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Thread: U.S. sues S&P over subprime ratings

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    Re: U.S. sues S&P over subprime ratings

    Quote Originally Posted by finebead View Post
    And it was Bill Frist and the repubs who let GSE reform die on the vine in 2005, the last opportunity to do any good. See proof below:

    Now I'm going to show you how the republicans fixed it so Fannie and Freddie could not be regulated, when regulation was needed.


    Freddie Mac Tried to Kill Republican Regulatory Bill in 2005 | Fox News

    Bill Frist (R-Tenn) did not bring the bill up for a vote because there was not adequate repub support to regulate Fannie, and since they were in the majority in the senate, that ended the effort. It turns out you don't have to buy the whole senate, you just have to get enough votes on the margin to deny the majority their majority, and DCI did that. But you will notice this did not come to light until 2008. For the republicans, you can be for regulation and against regulation at the same time.

    Heck, by my count, that's 25 repubs in the senate in favor of reform, and 29 against, out of a total of 54 repub senators. The repubs couldn't even get a majority in their own caucus. This was not on Barney Frank, this could never have passed the senate because the republicans would have killed it if it came to a vote. Frist was just too smart to show the public the real story. Then you can talk about reform and blame its failure on someone else, since the hypocrits weren't on the record.
    Which ignores the partisan reality that the dems were for it even more than the republicans. The DC establishment was for it. Which brings me back to you having partisan blinders in your viewpoint of this entire mess.

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    Re: U.S. sues S&P over subprime ratings

    Quote Originally Posted by Hard Truth View Post
    Thank you for admitting that causes like the ones listed below are considered "liberal" by conservatives. Which means one can infer that conservatives don't care about helping refugees, children, the poor and powerless. (this is not exactly late breaking news, but its nice to see a conservative come out and admit it in public)


    "...asylum for a prominent Iranian journalist, Ms. S. In 2005, an Iranian court had sentenced Mr. S to death for his outspoken support of press freedom and women's rights....

    a nonprofit organization working to end child labor in the carpet industry in South Asia.

    reforms to a North Carolina school system designed to prevent abusive treatment of special needs students.

    children who arrived in the United States unaccompanied from Guatemala....after receiving death threats from Guatemalan gangs against the children.

    [Iraqi] refugees. Often fleeing from death threats by armed groups, many escaped to neighboring countries such as Syria, where they have tried to navigate the United States Citizenship and Immigration Services (USCIS) refugee and resettlement process without access to counsel.
    Religious freedom, FOIA cases, gun control issues, states rights cases, HHS mandates, on and on. I cant find any evidence of them working on those sorts of cases. What Im saying is they are only pushing issues on one side of the political spectrum. Immigration issues, child labor in foreign countries, Syrian/Iraqi national issues, etc.

    I see you excluded the appeal of a death sentence and a few others. Dont cherry pick data, its revealing of the weakness of your argument.

    Bolded: strawman, inflammatory and just plain dickish.

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    Re: U.S. sues S&P over subprime ratings

    Quote Originally Posted by OpportunityCost View Post
    Religious freedom, FOIA cases, gun control issues, states rights cases, HHS mandates, on and on. I cant find any evidence of them working on those sorts of cases. What Im saying is they are only pushing issues on one side of the political spectrum. Immigration issues, child labor in foreign countries, Syrian/Iraqi national issues, etc.

    I see you excluded the appeal of a death sentence and a few others. Dont cherry pick data, its revealing of the weakness of your argument.

    Bolded: strawman, inflammatory and just plain dickish.
    Maybe the different points have become too wedded to either side and so you rarely see crossovers about certain points.....................

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    Re: U.S. sues S&P over subprime ratings

    Quote Originally Posted by Hard Truth View Post
    I'll give you credit for trying, but that does not say anything about lowering lending standards. It is about preventing redlining and racial discrimination.
    Ok. Since the logic seems to escaping you.

    Bank in an area is not lending much money because the area is high risk via their lending standards. CRA comes along in the 90s and informs the bank that they HAVE to lend money in their area of they wish to maintain prime lending rates, expand, aquire another bank or merge with another bank. Further, area community groups would be consulted to see what sort of lending practices occur in the local area.

    Bank starts lending in the local area.

    Why do you think that is?

    Lets take it one step past the bank. Once the loan occurs and a bunch of others, the bank bundles those mortgages out with a rating, which they insure against default and also possibly sell portions of the risk and profit--bundling and CDSs. FnF at some point or another will aquire a portion of the risk, if not outright ownership because they own a significant portion of the home lending market by 2007, just under HALF.

    A bank seeing that the government is taking up the risk is going to do what? A bank that is being telegraphed that lending standards are of no consequence so long as their CRA compliance is solid---further that they will recieve rosy reports from inspectors for more funds, aquisitions ratings, etc---all the while their CAMELS rating was dropping. Im not providing you with proof, Im asking that you use your brain and follow the steps of what occurred.

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    Re: U.S. sues S&P over subprime ratings

    Quote Originally Posted by OpportunityCost View Post
    Which ignores the partisan reality that the dems were for it even more than the republicans. The DC establishment was for it. Which brings me back to you having partisan blinders in your viewpoint of this entire mess.
    Here's the concession. The republicans were for it also. You can no longer deny Bush's drive to put 5.5 mil. minorities in houses, the SEC passing a rule to let the biggest banks triple their leverage, and Frist and the senate repubs tanking FnF reform in 2005 after being lobbied by DCI.

    Were the dems for expanding home ownership? Sure, many were. Barney Frank and Maxine Waters said many stupid things about govt. support for housing. But at the end of the day, repubs hand was on the wheel and they enacted the dumbest rules (and in the case of lifelong repub Greenspan, he FAILED to enact smart regulations that could have prevented this).

    But if you look at HR 1464, the house companion bill for FnF reform, it passed the house in 2005 by a vote of 330 to 90, it passed with a majority from BOTH PARTIES! There were enough dem votes for responsibility, and that vote proved it. Only Frist and the repubs fumbled the ball on FnF reform in 2005.

    And this describes Greenspans failure:

    This post is the last installment in a three-part series harvesting the recent Financial Crisis Inquiry Report (FCIC Report) to debunk the top-ten urban myths about the Financial Crisis. To read about myths 1 – 5, click here.
    Myth 6: The Financial Crisis was caused by too much government regulation.
    Reality 6: No. Deregulation and regulatory forbearance contributed to the Crisis. Stronger, not weaker oversight is now needed.

    • The Report states: “[D]eregulation 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.”

    For example, housing advocates began “meeting with Greenspan at least once a year starting in 1999, each time highlighting to him the growth of predatory lending practices and discussing with him the social and economic problems they were creating.” Greenspan refused to use its authority under the Home Ownership and Equity Protection Act (HOEPA), which permitted the Fed to ban bad underwriting practices at both banks and “nonbank” institutions.

    “This was a missed opportunity, says FDIC Chairman Sheila Bair, who described the ‘one bullet’ that might have prevented the financial crisis: ‘I absolutely would have been over at the Fed writing rules, prescribing mortgage lending standards across the board for everybody, bank and nonbank, that you cannot make a mortgage unless you have documented income that the borrower can repay the loan.’” (emphasis added).
    Instead of a such a rule, in 2006, the Fed adopted non-binding “guidance” for the mortgage industry which “directed lenders to consider a borrower’s ability to make the loan payment when rates adjusted, rather than a lower starting rate. It warned lenders that low-documentation loans should be ‘used with caution.’” In response, the American Bankers Association was “up in arms,” complaining that the guidance “overstated the risk of non-traditional mortgages” and, not surprisingly, the industry ignored it.
    mythbusters: telling the truth about the financial crisis, part iii | theParetoCommons

    Greenspan had the authority to regulate both bank and non-bank operators and he did NOTHING. Greenspan the repub helped it blow up much more than the dems, who had no voting majority while this was blowing up.
    Last edited by finebead; 02-11-13 at 08:57 AM.

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    Re: U.S. sues S&P over subprime ratings

    Quote Originally Posted by finebead View Post
    Here's the concession. The republicans were for it also. You can no longer deny Bush's drive to put 5.5 mil. minorities in houses, the SEC passing a rule to let the biggest banks triple their leverage, and Frist and the senate repubs tanking FnF reform in 2005 after being lobbied by DCI.

    Were the dems for expanding home ownership? Sure, many were. Barney Frank and Maxine Waters said many stupid things about govt. support for housing. But at the end of the day, repubs hand was on the wheel and they enacted the dumbest rules (and in the case of lifelong repub Greenspan, he FAILED to enact smart regulations that could have prevented this).

    But if you look at HR 1464, the house companion bill for FnF reform, it passed the house in 2005 by a vote of 330 to 90, it passed with a majority from BOTH PARTIES! There were enough dem votes for responsibility, and that vote proved it. Only Frist and the repubs fumbled the ball on FnF reform in 2005.

    And this describes Greenspans failure:


    mythbusters: telling the truth about the financial crisis, part iii | theParetoCommons
    Youre a broke god damned record, Ive said all along BOTH parties held culpability. You have been playing blame Bush the entire damn time. This was an establishment DC driven issue and crisis. They enabled and legislated every bit of what made it possible.

    The Congressional Black Caucus had the race card out and ready to throw it over CRA regulation. You seem to have this stupid ****ing problem where you want to make sure the GOP holds more responsibility....I dont give a flying ****. I know both parties were neck deep in this. I know about Gramm/Leach/Bliley and CDS regs and derivative regulation being eased to the point of basically not existing.

    Know what my problem is?

    We are still doing it. We are still bailing this **** out. We are still doing subprime lending with GSE backing. Its just damned stupid. The more you use borrowed money to prop up the housing industry the harder it will be for it to fully recover.

    Banks didnt magically find a profit fairy in low income loans, they found a way to socialize the loss and keep the profit. Fix THAT and we will have a healthy mortgage market again.

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    Re: U.S. sues S&P over subprime ratings

    Quote Originally Posted by OpportunityCost View Post
    Ok. Since the logic seems to escaping you.

    Bank in an area is not lending much money because the area is high risk via their lending standards. CRA comes along in the 90s and informs the bank that they HAVE to lend money in their area of they wish to maintain prime lending rates, expand, aquire another bank or merge with another bank. Further, area community groups would be consulted to see what sort of lending practices occur in the local area.

    Bank starts lending in the local area.

    Why do you think that is?

    Lets take it one step past the bank. Once the loan occurs and a bunch of others, the bank bundles those mortgages out with a rating, which they insure against default and also possibly sell portions of the risk and profit--bundling and CDSs. FnF at some point or another will aquire a portion of the risk, if not outright ownership because they own a significant portion of the home lending market by 2007, just under HALF.

    A bank seeing that the government is taking up the risk is going to do what? A bank that is being telegraphed that lending standards are of no consequence so long as their CRA compliance is solid---further that they will recieve rosy reports from inspectors for more funds, aquisitions ratings, etc---all the while their CAMELS rating was dropping. Im not providing you with proof, Im asking that you use your brain and follow the steps of what occurred.
    This makes no sense at all.

    Let's see, I'm in private industry, and I see the govt. lowering lending standards, so I think, gee, this is a smart business model, let me go make some loans to people who probably can't pay them back. Since when has private industry decided govt. was good businessmen and decided to emulate what they do? Never.

    That was the Countrywide model. Countrywide CEO made a fortune by selling the bad debt to Goldman, Bear Stearns, Merrill Lynch who rolled them into CMO's and sold them. When the repo agreements kicked in, Countrywide would sell itself off or declare bankruptcy and Angelo would be rich which is what happened (sold to BofA). The only way to prevent this was with up front regulation, and Greenspan had the authority to do it, but he failed to use it and he facilitated the greatest financial crisis in the US since the Depression.

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    Re: U.S. sues S&P over subprime ratings

    Quote Originally Posted by finebead View Post
    This makes no sense at all.

    Let's see, I'm in private industry, and I see the govt. lowering lending standards, so I think, gee, this is a smart business model, let me go make some loans to people who probably can't pay them back. Since when has private industry decided govt. was good businessmen and decided to emulate what they do? Never.

    That was the Countrywide model. Countrywide CEO made a fortune by selling the bad debt to Goldman, Bear Stearns, Merrill Lynch who rolled them into CMO's and sold them. When the repo agreements kicked in, Countrywide would sell itself off or declare bankruptcy and Angelo would be rich which is what happened (sold to BofA). The only way to prevent this was with up front regulation, and Greenspan had the authority to do it, but he failed to use it and he facilitated the greatest financial crisis in the US since the Depression.
    You missed the part where FnF picked up more than a little of the paper and where AIG insured it. You almost have it but you dont want to admit the GSEs wound up holding nearly half of the entire US mortgage market once this was all said and done. That tears up this obsessive BOOOOOOOOOSSSSSSHHHH issue you have. Ignore who was in charge, you act like Obama or Clinton would have done ANYTHING differently. They wouldnt have. Thats part of the point.

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    Re: U.S. sues S&P over subprime ratings

    Quote Originally Posted by OpportunityCost View Post
    Youre a broke god damned record, Ive said all along BOTH parties held culpability. You have been playing blame Bush the entire damn time. This was an establishment DC driven issue and crisis. They enabled and legislated every bit of what made it possible.

    The Congressional Black Caucus had the race card out and ready to throw it over CRA regulation. You seem to have this stupid ****ing problem where you want to make sure the GOP holds more responsibility....I dont give a flying ****. I know both parties were neck deep in this. I know about Gramm/Leach/Bliley and CDS regs and derivative regulation being eased to the point of basically not existing.

    Know what my problem is?

    We are still doing it. We are still bailing this **** out. We are still doing subprime lending with GSE backing. Its just damned stupid. The more you use borrowed money to prop up the housing industry the harder it will be for it to fully recover.

    Banks didnt magically find a profit fairy in low income loans, they found a way to socialize the loss and keep the profit. Fix THAT and we will have a healthy mortgage market again.
    You are right about me. I want to be sure everyone knows what the repubs did during Bush's failed presidency. The right doesn't want to talk about the repub failing, they would rather talk about a law in 1996 that had little to do with the spike in subprime in 2004, and act like it was all CRA. It was not, the repub hands were on the wheel, and I know what they DID, or in Greenspans case failed to do, that directly made this into a crisis. It didn't have to be that way, but the repub hands were on the wheel, and they did the deeds. The dems were not helpful to the nation at the time this was going on, but the repubs were driving the bus, over a cliff.

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    Re: U.S. sues S&P over subprime ratings

    Quote Originally Posted by OpportunityCost View Post
    You missed the part where FnF picked up more than a little of the paper and where AIG insured it. You almost have it but you dont want to admit the GSEs wound up holding nearly half of the entire US mortgage market once this was all said and done. That tears up this obsessive BOOOOOOOOOSSSSSSHHHH issue you have. Ignore who was in charge, you act like Obama or Clinton would have done ANYTHING differently. They wouldnt have. Thats part of the point.
    You can't make that point. Clinton had his run, and the economy purred on his watch.

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