Economic collapse !!

Glen Contrarian · Oct 28, 2015

GoNavy said:
Do you have any sources for your - "conservatives do have a habit of not listening to professionals" - or are you just partisan bashing?

I was hoping for less troll activity. Definitely not advancing the discussion.

Sources providing examples of conservatives having a habit of not listening to professionals? You mean, like the FACT that every single national physical science organization of every developed nation on the planet agree that global warming is real and is mainly driven by human civilization, yet American conservatives (as opposed to most conservatives in most other nations) can't allow themselves to believe them? Do you really need a source to tell you that?

And in America, when someone says that the planet's only 6,000 years old (despite what the paleontologists - the real professionals - say), what's that person's probable political lean? I think you know, even if you won't admit it.

I could go into birtherism and Obama's-a-secret-Muslim-ism, but I think the point is already made: when a professional says something that goes against far-right conservative dogma, that professional MUST be wrong...no matter how qualified he is to make that statement.

KevinKohler · Oct 28, 2015

Glen Contrarian said:
I guess as long as you don't pay attention to, you know, like, PROFESSIONALS, that might be true. You have not disclosed your political lean, but you seem conservative, and conservatives do have a habit of not listening to professionals (e.g. global warming, paleobiologists, economists, anyone who doesn't adhere to conservative dogma). That, and they seem to have a real problem confusing matters of degree, as in comparing proverbial molehills to mountains.

It's funny. When I debate a conservative, they label me a liberal. When I debate a liberal, they label me a conservative. Do you think it's because both sides cling to the delusion that they are always correct, and, like a religion, must find some way, ANY WAY, to denounce or otherwise invalidate any argument, even those that come from within, that threatens to shatter that delusion?

As to the subject of this paragraph, it was EXPERTS that I listened to on NPR, hardly known to be a bastion of hawkish conservatism, that convinced me that there really is no difference between a recession, and a "market correction".

But just so ya might have an opportunity to learn what a stock market CORRECTION is:

DEFINITION OF 'CORRECTION'
A reverse movement, usually negative, of at least 10% in a stock, bond, commodity or index to adjust for an overvaluation. Corrections are generally temporary price declines interrupting an uptrend in the market or an asset. A correction has a shorter duration than a bear market or a recession, but it can be a precursor to either.

By your own definition, you assert that the only MEANINGFUL difference between a correction and a recession is duration.

That's like shouting that cults and religions, are, like, TOTALLY different....

Um, it might do you good to look back at my post - I never mentioned the Great DEPRESSION (which happened 83 and not 100 years go). I referred to the Great RECESSION (which happened SEVEN years ago).

I'm pretty sure you were in a rush - but you have to be careful when you're reading and replying in a rush - that's how mistakes get made.

Yep, you are correct...my bad. For that I agree with you. If you had the money, and bought stocks following this last long term correction (lol), you would be rich right now.

Absentglare · Oct 28, 2015

GoNavy said:
Greenspan - did - say the economy was fine in 2000. Fact.
Bernanke - did - say the economy was fine in 2008. Fact.
And I've taken economics.

Care to elaborate? Or is that how you contribute ... in life? Throw rocks and walk away? Not very objective or academic.

The economy was fine in 2000. It was President Bush 2's failed housing policies that caused the crash:

ImageUploadedByTapatalk1446064493.328297.jpg

JohnfrmClevelan · Oct 28, 2015

GoNavy said:
Greenspan - did - say the economy was fine in 2000. Fact.
Bernanke - did - say the economy was fine in 2008. Fact.

Before those debt bubbles pop, the economy is fine, and everybody is happy. Fed chairs always believe they can manipulate the economy with monetary policy, but I don't think they can do much about large levels of consumer debt.

We all probably agree that the housing crash was the cause of 2008's recession. What people don't agree on is the cause of the 2000-2001 recession. But that was on the back end of a few Clinton surpluses, where we went from steady federal deficits to a net loss of dollars to the government. The success of the late 1990's was happening because of increasing private debt, and that's not sustainable. Dubya actually did the right thing (probably by accident) when he moved the government back into deficit.

DA60 · Oct 28, 2015

JohnfrmClevelan said:
Before those debt bubbles pop, the economy is fine, and everybody is happy. Fed chairs always believe they can manipulate the economy with monetary policy, but I don't think they can do much about large levels of consumer debt.

We all probably agree that the housing crash was the cause of 2008's recession. What people don't agree on is the cause of the 2000-2001 recession. But that was on the back end of a few Clinton surpluses, where we went from steady federal deficits to a net loss of dollars to the government. The success of the late 1990's was happening because of increasing private debt, and that's not sustainable. Dubya actually did the right thing (probably by accident) when he moved the government back into deficit.

Fenton · Oct 29, 2015

Absentglare said:
The economy was fine in 2000. It was President Bush 2's failed housing policies that caused the crash:

View attachment 67192100

The Housing Bubble...
Homeownership rates in 1993 ? 63%.
Homeownership rates in 2000 ? 68%

Homeownwrship rates in 2005 ? 69%

So enough Subprime loans were made under Bush's 1% increase in Homeowner-ship rates and all after 2004 to Bankrupt the GSEs leaving them holding over 5 Trillion dollars in debt, bankrupt CountryWide, AIG, Lehman Brothers, HSBCs residential mortgage division, etc and cause financial shockwaves that reverberated throughout the Worlds largest Capital markets leading to a 35 Trillion dollar loss in wealth ??

Fenton · Oct 29, 2015

JohnfrmClevelan said:
Before those debt bubbles pop, the economy is fine, and everybody is happy. Fed chairs always believe they can manipulate the economy with monetary policy, but I don't think they can do much about large levels of consumer debt.

We all probably agree that the housing crash was the cause of 2008's recession. What people don't agree on is the cause of the 2000-2001 recession. But that was on the back end of a few Clinton surpluses, where we went from steady federal deficits to a net loss of dollars to the government. The success of the late 1990's was happening because of increasing private debt, and that's not sustainable. Dubya actually did the right thing (probably by accident) when he moved the government back into deficit.

The Success of the late 90s was tied to Clintons Housing Bubble that peaked in 2000 at 68%, up from 63% in 1993.

There are profound consequences to Government mandates that force private lending Institutions to either lower their lending standards or face DOJ prosecution

Like a massive credit bubble.

There are also profound consequences to co-opting Fannie and Freddie into the Subprime market by giving them " affordable lending " quotas that start at 42% and appointing your criminal buddies ( Franklin Raines ) to run them..

That led to a Systemic Financial meltdown that bankrupted both GSEs and numerous private Institutions. It also wiped out trillions in wealth.

joG · Oct 29, 2015

Absentglare said:
The economy was fine in 2000. It was President Bush 2's failed housing policies that caused the crash:

View attachment 67192100

You don't believe that, do you?

The Penguin · Oct 29, 2015

Fenton said:
The Housing Bubble...
Homeownership rates in 1993 ? 63%.
Homeownership rates in 2000 ? 68%

Homeownwrship rates in 2005 ? 69%

So enough Subprime loans were made under Bush's 1% increase in Homeowner-ship rates and all after 2004 to Bankrupt the GSEs leaving them holding over 5 Trillion dollars in debt, bankrupt CountryWide, AIG, Lehman Brothers, HSBCs residential mortgage division, etc and cause financial shockwaves that reverberated throughout the Worlds largest Capital markets leading to a 35 Trillion dollar loss in wealth ??

LOL! Still going Fenton? Boy you are one desperate guy! For those of you who don't know, Fenton ran away from a thread on this very subject that I was thrashing him all over. Particularly this post here, here, and here.

The Penguin · Oct 29, 2015

Fenton said:
The Success of the late 90s was tied to Clintons Housing Bubble that peaked in 2000 at 68%, up from 63% in 1993.

And of which the default rate was steady and consistent all the way through 2003...then it started to grow. Gee, I wonder why.

From the Federal Reserve Bank of Chicago:

The percentage of subprime loans that had defaulted after 12 months was 14.6 percent for loans made in 2005, 20.5 percent for loans made in 2006, and 21.9 percent for loans made in 2007. To put these figures in perspective, only 1.4 percent of prime loans and less than 7 percent of subprime originated in 2002 defaulted within their first 12 months.

Basically, everything Fenton says is a half truth...in other words, he lies.

The Penguin · Oct 29, 2015

Fenton said:
The Success of the late 90s was tied to Clintons Housing Bubble that peaked in 2000 at 68%, up from 63% in 1993.

There are profound consequences to Government mandates that force private lending Institutions to either lower their lending standards or face DOJ prosecution

Like a massive credit bubble.

There are also profound consequences to co-opting Fannie and Freddie into the Subprime market by giving them " affordable lending " quotas that start at 42% and appointing your criminal buddies ( Franklin Raines ) to run them..

That led to a Systemic Financial meltdown that bankrupted both GSEs and numerous private Institutions. It also wiped out trillions in wealth.

So Fenton...up until 2003 there were 1.1M subprime originations. That means from the first subprime loan that was ever originated all the way up through 2003, the total was 1.1M. Then by 2005, that figure reached 1.9M. So between 2004-5, 800,000 subprime mortgage originations were made. That's according to the Federal Reserve Board.

And you want us to believe you that the bubble started earlier? LOL! What a joke!

The Penguin · Oct 29, 2015

Fenton said:
The Success of the late 90s was tied to Clintons Housing Bubble that peaked in 2000 at 68%, up from 63% in 1993.

There are profound consequences to Government mandates that force private lending Institutions to either lower their lending standards or face DOJ prosecution

Like a massive credit bubble.

There are also profound consequences to co-opting Fannie and Freddie into the Subprime market by giving them " affordable lending " quotas that start at 42% and appointing your criminal buddies ( Franklin Raines ) to run them..

That led to a Systemic Financial meltdown that bankrupted both GSEs and numerous private Institutions. It also wiped out trillions in wealth.

So Fenton will also lie and say that the mean old CRA forced banks to lend to people who couldn't pay. However, when prompted to point the specific passage in the CRA that says that, we get crickets. Good thing we have Sheila Bair, Bush's FDIC Chair, who can clear this up for us:

“Let me ask you, where in the CRA does it say to make loans to people who can’t afford to repay? Nowhere.”

Fenton will also say that the Bush Working Group on Financial Markets, which is made up of Bush's Treasury Secretary, Bush's FDIC Chair, Bush's SEC Chair, Bush's CFTC Head, Bush's Fed appointee Bernanke, etc. was trying to cover for Democrats(!) by saying the cause of the crisis was the issuing of subprimes with lowered lending standards from 2004-7. Now, who in their right might would believe that Bush's own people would cover for Democrats? I don't know. No one, I guess. Only those desperate to avoid accountability because it undermines their entire belief system.

Thing is, I know why Fenton doesn't want to admit Bush's loans were the bad ones. Doing so would be an admission that Bush lowered lending standards in 2004. Which means that he wanted to create a Housing Bubble. Which means his economy wasn't performing as promised. Which means his Bush Tax Cuts were miserable failures. Which means trickle-down economics is a sham. Which means his entire governing economic ideology is bunkum.

And if he's completely wrong about his entire economic belief system, then why would he be right about anything else he says?

So really, Fenton denies the facts because admitting they are true would shatter his entire belief system.

The Penguin · Oct 29, 2015

Fenton said:
The Housing Bubble...
Homeownership rates in 1993 ? 63%.
Homeownership rates in 2000 ? 68%

Homeownwrship rates in 2005 ? 69%

We just heard last night that Marco Rubio had a foreclosure on his second home. So even though Rubio lost his second home because he's terrible with money, that doesn't affect the homeownership rate because he still has his first one.

So the 800,000 subprime originations that Bush did between 2004-5 were probably for people like Marco Rubio...those with shaky finances who wanted to own a second home, or wanted to flip a home, or were borrowing against their home.

So that's why what you're doing here is deliberately deceptive.

Fenton · Oct 29, 2015

The Penguin said:
We just heard last night that Marco Rubio had a foreclosure on his second home. So even though Rubio lost his second home because he's terrible with money, that doesn't affect the homeownership rate because he still has his first one.

So the 800,000 subprime originations that Bush did between 2004-5 were probably for people like Marco Rubio...those with shaky finances who wanted to own a second home, or wanted to flip a home, or were borrowing against their home.

So that's why what you're doing here is deliberately deceptive.

Lol !!! 800 thousand Sub-prime loans bankrupted the GSE's, AIG, Lehman Brothers, CountryWide and caused Capital Markets around the globe to tank leading to a wash out of nearly 35 Trillion dollars in wealth ??

There were 27 Million Sub-prime, Alt-A, NINA loans in existence in 2008, and the GSEs either owned or guaranteed 70 % of them. Your highly selective hack job to put the blame on Bush never did add up. It's why I pushed you to provide the # of post 2004 Sub-prime loans.

I thought this was interesting. Eric Holder used to shakedown ( sue ) Banks for " discriminatory lending " practices when he worked under Janet Reno. And so did Obama when he was a Plaintiffs attorney in Chicago. So it would make sense that Holder would continue to shakedown Financial institutions when he became AG, right ?

Well he did. He sued Banks for selling Fannie and Freddie Sub-prime Securities, and that disclosed the following list. Like Fannie and Freddie had no idea what they were buying...:roll:

6 BILLION FROM BANK OF AMERICA...
25 BILLION FROM MERYYL LYNCH
27 BILLION FROM COUNTRYWIDE
33 BILLION FROM JP MORGN
30 BILLION FROM ROYAL BANK OF SCOTLAND
14 BILLION FROM DEUTCHE BANK
14 BILLION FROM CREDIT SUISSE
11 BILLION FROM GOLDMAN SACHS
10 BILLION FROM MORGAN STANLEY\
6.2 BILLION FROM HSBC
6 BILLION FROM ALLY
5 BILLION FROM BARCLAYS
4 BILLION FROM CITIGROUP
2 BILLION FROM NOMURA

The Penguin · Oct 29, 2015

Fenton said:
Lol !!! 800 thousand Sub-prime loans bankrupted the GSE's, AIG, Lehman Brothers, CountryWide and caused Capital Markets around the globe to tank leading to a wash out of nearly 35 Trillion dollars in wealth ?

YES! Because those subprime loans were leveraged at 30/40 to 1 in the banks EACH TIME THEY WERE PACKAGED. And we know that a typical subprime loan was packaged and re-packaged dozens of times into dozens of different assets. So the totality of the subprime mortgage market by 2007 was over $1T (up from just $100B in 2001), yet the derivatives and securities backed by those products was far, far more! So you are dishonestly trying to look at the mortgage crisis in terms of just the subprime loans while ignoring the hundreds of trillions of dollars in derivatives and securities that were cobbled together from those loans dozens, perhaps even hundreds or thousands of times each!

The Penguin · Oct 29, 2015

Fenton said:
There were 27 Million Sub-prime, Alt-A, NINA loans in existence in 2008, and the GSEs either owned or guaranteed 70 % of them. Your highly selective hack job to put the blame on Bush never did add up. It's why I pushed you to provide the # of post 2004 Sub-prime loans.

One bad apple spoils the bunch. In this case, 800,000 bad apples spoil the bunch.

Fenton · Oct 29, 2015

The Penguin said:
LOL! Still going Fenton? Boy you are one desperate guy! For those of you who don't know, Fenton ran away from a thread on this very subject that I was thrashing him all over. Particularly this post here, here, and here.

Yes, and you think 800 thousand Sub-prime loans bankrupted two GSEs leaving them holding over 5 Trillion dollars in debt, bankrupted AIG, CountryWide, Lehman Brothers, and numerous financial entities and institutions.

You think when Sub-prime loans default they make prime loans Sub-prime. You think everything started after 2004 and and the Housing Bubble occurred " overnight ".

The Penguin · Oct 29, 2015

Fenton said:
Yes, and you think 800 thousand Sub-prime loans bankrupted two GSEs leaving them holding over 5 Trillion dollars in debt, bankrupted AIG, CountryWide, Lehman Brothers, and numerous financial entities and institutions.

I don't think that, I know that. As I said, what bankrupted the banks wasn't necessarily the loans they made, it was the derivatives and securities that went toxic FROM the loans they made. And in just two years, Bush made 800,000 bad loans. Each one of those 800,000 bad loans was packaged and re-packaged and re-packaged over and over and over, dozens, hundreds, maybe even thousands of times, into securities that the banks were buying and selling to each other, all the while taking out bets on when those securities would go toxic, which they knew would happen! And the whole thing was leveraged at 40 to 1!

And this was all made possible by Bush who lowered lending standards in 2004 so those 800,000 loans could be issued.

The Penguin · Oct 29, 2015

Fenton said:
You think when Sub-prime loans default they make prime loans Sub-prime. You think everything started after 2004 and and the Housing Bubble occurred " overnight ".

NO! You are a liar building a straw man! You just invest positions and debate them, but you're debating no one.

What I've said countless times is that the toxic loans were the ones made starting in 2004 and those were the ones that defaulted. And it's not just me that says that, Bush's Working Group on Financial Markets says it, and so does the Federal Reserve.

The best you can do at this point is invent silly straw men and seize upon facetious word use to avoid admitting that your entire belief system is a load of malarkey.

The Penguin · Oct 29, 2015

Fenton, I get it...I get why you are so resistant to facts and reality. To you, it's just impossible to conceive that 800,000 bad loans could have wiped out $35T in global wealth. Of course, ignoring the mortgage-backed securities is the way to do it, I guess. If those subprimes had defaulted, the impact probably wouldn't have been that bad...if they defaulted by themselves and weren't tied to a $100T (or more) derivatives and securities market that was buying, selling, trading, and insuring assets backed by those loans that banks were holding.

You can't have a toxic MBS without a toxic "M".

Fenton · Oct 29, 2015

The Penguin said:
One bad apple spoils the bunch. In this case, 800,000 bad apples spoil the bunch.

:lamo Yea we know all about your ridiculous Bush obsession. Sub-prime loans make prime loans and Securities backed by Prime loans worthless.:roll:

The GSE's had Trillions of dollars of Prime loans and Securities backed by Prime loans until a batch of really bad loans made after 2004 corrupted their entire portfolio and caused a Financial meltdown.

Sorry, your make it up as you go along Sub-prime narrative leaves much to be desired. No, 800k Sub-Prime loans didn't " spoil the bunch ". The GSE's having portfolios filled with Sub-prime loans spoiled the bunch.

The GSE's distributing Trillions in ' AAA " rated Securities backed by Sub-prime loans spoiled the bunch. The GSEs BUYING hundreds of Billions of private issue MBSs backed by Sub-prime loans spoiled the Bunch.

Trillions of dollars with excessive loan to value ratios, loans that were made to people with no prior credit history, loans that were made to LOW INCOME borrowers " spoiled the bunch ".

Having a GLUT of MBSs backed by Mortgages made to people who wouldn't pay them back sitting in the portfolios of Investment banks and investors portfolios " spoiled the bunch "

Here, Barney Frank in 2010....When how in the future, the GSE's could be structured to avoid a Moral Hazard he responded..

" I think the answer is you separate out the function of providing the equity in general for the mortgage market and doing some subsidy and in my judgment, the subsidy again, as I said before, should be focused on affordable rental housing, not in pushing low income people into owning homes that they can't afford.

You Think ????

The Penguin · Oct 29, 2015

Fenton said:
You think everything started after 2004 and and the Housing Bubble occurred " overnight ".

The shenangians started in 2004 when Bush lowered lending standards. That act produced the 800,000 subprime loans that were then packaged countless times into securities that banks bought, sold, traded, and insured while leveraging themselves at 40-1 in order to buy, sell, trade and insure more and more securities that they just kept recycling by repackaging the toxic MBS with different assets each time. And this practice went on for 3 years...remember, those 800,000 loans were just between 2004-5...that's not even counting the loans from 2006-7.

So that's how you create a subprime bubble, then see an economic collapse.

The Penguin · Oct 29, 2015

Fenton said:
:lamo Yea we know all about your ridiculous Bush obsession. Sub-prime loans make prime loans and Securities backed by Prime loans worthless.:roll:

Again, I don't know where you're getting this nonsense from, but I haven't argued anything close to that. At this point, you're just constructing straw men because you recognize the argument we are supposed to have isn't going in your favor.

I never said a subprime loan becomes a prime loan. You're the one who's saying that and you're attributing that to me, when it's not even anything I've even come close to saying.

I think you just don't understand this subject.

The Penguin · Oct 29, 2015

Fenton said:
The GSE's had Trillions of dollars of Prime loans and Securities backed by Prime loans until a batch of really bad loans made after 2004 corrupted their entire portfolio and caused a Financial meltdown.

That is precisely what happened. Except the batch of really bad loans were subprime loans that had lowered lending standards thanks to your guy Bush who wanted to create a housing bubble to cover for the failure of his tax cuts to grow the economy.

The Penguin · Oct 29, 2015

Fenton said:
No, 800k Sub-Prime loans didn't " spoil the bunch ". The GSE's having portfolios filled with Sub-prime loans spoiled the bunch.

Again, a subprime loan is fine until it defaults. And the subprime loans that made up their portfolios prior to 2004 were OK. It wasn't until YOUR GUY'S loans came along and started defaulting that the whole thing came crashing down because of how over-leveraged those banks were, which was the cause of the derivatives market hitting the hundreds of trillions of dollars in value. Who de-leveraged the banks again? Oh right, Bush did in 2004.

The GSE's distributing Trillions in ' AAA " rated Securities backed by Sub-prime loans spoiled the bunch. The GSEs BUYING hundreds of Billions of private issue MBSs backed by Sub-prime loans spoiled the Bunch.

Securities that Wall Street lied about their value. So again, you are trying to conflate the market before 2004 with the market after 2004 and indicting the market as a whole. And that's bogus and dishonest.

Trillions of dollars with excessive loan to value ratios, loans that were made to people with no prior credit history, loans that were made to LOW INCOME borrowers " spoiled the bunch ".

Right, which were the loans issued from 2004-7. Who was President then?

Having a GLUT of MBSs backed by Mortgages made to people who wouldn't pay them back sitting in the portfolios of Investment banks and investors portfolios " spoiled the bunch "

All, of this isn't possible without the 800,000 bad loans your guy injected into the system. The loans prior were fine. The default rate was low. Then the default rate tripled shortly after those 800,000 loans were issued. Coincidence?