FACTS on Dubya's great recession

Which branch had OVERSIGHT via SEC, FBI, OCC, etc? Which branch had POLICIES as I've outlined REPEATEDLY that pushed the subprime bubble and cheered on the Banksters?

I forgot, Prez policy is ONLY important when St Ronnie creates 17 years of prosperity (according to right wings narrative), BUT when the same policy (like Ronnie ignoring regulator warnings on the S&L crisis OR DUBYA'S SUBPRIME BUBBLE) FAILS, IT'S AN EQUAL SHARE OF BLAME, lol

 

Bush sent H.R. 1461 because it was an extremely weak bill that would not have accomplished anything. It was a watered down piece of crap that Congress passed just to say they did something when it wouldn't have stopped anything. Congress was supposed to redo it but they never could, MAINLY BECAUSE OF DEMOCRATIC OPPOSITION.

http://www.presidency.ucsb.edu/ws/?pid=24851

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The republicans did not have a supermajority you know.

 

Got it, MORE opinions based on BULL(*)(*)(*)(*)

Weird you will not acknowledge Dubya WAS THE ACTUAL REGULATOR OF F/F?


HE forced them to up their goals from 50% to 56% in 2004, dropping the rules Clinton had put in place in 2000 to NOT count the subprime loans in those goals AND FORCED F/F TO PURCHASE $440 BILLION (MORE THAN 100 TIMES THE ACCOUNTING SCANDALS TOTAL NUMBERS FROM 2003-2004 ACCOUNTING SCANDAL, LOL) IN THE SECONDARY MARKETS (MBS's)...lol

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It takes a super majority to get a bill out of the GOP majority House 2001- Jan 2007???? lol

ONE bill made it out of there, DUBYA OPPOSED IT!!!

 

Actually that bill never passed the Senate. Bush opposed it the whole time but it never actually got to his desk.

He wanted it redone.

Are you totally ignorant of the points you are trying to argue?

And would you like to know why it never passed the Senate?

Because the democrats took over in 2006 and KILLED IT.

 

Weird, you mean the Prez couldn't get the GOP House to give him ONE bill that he liked? I mean 2 UNFUNDED tax cuts (cutting spending or increasing taxes), 2 UNFUNDED wars (again cutting spending or getting more revenues) AN UNFUNDED Medicare expansion, a bill to get between a husband and his wife (Schiavo) but Dubya couldn't get the GOP House to give him ONE bill he liked UNTIL the Dems tok power in 2007?

THAT'S YOUR POSIT? LOL

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Myth 1

There has been no official bipartisan consensus on the causes of the financial crisis: An official government report was produced in April 2011 by the Senate Permanent Subcommittee on Investigations, led by Chairman Carl Levin (D-MI) and Ranking Member Tom Coburn (R-OK), titled Wall Street and the Financial Crisis: Anatomy of a Financial Collapse. The “Levin-Coburn Report,” a 639-page document, including 2,849 footnotes unanimously and unambiguously concluded that “the [2008] crisis was not a natural disaster, but the result of high risk, complex financial products; undisclosed conflicts of interest; and the failure of regulators, the credit rating agencies, and the market itself to rein in the excesses of Wall Street.”


Myth 3

The financial crisis was brought about because the Community Reinvestment Act of 1977 forced banks to lend to people with low incomes who could not afford to pay back their mortgages: The FCIC Majority and Primary Dissent roundly reject this myth, leaving the Solo Dissent as the lone proponent of this shaky story. The Community Reinvestment Act (CRA) was enacted to prevent banks from refusing to extend loans to creditworthy borrowers in particular neighborhoods, a practice known as “redlining.” The FCIC Majority notes that “the CRA requires banks and savings and loans to lend, invest, and provide services to the communities from which they take deposits, consistent with bank safety and soundness.” Further,
it states that

the CRA was not a significant factor in subprime lending or the crisis. Many subprime lenders were not subject to the CRA. Research indicates only 6% of high-cost loans—a proxy for subprime loans—had any connection to the law. Loans made by CRA-regulated lenders in the neighborhoods in which they were required to lend were half as likely to default as similar loans made in the same neighborhoods by independent mortgage originators not subject to the law.

Similarly, the Primary Dissent explicitly states that the Community Reinvestment Act was not a “significant cause.” Many government officials and scholars have also rejected this myth. In contrast, the Solo Dissent singles out U.S. government housing policy, including the CRA, as the sine qua non of the financial crisis.

Myth 4

The giant government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, caused the financial crisis because the government pushed them to guarantee mortgage loans to people with low incomes as part of their public housing mission: Not exactly—both the FCIC Majority Report and the Primary Dissent agree that Fannie and Freddie on their own did not cause the financial crisis. They focus blame largely on the private-label mortgage market. Fannie and Freddie did not originate any loans; the “exotic” and high-risk loans were designed by and extended to borrowers through the private-label pipeline. While the Majority and the Primary Dissent concur that Fannie and Freddie’s business model was flawed, they also agree that affordable housing goals neither drove Fannie and Freddie to ruin nor caused them to create the overwhelming demand for predatory, high-risk, mortgages.

The Majority Report stated that the affordable housing goals that the Department of Housing and Urban Development (HUD) gave to the GSEs “did contribute marginally” to their purchase of risky mortgages. But it was the desire to gain market share and increase executive compensation that drove the management teams at Fannie and Freddie to fill their portfolios with high-risk private-label mortgage-backed securities. It was the growth of their portfolio business for profit coupled with a 75– 1 leverage ratio—not their public housing mission—that caused them to fail. Fannie and Freddie “had a deeply flawed business model as publicly traded corporations with the implicit backing of and subsidies from the federal government and with a public mission.”

Similarly, the Primary Dissent concluded that “Fannie Mae and Freddie Mac did not by themselves cause the crisis, but they contributed significantly in a number of ways.” It noted that U.S. housing policy does not itself explain the housing bubble. The Primary Dissent echoed the Majority in contending that “Fannie Mae and Freddie Mac’s failures were the result of policymakers using the power of government to blend public purpose with private gains and then socializing the losses.” In his Solo Dissent, Peter Wallison blamed housing policy and the GSEs for the crisis.


Myth 5

Mistakes were made, but there was not widespread fraud and abuse throughout the financial system: There is evidence of widespread fraud and abuse throughout the private mortgage market. Examples exist across the mortgage supply chain, beginning with fraud in mortgage documentation and ending with the peddling of worthless synthetic mortgage-related bonds to guileless institutional investors. From borrowers, to brokers, to lenders, to bank securitizers, to credit-rating agencies, to investment bankers, the Majority Report found evidence of either fraud or corrupt and abusive behavior across each link. It describes FBI agents warning of mortgage fraud in 2004 and 2005 and housing advocates early and consistently trying to get the attention of regulators to crack down on predatory lending. As for abuse, the bipartisan Levin-Coburn Report and the FCIC Majority provided many instances of lenders making loans they clearly knew borrowers could not afford.


The Primary Dissent agreed that the industry’s conduct went well beyond mistakes and errors: “Securitizers lowered credit quality standards and Mortgage originators took advantage of this to create junk mortgages.” Although Wallison’s Solo Dissent rejected the notion that fraud was an “essential cause” of the crisis, he agreed that it was a “contributing factor and a deplorable effect of the bubble.” He acknowledged that “mortgage fraud increased substantially” beginning in the 1990s “during the housing bubble” and that “this fraud did tremendous harm.” But unlike the Majority and Primary Dissent, Wallison blamed “predatory borrowers” as the ones who “engaged in mortgage fraud.” LOL



Myth 6

The financial crisis was caused by too much government regulation: Deregulation and regulatory forbearance—too little regulation, rather than too much—contributed to the crisis. The entire toxic- mortgage supply chain was enabled by decades of deregulation and desupervision. The Levin-Coburn Report included more than eighty pages focused exclusively on the regulatory failure at one agency, the Office of Thrift Supervision (OTS). It also made recommendations for further reform beyond Dodd-Frank’s changes. The FCIC Majority stated that more than three decades of:

deregulation and reliance on self- regulation by financial institutions, championed by former Federal Reserve chairman Alan Greenspan and others, supported by successive administrations and Congresses, and actively pushed by the powerful financial industry at every turn, had stripped away key safeguards, which could have helped avoid catastrophe. This approach had opened up gaps in oversight of critical areas with trillions of dollars at risk, such as the shadow banking system and over-the-counter derivatives markets. In addition, the government permitted financial firms to pick their preferred regulators in what became a race to the weakest supervisor.

Similarly, the Primary Dissent identified “in effective regulatory regimes” for nonbank mortgage lenders as an important “causal factor.” It faulted “lenient regulatory oversight on mortgage origination” at the federally regulated bank and thrift lenders Wachovia, Washington Mutual, and Countrywide.

In the Solo Dissent, Wallison claimed the Majority had “completely ignored” solid evidence that there were not thirty years of deregulation. He pointed to the FDIC Improvement Act of 1991 (FDICIA), a law that he said “was celebrated at the time of its enactment as finally giving the regulators the power to put an end to bank crises.”

Contrary to his assertion, the Majority did discuss FDICIA; it has nothing to do with the deregulation that enabled high-risk mortgage lending and securitizing. This law requires the FDIC to shut down or sell a failing bank or thrift. This part of the law did not apply to independent investment banks like Bear Stearns and Lehman Brothers; for them the choice was bailout or bankruptcy. And, there were loopholes in FDICIA. If the regulators determined that the firm posed a “systemic risk” to the financial system, the FDIC did not have to pursue a resolution of “least cost” to the deposit insurance fund. Also, the Fed was permitted to make emergency loans to failing banks. Given these loopholes, the Majority explained that FDICIA sent a “mixed message: you are not too big to fail—until and unless you are too big to fail. So the possibility of bailouts for the biggest, most centrally placed institutions—in the commercial and shadow banking industries—remained an open question until the next crisis, 16 years later.” Indeed, the “systemic risk” exception would be invoked several times during the bailouts.


Myth 7

Nobody saw it coming: Plenty of people saw it coming, and said so. The problem wasn’t seeing, it was listening. As both the Levin-Coburn Report and the FCIC Majority showed, financial sector insiders, consumer advocates, regulators, economists, and other experts saw the warning signs. They spoke out frequently about the housing bubble and the mortgage underwriting practices that fueled it. Yet most whistleblowers were ignored or ridiculed at best, and fired and blacklisted at worst.

The Primary Dissent emphasized that some players in the market saw what was ahead: “Managers of many large and midsize financial institutions in the United States and Eu rope amassed enormous concentrations of highly correlated housing risk on their balance sheets. In doing so they turned a building housing crisis into a subsequent crisis of failing financial institutions. Some did this knowingly; others, unknowingly.”

The Solo Dissent stated that the housing bubble was clearly growing but also claimed that the “number of defaults and delinquencies among these mortgages far exceeded anything that even the most sophisticated market participants expected.”

Myth 8

The financial crisis was unavoidable. And financial crises of this magnitude are inevitable: The Majority Report unequivocally stated that “this financial crisis was avoidable. . . . The captains of finance and the public stewards of our financial system ignored warnings and failed to question, understand, and manage evolving risks within a system essential to the well-being of the American public.” The Solo Dissent contended that. “No financial system . . . could have survived the failure of large numbers of high risk mortgages once the bubble began to deflate.” However, it blamed housing policy, not bankers, for the creation of the high-risk mortgages.

This myth that we cannot avoid large-scale financial crises is particularly corrosive, as those who are in its thrall reason that since crashes are inevitable, regulation is fruitless. But this is not the necessary conclusion. There were no major financial crises between the New Deal and the S&L crisis, a span of fifty years when each type of firm was protected in its own niche and limited in their activities. Deregulation delivered the S&L debacle and the related 2008 financial crisis. This inevitability myth also distorts the view of Hyman Minsky, the economist who advanced the theory in 1986 that markets are prone to instability. The sensible reaction to this recognition is not to let the system keep running up risk and collapsing, but instead to create countercyclical buffers. This could involve doubling equity capital requirements in good times when it appears an asset bubble is inflating, so as to slow down its growth and create a better cushion on the downturn. It might also require higher capital to finance those assets the prices of which tend to rise and fall with the business cycle.



http://www.salon.com/2014/05/25/tox..._you_think_about_the_housing_market_is_wrong/

 

It wasn't the republicans who were the problem, it was the democrats. Hell, over half of them in the House voted against HR 1461 the way it was and that number would have been zero if the republicans did not compromise to get that.

Only 15 republicans voted against it.

But regardless, you obviously do not know your facts and are making stuff up as you go along so I see no point in continuing this discussion further. Perhaps if you research the points you would like to make then we can have a grown up discussion at a later date.

 

[video=youtube;cMnSp4qEXNM]https://www.youtube.com/watch?v=cMnSp4qEXNM[/video]

 

PLEASE, PLEASE, PRETTY PLEASE tell me about these Dems with super duper powers in the GOP House where simple majority ruled 1995- Jan 2007?

Yes, Those dastardly Dems stopped the GOP from giving Dubya a bill he liked in the House, lol

BUT YOU STILL IGNORE DUBYA';S POLICIES AS THE ACTUAL REGULATOR OF F/F I LISTED? THE 56% GOAL? GETTING RIFD OF CLINTON'S RULE ON SUBPRIMES COUNTING? THE $440 BILLIOIN IN NEW MBS'S F/F HAD TO BUY??? ALL BY BUSH 2004??? HMM



Yeah, I don't know, lol

 

THIRD TIME:




Q What about the conservative 'narrative' that Bush tried to stop the bubble?

A Its simply another false narrative created by the 'conservative entertainment complex'. That narrative is 'crafted' around the statements of Bush saying fannie and freddie needed to be regulated. Lets look at the structure of this narrative

Bush said GSEs needed to be regulated (actually true)
Barney Frank and other dems said GSEs were fine (actually true)
Democrats blocked reform (false)
GSEs caused the crisis (false)

Just another mish mosh of lies spin and half truths the 'conservative entertainment complex' relies on to push their agenda. Lets deconstruct the narrative. Yes, Bush repeatedly talked about GSE reform. The problem is reform in 2003 had nothing to do with subprime mortgages. As I've already documented, Bush lifted the restrictions Clinton placed on the GSEs to limit their purchase of abusive subprime loans. Later in 2004, Bush would increase the GSE housing goals forcing them to buy more low income home loans and get them to buy 440 billion more minority home loans in the secondary market.

"•Substantially increase by at least $440 billion, the financial commitment made by the government sponsored enterprises involved in the secondary mortgage market, specifically targeted toward the minority market;"

Homeownership Policy Book - Executive Summary

"In April, HUD proposed new federal regulations that would raise the GSEs targeted lending requirements. HUD estimates that over the next four years an additional one million low- and moderate-income families would be served as a result of the new goals."

HUD Archives: HUD DATA SHOWS FANNIE MAE AND FREDDIE MAC HAVE TRAILED THE INDUSTRY IN PROVIDING AFFORDABLE HOUSING IN 44 STATES

there goes the narrative that Bush tried to stop anything

http://www.politicalforum.com/showthread.php?t=394878&p=1064711650#post1064711650

 

Such hogwash. Posting a bunch of incoherent drivel from some liberal echo chamber proves nothing. Politicians were warned about the dangers of deregulation during the Clinton years and they did nothing.

 

Weird, you mean conservatives PUSHING deregulation???? lol

No this was NOT a regulation problem, but just like Ronnie's S&L crisis where Mr Gray started warning in 1984 of problems that Ronnie ignored that would've stopped 90%+ of that crisis (that Poppy inherited), Dubya had a REGULATOR FAILURE.

Weird we elect guys who 'don't believe in' Gov't and then are shocked their POLICIES hose US!!!!

 

At 30% the risk was acceptable. However, HUD pushed it up over 55% all the way to 70% with disastrous results.

 

You can't re-write history, not in this day and age.

 

So you think cherry picking certain things proves you are correct? Think again for the first time. There is a lot more to the cause of the crisis than what you post. I wonder why you ignore those facts?

 

And who was a top executive at Fannie Mae who was pushing for deregulation? Democrat Barney Frank's gay lover.....you can't make this stuff up folks!

 

"You can't re-write history, not in this day and age. "



Conservatives sure do TRY

LOL


The Wall Street Journal
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OF WHO? YOUR LINK DOESN'T EVEN SHOW THAT??? WEIRD RIGHT LOL

WANT TO BET IT WAS AEI (ED PINTO, ED WALLISON, OR SOME OTHER LIAR???)

Please GSE's around for 70+ years caused it? lol. Almost as bad as CRA caused it OR Barney had super powers in the GOP House...


US HOUSEHOLD DEBT DOUBLED 2001-2007, THAT F/F FAULT TOO? LOL




No, the GSEs Did Not Cause the Financial Meltdown (but thats just according to the data)


1. Private markets caused the shady mortgage boom: The first thing to point out is that the both the subprime mortgage boom and the subsequent crash are very much concentrated in the private market, especially the private label securitization channel (PLS) market. The Government-Sponsored Entities (GSEs, or Fannie and Freddie) were not behind them. The fly-by-night lending boom, slicing and dicing mortgage bonds, derivatives and CDOs, and all the other shadiness of the mortgage market in the 2000s were Wall Street creations, and they drove all those risky mortgages.

Here’s some data to back that up: “More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions… Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.”


http://www.ritholtz.com/blog/2011/1...ampaign=Feed:+TheBigPicture+(The+Big+Picture)




Wall Street, Not Fannie and Freddie, Led Mortgage Meltdown




The evidence indicates Fannie and Freddie contributed to the mortgage meltdown, but they played a secondary role to Wall Street. Wall Street firms and the mortgage lenders they bankrolled led the growth of the market for subprime loans and other risky mortgages.

Government data show Fannie and Freddie didn’t take the same risks that Wall Street’s mortgage-backed securities machine did. Mortgages financed by Wall Street from 2001 to 2008 were 4½ times more likely to be seriously delinquent than mortgages backed by Fannie and Freddie.



“The idea that they were leading this charge is just absurd,” said Guy Cecala, publisher of Inside Mortgage Finance, an authoritative trade publication. “Fannie and Freddie have always had the tightest underwriting on earth…They were opposite of subprime.”

Fannie and Freddie, Cecala said in a telephone interview, didn’t start making a big move into riskier mortgages until the mortgage boom was already under way, and they were fighting to reclaim market share they’d lost to more aggressive Wall Street players. Even then, they were more cautious than Lehman Brothers and other investment banks

For example, just over 15 percent of Fannie- and Freddie-backed loans made in 2007 have been seriously delinquent, compared to nearly 42 percent of mortgages bankrolled by Wall Street, according to the FHFA.

None of this should excuse Fannie and Freddie for their role in the mortgage debacle. Their latter-day bets on high-wire mortgages contributed to a sea of government red ink and exacerbated the size of the mortgage meltdown and level of pain that borrowers and other Americans are now suffering


http://www.thedailybeast.com/articl...fannie-and-freddie-led-mortgage-meltdown.html






Competition and Crisis in Mortgage Securitization


Abstract:
U.S. policymakers often treat market competition as a panacea. However, in the case of mortgage securitization, policymakers’ faith in competition is misplaced. Competitive mortgage securitization has been tried three times in U.S. history - during the 1880s, the 1920s, and the 2000s - and every time it has failed. Most recently, competition between mortgage securitizers led to a race to the bottom on mortgage underwriting standards that ended in the late 2000s financial crisis. This article provides original evidence that when competition was less intense and securitizers had more market power, securitizers acted to monitor mortgage originators and to maintain prudent underwriting. However, securitizers’ ability to monitor originators and maintain high standards was undermined as competition shifted market power away from securitizers and toward originators. Although standards declined across the market, the largest and most powerful of the mortgage securitizers, the Government Sponsored Enterprises (“GSEs”), remained more successful than other mortgage securitizers at maintaining prudent underwriting.


http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1924831



Jun 16, 2005


The worldwide rise in house prices is the biggest bubble in history. Prepare for the economic pain when it pops

NEVER before have real house prices risen so fast, for so long, in so many countries. Property markets have been frothing from America, Britain and Australia to France, Spain and China. Rising property prices helped to prop up the world economy after the stockmarket bubble burst in 2000. What if the housing boom now turns to bust?

According to estimates by The Economist, the total value of residential property in developed economies rose by more than $30 trillion over the past five years, to over $70 trillion, an increase equivalent to 100% of those countries' combined GDPs. Not only does this dwarf any previous house-price boom, it is larger than the global stockmarket bubble in the late 1990s (an increase over five years of 80% of GDP) or America's stockmarket bubble in the late 1920s (55% of GDP). In other words, it looks like the biggest bubble in history.


FANNIE/FREDDIE? LOL

http://www.economist.com/node/4079027

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Yeah it was the Dems pushing deregulation *shaking hjead*

You guys have nightmares about the minority member of the GOP majority House 1995-2007 right? Top executive? lol

 

Like I said AEI bull sh*t, I'm shocked no really I am,. lol

You meant to say DUBYA INCREASED IT FROM 50% IN 2004 TO 56% AND got rid of Clinton's rule from 2000 that restricted subprimes loans? YES. Dubya ALSO required F/F to purchase $440 BILLION IN MBS'S FROM THE SECONDARY (THINK WALL STREET) MARKETS IN 2004

Yeah Dubya hosed F/F. But F/F didn't drive the bubble. Honesty try it

 

So besides ad hominems you have nothing. Got it

Sorry, EVERY US Prez since FDR had homes pushes, why ONLY under Ronnie (S&L crisis) and Dubya (subprime bubble) did the Banksters hose US?


I guess electing guys who 'believe in' 'free markets' and don't believe in GOOD REGULATORS ON THE BEAT EXPLAINS IT????

 

So what? Are you claiming there hasn't been a democrat in office until 2008? You might want to back away from your delusional posts.

 

"And who was a top executive at Fannie Mae who was pushing for deregulation? "

Herb Moses, who was Fannie’s assistant director for product initiatives. Moses worked at the government-sponsored enterprise from 1991 to 1998

TOP EXEC??? lol

http://www.foxnews.com/story/2008/10/03/lawmaker-accused-fannie-mae-conflict-interest/


The "turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007," the President's Working Group on Financial Markets

 

And who would come up with anything called "affordable housing"? The same party that came up with "affordable health care". Why is it when democrats make things "affordable" it turns into disaster?

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Bull crap. The housing crisis was brewing during the Clinton years. Your phony claim is nonsense.

 

PLEASE PLEASE tell me Barney or ANY Dems super power in the GOP majority House 1995-Jan 2007? You know what it takes to stop ANY GOP bill???

 

NOT my claim Bubba, Very FIRST post in this thread:



Q When did the Bush Mortgage Bubble start?

A The general timeframe is it started late 2004.

From Bush's President's Working Group on Financial Markets March 2008

"The Presidents Working Group’s March policy statement acknowledged that turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007."




Q Did the Community Reinvestment Act under Carter/Clinton caused it?


A "Since 1995 there has been essentially no change in the basic CRA rules or enforcement process that can be reasonably linked to the subprime lending activity. This fact weakens the link between the CRA and the current crisis since the crisis is rooted in poor performance of mortgage loans made between 2004 and 2007. "


www.federalreserve.gov/newsevents/speech/20081203_analysis.pdf