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

  1. #621
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    Re: U.S. Jobless Rate Unexpectedly Declines to 8.6%

    Quote Originally Posted by Goldenboy219 View Post
    No; that is simple bull****! If this was the case, we would see that CRA mandated loans represented the single largest default class and/or CRA mandated loans were the most likely to be packaged into a jumbo security and sold off to unsuspecting investors.

    Since neither of these are true, your little theory is just as false.
    Where in my post did you see me say that CRA mandated anything? Or are you just making things up to back your position? in fact I even said "granted they didn't “force” banks to make questionable loans,"
    Last edited by The Barbarian; 12-07-11 at 09:33 PM.

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

    Quote Originally Posted by The Barbarian View Post

    you guys get funnier all the time ... that bill passed in 2004
    Well if nothing else, you prove you have no idea what you're talking about.

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

    Quote Originally Posted by Sheik Yerbuti View Post
    Well if nothing else, you prove you have no idea what you're talking about.
    yeah you're right .. it wasn't a bill ..

    1/20/2004
    Bush seeks to increase minority homeownership
    By Thomas A. Fogarty, USA TODAY
    In a bid to boost minority homeownership, President Bush will ask Congress for authority to eliminate the down-payment requirement for Federal Housing Administration loans.
    But it doesn't change anything does it .. you liberals now have it down to a two year bubble .

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

    Quote Originally Posted by The Barbarian View Post
    The housing bubble was caused by a multitude of things was the CRA one of those things, only a fool would say no, granted they didn't “force” banks to make questionable loans, but they were capable of applying enough pressure that it was much easier on banks to go along with what they wanted then it was to fight it. That is the simple truth.

    The bubble began with Carter and the *the*Housing*and Community Development*Act it was surely helped along by the repeal of Glass-Steagall that was signed by Clinton and written and passed by a Republican controlled senate and house. Bush signed the Bush*Signs American Dream Downpayment*Act*·* which further pushed things along .. I'm sure there are more things but these are just a few that shows “both” parties had a hand in forming and encouraging the bubble.

    Could anything have been done … in my opinion no …. and I say this because of not the parties but because we as the people of this country would have destroyed any politician that would have put any serious effort into doing so. Times were good … you could buy a home with no money down, the payments could amount to 50% or more of your income. Everyone dreams of owning their own home, in good times trying to restrict home ownership would have been political suicide
    The bubble did not begin under Carter, that is delirious on its face.

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

    Quote Originally Posted by The Barbarian View Post
    Where in my post did you see me say that CRA mandated anything? Or are you just making things up to back your position? in fact I even said "granted they didn't “force” banks to make questionable loans,"
    It looks as though there is some confusion with my use of the word "mandated". A CRA mandated loan is a loan that falls under the category of a CRA bank. My apologies.
    It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
    "Wealth of Nations," Book V, Chapter II, Part II, Article I, pg.911

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

    Quote Originally Posted by The Barbarian View Post
    yeah you're right .. it wasn't a bill ..



    But it doesn't change anything does it .. you liberals now have it down to a two year bubble .
    Umm, yeah, there was a bill. In fact, there were two.

    S. 2239: FHA Downpayment Simplification Act of 2002

    S. 811: American Dream Downpayment Act of 2003

    ... again you demonstrate you don't know what you're talking about.

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

    I think this is what The Barbarian is referring to when he says the bubble started 30 years ago. You do see dramatic decreases in FM/FM holdings around 2003 (anyone got some color on what drove this) and a corresponding spike in Asset-Backed Security issuers. Krugman argues that this alleviates the responsibility of FM/FM in contributing to the crisis and puts the blame on the ABS issuers.

    Fannie Freddie data - NYTimes.com
    6a00d83451b33869e2010534d3c619970c-800wi.jpg

    Also here is a fantastic report by the St. Louis Fed on the role of housing policy on the expansion of FM/FM's balance sheets. I would recommend reading through it for the people who are interested in the subject. Of course there are conflicting studies done by others that claim that housing policy initiatives and FM/FM purchases played a bigger role in subprime origination but this study attempts to refute those claims. For a truly unbiased perspective I would read those studies as they are listed and quoted in the report. The ultimate conclusions are that it did not play a major role and are listed below:

    Things we know:
    • Housing policy via Subprime PLS was not a major factor in Fannie/Freddie losses.
    Losses mainly came from “off balance sheet” business done along traditional lines,
    especially in the Alt-A market. The devil didn’t make them do it.
    • Fannie and Freddie did not cause the subprime boom and bust. They did have a role in
    buying senior pieces of structured deals, but these were the easy AAA parts that lots of
    investors wanted. They were not involved in the crucial CDO market or other vehicles for
    selling the important junior pieces of the deals.
    Things we think we think we know:
    • They were not the victims of housing policy. Their goals explain a small share of their
    risk-taking. The ramping up of credit risk was especially in Alt-A lending, and it was
    based on business decisions, most likely regarding market share.
    • A very large share of their losses on Alt-A and related loans was associated with property
    value declines; these loans began with smaller than average shares of high LTV loans but
    wound up with much higher shares of underwater mortgages, presumably because of
    their locations and origination years.
    Things we don’t know:
    • We know little about the importance of goals to mortgages not in PLSs, For instance
    Fannie/Freddie increased purchases of high loan to value loans, especially in 2007. We
    would like to know the performance of goals rich loans within this category and the
    importance of mortgage insurance in controlling losses.
    • How much of losses were from price declines and how much from loan quality
    (especially Alt-A). This is easily doable with disaggregated data
    One should note the increases in FM/FM purchases leading up to 2004 where they begin to decline. How much their balance sheet expansion leading up to 2004 played a role in the rating agencies decisions and consequently mortgage origination is hard to quantify. I have a few books on the subject that suggest it was significant but I don't have them on hand so I can't quote them. It really does confirm Kyle Bass'/Peter Thiel's thesis that in 2003 the bubble in equity markets simply shifted into the housing markets. Despite claims from both sides that federal government policy (or lack thereof) caused this bubble it seems the data doesn't clearly back this up. In reference to the bills posted by Sheik above, I would hypothesize that even if they were passed and implemented in a timely manner (unlikely) that they would have not been able to rein in FM/FM. Here are some charts/tables from the report for the lazy.

    Fed data.JPG
    Market Share.JPG
    In order to determine how much of the above decline in market share was driven by growth in the overall market one must read the full report as the graph on it's own can be misleading.
    "There is an excellent correlation between giving society what it wants and making money, and almost no correlation between the desire to make money and how much money one makes." ~Dalio

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

    Quote Originally Posted by Goldenboy219 View Post
    For those who continue to peddle nonsense regarding the CRA:
    Blah blah, the percentage of loans that were covered by CRA was low, blah blah blah.

    The problem is the default rate on CRA loans was higher. Earlier, I posted that BofA had 3% of their business in CRA causing 29% of their losses. Its the risk involved in CRA not the percentage that is good, there is a certain percentage that is downright poisonous to profit and loss. Saying a certain percentage performed well is a shined up turd, the reality is that CRA did three things that were bad for financial institutions nationwide:
    --wrote bad paper
    --spread the risk for that paper far and wide
    --lowered financial standards for home loans across the board

    I keep seeing sidestepping on addressing the overall risk of CRA based loans, I see percentages of what was loaned, percentages of good loans but no discussion of how the bad overall from CRA affected bank margins and bundling procedures for CDSs and risk management.

    Remedies :
    Ban CDSs, mathematically they have never worked sufficiently on higher risk ventures, financial institutions always seem to need to cheat to sell them.
    Make financial criteria the number one factor in loaning money, social justice based home financing is a fail of epic proportions. No money down on a home is ludicrous on the face of it. Make buyers have skin in the game again.
    Ban loan based derivatives, see point one above, they just beg for the financial institution to cheat the buyer of said derivative.
    Reaffirm the barriers between commercial and traditional banks. Mixing those particular coffers and debts led us into this mess.


    Honesty here, I could give a rats ass whose really to blame, Id rather not see it happen again. Fix the problems. **** whose to blame--
    FIX IT!

  9. #629
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    Re: U.S. Jobless Rate Unexpectedly Declines to 8.6%

    Quote Originally Posted by OpportunityCost View Post
    Blah blah, the percentage of loans that were covered by CRA was low, blah blah blah.

    The problem is the default rate on CRA loans was higher.
    That's a baldfaced lie that's already been busted at least three times. Why do you keep repeating it?

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

    Quote Originally Posted by AdamT View Post
    That's a baldfaced lie that's already been busted at least three times. Why do you keep repeating it?
    No its a statment that you believe is refuted through using fed parsed data being presented to accomplish the desired result...covering bureaucrat ass.
    The data and conclusions they reach are carefully parsed to lie within a certain data set and cherry picked to support that conclusion, they almost never look at data as a whole or try to examine the overall impact on the market.

    I wonder why?

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