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Thread: U.S. Jobless Rate Unexpectedly Declines to 8.6%

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    Re: U.S. Jobless Rate Unexpectedly Declines to 8.6%

    Quote Originally Posted by AdamT View Post
    Bull**** indeed!!

    There was no mortgage crisis in '94, '98, or '02. The subprime fiasco really exploded between '02 - '06, and the VAST majority of loans were given out by private lenders who weren't even regulated under CRA. Careful ... you can throw out your back missing the ball by that much!
    Yeah, this isnt misinformed at all. What you are blind to is that you can write more and more as housing prices go up and up. The problem becomes the value isnt intrinsic anymore it becomes part of a postive feedback occurring from writing paper that shouldnt be getting done IE artifically created demand because they couldnt satisfy financial particulars or money down requirements. It takes TIME for that kind of underwriting to implode.

    4th largest commercial bank in the US was Washington Mutual and they pledged to write $1billion in CRA type paper in 2004. They were done in 2007. I dont think the facts bear out your opinion. This one just so we are on the same page :
    and the VAST majority of loans were given out by private lenders who weren't even regulated under CRA
    I dont think thats factual.

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    Re: U.S. Jobless Rate Unexpectedly Declines to 8.6%

    Quote Originally Posted by OpportunityCost View Post
    Yeah, this isnt misinformed at all. What you are blind to is that you can write more and more as housing prices go up and up. The problem becomes the value isnt intrinsic anymore it becomes part of a postive feedback occurring from writing paper that shouldnt be getting done IE artifically created demand because they couldnt satisfy financial particulars or money down requirements. It takes TIME for that kind of underwriting to implode.

    4th largest commercial bank in the US was Washington Mutual and they pledged to write $1billion in CRA type paper in 2004. They were done in 2007. I dont think the facts bear out your opinion. This one just so we are on the same page : I dont think thats factual.
    Well you think wrong. WAAAAAY wrong.

    Federal Reserve Board data show that:
    • 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.

    • Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that's being lambasted by conservative critics.
    Read more: Private sector loans, not Fannie or Freddie, triggered crisis | McClatchy

    The fact is that Fannie and Freddie were pushed into the subprime market by the private lenders who were taking away their business.

    Private lenders—not the government-backed Fannie and Freddie—issued the vast majority of subprime loans, and to low- and moderate-income borrowers in particular. Fannie and Freddie did not guarantee and securitize large quantities of subprime loans. - In fact, Fannie Mae actually lost market share because it chose not to “participate in large amounts of these non-traditional mortgages in 2004 and 2005” because it “determined that the pricing offered for these mortgages often was insufficient compensation for the additional credit risk associated with these mortgages.” As economist Dean Baker stated, “Fannie and Freddie got into subprime junk and helped fuel the housing bubble, but they were trailing the irrational exuberance of the private sector….In short, while Fannie and Freddie were completely irresponsible in their lending practices, the claim that they were responsible for the financial disaster is absurd on its face—kind of like the claim that the earth is flat.” - In testimony before the House Committee on Oversight and Government Reform, Lehman Brothers CEO Richard Fuld acknowledged that Fannie and Freddie’s role in Lehman’s demise was “de minimis,” or so small that it does not matter.
    How Did This Happen? » Myths and Facts about the Financial Crisis

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    Re: U.S. Jobless Rate Unexpectedly Declines to 8.6%

    Yeah...your source is...terrible. McClatchy and a hard left echo chamber. Cmon.
    A Poisonous Cocktail - Forbes.com

    Liberals pooh-pooh the idea that a 30-year-old law could have contributed to the current subprime crisis and credit crunch. But what they ignore is the massive expansion of CRA-commitments forced on banks in the run-up to the 2008 financial crisis.
    According to the National Community Reinvestment Coalition, in the first 20 years of the act, up to 1997, commitments totaled approximately $200 billion. But from 1997 to 2007, commitments exploded to more than $4.2 trillion. (Keep in mind this is more than four times the size of the current health bill being debated in Congress.) The burdens on individual banks can be enormous. Washington Mutual, for example, pledged $1 trillion in mortgages to those with credit histories that "fall outside typical credit, income or debt constraints," and was awarded the 2003 CRA Community Impact Award for its Community Access program. Four years later it was taken over by the Office of Thrift Supervision. In 2004 Bank of America ( BAC - news - people ) agreed to provide $750 billion in CRA loans to applicants with poor credit who had previous difficulty obtaining a mortgage. By 2008 Bank of America was reporting that CRA loans represented only 7% of its portfolio but 29% of its losses. Numerous large banks are now in the middle of enormous CRA commitments. In 2004 J.P. Morgan Chase ( JPM - news - people ) agreed to provide $800 billion of such loans over the course of 10 years.
    What you are driving at is the percentage of loans serviced. What Im driving at is the orgination of the failed loans and the impact on the banks' balance sheets. Bottom line: the banks with the rosiest CRA investiture got the best rates from the fed, got easy bundling and underwriting assurances from F&F and went to bankrupt or headed to the public trough the fastest. Compliance = bad financial picture. Non-Compliance = stunted growth opportunities but better P&L.

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    Re: U.S. Jobless Rate Unexpectedly Declines to 8.6%

    Quote Originally Posted by AdamT View Post
    The fact is that Fannie and Freddie were pushed into the subprime market by the private lenders who were taking away their business.

    That is a perfect example of liberalism......saying F&F were forced to underwrite trillions in crappy loans is like saying a woman was forced to joined the prostitution industry when she noticed other high end call girls were driving nice cars. F&F bundled and re-sold trillions in garbage......claiming anything otherwise suggests you aren't a person to be taken seriously.
    I love the smell of burning moonbat in the morning.

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    Re: U.S. Jobless Rate Unexpectedly Declines to 8.6%

    Quote Originally Posted by OpportunityCost View Post
    Yeah...your source is...terrible. McClatchy and a hard left echo chamber. Cmon.
    A Poisonous Cocktail - Forbes.com

    What you are driving at is the percentage of loans serviced. What Im driving at is the orgination of the failed loans and the impact on the banks' balance sheets. Bottom line: the banks with the rosiest CRA investiture got the best rates from the fed, got easy bundling and underwriting assurances from F&F and went to bankrupt or headed to the public trough the fastest. Compliance = bad financial picture. Non-Compliance = stunted growth opportunities but better P&L.
    You're complaining about my sources as you cite Forbes? Wasn't there a billionaire Republican of that name who ran for president a few years back?

    But to answer your comment, no, I'm not separating perentage serviced from origination. Either way you look at it the non-CRA lenders dominated the subprime market. What's more, the private lenders -- unlike CRA-regulated banks -- were not required to consider the mortgagee's ability to repay. As aresult, non-CRA loans performed much worse than CRA-regulated loans. Wasn't there some sort of official inquiry into all this? Oh yeah, there was!

    The Commission concludes 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 the 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. [The Financial Crisis Inquiry Report, January 2011]
    http://www.gpoaccess.gov/fcic/fcic.pdf

    What about the Federal Reserve? Didn't they look into it, too? Yep.

    We find little evidence that either the CRA or the GSE goals played a significant role in the subprime crisis. Our lender tests indicate that areas disproportionately served by lenders covered by the CRA experienced lower delinquency rates and less risky lending. Similarly, the threshold tests show no evidence that either program had a significantly negative effect on outcomes. [Federal Reserve, 8/3/11]
    http://www.federalreserve.gov/pubs/f.../201136pap.pdf
    Last edited by AdamT; 12-05-11 at 07:17 PM.

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    Re: U.S. Jobless Rate Unexpectedly Declines to 8.6%

    Forbes' business is money. When it comes to markets, be it commodities, banking or wall street, they generally are a decent source.

    Ive read both of those reports before now. They come under the heading of government based CYA. I find it amusing that someone that is so distrusting of government finds using them as a corroborating source so easy.

    I find it hard to believe that $9 trillion in paper going through Fannie and Freddie from 2000 to 2007 is "not a significant factor in subprime lending or the crisis" to quote your article. Actually, I can't believe it at all. Nor should you.

    -

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    Re: U.S. Jobless Rate Unexpectedly Declines to 8.6%

    Quote Originally Posted by OpportunityCost View Post
    Forbes' business is money. When it comes to markets, be it commodities, banking or wall street, they generally are a decent source.

    Ive read both of those reports before now. They come under the heading of government based CYA. I find it amusing that someone that is so distrusting of government finds using them as a corroborating source so easy.

    I find it hard to believe that $9 trillion in paper going through Fannie and Freddie from 2000 to 2007 is "not a significant factor in subprime lending or the crisis" to quote your article. Actually, I can't believe it at all. Nor should you.

    -
    The Fed is independent -- not responsible for decisions about the GSEs or CRA. They have no reason to cover up anything. Forbes' numbers sound like bull**** to me. Do you really think that poor people took out $9 trillion in mortgages? It doesn't pass the laugh test.

    Nor have you refuted any of the major points:

    * the vast majority of subprime was issued by non-CRA banks;
    * what little subrime regulated banks did issue strongly outperformed non-regulated loans;
    * no one had to twist the banks arms to give out loans; they were giving them to anyone who breathed (and I'm sure some who didn't).
    Last edited by AdamT; 12-05-11 at 08:35 PM.

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    Re: U.S. Jobless Rate Unexpectedly Declines to 8.6%

    Did anyone else see 60 Minutes and their expose of mortgage fraud and cover up? Quite eye opening.

    Here's an article about it:


    60 Minutes Shines Spotlight on Persistent Mortgage Fraud

    First, I want to give the credit where it’s due. This is Michael W. Hudson’s story that 60 Minutes appropriated. He found Eileen Foster, the senior executive and fraud monitor at Countrywide Financial, and detailed her story way back in September, including how the company treated her allegations at the time (Foster got fired for her trouble, and Countrywide started concealing the results from their fraud monitoring from the monitors themselves). Hudson has been in front of the mortgage fraud story since his book The Monster detailed the fraud at Ameriquest.
    "Donald Trump is a phony, a fraud... [he's] playing the American public for suckers." Mitt Romney

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    Re: U.S. Jobless Rate Unexpectedly Declines to 8.6%

    Quote Originally Posted by Conservative View Post
    Considering the options, no I don't have a problem with that at all.

    Like you said “Nothing changes the mind of an ideologue “does it?
    The haggardness of poverty is everywhere seen contrasted with the sleekness of wealth, the exhorted labor of some compensating for the idleness of others, wretched hovels by the side of stately colonnades, the rags of indigence blended with the ensigns of opulence; in a word, the most useless profusion in the midst of the most urgent wants.Jean-Baptiste Say

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    Re: U.S. Jobless Rate Unexpectedly Declines to 8.6%

    Quote Originally Posted by conservativeguy View Post
    Do you have a source for that data?
    Sure do .

    National debt by U.S. presidential terms - Wikipedia, the free encyclopedia

    And i verified the wiki here.

    Historical Tables | The White House

    You,ll need excel.
    The haggardness of poverty is everywhere seen contrasted with the sleekness of wealth, the exhorted labor of some compensating for the idleness of others, wretched hovels by the side of stately colonnades, the rags of indigence blended with the ensigns of opulence; in a word, the most useless profusion in the midst of the most urgent wants.Jean-Baptiste Say

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