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Thread: W:1083,1531:2983:3137]******Bush Mortgage Bubble FAQs

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    re: Bush Mortgage Bubble FAQs[W:1083,1531]

    Quote Originally Posted by Vern View Post
    Q My conservative friends blame policies from 1864, 1977, 1992, 1995, 1999 and 2000. Why aren’t those policies responsible for the Bush Mortgage Bubble?

    A Those policies had nothing to do with banks lowering their lending standards in late 2004 and they had nothing to do with Bush’s regulators not their jobs and had nothing to do with Bush’s regulators blocking state regulators from doing their jobs.

    Q I have a friend who's a realtor and she insists the Bubble started in 2000, if not a year or so before then. What about that?

    A Well I cant answer for anecdotal statements that are simply not supported by any data. I can only post clear straightforward points and back them up with solid factual links. Bush's working group told you it started late 2004. The fed told you it started in the same timeframe. Subprime loans increased 300 % a little before that timeframe and No Doc loans ROCKETED UP 1000% in that exact timeframe laid out by Bush's Working Group.

    How can anybody argue with that?

    A no, I ask the questions.

    Q sorry
    Question: Why would anyone bother to read your pontifications?

    Answer: Most of them wouldn't.
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    re: Bush Mortgage Bubble FAQs[W:1083,1531]

    Q Some people think you saying it started in late 2004 just to lay it all at Dubya's feet is just hyper-partisanship. Is that true?

    A No. First, I'm not saying it. Bush's Working Group on Financial Markets is saying it. The Federal Reserve is saying it. The actual data on No Doc Loans and subprime loans are saying it.

    Q I couldn’t help but notice all caps when posting the Bush Preemption policy. Can you tell me more about this ‘preemption’ rule from the OCC?

    A Yes, states noticed an increase in predatory and abusive loans in the early 2000s. more than 30 states passed laws of varying degrees restricting certain types of loans. Banks complained to the OCC and the OCC enacted its Preemption policy

    “Rapid growth in subprime lending over the past decade has led to rising concerns about abusive practices by subprime lenders. By early 2004, those concerns prompted Georgia and more than 30 other states to pass laws designed to eliminate abusive or predatory lending practices by the financial services firms, including those with federal charters, operating within their boundaries. In 2003, the OCC concluded that federal law preempts the provisions of the Georgia Fair Lending Act (GFLA) that would otherwise affect national banks’ real estate lending. In early 2004, the OCC adopted a final rule providing that state laws that regulate the terms of credit are preempted. “

    http://www.occ.gov/publications/publ...0/wp2004-4.pdf

    Q Why would they do that?

    A To increase subprime lending

    (same link above)

    “ In addition, clarification of the applicability of state laws to national banks should remove disincentives to subprime lending and increase the supply of credit to subprime borrowers. “

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    re: Bush Mortgage Bubble FAQs[W:1083,1531]

    Q Wow, Bush preempted all state laws against predatory lending.

    A thats not a question.

    Q Sorry, er uh what did all 50 State Attorney Generals and all 50 State Banking Supervisors think of Bush's preemption?

    A They didnt like it.

    "The Conference of State Bank Supervisors (CSBS) along with a number of prominent organizations, including the National Governors Association (NGA), the National Association of Attorneys General (NAAG), the National Conference of State Legislatures (NCSL), and the North America Securities Administrators Association (NASAA), have voiced their opposition to the OCC's proposed rule that would effectively preempt all state laws that apply to the activities of national banks and their state-licensed subsidiaries. The groups are asking OCC to withdraw the controversial proposal."

    States Unite to Fight Sweeping OCC Preemption

    Q What did all 50 State Attorney Generals and all 50 State Banking Supervisors say would happen?

    A Bad things

    "
    Concentrating regulatory control at the OCC ensures that regulatory and consumer protection problems that emerge will be solved with a one-size fits all approach," CSBS President and CEO Neil Milner wrote in his comment letter, adding that the proposed rule would concentrate regulatory power in the hands of a single individual, the Comptroller, with virtually no direct congressional oversight until problems or scandals emerge.
    "

    Q Did they predict in 2003 exactly what happened?
    A Yes

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    re: Bush Mortgage Bubble FAQs[W:1083,1531]

    actually the bubble started in 1997,which is backed by almost every mainstream economist supported by empirical data.

    second the presidents workgroup is not the authority on the economy,hell clintons presidentialworkgroup stated that heavily deregulation was good for the economy through all evidence and supported enacting the cfma.

    but of course your only claim to your answer is bushs workgroup and lowering lending standards.further the lowered lending standards at shaky levels started under clinton as well,who tried to push home ownership to those who couldnt afford it.

    the bubble itself started to skyrocket in 01,after the .com bubble had fully collapsed,causing investors to jump shipand hop aboard an already growing bubble.even further the bubble didnt start in 04,the bubble peaked in 04-05,so that in itself is ignorance in belief,since a bubble doesnt start the second it collapses,it grows until it collapses.the bubble itself in 05-07 started to shrink and in mid 07 saw full collapse.

    the mortgage bubble itself started when house prices started to skyrocket in the mid 90's,followed by clinton who pushed to lower standards,and bush who continued those standards.
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    re: Bush Mortgage Bubble FAQs[W:1083,1531]

    Q I'm serious, my conservative friends are really really really adamant that policies from 1864, 1977, 1992, 1995, 1997 1999 and 2000 are to blame. What do I say to them?

    A just explain the facts to them and show them the actual data that proves it didnt start until late 2004.

    Q Yea, that didnt work. try again.

    A Just point out to them that what they believe cannot be supported by any data whatsoever and that their empty factless rhetoric in no way changes any facts. For example, say they claim that the Bush Mortgage Bubble started in 1997 and they claim this is backed by almost every mainstream economist supported by empirical data. First ask them to back up their claims. And then ask them "how do you ignore the empirical data already posted in this thread?". Then ask them how anything from 1997 prevented Bush's regulators from enforcing proper lending standards. (of course they will do nothing but repeat their 'claims')

    Q They really dont want to 'let go' of their beliefs. Why do they cling to such specious beliefs?
    A Sorry, I cant explain it. Mental health issues are not my field of study

    Q Where to they get such factless baseless beliefs?
    A the 'conservative entertainment complex' has literally put out 1000's of lying editorials about this. What proves they are lying is not one of them has ever mentioned anything I posted in this Q&A. You cant explain Bush's working group telling you it started late 2004. So dont mention it. You cant explain away "bush protecting predatory lenders" so you absolutely can never ever mention it in an editorial. You cant explain away Bush lifting restrictions Clinton placed on GSE purchases of subprime mortgages when you are crafting a narrative that "bush tried to stop the bubble"

    "(In 2000) HUD restricted Freddie and Fannie, saying it would not credit them for loans they purchased that had abusively high costs or that were granted without regard to the borrower's ability to repay."

    How HUD Mortgage Policy Fed The Crisis

    "In 2004, the 2000 rules were dropped and high‐risk loans were again counted toward affordable housing goals."

    http://www.prmia.org/pdf/Case_Studie..._090911_v2.pdf

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    re: Bush Mortgage Bubble FAQs[W:1083,1531]

    Quote Originally Posted by MaggieD View Post
    Those of us on the ground (selling real estate) see the bubble quite differently. It quite easily began in 2000, if not a year or so before then. Most Realtors would put the cause squarely on the backs of lenders for developing smoke- and-mirror mortgage products specifically for low-income bums who couldn't buy lunch, much less pay a mortgage...on the backs of FNMA and FHA for issuing and guaranteeing these products...on the backs of the rating agencies like Standard & Poors, Moody's and Fitch for rating junk as Triple A.
    Well before the crash, the FBI said fraud was rampant.

    85% on the part of lenders.
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    re: Bush Mortgage Bubble FAQs[W:1083,1531]

    Quote Originally Posted by Goshin View Post
    The bubbles, not just housing but other things as well, began in the late 80s and early 90s. By the late 90s, those of us who were watching were already seeing the first signs that the bubbles were going to burst. There was a dramatic downturn in many markets in 99 and 2000... before Bush even took office.

    The fact is there is a LOT of blame to spread around for the economic disasters we've experienced over the past decade-plus... including at least three presidents, innumerable Senators and Reps, and a lot of Wall Street types.


    Laying it all at Dubya's feet is just hyper-partisanship.
    Have you seen Inside Job?

    Pretty good doc on the subject. Best explanation of the mechanics of CDs, etc I've seen

    And yes, BOTH sides have been serving Wall St. at everybody elses expense for decades.

    People.come from the finance sector to "advise" administrations, get changes made, go back to their "real" jobs and make fortunes on the changes they got made.

    Its not good.
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    re: Bush Mortgage Bubble FAQs[W:1083,1531]

    Q What about the conservative 'narrative' that Bush tried to stop the bubble?

    A Its simply another false narrative created by the 'conservative entertainment complex'. That narrative is 'crafted' around the statements of Bush saying fannie and freddie needed to be regulated. Lets look at the structure of this narrative

    Bush said GSEs needed to be regulated (actually true)
    Barney Frank and other dems said GSEs were fine (actually true)
    Democrats blocked reform (false)
    GSEs caused the crisis (false)

    Just another mish mosh of lies spin and half truths the 'conservative entertainment complex' relies on to push their agenda. Lets deconstruct the narrative. Yes, Bush repeatedly talked about GSE reform. The problem is reform in 2003 had nothing to do with subprime mortgages. As I've already documented, Bush lifted the restrictions Clinton placed on the GSEs to limit their purchase of abusive subprime loans. Later in 2004, Bush would increase the GSE housing goals forcing them to buy more low income home loans and get them to buy 440 billion more minority home loans in the secondary market.

    "•Substantially increase by at least $440 billion, the financial commitment made by the government sponsored enterprises involved in the secondary mortgage market, specifically targeted toward the minority market;"

    Homeownership Policy Book - Executive Summary

    "In April, HUD proposed new federal regulations that would raise the GSEs targeted lending requirements. HUD estimates that over the next four years an additional one million low- and moderate-income families would be served as a result of the new goals."

    HUD Archives: HUD DATA SHOWS FANNIE MAE AND FREDDIE MAC HAVE TRAILED THE INDUSTRY IN PROVIDING AFFORDABLE HOUSING IN 44 STATES

    there goes the narrative that Bush tried to stop anything

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    re: Bush Mortgage Bubble FAQs[W:1083,1531]

    blah blah blah....Reagonomics is where it all started...

    Canada would not allow for these banking practices, the world ate them and now Trillions of fake money later.....the usa and the world is still nowhere near the great economic power it once was...

    a slight rise in the housing market in the USA and everyone goes gaga....


    The economy is being held together with ruinous deficit spending ......

    Taking a page out of Nazi Germany you print money like it's no tomorrow....

    have fun...

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    re: Bush Mortgage Bubble FAQs[W:1083,1531]

    Q What about the second part of the "bush tried to stop the bubble" narrative when "Barney Frank and other dems said GSEs were fine "? GSE's did go bankrupt

    A Yes Barney Frank and other dems said there was nothing wrong with the GSEs. And they were fine in 2003. The Bush Mortgage Bubble hadn't started yet (remember we learned that it didnt start until late 2004). Once the Bush Mortgage Bubble started, any entity that bought mortgages or invested in mortgage backed securities got hammered. Of the big five investment banks, only one survived and remained independent (it did change its charter to commercial bank to qualify for TARP funds). Numerous hedge funds went under. And yes, Freddie and Fannie went bankrupt. The difference is nobody was forcing hedge funds, investment banks, pension funds, insurance companies etc. to buy mortgages and mortgage backed securities (see above).


    Oh and here's the key part of about democrats saying there was nothing wrong with GSEs: They were just repeating what Bush told them. (yea, this doesnt get mentioned in any 'conservative entertainment complex' editorials does it?).

    Testimony from W’s Treasury Secretary John Snow to the REPUBLICAN CONGRESS concerning the 'regulation’ of the GSE’s


    Mr. Frank: ...Are we in a crisis now with these entities?

    Secretary Snow. No, that is a fair characterization, Congressman Frank, of our position. We are not putting this proposal before you because of some concern over some imminent danger to the financial system for housing; far from it.


    - THE TREASURY DEPARTMENT'S VIEWS ON THE REGULATION OF GOVERNMENT SPONSORED ENTERPRISES

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