FACTS on Dubya's great recession

Private sector loans, not Fannie or Freddie, triggered crisis


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

http://www.mcclatchydc.com/2008/10/12/53802/private-sector-loans-not-fannie.html



Most subprime lenders weren't subject to federal lending law
Community Reinvestment Act, blamed for home market crash, didn't apply to the banks that did the most lending.
http://www.ocregister.com/articles/loans-20542-subprime-banks.html


DUBYA FOUGHT ALL 50 STATE AG'S IN 2003, INVOKING A CIVIL WAR ERA RULE SAYING FEDS RULE ON "PREDATORY" LENDERS!

Dubya was warned by the FBI of an "epidemic" of mortgage fraud in 2004. He gave them less resources. Later in 2004 Dubya allowed the leverage rules to go from 12-1 to 33-1 which flooded the market with cheap money!

 

They are still trying to win a losing argument that you and Dad have totally buried them with a long time ago, showing every link and fact out there, and they still never get it. It's embarrassing! Between the two of you, there has been no stone un turned with this debate. And yet, the Right has mounted zero rebuttal contrary to the facts you and Dad presented. When are they going to get it?

 

I think they get it just fine. They just have a vested political interest in blaming the gay guy and the party that did not control the House, Senate or White House while the housing bubble blew up to its absurd levels and started imploding.

 

Alas,you 'll never 'get it' constantly repeating it won't make it Bush's fault..

Sorry!

 

Are they ever going to understand that they have lost this argument. They keep trying to circle the wagon with no bullets. It's amazing!

- - - Updated - - -

Then who's is it then?

 

Actually,I'm done with this silly partisan thread..Honestly,It's like trying to argue with a drunk college student.

 

I'm glad you agree, Weird how many right wingers get drunk on blaming BJ Bill for Dubya's failure yet credit Ronnie for his successes....

 

Given the price (inflation adjusted or nominal) does not even break through the long term trend line until 1998-1999, there is certainly no technical analyst that would claim there was a bubble in place before that point so the claim for 1996 is without technical merit, that is for sure.

If we look at the inflation adjusted chart we see deviations from trend by as much as 15% without there being a "bubble" such as in 1989.

Using 15% above trend as basis for suggesting a "possible" bubble. 2001 is the earliest you would even suggest such a thing. If you lower it to 10% which the earliest would be 2000.

Now a confirmed upward price movement above the long term trend line, even of 50% or more, might not be a bubble. External factors such as scarcity have to be examined. Maybe the commodity was worth 1.00 last year but really is worth 1.50 this year and in fact is undervalued rather than being in a bubble.

There was no housing bubble in 1996 by any type of analysis that I know or have heard of.

 

Wise. You've demonstrated you have nothing to support your position but insults long ago.

 

You're done? Heck, you never started.

 

He proved my point beautifully.

 

Much of what you state is true.However you just coincidentally forgot one
important aspect.President Bush WANTED to regulate Banking and Fed Policy.
But he was stropped in his tracks by Chuckie Schumer and Maxine Waters
and Chris Dodd { who we later found out got himself a sweatheart mortgage
on one of his vacation properties.
Schumer and Waters played the race card really hard against Bush,accusing him
of the same stuff dempcrats do.That those country club Republicans don't like the
idea of Poor,especially blacks having the opportuinity to have their own home.
Which of course was pure bunk but it sold like hotcakes with the driven
highly one-sided Mainstream media.Under Bush's 2 terms Blacks made historic gains
into the Middle class.But Bush who had an MBA from Harvard saw the housing bubble
has something waiting to happen.That yes,All players involved in the Prime and
subprime Housing business were making money.There was no reason for them to
control the runaway freight train.
Bush tried to tighten and introduce stricter regulation and Schumer and
Maxine Waters and Chris Dodd fought him every inch of the way.With LIES.

 

First DUBYA WAS THE REGULATOR. Second you didn't go far enough into the post


Bush talked about reform. He talked and he talked. And then he stopped reform. (read that as many times as necessary. Bush stopped reform).

WHY, IF DUBYA WAS SO CONCERNED, DID HE USE SUCH HORRIBLE POLICY TO HARM F/F?


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

THAT WAS POST #3 ON PAGE ONE

THIS IS POST #4

Q What about the second part of the "bush tried to stop the bubble" narrative when "Barney Frank and other dems said GSEs were fine "? GSE's did go bankrupt

A Yes Barney Frank and other dems said there was nothing wrong with the GSEs. And they were fine in 2003. The Bush Mortgage Bubble hadn't started yet (remember we learned that it didnt start until late 2004). Once the Bush Mortgage Bubble started, any entity that bought mortgages or invested in mortgage backed securities got hammered. Of the big five investment banks, only one survived and remained independent (it did change its charter to commercial bank to qualify for TARP funds). Numerous hedge funds went under. And yes, Freddie and Fannie went bankrupt. The difference is nobody was forcing hedge funds, investment banks, pension funds, insurance companies etc. to buy mortgages and mortgage backed securities (see above).


Oh and here's the key part of about democrats saying there was nothing wrong with GSEs: They were just repeating what Bush told them. (yea, this doesn't get mentioned in any 'conservative entertainment complex' editorials does it?).

Testimony from W’s Treasury Secretary John Snow to the REPUBLICAN CONGRESS concerning the 'regulation’ of the GSE’s Sept 2003

"Mr. Frank: ...Are we in a crisis now with these entities?

Secretary Snow. No, that is a fair characterization, Congressman Frank, of our position. We are not putting this proposal before you because of some concern over some imminent danger to the financial system for housing; far from it.“

- THE TREASURY DEPARTMENT'S VIEWS ON THE REGULATION OF GOVERNMENT SPONSORED ENTERPRISES



Q are you serious? I've heard "Barney Frank said Freddie and Fannie were fine" a million times as if it proved something and now I find out that Bush said it too. I give up. Whats my next question?

A uh you want to ask me about "dems blocking reform"

Q fine, did dems block reform?

A Well since everything else the 'conservative entertainment complex' said was a lie, why wouldnt this be a lie? Now remembering that Bush forced GSEs to buy more low income home loans, got freddie and fannie to buy an additional 440 billion in mortgage backed securities and reversed the restrictions Clinton placed on the GSEs purchases of subprime home loans this will not be much of a shock

"Strong opposition by the Bush administration forced a top Republican congressman to delay a vote on a bill that would create a new regulator for mortgage giants Fannie Mae and Freddie Mac."

Oxley pulls Fannie, Freddie bill under heat from Bush - MarketWatch

Despite what appeared to be a broad consensus on GSE regulatory reform, efforts quickly stalled. A legislative markup scheduled for October 8, 2003, in the House of Representatives was halted because the Bush administration withdrew its support for the bill,


(fyi, broad consensus means it would have probably passed. what happened to it again? oh yea bush stopped it)

 

The Horror! The Horror!

“The Administration strongly believes that the housing GSEs should be focused on their core housing mission, particularly with respect to low-income Americans and first-time homebuyers. Instead, provisions of H.R. 1461 that expand mortgage purchasing authority would lessen the housing GSEs' commitment to low-income homebuyers.”

“The corporation may purchase a conventional mortgage which was originated more than one year prior to the purchase date only if the seller is the Federal Deposit Insurance Corporation, the Resolution Trust Corporation, the National Credit Union Administration, or any other seller currently engaged in mortgage lending or investing activities. For the purpose of this section, the term “conventional mortgages” shall include a mortgage, lien, or other security interest on the stock or membership certificate issued to a tenant-stockholder or resident-member of a cooperative housing corporation, as defined in section 216 of title 26, and on the proprietary lease, occupancy agreement, or right of tenancy in the dwelling unit of the tenant-stockholder or resident-member in such cooperative housing corporation. The corporation shall establish limitations governing the maximum original principal obligation of conventional mortgages that are purchased by it; in any case in which the corporation purchases a participation interest in such a mortgage, the limitation shall be calculated with respect to the total original principal obligation of the mortgage and not merely with respect to the interest purchased by the corporation. Such limitations shall not exceed $417,000 for a mortgage secured by a single-family residence, $533,850 for a mortgage secured by a 2-family residence, $645,300 for a mortgage secured by a 3-family residence, and $801,950 for a mortgage secured by a 4-family residence,” https://www.law.cornell.edu/uscode/text/12/1717

“SEC. 123. CONFORMING LOAN LIMITS.

(a) Fannie Mae.--
(1) General limit.--Section 302(b)(2) of the Federal
National Mortgage Association Charter Act (12 U.S.C.
1717(b)(2)) is amended by striking the 7th and 8th sentences
and inserting the following new sentences: ``Such limitations
shall not exceed $359,650 for a mortgage secured by a single-
family residence, $460,400 for a mortgage secured by a 2-family
residence, $556,500 for a mortgage secured by a 3-family
residence, and $691,600 for a mortgage secured by a 4-family
residence,” https://www.congress.gov/bill/109th-congress/house-bill/1461/text

So the word “expand” in Bush’s offending sentence should be replaced with something like “continues the insanity,” and the word “lessen” should be replaced with something with regard to abject stupidity. If the “core housing mission” is “with respect to low-income Americans and first-time homebuyers,” what are they doing there?

"WILLIS: A truck driver, Bernita saved up $14,000 to close on a six-bedroom house. Purchase price -- $180 grand. She thought she got a deal on her first loan, a two-year adjustable rate mortgage at 8.375 percent. Her monthly payments -- $1,200." http://transcripts.cnn.com/TRANSCRIPTS/0803/28/siu.01.html

Who in the hell as a first-time home buyer or low-income buyer needs anything like a $359,650 mortgage on a single family dwelling?

I would reword it like this:

“The Administration strongly believes that the housing GSEs should be focused on their core housing mission, particularly with respect to low-income Americans and first-time homebuyers. Instead, provisions of H.R. 1461 continues the insanity inherent in the previous mortgage purchasing authority and would continue the abject stupidity that is not focused on housing GSEs' commitment to low-income homebuyers.”

I got a $17,500 car loan at my Credit Union for my first house, a fracking 57 foot no longer mobile home on an acre of land.

What freaking planet are you people from?

 

Sure, THAT'S why Dubya couldn't get it passed in the GOP House where it took a simple majority *shaking head* in his first 6 years...



The critics have forgotten that the House passed a GSE reform bill in 2005 that could well have prevented the current crisis, says Mr Oxley (R), now vice-chairman of Nasdaq.”

“What did we get from the White House? We got a one-finger salute.”



Oxley was Chairman of the House Financial Services committee and sponsor of the only reform bill to pass any chamber of the republican controlled congress




Bush talked about reform. He talked and he talked. And then he stopped reform. (read that as many times as necessary. Bush stopped reform). And then he stopped it again

Bush's documented policies and statements in timeframe leading up to the start of the Bush Mortgage Bubble include (but not limited to)




Forcing GSEs to spend an additional $440 billion in the secondary markets (2003)

Reversing the Clinton rule that restricted GSEs purchases of subprime loans (2004)

Forcing GSEs to buy more low income home loans by raising their Housing Goals from 50% to 56% (2004)


GSE'S ARE F/F. He was "concerned", lol

June 17, 2004

Builders to fight Bush's low-income plan
Groups ask HUD to rethink plan that would increase financing of homes to low-income people.


Home builders, realtors and others are preparing to fight a Bush administration plan that would require Fannie Mae and Freddie Mac to increase financing of homes for low-income people, a home builder group said Thursday.

http://money.cnn.com/2004/06/17/real_estate/lowcost_housing/


"We have made significant adjustments to our mortgage loan sourcing and purchase strategies in an effort to meet the increased housing goals and subgoals. These strategies include entering into some purchase and securitization transactions with lower expected economic returns than our typical transactions. We have also relaxed some of our underwriting criteria to obtain goals-qualifying mortgage loans and increased our investments in higher-risk mortgage loan products that are more likely to serve the borrowers targeted by HUD’s goals and subgoals,"

http://www.freddiemac.com/investors/ar/2007/06.htm


HOLY COW! Bush forced them to lower their standards. If only somebody had warned us that Bush's policies would hurt Freddie and Fannie. Wait, somebody did.


Fannie, Freddie to Suffer Under New Rule, BARNEY Frank Says

Fannie Mae and Freddie Mac would suffer financially under a Bush administration requirement that they channel more mortgage financing to people with low incomes, said the senior Democrat on a congressional panel that sets regulations for the companies.


So if your narrative is "GSEs are to blame" then you have to blame bush


http://democrats.financialservices....s/112/06-17-04-new-Fannie-goals-Bloomberg.pdf

 

“Fannie and Freddie, which use their ability to borrow cheaply in the government agency bond market to help middle-to-low income people buy homes, would be compelled to provide more funds to low-income home buyers by slashing their financing of middle-income home buyers, David Crowe of the NAHB told the paper.”
http://money.cnn.com/2004/06/17/real_estate/lowcost_housing/

“Builders to fight Bush's low-income plan”

My contractor wanted to build smaller houses, at the time the requirement was 1100 square feet, a few years later raised to 2000 square feet, and in Bernita’s hood it was 2000 square feet minimum when it was 1100 where I built. He wasn’t just opposed by a County government bordering Fulton County, he was opposed by other builders. I could build an 860 square foot house for a hell of a lot less than a 2000 square foot one, and every Negroid who bought one would still have them, we are talking a car loan for a house, the only problem is Bubs, a Negroid might buy it in the wrong county, and the builders in the area would not want their $359,650 investment in Whiteyville going down the drain with the Real Estate Principle of Regression. Those zoning requirements for house sizes were fought as racially discriminatory by the NAACP during Cotter Pin, but the suit was dropped right when the CRA came out; go look it up.

I got news for you Bubs, you don’t know squat about why those builders didn't want those “Negroid” size houses in DeKalb County, where my subdivision previously had a covenant against coloreds, or in other places why zoning laws on house sizes and fictional “watershed” makes requirements for 2.5 acre lot sizes fit the bill when the covenants were no longer legal to keep the Negroids out of the county, all except b-ball players. Let’s see it was 6% Negroid in the county I lived in during the 90’s, right next to John Lewis’ district, why is that Bubs?

The Libertarians are your worst nightmare Bubs, they would build a tiny house next to your $359,650 idea of Gubermint Housing.

 

Bush's Reaganomics based Great Recession leads to this:








more and more welfare for the rich

 

Clinton policies were far more to blame than GWB policies for the mortgage collapse, as this thread and so many others demonstrate. If we are factoring out TONS of necessary context, and focusing only on presidential administrations, the blame goes about 20% Reagan policy, 70% Clinton policy, 10% GWB policy. If we are factoring in overall GOVERNMENT malfeasance trans-administration over many decades of wrongful government meddling in the mortgage markets, the blame goes about 80% general government policy. 5% Reagan and GWB, 15% Clinton. The mortgage collapse was overall a GOVERNMENT failure and union label attempts to "partisan" it out to the other guy are transparently puerile. For example, it doesn't matter one iota what specific -year- the bubble began, because preexisting policies took years to come to nasty fruition. It's like some guy throwing oily rags on his garage floor for years and then his kid blows the whole thing up sneaking a cig. "IT WAS THE KID HE DIDIT HE DIDIT." Infantile and transparent.

 

It's Clinton's fault?

[video=youtube;hDou01X5d28]https://www.youtube.com/watch?v=hDou01X5d28[/video]

There was no bubble when Clinton was president. When the housing bubble started and blew up it its absurd levels, Clinton had been out of office for years and had no power to do anything.

Only one party and person had power at that time -- the Republicans controlled the Senate, and the House, and Bush controlled the Administration.

But "Mr. Ownership Society" and the "Business can regulate itself" Republicans where more interested in their political agendas.

 

Dealt with, unanswered. Sorry, lefties, the economy is not a light switch that magically and instantly responds to your side's policies in ever more and always beneficial ways in real time, and equally magically and instantly responds to the other guy's policies in negative ways. As this thread and so many others on this topic clearly show, of recent policy impacts on the mortgage collapse, Clinton policies, specifically allowing an illicit, horizontal merger boom in mortgage providers throughout the 90s, and in constant threats of harsh action to those newly consolidated banks and other via CRA (the number and amount of actual CRA loan failures being utterly and entirely irrelevant to an overall government MANDATE for the mortgage industry to lower standards... or else), are far more to blame than any other.

 

Clinton didn't "allow" anything. Clinton wasn't the president when the housing bubble blew up to its absurd levels and started imploding, and didn't have the power to do or allow anything.

The only folks with the power to allow or not allow things during that time was the "business can regulate itself" Republicans led buy "Mr. Ownership society".

 

Dealt with thoroughly in immediately prior posts, utterly ignored as expected from the union label.

 

Dealt ith thoroughly in immediately prior posts, utterly ignored as expected from the 1% apologist.

 

More right wing nonsense. I'm shocked. CRA didn't start the problem, the areas effected by Dubya's subprime ponzi scheme weren't the inner-cities, but suburbs (middle class) And NO, the poor and minorities DIDN'T force the Banksters to make over 50% of loans in 2006 no/low documentation loans...

 

What total crap. Gov't policy didn't cause the subprme bubble that Dubya not only cheered on bought fought ALL 50 states who wanted to reign it in NOR did it require Dubya to ignore the FBI when he pushed his bad policies that ALLOWED THE BANKSTER TO ADD THE US TO THEIR WORLD WIDE CREDIT BUBBLE AND BUST


Gov't policy that failed was EXECUTIVE BRANCH OVERSIGHT UNDER DUBYA. PERIOD


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. "