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re: Don't buy things you can't afford.
Posted on 6/27/14 at 8:24 am to 3nOut
Posted on 6/27/14 at 8:24 am to 3nOut
quote:
People probably won't believe me when I say this, but those bad banking policies were put in under Clinton and attemptedly fixed by Bush, but denied by a dem controlled congress.
I don't because it's not completely true. The unraveling of banking regulations started in the 80's under Reagan(S&L crisis, anyone?), and continued through the Clinton administration. Yes, Clinton signed the repeal of the Glass-Steagall Act(though it was authored by 2 Republicans- Phil Gramm and I forget the other) but it was one of the last things he did in office and was the final push the banks needed to rape this country. He could have vetoed it, but when it got to his desk it was veto proof based on the votes it got in the House and Senate. When you have banks making bad home loan to unqualified people, the those same banks hedging their risk on those loans through the speculative market(which the repeal of Glass-steagall allowed) bad things are going to happen. The banks are insulated on both sides until the bubble pops, and while they were insulated they raped this country. None of those responsible for it have gone to jail and they're doing it again right now.
Bush did try to fix Freddie Mae, and I give him credit for that. But even had he been successful, the crash was inevitable.
The housing crisis was a bipartisan effort and both parties should be ashamed of the damage they've done, and even more ashamed that they bailed out those responsible for it rather than the victims of it.
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Posted on 6/27/14 at 8:40 am to The Spleen
quote:
I don't because it's not completely true. The unraveling of banking regulations started in the 80's under Reagan(S&L crisis, anyone?), and continued through the Clinton administration. Yes, Clinton signed the repeal of the Glass-Steagall Act(though it was authored by 2 Republicans- Phil Gramm and I forget the other) but it was one of the last things he did in office and was the final push the banks needed to rape this country. He could have vetoed it, but when it got to his desk it was veto proof based on the votes it got in the House and Senate. When you have banks making bad home loan to unqualified people, the those same banks hedging their risk on those loans through the speculative market(which the repeal of Glass-steagall allowed) bad things are going to happen. The banks are insulated on both sides until the bubble pops, and while they were insulated they raped this country. None of those responsible for it have gone to jail and they're doing it again right now.
Bush did try to fix Freddie Mae, and I give him credit for that. But even had he been successful, the crash was inevitable.
The housing crisis was a bipartisan effort and both parties should be ashamed of the damage they've done, and even more ashamed that they bailed out those responsible for it rather than the victims of it.
i find that (most of your comments)to be pretty much true. Maybe not that Clinton voted for it because it was veto proof. The policy itself lined up with him on a few fronts. I do think that was a failed Reagan policy that Clinton put the final chink in.
And Graham is a conservative as much as I am a liberal.
While I do think everybody is to blame on this one, I find the banks raped comment to be a bit much. They were told to approve loan amounts that they shouldn't have signed off on. I was pretty young at the time, but I was given a $90k mortgage on a base salary of about $25k at the time. No way they should have approved me for that, but I never missed a payment
This post was edited on 6/27/14 at 8:42 am
Posted on 6/27/14 at 8:54 am to 3nOut
The problem is what is called 'consolidated debt obligations (CDOs)....read here CDOs
When the banks started selling CDOs that included mortgages, they STOPPED doing their due diligence on who was applying for loans because they were making millions off of repackaging them and reselling them.
Everybody in Congress could have fixed the problem but all know why that didn't happen.
When the banks started selling CDOs that included mortgages, they STOPPED doing their due diligence on who was applying for loans because they were making millions off of repackaging them and reselling them.
Everybody in Congress could have fixed the problem but all know why that didn't happen.
This post was edited on 6/27/14 at 8:55 am
Posted on 6/27/14 at 8:54 am to 3nOut
Yeah I didn't intend to make that sound like I was absolving Clinton because I think he would have signed it whether it was veto proof or not. He was just as cozy with the big banks as Reagan, HW Bush, W Bush, and Obama all were and are.
And actually I should correct myself. The first shot over the bow of banking regulations was fired under the Carter administration, which coincidentally was also one of the last things he signed while in office. That one was the precursor to the S&L crisis.
Take a look sometime at the number of bank failures between the end of the Great Depression(when Glass Steagall was enacted) through the early 80's. There were very few. Compare that to the number of bank failures between the early 80's and now. It is astronomical.
I've done a ton of research on this because my wife used to work in compliance for a bank and she's lazy about research while I love it.
Thankfully she got out of the banking industry.
And actually I should correct myself. The first shot over the bow of banking regulations was fired under the Carter administration, which coincidentally was also one of the last things he signed while in office. That one was the precursor to the S&L crisis.
Take a look sometime at the number of bank failures between the end of the Great Depression(when Glass Steagall was enacted) through the early 80's. There were very few. Compare that to the number of bank failures between the early 80's and now. It is astronomical.
I've done a ton of research on this because my wife used to work in compliance for a bank and she's lazy about research while I love it.
Thankfully she got out of the banking industry.
Posted on 6/27/14 at 8:56 am to The Spleen
Me too Spleen....my wife didn't know either
Posted on 6/27/14 at 8:59 am to DCRebel
quote:
Bad banking practices backed by bad government policy led to a fricking sinkhole that people were just pouring money into. fricking travesty is what it was.
Blame the banks and government policy instead of the holding stupid people accountable for their mistakes. That makes sense.
Posted on 6/27/14 at 9:01 am to JustinBieberFan
quote:
Thanks for sharing that Sleeping Tiger.
Are you a CFA or something along those lines?
Close. He sells wine.
Posted on 6/27/14 at 9:04 am to The Spleen
quote:
I've done a ton of research on this because my wife used to work in compliance for a bank and she's lazy about research while I love it.
Thankfully she got out of the banking industry.
interestingly, my wife was in banking and got out around late 2008. I'm glad she did as well.
Posted on 6/27/14 at 9:08 am to InVolNerable
quote:
Blame the banks and government policy instead of the holding stupid people accountable for their mistakes. That makes sense.
Do you hold the same opinion when someone is a victim of fraud? For a lot of people fraud is exactly what happened to them. Is there some culpability for the victim? Sure maybe a little, but when the banker is not being completely honest about the mortgage they're pushing on you, they hold some culpability as well. Along with the lawmakers that passed the laws that allow the bankers to push those loans in a dishonest manner.
This post was edited on 6/27/14 at 9:10 am
Posted on 6/27/14 at 9:11 am to The Spleen
I kind of get what you're saying but ignorance is no excuse.
I think we will all agree that there's has been and still is a lot of bad policies but everyone should know not to sign something they know nothing about.
I think we will all agree that there's has been and still is a lot of bad policies but everyone should know not to sign something they know nothing about.
Posted on 6/27/14 at 9:18 am to DMagic
quote:
But my baby really needed that north face or people would judge us
I just bought some second hand northface stuff. I got one of their "Denali" fleeces (a navy one) for about $20. Looks almost new. I also got a black and grey Denali vest for about the same price and it looks brand new.
Posted on 6/27/14 at 9:19 am to Wtodd
I don't disagree with that, and I do hold the victims partially responsible. I just don't agree with the attitude that they're wholly to blame because they should have known what they were signing. I think all three parties are to blame, but I just put more blame on the lawmakers that created the environment for it to happen and the bankers that took advantage of that environment.
Edited - 2nd fricking their/they're/there mistake of the morning. I should kill myself.
Edited - 2nd fricking their/they're/there mistake of the morning. I should kill myself.
This post was edited on 6/27/14 at 9:21 am
Posted on 6/27/14 at 9:19 am to The Spleen
quote:
I just put more blame on the lawmakers that created the environment for it to happen and the bankers that took advantage of that environment.
Posted on 6/27/14 at 9:23 am to The Spleen
quote:
Do you hold the same opinion when someone is a victim of fraud? For a lot of people fraud is exactly what happened to them. Is there some culpability for the victim? Sure maybe a little, but when the banker is not being completely honest about the mortgage they're pushing on you, they hold some culpability as well. Along with the lawmakers that passed the laws that allow the bankers to push those loans in a dishonest manner.
A mortgage is one of the, if not THE, most important ventures in a person's life; they shouldn't rely on other people to let them know how it works or how much they should borrow. They can do a little research and go in there knowing exactly what he needs and how much they can afford.
quote:
I just put more blame on the lawmakers that created the environment for it to happen and the bankers that took advantage of that environment.
Why? They didn't force people to get these mortgages.
This post was edited on 6/27/14 at 9:27 am
Posted on 6/27/14 at 9:24 am to kingbob
It's just not in my DNA to blame someone else for things I have complete control over. A lot of people bought houses they knew they couldn't afford unless the entire universe aligned for them.
Posted on 6/27/14 at 9:28 am to DCRebel
poors aren't smart people so when you throw out some pretty numbers to entice them into something dumb they will always jump at the chance.
Posted on 6/27/14 at 9:34 am to The Spleen
quote:
Edited - 2nd fricking their/they're/there mistake of the morning. I should kill myself.
i saw that and was going to comment on it because you've done the same to me.
ahole.
Posted on 6/27/14 at 9:35 am to DCRebel
quote:
If people would have followed this, then we wouldn't have even had the housing bubble that led to the recession in the first damn place.
This issue, and the understanding of it through a couple years of reading, and growing up, made me far less hardline libertarian than I was in college. The free market, in my opinion didn't let the crisis happen, which is the easy sell to some, but instead it highlights the aspects of human nature which show we aren't pure economic creatures that can harmoniously exist with the free market in all instances, and that we need regulatory forces.
Posted on 6/27/14 at 9:35 am to Wtodd
The bank has to consider the possibility of it not getting paid back and not offer too much that won't get paid back. The government has to create the right kind of incentives and not those that drive up a bubble.
The government didn't get punished for their roles. The banks got slaps on the wrist. The people lost their homes. It seems to me only one of those three parties actually had to take their medicine.
The government didn't get punished for their roles. The banks got slaps on the wrist. The people lost their homes. It seems to me only one of those three parties actually had to take their medicine.
Posted on 6/27/14 at 9:37 am to DCRebel
quote:
If people would have followed this, then we wouldn't have even had the housing bubble that led to the recession in the first damn place.
Housing bubble was the cover up. The real cause of the 2008 collapse was underfunded insurance on bonds and Wall Street leveraging up on derivative's to reap speculative returns while disconnecting the actual risk involved. Combined it created the "perfect storm" for economic collapse. Hell the Wall Street folks could have gambled at the crap tables in Vegas with less risk but it would be harder to sell this to pension funds and mutual funds who gave them the money to do it.
If you hold a municipal bond today is it rated by risk or is it rated by insurance?
Say you buy a C grade municipal bond at steep discount you can make high returns but you are taking high risk of total loss to do so. No little old lady or pension fund would take such a risk.
What happens tho when a Wall Street firm gobbles up those C grade Municipal Bonds at steep discount. Then turns around and insures them through a 3rd party insurance company and resells then as A grade and pockets the difference. Problem is twofold :
#1 Little old lady thinks they are holding A grade when in fact they are holding C grade bonds
#2 Insurance company can afford to "cover" maybe 1 default in 100 but actual risk may be 50 in 100. In short the insurance company can not survive many hits before sinking
In main street USA you would go to jail for such a scheme but on Wall Street you get a big fat bonus.
PS, while we keep calling it a recession we need to call it what it really is - a depression - and demand price drops relative to reality. Prices continue to rise while real wages do not. That is the real bubble in all of this.
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