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Thread: US Median Income Lowest Since 1995

  1. #161
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    Re: US Median Income Lowest Since 1995

    Quote Originally Posted by Born Free View Post
    Here's another joke, it was Fannie and Freddie that were buying up loans from banks that gave out loans to people with no money down, no credit, no job, and no way to pay the loan.
    This is a graph of secondary mortgage market share -- the percent of all securitizations being done by those who did them. It is probably the single most telling graph about the history of the credit crisis. The red line is the private-label Wall Street securitizers. Large percentages of that red line are subprime loans with increasing numbers of those written at poor and deteriorating underwriting standards. This is where the junk went when the GSE's wouldn't take it. That private-label bulge and takeaway from the GSE's is why the credit crisis happened.

    gse_market_share.jpg

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    Re: US Median Income Lowest Since 1995

    Quote Originally Posted by Born Free View Post
    And it was Old Barney Frank that told us that Fannie and Freddie was in excellent financial shape, and then it collapsed.
    That was in 2003, and when pointedly asked about that very thing during testimony related to the Bush administration's 2003 attempt to gut the GSE's by putting yet another czar on top of them, Treasury Secretary Snow was just as pointed in agreeing that no, the administration did not believe that any crisis existed within the housing finance industry.. Far from it, he said.

    In another oddity the Republican history on this subject appears to end in 2003. I understand why they find later events unpleasant, since those events document the gathering series of policy mistakes that the Republicans made which ended in their being repudiated in 2006, and re-repudiated in 2008. In their view of the world, the last relevant thing that happened was a statement I made in 2003 in which I said that Fannie Mae and Freddie Mac were not in crisis. I did say that. And I would have said it as well-- and may have-- about Wachovia Bank, Lehman Brothers, Bear Stearns, the Royal Bank of Scotland, and dozens of other financial institutions in America and elsewhere which were not in fact in crisis in 2003.
    -- Rep. Barney Frank

    Quote Originally Posted by Born Free View Post
    Let me remember Barney Frank was a Democrat.
    Yes, that would have made him a member of the minority party. The one with no power to do anything on its own. Congressman Frank again...

    Being accused of having blocked legislation to prohibit irresponsible lending to low-income people from 1995 to 2006 is flattering in a bizarre way. Apparently those Republicans parroting these right-wing talking points believe that I had some heretofore undisclosed power over first Newt Gingrich and then Tom DeLay, which allowed me to keep them from passing legislation they wanted to pass. If that had been true, I would have used that power to block the impeachment of Bill Clinton in the House, the war in Iraq, large tax cuts for the very wealthy, the intrusion into the sad case of Terri Schiavo, and appropriations bills that badly underfunded important social priorities.

    I did not try to stop them from passing legislation to control subprime lending or to regulate Fannie Mae and Freddie Mac because in the first case they were never willing to do so, and in the second case, I worked together with Republican Chairman Mike Oxley on the only bill that the Republicans considered during that period to restrict Fannie Mae and Freddie Mac, and the bill was defeated because, in the words of Mr. Oxley, the Bush administration gave his efforts "the one-finger salute."

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    Re: US Median Income Lowest Since 1995

    Quote Originally Posted by Born Free View Post
    Here again you wish to dodge the truth, it weas Barney Frank through Fannie and Freddie who lowered their standards of purchasing loans. Thus the lenders lowered their standards to meet Fannie and Freddie buying standards. Which amounted to no money down, no credit, no job, and no way to pay the loan.
    You are totally befogged. Barney Frank did not set any lending standards at all, and it was the STRONG limits posed by GSE underwriting minimums that forced all that garbage business to go off to Wall Street instead. Villains such as Countrywide's Angelo Mozilo were constantly bashing the GSE's, demanding that they weaken their standards and theatening to take their sizable chunk of prime business off to Wall Street as well if the GSE's didn't comply. They didn't comply.

    Meanwhile, in 2000, the Clinton administration -- worried about the potential for abuse as subprime markets were opened up to traditional lenders -- disqualified predatory loans with high-cost terms from counting toward mandated affordable housing goals. In 2004, the Bush adminstration removed that restriction and signficantly raised the mandate while at the same time removing levrage limits from Wall Street. Bush simply invited the disaster that eventually befell him.

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    Re: US Median Income Lowest Since 1995

    Quote Originally Posted by Born Free View Post
    Wrong again, it was the loose money being floated out by Barney Frank through Fannie and Freddie that people were allowed to buy as many homes as they wanted with no money down, no credit and no job. That is what created the bubble. No different than the tech bubble.
    You have made yourself look very foolish here indeed. Monetary policy is under the direction of the Fed. Principally the genius Alan Greenspan during the relevant time periods. It is quite safe to say that Barney Frank had no influence at all with Alan Greenspan. It was Greenspan who pledged in 2002 to keep interest rates at 1% until economic activity picked up. It was Greenspan who spoke out against the 2005 GSE reform bill passed in the House, saying that it was worse than no bill at all. It was Greenspan who consistently refused to use the oversight and regulatory powers that Congress (and Barney Frank, actually) had given the Fed with regard to subprime credit markets in 1994, even after it was pointed out that abuse of subprime markets was reportedly rampant and that substantial downstream risks were posed by such abuse.

    The credit crisis and resulting Great Bush Recession were brought to you by cowboy capitalism and the truly horrible fiscal, monetary, and regulatory policies of a bunch of simpletonian, laissez-faire, free-market Republicans, George W Bush, Team Captain. End of story.

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    Re: US Median Income Lowest Since 1995

    Quote Originally Posted by OldWorldOrder View Post
    What? Anyone can find a certain set of facts to support their proclivities, can they not? It's more telling, though, when one offers up only the best examples of one and the worst examples of another and then attempt to compare them. Tells you a lot about the person doing it. Tells you they have no interest in being rational or objective.
    Sloppy attempts at personal insult noted. But the bigger headline seems to be that even when called out multiple times by multiple posters for the total hollowness of your posts, you have no intention of backing up your slanders with anything at all. Have I got that about right?

    Here again is the original text you decried. Quite a range of facts is covered within it. Can you refute or even dispute ANY of them or am I dealing here with just another drive-by, right-wing wimp?

    While Bush's work on AIDS and good-governance in Africa so far falls short of what the Clinton Global Initiative has been doing, they had a head start, and Bush did get points by comparison simply for not ignoring Africa while actually in office, the fact that he had simply run out of other places he could travel to notwithstanding. These efforts likely do stand as the one and only net positive contrbution that Bush was able to make in eight years. One entry does not comprise a list, however.

    Decent? What in God's name was there that even approached decent? Iraq? The economy? Abu Ghraib and Gitmo? His bold steps forward on health care, energy, and immigration policy? DHS? Education? The environment? Foreign policy? Civil rights? Katrina? What? There is an eight-year litany of very nearly wall-to-wall disgrace and failure. Do point out the decent parts that are somehow being covered up.

    Obama is like FDR. This is no average for what he's been asked to do. And FDR of course didn't have to deal with a hostile, terrorist Congress while doing it. We'll have to see how it all shakes out over the next four years, but I would guess that he'll be at least knocking on the door of upper quartile status.

    Try to be serious. Recency bias and the serial position effect are tiddlywinks notions related to small-scale short-term memory storage and recall. They have nothing to do with history. You're either a researcher in the field plumbing for grant money or are a quite considerable way off base.

    Returning to reality, there is nothing about lately that precludes it from having witnesssed one of the worst presidencies of all time. All that's necessary is for there recently to have been a President whose failures and shortcomings were so glaring and numerous as to qualify him for such a position. Quite a powerful case can in fact be made for exactly that having happened.

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    Re: US Median Income Lowest Since 1995

    Quote Originally Posted by Camlon View Post
    That would only be an argument is democrats vored against Republican reforms. They didn't.
    What? How is anyone supposed to divine whatever it is you were trying to say?

    Quote Originally Posted by Camlon View Post
    So instead of just stating there was bills that would deal with the crisis, can you name them.
    Why aren't you aware of them already? Is it because you were not actually paying any attention at the time and have gotten all your news from the disinformation media? It's a little late now, of course, but go check out H.R. 1461 of the 109th Congress, the Federal Housing Finance Reform Act of 2005.

    Quote Originally Posted by Camlon View Post
    You are wrong here. First, tax cuts for the rich is not the cause of low interest rates. Low interest rates happen before the tax cuts. Also, the tax cuts were not just for the rich. It was a tax cut for everyone, and democrats agreed with the tax cuts, but not towards the rich.
    LOL! The federal funds rate target was at 6% at the start of 2001, but it had to be lowered to 3.75% by June on account of the Lesser Bush Recession. Tax Cuts for the Rich were also passed in June 2001, with various provisions being retroactive. Post-9/11, the target rate was lowered to 1.75%, but it was the cuts to 1.25% in late 2002 and then to 1.00% in mid-2003 that I was talking more about.

    Tax Cuts for the Rich were meanwhile just that. They dumped huge piles of money on the already wealthy while providing peanuts to the middle and upper-middle classes. Benefits continue to accrue to the weathy year after year but have almost vanished now for everyone else. More than 50% of the benefits today go to the top 1% of earners. Like they are having a hard time.

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    Re: US Median Income Lowest Since 1995

    Quote Originally Posted by Cardinal Fang View Post
    What? How is anyone supposed to divine whatever it is you were trying to say?
    What I said was "That would only be an argument if democrats voted against Republican reforms. They didn't."


    Why aren't you aware of them already? Is it because you were not actually paying any attention at the time and have gotten all your news from the disinformation media? It's a little late now, of course, but go check out H.R. 1461 of the 109th Congress, the Federal Housing Finance Reform Act of 2005.
    Maybe because I don't read your mind trying to figure which law you will use to your defence.

    Over to the law you mentioned, I don't see how it is relevant. Both democrats and republicans voted in favour of it, and it didn't really solve the major problems. However, what happened was that the law didn't get implemented because of democrats blockading it in the senate. Are you stating that law would have made the crisis worse? Most people would say that law would help. However, it was in 2005 and that was too late. House prices started dropping in late 2006.

    LOL! The federal funds rate target was at 6% at the start of 2001, but it had to be lowered to 3.75% by June on account of the Lesser Bush Recession. Tax Cuts for the Rich were also passed in June 2001, with various provisions being retroactive. Post-9/11, the target rate was lowered to 1.75%, but it was the cuts to 1.25% in late 2002 and then to 1.00% in mid-2003 that I was talking more about.
    Oh... right. So you think the cuts from 1.75 to 1% was the cause of the inflated property market, and not the cuts from 6% to 1.75%?!

    Also, the correct name is Dotcom bubble, not Bush mild recession. Just like Obama, Bush had just entered office. If you are going to name it after a president, it would be Clinton's mild recession.
    Last edited by Camlon; 09-30-12 at 10:42 AM.

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    Re: US Median Income Lowest Since 1995

    Uhhh..what hollowness? You're the one trying to say the guy was the worst president ever. I've never heard an educated person say that unless they were a complete partisan.

    You're the one making the assertion. It's laughable and not really worth considering.
    The whole modern world has divided itself into Conservatives and Progressives. The business of Progressives is to go on making mistakes. The business of Conservatives is to prevent mistakes from being corrected.
    -GK Chesterton

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    Re: US Median Income Lowest Since 1995

    Quote Originally Posted by Camlon View Post
    Not directly yes, but indirectly they are.
    So you retract now your silly claim that Fannie and Freddy were certainly lending to people who were subprime, and now recognize that Fannie and Freddie don't actually lend to anybody at all. Good.

    Quote Originally Posted by Camlon View Post
    They are the ones who provide funding for lenders by buying mortages...
    Selling off part of a mortgage portfolio is one among many ways in which lending institutions obtain funds to lend. They do the same thing with credit card and auto loan debt that they might hold for instance. Then there is the entirely separate market for commercial real estate. The list goes on, but no matter how they raise the funds, it is still the banks that do the lending.

    Quote Originally Posted by Camlon View Post
    ...hence they are the ones who set the standards. And then they repackage them and sell them to the investors.
    Yes, unlike Wall Street, the GSE's set minimum underwriting standards for the loans they will agree to purchase. They always have done that and still do.

    Quote Originally Posted by Camlon View Post
    Well, then you supported the policies that lead to the crisis.
    That's rich. Pointing out that loan standards TODAY are too tight has some affect on events in 2008 and earlier? I don't really think so.

    Quote Originally Posted by Camlon View Post
    Do you know what subprimie mortages is? Subprime mortages are mortages from people who do not qualify. You just said you agreed with such loans.
    Absolutely, but it is most definitely you that is confused. Subprime is simply everything that does not qualify as prime/conventional according to GSE-set standards. The finance companies (Household, Beneficial, etc) had been making tidy profits for decades serving these markets that traditional lenders through red-lining and other questionable practices had turned their backs on. But the finance companies made their money through payday-lender type terms of extortion. It's not like their customers had any place else to go. But they did have someplace else to go in the 1990's when Clinton made an acceptable CRA rating a condition for approval of new applications for acquisitions and interstate banking operations. CRA required that consistent with sound business practices, banks and S&L's taking federal deposit insurance had to make serious efforts to lend into the communities that they were taking deposits from. No more sucking all the savings out of urban low- and moderate income communities and using them all to build gated golf course communities in the upscale suburbs. They didn't have to make any actual loans at all. They merely had to make serious efforts to find qualified borrowers. Traditional lenders balked at first, but they were soon somewhat astonished as nearly half of the new borrowers they were able to unearth right next door were qualified at prime terms and nearly all the rest at Alt-A, the level down just a hair from prime. It is not hard to make a profit from lending to such populations, and with very few adjustments to terms for those in the Alt-A group, a substantial portfolio of CRA loans was soon built up that performed better than industry averages. Lending into these previously underserved or unserved markets turned out to be both good policy and good business.

    The success of these loans -- both prime and subprime -- led to a situation remisicent of the Oklahoma Land Rush. Everyone wanted a piece of those profits, and subprime in particular became a market that everyone was interested in. The GSE's for their part were busy designing model credit types for these markets -- typically a 30-year fixed-rate instrument with front-loaded fees and premiums that borrowers could earn their way out of through solid loan performance. But Wall Street and their broker-henchmen had other ideas. Ideas like teaser rates, no-cap ARM's, interest-only, and reverse-amortization. They packed their loans with all sorts of gimmicks, put the hard-sell on those products into subprime and other markets, then sold the slop they were generating off through Wall Street and into the secondary markets. That's where the problems came from.

    Subprime markets did and still do hold great potential for profitability. They were not the problem. Market abuse and predatory lending by cowboy capitalists were the problem, particularly as the quality of borrower they were dragging in kept falling to new lows. That plus regulators somehow convinced that markets were wise enough to regulate themselves.

    Quote Originally Posted by Camlon View Post
    I never said nationalize. The government certainly shouldn't have full control of the banks. However, there should be regulations of banks, and there should be national lending standards.
    It doesn't matter whether you use the word or not. When you want the federal government to take over and dictate work that banks do now, you are nationalizing them. Of course, nationalization of the banking system was one option back in 2009, and quite a number of people will still say that we missed the boat in not doing so. They point out that the recovery would have been easier, quicker, and more robust under such a scenario, and it is very hard to argue with that premise. The kicker however is that it is very hard to re-privatize a banking system once you have nationalized it. That was the biggest sticking point, and it was a very valid one indeed.

    Quote Originally Posted by Camlon View Post
    Problem is your argument for this being a republican enterprise is that the tax cuts led to cut in interest rates, but the tax cuts happened after the cuts in the interest rates. People would get their rebate check by December 2001. By then the interest rate was already dropped from 6% to 2%.
    This amounts to already debunked babbling. The credit crisis was a child of the years 2002 to 2006. Democrats were in charge of nothing over that interval. It was all Bush and the neocons (all now reconstructed as lifelong "libertarians" it seems) who were responsible for this mess, lock, stock, and barrel. Cowboy capitalism met blind, laissez-faire, free-marketeerism, and this is the result we got.
    Last edited by Cardinal Fang; 09-30-12 at 11:01 AM.

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    Re: US Median Income Lowest Since 1995

    Quote Originally Posted by Camlon View Post
    What I said was "That would only be an argument if democrats voted against Republican reforms. They didn't."
    Merely fixing the typos doesn't resolve the problems. What Republican reforms do you think Democrats did not vote against?

    Quote Originally Posted by Camlon View Post
    Maybe because I don't read your mind trying to figure which law you will use to your defence.
    The descriptions originally provided were more than specific enough for anyone familiar with any of the relevant history to have known which was being talked about. Those with no such familairity might well have been left in the dark of course.

    Quote Originally Posted by Camlon View Post
    Over to the law you mentioned, I don't see how it is relevant. Both democrats and republicans voted in favour of it, and it didn't really solve the major problems.
    LOL! It was a bipartisan bill, the product of cooperation between Barney Frank (D) and Mike Oxley (R). This bipartisan result was possible because there was no actual disagreement over the need for GSE reform and no signficant disagreement over the safety-and-soundness issues that were in need of attention. What brought about stalemate time after time was the Bush admisntration's insistence that any bill chop the GSE's down in size so that more and more of their mission could be privatized. Indeed, a safety-and-soundness bill had been voted out of committee in the Senate in 2003 and Bush killed that as well. All he wanted was to move market share to Wall Street. His every effort was put toward that end and he simply didn't care about the rest.

    Quote Originally Posted by Camlon View Post
    However, what happened was that the law didn't get implemented because of democrats blockading it in the senate.
    LOL! There were only 45 of them. Keep in mind that this was in the days prior to the Republican resort to wall-to-wall, 24/7 obstructionism. Simple majorities passed bills back in those days but the Republicans didn't have 50 votes in favor within their own 55-person caucus. This is why S.190 failed. H.R. 1461 was never taken up in the Senate because Bush gave it the old one-finger salute.

    Quote Originally Posted by Camlon View Post
    Are you stating that law would have made the crisis worse? Most people would say that law would help. However, it was in 2005 and that was too late. House prices started dropping in late 2006.
    What? No one can tell what affects HR 1461 would have had because it never became law. Housing prices meanwhile peaked -- as they should have -- in the Spring of 2006 just as the long string of Fed interest rate increases reached its conclusion.

    Quote Originally Posted by Camlon View Post
    Oh... right. So you think the cuts from 1.75 to 1% was the cause of the inflated property market, and not the cuts from 6% to 1.75%?!
    I'll try again. This is about market effects. The initial cuts to 3.75% were recessioin oriented. The cuts to 1.75% were then to ward off post-9/11 investor panic. Those were both short-term moves. The subsequent cuts in 2002 and 2003 coupled with Greenspan's pledge to keep interest rates at such low levels for however long it took economic activity to pick up were like lighting a fire under real estate prices. Long-term low interest rates force the price of all long-term assets up. Surely, you do understand that much, and also that these plainly stated intentions were plenty enough to send institutional investors off on a search for yield, which they happened to find within normally staid secondary mortgage markets.

    Quote Originally Posted by Camlon View Post
    Also, the correct name is Dotcom bubble, not Bush mild recession. Just like Obama, Bush had just entered office. If you are going to name it after a president, it would be Clinton's mild recession.
    All propaganda, all the time. The dot-com bubble is a myth. It's a cover-up buzzword designed to cloak and conceal such things as the billions worth of rigged IPO's that hit especially the NASDAQ as soon as GLB was passed and the investment people could arrange crooked deals to benefit their favored commercial customers. Then there was a series of Enron-style accounting scandals at major firms, some of whom happened to be involved in telecommunications. Then there was the lose-your-shirt madess of people becoming convinced that they could make a living as "day-traders" (most often also on the NASDAQ) with of course the 24/7 support and encouragement of burgeoning cable business channels. Sheep to the slaughter. Got anything else to add to this pretend event of yours? Maybe some paper market losses that had reversed themselves within a matter of months or something?

    The actual recession of March-November 2001 grew out of an understandable crisis in confidence in this George W Bush guy and his extremist economic policies. The first signs of worry show up in declining gross private domestic investment in the second half of 2000, as the chance of this bumpkin actually becoming a candidate and potentially becoming President start to increase. Things only get worse from there. Now, it is of course as normal as 98.6 degrees for there to be a period of business caution both before and after a change in administrations, but this was much more than that, as where Gore could be counted on for economic continuity, this Bush guy was issuing calls to upset the entire apple cart that had served so many so well for so long. And then he actually did it. The case could be and has been made that it was actually the slap-in-the-face and national unity of 9/11 that actually brought the Lesser Bush Recession to an end. Trying to pass it off on Clinton is simply absurd, and of course, the Great Bush Recession officially began in December 2007, 13 months before Obama took office. You are getting really desperate for material here.
    Last edited by Cardinal Fang; 09-30-12 at 12:24 PM.

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