| Author | Message | ||
     Fahren |
We are still beating this poor horse? Absolute disagreement with Sifo and his "The gummint made me do it!" line. We've been through the discussion over this before, though, so no point to re-hash it. You "know" one "truth," I "know" another, conflicting "truth." We part ways over political viewpoints - hope to see you one day out riding, though! :-) | ||
| Hootowl |
I know we've beat it to death, but what part of government quota do you think is not true? They HAD to make those loans, or they couldn't make other loans. The gubment said so, and they set up Fannie/Freddie to buy the loans. It was a disaster waiting to happen, and it did. You will...you're going to the S2 gathering in 2012 right?  | ||
| Sifo |
Absolute disagreement with Sifo and his "The gummint made me do it!" line. You can disagree all you want but it will never change the FACT that a bank that refuses to give you a loan that you qualify for is in violation of federal laws and it was the government the set FM/FM up to make the qualification rules. You have never offered anything to disprove this. What do I know though. I was just a Loan Officer at American Home Mortgage as this was going on. EDIT: BTW, I was also tested and licensed to originate mortgages by the state of Illinois as well as 40 hours of training when hired that spent a good deal of time on compliance. I really have no idea what I'm talking about here. (Message edited by SIFO on October 17, 2011) | ||
| Fahren |
I offered up plenty of documentation to the contrary in a past thread, but you may not remember it. I remember you just brushing off the material, though, since I guess that's all you can do if it doesn't fit your understanding of it. You honestly think there is no investment banking fraud, that the bad mortgages were not bundled up as mortgage-backed securities, and, knowing they were bad, were sold to pension funds and other "conservative" investors; then bet against for huge profits with shorts by the very same investment houses that sold the bad goods? The big investment banks, Golman, JPM/Chase, Citi have been hauled up for fraud plenty of times - they get off with a fine that costs them far, far less than the huge money they made perpetrating the fraud - there's no real incentive for them to stop commiting fraud with those kinds of SEC "wrist slaps." And so, if banking had not been de-regulated little by little since the '80's, through aseries of self-interested bank lobbying efforts on left and right in government, then mortgages (and in this, it doesn't matter who you blame for bad mortgages) would not have been possible in the first place. And selling them off as junk, passing them on fraudulently with falsified documents, bogus notarizations and electronic MERS transfers (which, by the way, was a clever way for many banks to try to avoid paying transfer taxes) would not have been possible. Your experience may be interesting, but it counts for little in this, since the problem is way, way bigger than how the mortgages were initially made. | ||
| Sifo |
Fahren, All that may be interesting, but it denies one detail. It requires bad mortgages in the first place. The rest is details of who was holding them when they blew up. Would it have mattered if every "i" was dotted and every "t" crossed every time these bad mortgages were bundled and passed? Of course not, we were set up for a fall simply because we created a bunch of bad mortgages that couldn't be repaid as soon as there was a correction in the real estate market. Everything that you blame for the collapse is just what happened as a result of the collapse. The fireball isn't to blame for an explosion. It's the explosive material and the spark that sets it off. | ||
| Aesquire |
Did the Govt. set up this mess. Yes. It actually made sense to me at the time. I've learned better. Did the Congresscritters that were profiting with huge bribes blame the regulators that were trying to stop the fraud in FM/FM. Yes. There is video. Were the Congresscritters getting bribes? Well, yes. If I get a loan at a rate that no normal guy can get, or if I'm getting my ashes hauled AND I'm getting large ( questionably legal IMHO ) "campaign" donations from the very people I defend in Congressional hearings, while they rip the American taxpayer off for unearned bonuses? Duh. They took bribes to keep the scam going. Did the banks take advantage of the idiot rules? yes. I don't know the exact percentages, but it looks like the majority of losses were NOT on poor folk buying a first house in the inner city. It looks like the bulk of the losses were from "flip this house" yuppie scum. ... that the bad mortgages were not bundled up as mortgage-backed securities, and, knowing they were bad, were sold to pension funds and other "conservative" investors; then bet against for huge profits with shorts by the very same investment houses that sold the bad goods? Seems like facts to me. Don't forget the worthless insurance sold on the CDO's that often was sold multiple times for the same mortgage document. Sweet rip off that was. Saying that the evil politicians are not to blame for taking bribes from the evil bankers, though...... bogus. While I point with video at Dodd and Frank, http://www.youtube.com/watch?v=hxMInSfanqg I certainly believe that the guys with R attached also took bribes to set up this situation. So, Fahren, you have good points, and you are also in error. I have a few questions. Are they STILL selling CDO's? Has the problem of bad loans in these cobbled together bad bonds been solved? Are they Still out there on the market? Does my bank actually have legal right to repo a house they sold the debt on? ( probably yes ) Don't ever forget the people whose homes were repo'd illegally by banks that forged repo documentation, using interns signing papers as vice presidents of banks. http://www.youtube.com/watch?v=Ibjc7dIdniE http://www.lvrj.com/business/wells-fargo-accused-o f-forging-loan-documents-130337818.html http://www.youtube.com/watch?v=ruEeuskrAE0&feature =related I support jail time for fraud. No matter the party, ideology, or how wealthy you are. It's freaking obvious some of these guys should have new room mates. Dodd, Frank, and Pelosi should be on that list too. The former leaders of Fannie Mae, as well. ( who ripped YOU off for over 14 million bucks ) Don't you agree? | ||
| Kenm123t |
Fahren the system you refer to was designed by Eliazbeth Warren your correct the system was designed to hang bad paper all over the world. Sifo is correct in the loans that had to be made. Remember NCNB they were not making the loans your talking about and the Clinton Justice dept sued the board for not making no doc or poor risk loans They were accused of Redlining they ended up Paying 11 mill in damages and personal liabilities they sold out to Wachovia now Wells Fargo. After this the banks made the loans and sold them off to FM/FM FM/FM had to Package them into Securities to hide the subprime mortgages Elizabeth Warren invented the mortagage backed security under a NEW products program to hang this bad paper over seas . The problem it became more popular than any one imagined. At one point the demand was over 60Bill a year for this NEW security after all the the American home mortgage was the standard of the S&L s the most conservative of American investments. The mortgage defaults have nearly killed many small cities in Iceland The CRA from the Clinton Admin as well as the influence of Barney Frank and Chris Dodd only accelerated the crisis. Dodd recieved Special Mortgages from Country wides Al Mozilla and Barneys Boy friend got a multi million golden parachute from FM /FM There is plenty of blame to go around! Even if its legal you still need to have ethics. | ||
| Sifo |
I don't know the exact percentages, but it looks like the majority of losses were NOT on poor folk buying a first house in the inner city. It looks like the bulk of the losses were from "flip this house" yuppie scum. That's exactly right. The problem is that rules were set up so that the poor minorities could get loans that they couldn't afford. Anti-discrimination laws cut both ways though. You can't tell the well off white yuppie scum that you are denying him the loan that he qualified for either. These loans promoted house flipping in a huge way. As soon as the market corrected they could neither pay the loan long term or sell the house. | ||
| Kenm123t |
Good point Sifo I forgot to include that since its common knowledge here in So Fla | ||
| Fahren |
You see - we are all in agreement: large scale, broad based fraud and corruption, by banks (albeit mostly large investment banks, not the "George Bailey" type local banker types), by their lobbyist lawyer scum, by AIG and the big insurers, and by politicians red, blue and whatever other color there is. I am not trying to defend any politicians here. The system is broken. BO didn't break it, but he sure hasn't done what he said he was going to do to fix it. GWB didn't help - he hurt things badly, in many ways. Clinton had an advantageous economic glow shining onto him, but it was just the reflection glinting off a big, huge bubble, while he, too helped set us up for this big crash. So, why are we not all out in the streets? Are we not all mad as hell, and not going to take it any more? | ||
| Xdigitalx |
Why aren't those capable protesters joining the military to get more education and get paid for it all the while protecting and training other less fortunate people in the world? | ||
| Kenm123t |
The people that get it Fahren are too busy being responsible adults. 60 million or so of us keep the US and by default the world running. You are about to witness Atlas Shrugged in action. In some areas its already started. Stanley Druckinmiller Spell check Court. Has already Shrugged Venture capital builds the world. The Trans Contintal Railroad of the 1840s was built with loans from Deutsche Bank. Any place with out working capital or venture capital is a place of misery. | ||
| Slaughter |
Why aren't those capable protesters joining the military to get more education and get paid for it all the while protecting and training other less fortunate people in the world? I don't know - but it sure sounds like work - and it also sounds like being told what to do by a boss. | ||
| Danger_dave |
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| Reindog |
We are either too busy working or too busy looking for work. Fahren, I swear it seems like you are learning. Keep questioning. | ||
| Court |
Druckenmiller By the way . . . the fellow who worked across the hall from Stanley, on the 8th floor of 330 Madison, appeared in the Wall Street Journal a week ago Friday. He took a new job from another investor who's getting out of "public places" and has moved his money to pure family investing. I sent him a note, after reading about the "$65,000,000 base salary and performance bonus" and told him I'd do it without the bonus. If you don't thing time are changing . . . try getting investment capital . . UNLESS of course you are a "friend" of the White House . . . no sane business is going to hire, expand or invest until this guy is out of office. I don't need a level playing field but I do need one I can understand. No one, presently, has a clue as to what the business environment is or what it will be in a week, a month or a year. Witness that a MAJOR portion of Obamacare was disposed of yesterday when folks started understanding it was based on fantasy numbers. | ||
| Hootowl |
"Why aren't those capable protesters joining the military to get more education and get paid for it all the while protecting and training other less fortunate people in the world?" They likely do not qualify for military service. Drug use, criminal records, etc. | ||
| Sifo |
You honestly think there is no investment banking fraud, that the bad mortgages were not bundled up as mortgage-backed securities, and, knowing they were bad, were sold to pension funds and other "conservative" investors; then bet against for huge profits with shorts by the very same investment houses that sold the bad goods? I would be curious what the definition of "bad" is as you are using it. Are you claiming that mortgages known to be in default were being sold? Or is it that high risk sub prime mortgages were being sold as prime mortgages? | ||
| Fahren |
The latter. You can't make up crap as crazy as this: every day, more insanity from the big banks:
More: http://dailybail.com/home/holy-bailout-federal-res erve-now-backstopping-75-trillion-of.html | ||
| Kenm123t |
Fahren the common thread in this entire mess is FRANK - DODD. Those two should be in prison Barney may like the attention so he goes to the Womens prison. | ||
| Sifo |
The latter. Interesting. That proves the point I keep making. FM/FM isn't supposed to be in the subprime business. Their loans are right in the center of this mess and are now being called subprime. If the FM/FM loans were what they were supposed to be this entire meltdown could have been avoided. | ||
| Ft_bstrd |
The ONLY reason the FM and FM are involved at all is that the Federal Government needed banks to continue to originate CRA loans. Once the capacity was filled and there was no secondary market for the obviously risky loans, FM and FM were called in to provide secondary guarantees to make them marketable. This allowed banks to continue to originate, package, and sell risky subprime CRA loans in the open market. Purchasers bought them with the understanding that they would be backed by the full faith and credit of the Federal Government. When FM and FM defaulted, the house of cards collapsed. FM and FM were accomplices to this whole fiasco. The magnitude of the problem is as big as it is because of their involvement. They allowed the grist mill to continue churning out bad loans. Why all the blame on the banks and none on the Federal Government and FM/FM? | ||
| Ft_bstrd |
Interesting article from 2002: http://www.nhi.org/online/issues/125/goingsubprime .html | ||
| Fdl3 |
Ft_bstrd: Very informative article, indeed! And in 2002 no less... | ||
| Ft_bstrd |
You can't claim FM/FM were "duped" by the commercial banks. They were up to their necks in it. Without FM/FM's involvement, the "bubble" could NEVER have gotten to the size it was. | ||
| Sifo |
Ft_bstrd, that was an excellent article on the roll off FM/FM. Qualifying mortgages (those that FM/FM purchase) are not supposed to be high risk mortgages. They are bundled and sold as such. That is where my question to Fahren was important. I agree with his answer that the fraud wasn't in bundling loans that were known to be about to default. That would be clear fraud on the part of the holder of that paper. The fraud was in bundling high risk loans and not calling them high risk. This is exactly what FM/FM did and they did so with government oversight. The idea that regulations that controlled the sale of these mortgages would have had any impact on the mortgage meltdown is an absolute farce. These mortgages were going to fail on a market correction regardless of who owned the paper. The banks that held this paper when the market had it's meltdown were in fact the victims of the government regulations that they live by. The difficulty then becomes the question of whether to bail out banks that were caught up in this government sponsored fraud. Bush chose to bail them out despite noting that it was very distasteful. I hate to admit that I agree with that decision. It is unfair to set private corporations up for failure with government regulations, so what do you do when the systemic failure occurs? This doesn't mean that subprime mortgages should be completely taboo. There does have to be more "profit" built into them to offset the losses when they go bad. This is what FM/FM failed to do as they continued down the path of continually lowering qualifying standards, again under congressional oversight. The signs were there and some tried to change the regulations. Those with the power prevented that from happening. This is clearly shown in the video I posted earlier. Trying to blame any repeal of parts of the Glass Steagall act is nothing but revisionist history. | ||
| Reepicheep |
I would also place some blame on AIG and some other insurers. They claimed to have insured something without sufficient assets to back up that contract. Though that is (I suspect) a heavily regulated industry as well... so it's possible the government was just covering all it's bases when it set the rules up for insuring the high risk loans they were hiding. | ||
| Ft_bstrd |
It's hard to insure a risk when the nature of the asset isn't completely on the table. If you are insuring an asset that is backed by the full faith and credit of the Federal government, how "risky" do you believe that asset to be? How many assets should you allocate to back that liability? What is the projected failure rate? AIG bet on the data and were caught unaware. Now, that said, I don't believe we should have bailed out AIG. They bet long. They lost. Why is that the responsibility of the US taxpayer? | ||
| Sifo |
Yes the insurance industry is heavily regulated, especially on ratios of cash vs. liabilities. The problem is you need to know the real risk of what you are insuring. When the actuarials are told that you are insuring a prime debt but it's really subprime you will not wind up with enough cash to cover the claims. | ||
| Fahren |
25 minutes, 40 seconds, if you're up for it: |
