the rest of us convinced.
Chuck Akers
D-10855
Houston, TX
D-10855
Houston, TX
QuoteQuoteQuoteQuoteWhy do people keep posting the same thing over and over again? Is this what passes for debate and discussion here?
I grant you that minimum lending standards were changed. That is really not in contention. What was the effect of those changes on the overall economy? What was the impact of those changes versus other things that were happening at the same time? Why is this question so hard to understand?
It's not hard to understand. You just won't accept the answer. The housing bubble is the primary cause of the current overall economic situation, and the housing bubble was caused by ludicrous decisions in Washington at the hands of Clinton, Dodd, Frank, and their buddies.
This is all well established. You just keep looking for an answer you like.
Irony score 10/10.
Plenty of data has been presented (as opposed to opinion pieces which you present) and you refuse to accept.
You have not presented a single item that proves that CRA, Dodds or Frank, fannie, or Freddie CAUSED the banks to behave in the irresponsible way that lead to the crisis.
If any congressional action encouraged bad behavior by banks, look to Gramm (R), Leach(R) and Bliley(R).
So you are completely discounting the New York Times article attached to the OP's post? How many more noteworthy news sources do you want that are simply reporting what is part of the public record? I'm sure there are others, I just don't wish to spend my time doing the research. You can easily find it too, if you care to see the other side of things.
More importantly, none of the players involved have denied what they did. They just deny that it caused the problem.
Not good enough? Hit youtube. There's plenty of taped proceedings with those in question saying exactly what I and others here say they said. Read what economists say too. Let that be your proof. It has the rest of us convinced.
NYT and youtube don't prove causation of anything at all.
Do you know what "causation" means? Because your posts strongly suggest that you don't have a clue.
Show me proof that investment banks bought "securitized mortgages" because of government action.
Show me proof that government action forced ratings agencies to give ratings to securitized mortgage investments that were way too high.
Show me proof that the government in any way forced anyone to participate in credit default swaps.
Show me, and you may have a point.
Otherwise you have nothing.
If you can't fix it with a hammer, the problem's electrical.
hwt 0
Does this mean that they cant blame it on Bush?
Somewhere there is an article that warns about the Democrats push to lower restrictions would collapse the banking system, it is around the same time as that article. Blue Skies!
QuoteDoes this mean that they cant blame it on Bush?
Somewhere there is an article that warns about the Democrats push to lower restrictions would collapse the banking system, it is around the same time as that article. Blue Skies!
Plenty of blame to go around: The Fed, with its interest rate cuts fired up the bubble. Bush did nothing when warned and he had GOP control of both houses of Congress. Clinton signed the bill lowering regulatory standards, the investment banks VOLUNTARILY bought up the crap that Wall Street offered them, etc., etc.
riddler 0
It seems like the right has taken up mortgages as the sole reason for our financial problems. I never hear anyone on the right talk about how the Bush administration allowed a loophole in offshore oil speculation that caused the gas prices to rise dramatically last year. I rarely hear about how the GOP instituted a repeal of laws that allowed banks to gamble your money on risky investments (of which mortgages were just one). Nor do I hear about how an illegal war in Iraq increased our national debt by 50% in just eight years, which pummeled the dollar on the world market.
But hey, if mortgages are the only thing to blame, then we should see a complete turnaround in a few short years when housing prices are back up, right?
But hey, if mortgages are the only thing to blame, then we should see a complete turnaround in a few short years when housing prices are back up, right?
Trapped on the surface of a sphere. XKCD
nerdgirl 0
QuoteQuoteIf Fannie Mae and Freddie Mac are to blame for the “current economic condition,” there is one test that one can do: those are American institutions; have similar housing bubbles and subsequent mortgage default crises been observed in other nation-states?
What difference does that make? It may have happened in other nation-states. It might not have.
Scott - Are you genuinely asking a question that you want a response, being rhetorical, or are you trolling?
Previously I would have, as usual, functioned under the assumption of the first. A pointed but a real question.
Over the last month or so, the dialogue here has rapidly degraded, with the downward trend accelerating in the last 10 days.
So I don’t know anymore whether you’re actually asking or question or just trolling
/Marg
Act as if everything you do matters, while laughing at yourself for thinking anything you do matters.
Tibetan Buddhist saying
QuoteIt seems like the right has taken up mortgages as the sole reason for our financial problems. I never hear anyone on the right talk about how the Bush administration allowed a loophole in offshore oil speculation that caused the gas prices to rise dramatically last year.
it wasnt Bush but under clinton that caused the gas prices to go up. now before you go of half bent understand that the deregulation that caused the futures market to rise was actually passed in Clintons years. cox admitted to it acording to this article.http://www.stwr.org/multinational-corporations/how-big-oils-lobbyists-contributed-to-big-finances-crash.html
isn't it kinda funny the democrats, banks and companies mentioned in this article are all failing except for the oil companies?
Greenspan has even admitted his errors in thinking. I've not seen anybody from any angle dispute the source of the problem.
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