The Economic Paradox No One Wants to Talk About

[hippy dippy dude]

Who would have thought in 08 we would have an eight dollar McDonalds
meal or four dollar a gallon gas or elimination of profit sharing and
pensions?
Who would have thought we have people in Washington doing their
damnedest to turn us into a global 3rd world economy?

http://www.canadafreepress.com/index.php/article/46413

[Bret Cahill]

> Who would have thought in 08 we would have an eight dollar McDonalds
> meal or four dollar a gallon gas or elimination of profit sharing and
> pensions?

Instead of whining, why borrow some money from your parents and start
a business?


Bret Cahill

[clairbear]

hippy dippy dude <""\"\"\"@bet sweet.bipy"> wrote in news:1amor.21928
$em4....@newsfe21.iad:

They want to make all economically equal so their tactic is to bring as
many of as possible down to the lost level.

[David1950]

"hippy dippy dude" <""\"\"\"@bet sweet.bipy"> wrote in message
news:1amor.21928$em4....@newsfe21.iad...
: Who would have thought in 08 we would have an eight dollar McDonalds

that was the conservative and bush plan, it worked out real well for the dick
suckin maggots,

but. the dick suckin robots who elected bush deserve to get fucked, so it turned
out to be some pretty good punishment for the
trailer trash hillbillies, let them eat shit

[David1950]

"Bret Cahill" <Bret_E...@yahoo.com> wrote in message
news:d5a8c486-f5ef-4db5...@f37g2000yqc.googlegroups.com...
:> Who would have thought in 08 we would have an eight dollar McDonalds

:


cause the hillbilly's parents ain't got no money in them thar trashy trailers
either,

hell they ain't got enough money to buy a newspaper to put over the broken winders
in them thar kentuck trailers

[Econotron]

So it was Bush's fault, too. Ha ha ha.
--
e.

[Eddie Haskell]

"David1950" <Da...@eternalsep.net> wrote in message
news:jnt71u$qp5$1...@dont-email.me...

Go fuck yourself. YOU caused the fucking financial crisis that goddamned
near destroyed the Untied States. So do the world a favor and die in hell.

"Fannie Mae and Freddie Mac buy mortgages from lenders and bundle them into
securities; that provides lenders the funds to lend more"

"In 1992, Congress mandated that Fannie and Freddie increase their purchases
of mortgages for low-income and medium-income borrowers. Operating under
that requirement, Fannie Mae, in particular, has been aggressive and
creative in stimulating minority gains."

"The two companies are now required to devote 42% of their portfolios to
loans for low- and moderate-income borrowers"

"Although Fannie Mae actually has exceeded its target since 1994, it is
resisting any hike. It argues that a higher target would only produce more
loan defaults by pressuring banks to accept unsafe borrowers."

http://articles.latimes.com/1999/may/31/news/mn-42807

"The Bush administration today recommended the most significant regulatory
overhaul in the housing finance industry since the savings and loan crisis a
decade ago."

"Under the plan, disclosed at a Congressional hearing today, a new agency
would be created within the Treasury Department to assume supervision of
Fannie Mae and Freddie Mac, the government-sponsored companies that are the
two largest players in the mortgage lending industry."

http://tinyurl.com/6lp5qu

http://www.youtube.com/watch?v=M8LA8hPgQtI

http://www.opensecrets.org/news/2008/09/update-fannie-mae-and-freddie.html

http://www.youtube.com/watch?v=Lr1M1T2Y314

http://www.youtube.com/watch?v=_MGT_cSi7Rs

"McCain Letter Demanded 2006 Action on Fannie and Freddie"

"Sen. John McCain's 2006 demand for regulatory action on Fannie Mae and
Freddie Mac could have prevented current financial crisis, as HUMAN EVENTS
learned from the letter shown in full text below."

http://www.humanevents.com/article.php?id=28973

Unlike Bush and McCain, as senator, Obama did nothing, other than earn the
distinction of becoming the second largest recipient of F&F contributions in
the entire congress, even in his short stint there.

Bill Clinton himself said it best:

"I think the responsibility the Democrats have may rest more in resisting
any efforts by Republicans in the Congress or by me when I was President to
put some standards and tighten up a little on Fannie Mae and Freddie Mac."

-Bill Clinton

''These two entities -- Fannie Mae and Freddie Mac -- are not facing any
kind of financial crisis,'' said Representative Barney Frank of
Massachusetts, the ranking Democrat on the Financial Services Committee.
''The more people exaggerate these problems, the more pressure there is on
these companies, the less we will see in terms of affordable housing.''

[BeamMeUpScotty]

Who, That would be me.... I've been telling you this was going to
happen... I see what Obama is.


--
*He has the most who is most content with the least* -Diogenes-

[jim]

Eddie Haskell wrote:

>
> "Fannie Mae and Freddie Mac buy mortgages from lenders and bundle them into
> securities; that provides lenders the funds to lend more"

It doesn't provide funds but it does change the bank's capital
ratio and that does allow for more loans. But that secondary
market has been doing that for 80 years.

So what changed things in the during the housing bubble?

What changed was the banks discovered a way to use fraud
to greatly increase their profits in making and selling loans
to the secondary markets. It was a complicated scheme that
involved financial derivatives and the complicity of real estate
brokers, real estate appraisers, the financial ratings agencies
and to some degree the the mortgage borrower.

But practically none of that fraud that created the collapse
of the mortgage backed securities involved lower income
housing. This mostly because the low income housing required much
more strict and careful documentation of the loan criteria.
The low income loans allowed no possibility for loans that
that had no proof of income or assets or that had phony appraisals.
There were no low income loans that were "liar loans" or "no doc
loans" or "ninja loans". And the paper trail created by careful
documentation made it not possible to sell the sub prime low income
loans as triple A paper.

But with the loans that weren't covered by CRA there was all
kinds of possibilities for fraud. In those Banks simply allowed
the loan applicant to declare their income and assets without
showing any proof. And real estate agents and brokers coached the
home buyers on how to fudge the application. Then the lender's chosen
appraisers went in and inflated the value of the home so it looked
like there was a much stronger underlying asset for the loan than
there really was. And finally the ratings agency took these loans that
everyone down the line new were junk and gave them the highest
possible credit rating.


http://www.huffingtonpost.com/william-k-black/how-did-a-relatively-smal_b_803502.html

>
> "In 1992, Congress mandated that Fannie and Freddie increase their purchases
> of mortgages for low-income and medium-income borrowers. Operating under
> that requirement, Fannie Mae, in particular, has been aggressive and
> creative in stimulating minority gains."

What is wrong with that?

>
> "The two companies are now required to devote 42% of their portfolios to
> loans for low- and moderate-income borrowers"

It was the other 58% of the portfolio that sunk Fannie and Freddie
the lower income loans that were subject to closer regulatory scrutiny
performed much better than the rest.

[Eddie Haskell]

"jim" <"sjedgingN0Sp"@m@mwt,net> wrote in message
news:OqOdnY06F9vmMT_S...@bright.net...

>
>
> Eddie Haskell wrote:
>
>>
>> "Fannie Mae and Freddie Mac buy mortgages from lenders and bundle them
>> into
>> securities; that provides lenders the funds to lend more"
>
> It doesn't provide funds but it does change the bank's capital
> ratio and that does allow for more loans. But that secondary
> market has been doing that for 80 years.

Bullshit lie. Fuck off. Die.

"In 1992, Congress mandated that Fannie and Freddie increase their purchases
of mortgages for low-income and medium-income borrowers. Operating under
that requirement, Fannie Mae, in particular, has been aggressive and
creative in stimulating minority gains."

"The two companies are now required to devote 42% of their portfolios to
loans for low- and moderate-income borrowers"

[Bret Cahill]

> Die.

Try not to spree but if you must spree, spree local. Very local.
Just shoot up your trailer.

[Eddie Haskell]

"BeamMeUpScotty" <ThenDestro...@blackhole.nebulax.com> wrote in
message news:4FA2AA9C...@blackhole.nebulax.com...

> On 5/2/2012 10:35 PM, hippy dippy dude > wrote:
>> Who would have thought in 08 we would have an eight dollar McDonalds
>> meal or four dollar a gallon gas or elimination of profit sharing and
>> pensions?
>> Who would have thought we have people in Washington doing their
>> damnedest to turn us into a global 3rd world economy?
>>
>> http://www.canadafreepress.com/index.php/article/46413
>
>
> Who, That would be me.... I've been telling you this was going to
> happen... I see what Obama is.

Yeah, a third-world Marxist class warfare racist anti-American.

Goddamn America.

-Eddie Haskell

[Sir Ray]

On May 2, 10:35 pm, hippy dippy dude <""\"\"\"@bet sweet.bipy"> wrote:
> Who would have thought in 08 we would have an eight dollar McDonalds

We did have $8.00 McDonald's meals - heck, they were raising the
prices on certain dollar menu items to 1.19 back then
http://articles.latimes.com/2008/nov/26/business/fi-mcdon26
and $4.00/gal gas in 2008
http://money.cnn.com/2008/06/08/news/economy/gas_prices/

> meal or four dollar a gallon gas or elimination of profit sharing and pensions?

And there were companies certainly shedding pensions in 2008 and
before - in 2009 the GAO issued a report investigating companies
deliberating underfunding their pensions before dumping them onto the
Pension Benefit Guaranty Corporation
http://www.reuters.com/article/2009/11/19/businesspro-us-pensions-gao-idUSTRE5AI4DY20091119

> Who would have thought we have people in Washington doing their damnedest to turn us into a global 3rd world economy?

Everyone knew the Republicans were corrupt obstructionists way before
the 2008 election...

[Eddie Haskell]

"Sir Ray" <waterb...@hotmail.com> wrote in message
news:f0fa63bc-0502-42d6...@z6g2000vbz.googlegroups.com...

Oh, look. Poor dear is back to his "obstructionist" mantra now that we've
had bad economic data. Back when employment went down he was lauding the
success of the Hussein agenda.

Don't know whether to shit or wind their watches.

Sucks to be a democrat these days..

-Eddie Haskell

[jim]

Eddie Haskell wrote:
>
> "jim" <"sjedgingN0Sp"@m@mwt,net> wrote in message
> news:OqOdnY06F9vmMT_S...@bright.net...
> >
> >
> > Eddie Haskell wrote:
> >
> >>
> >> "Fannie Mae and Freddie Mac buy mortgages from lenders and bundle them
> >> into
> >> securities; that provides lenders the funds to lend more"
> >
> > It doesn't provide funds but it does change the bank's capital
> > ratio and that does allow for more loans. But that secondary
> > market has been doing that for 80 years.
>
> Bullshit lie. Fuck off. Die.
>
> "In 1992, Congress mandated that Fannie and Freddie increase their purchases
> of mortgages for low-income and medium-income borrowers. Operating under
> that requirement, Fannie Mae, in particular, has been aggressive and
> creative in stimulating minority gains."
>
> "The two companies are now required to devote 42% of their portfolios to
> loans for low- and moderate-income borrowers"

So what?
That didn't cause any problems before 2008 .
It hasn't caused any problems after 2008.



The CRA law simply made it difficult for banks to take deposits
from lower income communities and then refuse to make loans
in those same communities. All the bank had to do to comply was
make loans equal to 50% of the deposits taken.
What isthe big deal?

Clearly that is the minimum that could be expected.
If a bank does not want to serve the community where they set up
a branch then they have no business being in that community.

[Eddie Haskell]

"jim" <"sjedgingN0Sp"@m@mwt,net> wrote in message

news:goWdnYLoFdFRVD_S...@bright.net...

>
>
> Eddie Haskell wrote:
>>
>> "jim" <"sjedgingN0Sp"@m@mwt,net> wrote in message
>> news:OqOdnY06F9vmMT_S...@bright.net...
>> >
>> >
>> > Eddie Haskell wrote:
>> >
>> >>
>> >> "Fannie Mae and Freddie Mac buy mortgages from lenders and bundle them
>> >> into
>> >> securities; that provides lenders the funds to lend more"
>> >
>> > It doesn't provide funds but it does change the bank's capital
>> > ratio and that does allow for more loans. But that secondary
>> > market has been doing that for 80 years.
>>
>> Bullshit lie. Fuck off. Die.
>>
>> "In 1992, Congress mandated that Fannie and Freddie increase their
>> purchases
>> of mortgages for low-income and medium-income borrowers. Operating under
>> that requirement, Fannie Mae, in particular, has been aggressive and
>> creative in stimulating minority gains."
>>
>> "The two companies are now required to devote 42% of their portfolios to
>> loans for low- and moderate-income borrowers"
>
> So what?
> That didn't cause any problems before 2008 .
> It hasn't caused any problems after 2008.

It takes time for a bubble to form and then burst, you fucking idiot.

> The CRA law simply made it difficult for banks to take deposits
> from lower income communities and then refuse to make loans
> in those same communities.

I didn't say anything about CRI, you fucking idiot.

> All the bank had to do to comply was
> make loans equal to 50% of the deposits taken.
> What isthe big deal?

Ahh, lemmie think.. They couldn't pay the fucking money back?

> Clearly that is the minimum that could be expected.
> If a bank does not want to serve the community where they set up
> a branch then they have no business being in that community.

No, what the bank should do is deny you a checking account unless you are
credit worthy.

Haven't you fucked around with the banks and the free market and fucked
things up enough to have learned anything, you fascist idiot?

No, of course you haven't. Liberalism is a religion.

"In what could be a repeat of the easy-lending cycle that led to the housing
crisis, the Justice Department has asked several banks to relax their
mortgage underwriting standards and approve loans for minorities with poor
credit as part of a new crackdown on alleged discrimination, according to
court documents reviewed by IBD."

"Prosecutions have already generated more than $20 million in loan
set-asides and other subsidies from banks that have settled out of court
rather than battle the federal government and risk being branded racist. An
additional 60 banks are under investigation, a DOJ spokeswoman says."

http://news.investors.com/Article/577794/201107081851/DOJ-Begins-Bank-Witch-Hunt.htm

-Eddie Haskell

[jim]

loans to low income housing did not contribute much
to the bubble.
Very little changed in low income loans after 2008.
that is because it wasn't the problem.

>
> > The CRA law simply made it difficult for banks to take deposits
> > from lower income communities and then refuse to make loans
> > in those same communities.
>
> I didn't say anything about CRI, you fucking idiot.

So name the law you were talking about.

>
> > All the bank had to do to comply was
> > make loans equal to 50% of the deposits taken.
> > What isthe big deal?
>
> Ahh, lemmie think.. They couldn't pay the fucking money back?

Low income loans had fewer defaults and performed better
than the rest of the market.

>
> > Clearly that is the minimum that could be expected.
> > If a bank does not want to serve the community where they set up
> > a branch then they have no business being in that community.
>
> No, what the bank should do is deny you a checking account unless you are
> credit worthy.

The banks were happy to take the deposits. You must be a
socialist who wants to dictate what the banks should do.

[BeamMeUpScotty]

So HIGH RISK loans aren't really HIGH RISK LOANS? The subprime loans
are lower risk and yet all the people in government and in the industry
called them HIGH RISK LOANS. Interesting that you say the government
and the people in the industry were all "wrong" and they are all idiots.


Tell us what the percentage of failure rates were and why all these
"people in charge" that called subprime loans high risk, were ignorant
of what a high risk loan is. And you have to include the Democrats like
Barnie Frank and Chris Dodd and Obama as idiots that called subprime
loans high risk loans.


You stepped in it there, didn't you.

[Eddie Haskell]

"jim" <"sjedgingN0Sp"@m@mwt,net> wrote in message

news:7ZednU0f_YAzSz_S...@bright.net...

The answer to every stupid assed pretense of stupidity you posted is right,
you fucking idiot.

"In 1992, Congress mandated that Fannie and Freddie increase their purchases
of mortgages for low-income and medium-income borrowers. Operating under
that requirement, Fannie Mae, in particular, has been aggressive and
creative in stimulating minority gains."

"The two companies are now required to devote 42% of their portfolios to
loans for low- and moderate-income borrowers"

"Although Fannie Mae actually has exceeded its target since 1994, it is
resisting any hike. It argues that a higher target would only produce more
loan defaults by pressuring banks to accept unsafe borrowers."

http://articles.latimes.com/1999/may/31/news/mn-42807

"The Bush administration today recommended the most significant regulatory
overhaul in the housing finance industry since the savings and loan crisis a
decade ago."

"Under the plan, disclosed at a Congressional hearing today, a new agency
would be created within the Treasury Department to assume supervision of
Fannie Mae and Freddie Mac, the government-sponsored companies that are the
two largest players in the mortgage lending industry."

http://tinyurl.com/6lp5qu

>> > Clearly that is the minimum that could be expected.
>> > If a bank does not want to serve the community where they set up
>> > a branch then they have no business being in that community.
>>
>> No, what the bank should do is deny you a checking account unless you are
>> credit worthy.
>
> The banks were happy to take the deposits. You must be a
> socialist who wants to dictate what the banks should do.

Cite, you stupid bastard.

-Eddie Haskell

[jim]

BeamMeUpScotty wrote:

>
> So HIGH RISK loans aren't really HIGH RISK LOANS?

Low income loans are not high risk loans.

If you have someone who has a long history of paying $600/mo in rent
and they put 10% down and get a $500/mo mortgage, how is that a
high risk loan?

You have absolutely no evidence that low income loans
were more risky than other loans. All the evidence
indicates they has a lower default rate than the rest
of the market.

[jim]

Eddie Haskell wrote:

> >
> > Low income loans had fewer defaults and performed better
> > than the rest of the market.
>
> The answer to every stupid assed pretense of stupidity you posted is right,
> you fucking idiot.
>

You keep posting from an article that was written
in 1998 - before the housing bubble. Looking at
the facts after the bubble it is clear that your
article got everything wrong.

After the crisis studies in 2009 show that private label
Mortgage Backed Securities had a 23% delinquency rate while
Freddie and Fannie had a 4% delinquency rate.

To quote one study:

"The implication of Freddie Mac’s data — that the GSEs were
better at quality control than other entities — is broadly
consistent with a detailed analysis of loan performance
conducted by the Financial Crisis Inquiry Commission.
In May of 2009, Congress appointed the Financial Crisis
Inquiry Commission (“FCIC”) to investigate the causes
of the financial crisis of 2008."

"The GSEs’ superior performance may be due in part
to their size and market power, and perhaps also to
regulations which limited their ability to relax
their underwriting standards."

[Nickname unavailable]

> http://www.opensecrets.org/news/2008/09/update-fannie-mae-and-freddie...

>
> http://www.youtube.com/watch?v=Lr1M1T2Y314
>
> http://www.youtube.com/watch?v=_MGT_cSi7Rs
>
> "McCain Letter Demanded 2006 Action on Fannie and Freddie"
>
> "Sen. John McCain's 2006 demand for regulatory action on Fannie Mae and
> Freddie Mac could have prevented current financial crisis, as HUMAN EVENTS
> learned from the letter shown in full text below."
>
> http://www.humanevents.com/article.php?id=28973
>
> Unlike Bush and McCain, as senator, Obama did nothing, other than earn the
> distinction of becoming the second largest recipient of F&F contributions in
> the entire congress, even in his short stint there.
>
> Bill Clinton himself said it best:
>
> "I think the responsibility the Democrats have may rest more in resisting
> any efforts by Republicans in the Congress or by me when I was President to
> put some standards and tighten up a little on Fannie Mae and Freddie Mac."
>
> -Bill Clinton
>
> ''These two entities -- Fannie Mae and Freddie Mac -- are not facing any
> kind of financial crisis,'' said Representative Barney Frank of
> Massachusetts, the ranking Democrat on the Financial Services Committee.
> ''The more people exaggerate these problems, the more pressure there is on
> these companies, the less we will see in terms of affordable housing.''

lying again i see.

that is a lie. back it up with real facts, and you will be the first
to collect a $100,000.00 reward that has been offered for proof of
your conservative lie. go ahead liar, i will give you the info, go
collect the money, then get back to me liar.
Get Me ReWrite! 
By Barry Ritholtz - May 13th, 2010, 7:20AM 
My
approach to everything I have written, studied and analyzed in 
this
space is pretty straight forward: Start with the data and 
evidence
and 
go forward from there. Figure out what the “Truth” is; 
try to
get as 
close to the objective reality beneath the noise in 
order to
make 
intelligent investing decisions for myself and my 
clients.
There are others who do not share this objective. Their goals are
either political (winning the next election) or ideological (having
their belief system become dominant). Truth is irrelevant to these
people. 
Not surprisingly, these folks — many of whom contributed to
the 
crisis 
in a might way — are desperately trying to duck
responsibility 
for 
what happened. Those who helped cause the crisis
are engaged in 
an 
ongoing effort to rewrite its history. 
Their
goal? Exonerate their own bad behavior, throw off any 
responsibility
to the collapse, blame anything but their own ideology 
and horrific
decision making. They want to keep pushing their tired 
political
agendas, despite the damage they may have caused. 
When writing
Bailout Nation, I tried to steer clear of partisan 
finger 
pointing.
I kept the focus on what actually occurred, what 
could be 
proven
mathematically. I blamed Democrats and Republicans — 
not 
equally,
but in proportion to their what they did. Unsupported 
theories,
tenuous connection, loose affiliations were not part of the 
analysis.
Every legislative change, each regulatory failure, all 
corporate
actions, to be blameworthy, had to manifest themselves in 
actual
mathematical proof. 
This led me to ascertain the following 30 year
sequence: 
    -Free market absolutism becomes the dominant
intellectual 
thought. 
    -Deregulation of markets, investment
houses, and banks 
becomes a 
broad goal: This led to Glass Steagall
repeal, Derivative 
exemptions, 
Investing house leverage exemptions,
and a new breed of 
unregulated 
non bank lenders. 
    -Legislative
actions reduce or 
eliminate much of the regulatory 
oversight; SEC
funding is weakened. 
    -Rates come down to absurd levels. 
    -
Bond managers madly 
scramble for yield. 
    -Derivatives, non-bank
lending, leverage, 
bank size, compensation 
levels all run away from
prior levels. 
    - 
Wall Street securitizes whatever it can to
satisfy the demand for 
higher yields. 
    -”Lend to securitize”
nonbank mortgage writers 
sell enormous 
amounts of subprime loans to
Wall Street for this 
purpose. 
    -To meet this demand, non bank
lenders collapse lending 
standards, 
leading to a credit bubble. 
   
-The Fed approves of this 
innovation. 
    -Housing booms, then
busts 
    -Credit freeze, 
market collapse recession. 
You will note
that the CRA is not part of this sequence. I could find 
no evidence
that they were a cause or even a minor factor. If they 
were, the
housing bubbles would not have been in California or S. 
Florida or Ls
Vegas or Arizona — Harlem and South Philly and parts of 
Chicago and
Washington DC would have been the focus. 
Nor do I blame Fannie and
Freddie. Now understand, there is no love 
lost between myself and the
GSEs. For years, I have called them 
“Phoney and Fraudy.”  Since
George Bush and Hank Paulson nationalized 
them, I have accused the
government of using these two as a backdoor 
bailout for banks — a
hidden PPIP/TARP used to buy all the garbage 
mortgages that banks are
desperate to get off their balance sheets. 
Longtime readers will
recall we very publicly shorted Fannie based 
upon their fraudulent
practices and horrific balance sheet. 
But even I cannot reconcile the
movement to place all of the world’s 
troubles at the feet of the
GSEs. Not, at least, according to the 
data. 
That lack of evidence,
however, doesn’t stop ideologues from making 
the attempt. Consider
this attempt at rewriting the causes of the 
credit crisis by Kevin
Hassett: 
    “The worst financial crisis in generations was set off
by a 
massive government effort, led by the two mortgage giants, to
make 
loans to homebuyers no matter whether they could make the
payments. 
Lenders were willing to lend money to just about all
comers, no 
matter 
how low their income. Why? Because the lenders
knew Fannie and 
Freddie 
would purchase the loans from them for a
high price before 
bundling 
them into securities to sell to
investors.” 
Now, this makes for a fascinating narrative that plays
into a number 
of different ideological beliefs. It exonerates the
radical free 
market deregulators, it ignores what the private sector
did, and it 
somehow ignores the fact that Congress was controlled by
a very 
conservative GOP from 1994 to 2006 — the prime period of time
covered 
leading up to and including the beginning of the crisis. 
But
worse than all of that, the data supporting Hassett’s position 
simply
isn’t there. 
Over the past 2 years, I have repeatedly asked the
people who push 
this narrative to provide some evidence for their
positions. I have 
offered a $100,000 if they could prove their case.
Specifically, I have requested some data or evidence that DISPROVED
the following facts: 
    -The origination of subprime loans came
primarily from non bank 
lenders not covered by the CRA; 
    -The
majority of the underwriting, at leats fro the first few 
years of the
boom, were by these same non-bank lenders 
    -When the big banks
began chasing subprime, it was due to the 
profit motive, not any
mandate from the President (a Republican) or 
the the Congress
(Republican controlled) or the GSEs they oversaw. 
    -Prior to 2005,
nearly all of these sub-prime loans were bought 
by 
Wall Street — NOT
Fannie & Freddie 
    -In fact, prior to 2005, the GSEs were not
permitted to purchase 
non-conforming mortgages. 
    -After 2005,
Fannie & Freddie changed their own rules to start 
buying these non-
conforming mortgages — in order to maintain market 
share and compete
with Wall Street for profits. 
    -The change in FNM/FRE conforming
mortgage purchases in 2005 was 
not due to any legislation or marching
orders from the President (a 
Republican) or the the Congress
(Republican controlled). It was the 
profit motive that led them to
this action. 
These are data supported facts I pounded on in BN. 
Of
course, folks like Hassett hate this factual history, as it 
conflicts
with their goals and politics. Rather than produce 
evidence, 
they
create story lines unsupported by facts.  But Monkeys 
love a good
narrative, and so they give that to them. 
However, as an investor, I
demand evidence, data and facts. The blame 
Fannie & Freddie crowd
have managed to remain blissfully data free. 
They have steadfastly
ignored all calls for proof. 
Its way past the time to call out their
intellectual dishonesty. If 
you cannot show any data, if you cannot
prove what you are alleging 
with actual facts, you need to be called
out for what it is you 
actually are: Proponents of a failed
philosophy. 
http://www.ritholtz.com/blog/2010/05/rewriting-the-causes-of-the-cred...
---------------------------------------------------------------------------------------------------------------

Fannie Mae and Freddie Mac were victims, not culprits
Posted by: Aaron Pressman on September 26, 2008
http://www.businessweek.com/investing/insights/blog/archives/2008/09/...


There s a dangerous and misleading argument making the rounds about
the causes of our current credit crisis. It s emanating from
Washington 
where politicians are engaging in the usual blame game but
this time the 
stakes are so high that we can t afford to fall victim
to political 
doublespeak. In this fact-free zone, government
sponsored mortgage 
giants Fannie Mae and Freddie Mac caused the real
estate bubble and 
subprime meltdown. It s completely false. Fannie
Mae and Freddie Mac 
were victims of the credit crisis, not culprits.
Start with the most basic fact of all: virtually none of the $1.5
trillion of cratering subprime mortgages were backed by Fannie or
Freddie. That s right most subprime mortgages did not meet Fannie or
Freddie s strict lending standards. All those no money down, no
interest 
for a year, low teaser rate loans? All the loans made
without checking a 
borrower s income or employment history? All made
in the private sector, 
without any support from Fannie and Freddie.
Look at the numbers. While the credit bubble was peaking from 2003 to
2006, the amount of loans originated by Fannie and Freddie dropped
from 
$2.7 trillion to $1 trillion. Meanwhile, in the private sector,
the 
amount of subprime loans originated jumped to $600 billion from
$335 
billion and Alt-A loans hit $400 billion from $85 billion in
2003. 
Fannie and Freddie, which wouldn t accept crazy floating rate
loans, 
which required income verification and minimum down payments,
were left 
out of the insanity.
There s a must-read study by staff members of the Federal Reserve
Bank 
of New York analyzing the roots of the subprime crisis that came
out in 
March. I don t think it got much attention then as the
conclusions 
seemed uncontroversial at the time. But now that
Washington politicians 
are trying to rewrite history, it should be
mandatory reading for every 
American interested in knowing how we got
here.
The study identifies five causes of the subprime meltdown: 
-
Convoluted loan products that consumers didn t understand. 
-Credit
ratings that didn t do a good job highlighting the risks 
contained in
subprime-backed securities. 
-Lack of incentives for institutional
investors to do their own research 
(they just relied on the credit
ratings). 
-Predatory lending and borrowing (which I think means fraud
perpetrated 
by borrowers). 
-Significant errors in the models used by
credit rating agencies to 
assess subprime-backed securities.
You ll note in the Fed s five causes that there s some culpability
for 
lenders, borrowers, investors and credit raters. There s no blame
for 
Freddie Mac or Fannie Mae which had little or nothing to do with
the 
entire situation.
It s certainly fair to criticize Fannie and Freddie over real issues
that contributed to their downfall. The companies had numerous
accounting problems and inadequate safeguards covering their own
investment portfolios. Those weaknesses came home to roost when the
real 
estate market cratered. Fannie and Freddie purchased billions of
dollars 
of subprime-backed securities for their own investment
portfolios and 
got hit just like every other investor. But it s some
kind of crazy, 
politically inspired CYA to blame for the mess we re
in.
--------------------------------------------------------------------------------------------------------------
MERS, a creation of the free market to circumvent law, to defraud,
cheat on taxes, maybe the un-dueing of wall street:)the housing bubble
was solely a private sector affair to defraud, engage in criminal
activity, and racketeering



http://www.truth-out.org/homeowners-rebellion-recent-rulings-could-shield-62-million-homes-from-foreclosure62448

Homeowners' Rebellion: Recent Rulings Could Shield 62 Million Homes
From Foreclosure
Thursday 19 August 2010
by: Ellen Brown, t r u t h o u t | News Analysis

Over 62 million mortgages are now held in the name of MERS, an
electronic recording system devised by and for the convenience of the
mortgage industry. A California bankruptcy court, following landmark
cases in other jurisdictions, recently held that this electronic
shortcut breaks the chain of title, voiding foreclosure. The logical
result could be 62 million homes that are foreclosure proof.
In a Newsweek article a year ago called "Too Big to Jail: Why
Prosecutors Won't Hit Wall Street Hard in the Subprime Scandal,"
Michael Hirsch wrote that we were unlikely to see trials and
convictions like those in the savings and loan scandals of the 1980s,
because fraud and blame have been so widespread that there is no one
to single out and jail. Said Hirsch:
"The sad irony is that in pleading collective guilt, most of Wall
Street will escape whipping for a scheme that makes Bernie Madoff's
shenanigans look like pickpocketing. At the crest of the real-estate
bubble, fraud was systemic and Wall Street had essentially gone into
the loan-sharking business."
"Unfortunately," he added, "prosecution of fraud is the only way
you're going to get reform on Wall Street."
Sure enough, a year later we got a banking reform bill that was so
watered down that Wall Street got nearly everything it wanted. The too-
big-to-fails, rather than being whittled down to size, have grown even
bigger, circumventing antitrust laws; and they are being allowed to
carry on pretty much as before. The Federal Reserve, rather than being
called on the carpet, has been given even more power; and the Consumer
Protection Agency - the main part of the bill with teeth - has been
put under the Fed's watchful eye. Congress and the Justice Department
seem to have bowed out, leaving no one to hold the finance industry to
account.
But the best laid plans even of Wall Street can sometimes go awry. In
an ironic twist, the industry may wind up tripping over its own
Achilles heel, the Mortgage Electronic Registration Systems or MERS.
An online computer software program for tracking mortgage ownership
and rights, MERS is, according to its web site, "an innovative process
that simplifies the way mortgage ownership and servicing rights are
originated, sold and tracked. Created by the real estate finance
industry, MERS eliminates the need to prepare and record assignments
when trading residential and commercial mortgage loans." Or as Karl
Denninger puts it, "MERS own website claims that it exists for the
purpose of circumventing assignments and documenting ownership!"
MERS was developed in the early 1990s by a number of financial
entities, including Bank of America, Countrywide, Fannie Mae, and
Freddie Mac, allegedly to allow consumers to pay less for mortgage
loans. That did not actually happen, but what MERS did allow was the
securitization and shuffling around of mortgages behind a veil of
anonymity. The result was not only to cheat local governments out of
their recording fees, but to defeat the purpose of the recording laws,
which was to guarantee purchasers clean title. Worse, MERS facilitated
an explosion of predatory lending in which lenders could not be held
to account because they could not be identified, either by the preyed-
upon borrowers or by the investors seduced into buying bundles of
worthless mortgages. As alleged in a Nevada class action called Lopez
v. Executive Trustee Services, et al.:
"Before MERS, it would not have been possible for mortgages with no
market value ... to be sold at a profit or collateralized and sold as
mortgage-backed securities. Before MERS, it would not have been
possible for the Defendant banks and AIG to conceal from government
regulators the extent of risk of financial losses those entities faced
from the predatory origination of residential loans and the fraudulent
re-sale and securitization of those otherwise non-marketable loans.
Before MERS, the actual beneficiary of every Deed of Trust on every
parcel in the United States and the State of Nevada could be readily
ascertained by merely reviewing the public records at the local
recorder's office where documents reflecting any ownership interest in
real property are kept.…
"After MERS, ... the servicing rights were transferred after the
origination of the loan to an entity so large that communication with
the servicer became difficult if not impossible... . The servicer was
interested in only one thing - making a profit from the foreclosure of
the borrower's residence - so that the entire predatory cycle of
fraudulent origination, resale and securitization of yet another
predatory loan could occur again. This is the legacy of MERS and the
entire scheme was predicated upon the fraudulent designation of MERS
as the 'beneficiary' under millions of deeds of trust in Nevada and
other states."
MERS now holds over 62 million mortgages in its name, including over
half of all new US residential mortgage loans. But courts are
increasingly ruling that MERS is merely a nominee, without standing to
foreclose on the collateral that makes up a major portion of the
portfolios of some very large banks. It seems the banks claiming to be
the real parties in interest may have short circuited themselves out
of the chain of title entitling them to the collateral.
Technicality or Fatal Flaw?
To foreclose on real property, the plaintiff must be able to produce a
promissory note or assignment establishing title. Early cases focused
on MERS' inability to produce such a note, but most courts continued
to consider the note a mere technicality and ignored it. Landmark
newer opinions, however, stress that this defect is not just a
procedural. but a substantive failure, one that is fatal to the
plaintiff's case.
The latest of these decisions came down in California on May 20, 2010,
in a bankruptcy case called In re Walker, Case no. 10-21656-E-11. The
court held that MERS could not foreclose because it was a mere nominee
and that as a result plaintiff Citibank could not collect on its
claim. The judge opined:
"Since no evidence of MERS' ownership of the underlying note has been
offered and other courts have concluded that MERS does not own the
underlying notes, this court is convinced that MERS had no interest it
could transfer to Citibank. Since MERS did not own the underlying
note, it could not transfer the beneficial interest of the Deed of
Trust to another. Any attempt to transfer the beneficial interest of a
trust deed without ownership of the underlying note is void under
California law."
In support, the judge cited In re Vargas (California Bankruptcy
Court), Landmark v. Kesler (Kansas Supreme Court), LaSalle Bank v.
Lamy (a New York case) and In re Foreclosure Cases (the "Boyko"
decision from Ohio Federal Court). (For more on these earlier cases,
see here, here and here.) The court concluded:
"Since the claimant, Citibank, has not established that it is the
owner of the promissory note secured by the trust deed, Citibank is
unable to assert a claim for payment in this case."
The broad impact the case could have on California foreclosures is
suggested by attorney Jeff Barnes, who writes:
"This opinion ... serves as a legal basis to challenge any foreclosure
in California based on a MERS assignment; to seek to void any MERS
assignment of the Deed of Trust or the note to a third party for
purposes of foreclosure; and should be sufficient for a borrower to
not only obtain a TRO [temporary restraining order] against a
Trustee's Sale, but also a Preliminary Injunction barring any sale
pending any litigation filed by the borrower challenging a foreclosure
based on a MERS assignment."
While not binding on courts in other jurisdictions, the ruling could
serve as persuasive precedent there as well, because the court cited
nonbankruptcy cases related to the lack of authority of MERS, and
because the opinion is consistent with prior rulings in Idaho and
Nevada Bankruptcy courts on the same issue.
RICO and Fraud Charges
Other suits go beyond merely challenging title to alleging criminal
activity. On July 26, 2010, a class action was filed in Florida
seeking relief against MERS and an associated legal firm for
racketeering and mail fraud. It alleges that the defendants used "the
artifice of MERS to sabotage the judicial process to the detriment of
borrowers"; that "to perpetuate the scheme, MERS was and is used in a
way so that the average consumer, or even legal professional, can
never determine who or what was or is ultimately receiving the
benefits of any mortgage payments"; that the scheme depended on "the
MERS artifice and the ability to generate any necessary 'assignment'
which flowed from it"; and that "by engaging in a pattern of
racketeering activity, specifically 'mail or wire fraud,' the
Defendants ... participated in a criminal enterprise affecting
interstate commerce."
Local governments deprived of filing fees may also be getting into the
act, at least through representatives suing on their behalf. Qui tam
actions allow for a private party or "whistle blower" to bring suit on
behalf of the government for a past or present fraud on it. In State
of California ex rel. Barrett R. Bates, filed May 10, 2010, the
plaintiff qui tam sued on behalf of a long list of local governments
in California against MERS and a number of lenders, including Bank of
America, JPMorgan Chase and Wells Fargo, for "wrongfully bypass[ing]
the counties' recording requirements; divest[ing] the borrowers of the
right to know who owned the promissory note ...; and record[ing] false
documents to initiate and pursue non-judicial foreclosures and to
otherwise decrease or avoid payment of fees to the Counties and the
Cities where the real estate is located." The complaint notes that
"MERS claims to have 'saved' at least $2.4 billion dollars in
recording costs," meaning it has helped avoid billions of dollars in
fees otherwise accruing to local governments. The plaintiff sues for
treble damages for all recording fees not paid during the past ten
years and for civil penalties of between $5,000 and $10,000 for each
unpaid or underpaid recording fee and each false document recorded
during that period, potentially a hefty sum. Similar suits have been
filed by the same plaintiff qui tam in Nevada and Tennessee.
Axing the Bankers' Money Tree
Most courts continue to look the other way on MERS' lack of standing
to sue, but the argument has picked up enough steam to consider the
rather stunning implications. If MERS is not the title holder of
properties held in its name, the chain of title has been broken and no
one may have standing to sue. In MERS v. Nebraska Department of
Banking and Finance, MERS insisted that it had no actionable interest
in title, and the court agreed.
An August 2010 article in Mother Jones titled "Fannie and Freddie's
Foreclosure Barons" exposes a widespread practice of "foreclosure
mills" in backdating assignments after foreclosures have been filed.
Not only is this perjury, a prosecutable offense, but if MERS was
never the title holder, there is nothing to assign. The defaulting
homeowners could wind up with free and clear title.
In Florida, Jacksonville Area Legal Aid attorney April Charney has
been using the missing-note argument ever since she first identified
that weakness in the lenders' case in 2004. Five years later, she
says, some of those homeowners are still in their homes. According to
a Huffington Post article titled "'Produce the Note' Movement Helps
Stall Foreclosures":
"Because of the missing ownership documentation, Charney is now
starting to file quiet title actions, hoping to get her homeowner
clients full title to their homes (a quiet title action 'quiets' all
other claims). Charney says she's helped thousands of homeowners delay
or prevent foreclosure and trained thousands of lawyers across the
country on how to protect homeowners and battle in court."
If courts overwhelmed with foreclosures decide to take up the cause,
the result could be millions of struggling homeowners with the banks
off their backs and millions of homes no longer on the books of some
too-big-to-fail banks. Without those assets, the banks could again be
looking at bankruptcy, as was pointed out in a San Francisco Chronicle
article by attorney Sean Olender following the October 2007 Boyko
decision:
"The ticking time bomb in the US banking system is not resetting
subprime mortgage rates. The real problem is the contractual ability
of investors in mortgage bonds to require banks to buy back the loans
at face value if there was fraud in the origination process.
"... The loans at issue dwarf the capital available at the largest US
banks combined and investor lawsuits would raise stunning liability
sufficient to cause even the largest US banks to fail...."
Nationalization of these giant banks might be the next logical step -
a step that some commentators said should have been taken in the first
place. When the banking system of Sweden collapsed following a housing
bubble in the 1990s, nationalization of the banks worked out very well
for that country.
The Swedish banks were largely privatized again when they got back on
their feet, but it might be a good idea to keep some banks as publicly-
owned entities, on the model of the Commonwealth Bank of Australia.
For most of the 20th century, it served as a "people's bank," making
low interest loans to consumers and businesses through branches all
over the country.
With the strengthened position of Wall Street following the 2008
bailout and the tepid 2010 banking reform bill, the US is far from
nationalizing its mega-banks now. But a committed homeowner movement
to tear off the predatory mask called MERS could yet turn the tide.
While courts are not likely to let 62 million homeowners off scot-
free, the defect in title created by MERS could give them significant
new leverage at the bargaining table.

-------------------------------------------------------------------------------------------------------------------------------------------------
discussion archived here:
http://groups.google.com/group/alt.politics.democrats.d/browse_thread...
Private sector loans, not Fannie or Freddie, triggered crisis 
Read
more:  http://www.mcclatchydc.com/2008/10/12/53802/private-sector-
loans-not-... 
MCT
By David Goldstein and Kevin G. Hall | McClatchy Newspapers
WASHINGTON — As the economy worsens and Election Day approaches, a
conservative campaign that blames the global financial crisis on a
government push to make housing more affordable to lower-class
Americans has taken off on talk radio and e-mail.
Commentators say that's what triggered the stock market meltdown and
the freeze on credit. They've specifically targeted the mortgage
finance giants Fannie Mae and Freddie Mac, which the federal
government seized on Sept. 6, contending that lending to poor and
minority Americans caused Fannie's and Freddie's financial problems.
Federal housing data reveal that the charges aren't true, and that
the 
private sector, not the government or government-backed
companies, was 
behind the soaring subprime lending at the core of the
crisis.
http://www.mcclatchydc.com/2008/10/12/53802/private-sector-loans-not-...
Subprime lending offered high-cost loans to the weakest borrowers
during the housing boom that lasted from 2001 to 2007. Subprime
lending was at its height from 2004 to 2006.
Federal Reserve Board data show that:
•More than 84 percent of the subprime mortgages in 2006 were issued
by 
private lending institutions.
•Private firms made nearly 83 percent of the subprime loans to low-
and moderate-income borrowers that year.
•Only one of the top 25 subprime lenders in 2006 was directly subject
to the housing law that's being lambasted by conservative critics.
The "turmoil in financial markets clearly was triggered by a dramatic
weakening of underwriting standards for U.S. subprime mortgages
Read more: http://www.mcclatchydc.com/2008/10/12/53802/private-sector-loans-not-...
------------------------------------------------------------------------------------------------------------
http://www.informationclearinghouse.info/article28309.htm

A Beginners Guide to Shadow Banking, Financial Crisis and Repo 

By
Mike Whitney

June 12 2011 "Information Clearing House"  What if I
told you that the financial crisis could be explained in just two
words? Would you believe me?

It's true, and oddly enough, neither of
the words is "subprime".

So, what are the words?

Bank run. The
financial crisis was actually a run on the banking system. Only it
wasn't a run in the usual sense of the word where jittery depositors
line up on the street waiting to withdraw their savings, but a run on
the shadow banking system where traditional banks get their funding
via short-term loans in what's called the "repo market". (short for
"repurchase agreement") The shadow banking system has become a
critical part of the infrastructure of the modern financial system. It
provides a way for banks to move credit risk off their balance sheets,
thus reducing the amount of capital they need to support their
operations. The banks argue that this new system has made credit
cheaper for borrowers which, in turn, generates more activity and
growth in the economy. But, of course, the risks are much greater too,
as we can see from trillions of dollars that were lost following the
meltdown of 2008. These risks cannot be contained as long as shadow
banks remain unregulated.

So, when did the crisis actually begin?
Well, most people would point to September 15, 2008, the day that
Lehman Brothers defaulted and markets went into freefall. But that's
not when the trouble actually started. The trouble began a full year
earlier on August 9, 2007, as Pimco's Paul McCulley recalls in his
comments at the 19th Annual Hyman Minsky Conference. Here's an excerpt
from the speech:

"On August 9, 2007, game over. If you have to pick a
day for the Minsky Moment, it was August 9. And, actually, it didn’t
happen here in the United States. It happened in France, when Paribas
Bank (BNP) said that it could not value the toxic mortgage assets in
three of its off-balance sheet vehicles, and that, therefore, the
liability holders, who thought they could get out at any time, were
frozen. I remember the day like my son’s birthday. And that happens
every year. Because the unraveling started on that day. In fact, it
was later that month that I actually coined the term “Shadow Banking
System” at the Fed’s annual symposium in Jackson Hole.

...while the
run commenced on August 9th of 2007, it was pretty much an orderly run
up until September 15, 2008. And it was orderly primarily because the
Fed.... evoked Section 13-3 of the Federal Reserve Act in March of
2008 in order to facilitate the merger of under-a-run Bear Stearns
into JPMorgan. Concurrently, the Fed opened its balance sheet to the
biggest shadow banks of all, the investment banks that were primary
dealers, including most important, the big five. It was called the
Primary Dealer Credit Facility....

The Fed created a whole host of
facilities to stop the run. In fact, they expanded the Primary Dealer
Credit Facility to what are known as Schedule 2 assets, which meant
that dealers could rediscount anything at the Fed that they could
borrow against in the tri-party repo market.

Concurrently, the FDIC
stepped up to the plate, doing two incredibly important things. Number
one, they totally uncapped deposit insurance on transaction accounts,
which meant that the notion of uninsured depositors in transaction
accounts became an oxymoron. If you were in a transaction account,
there was no reason to run. And then the FDIC effectively became a
monoline insurer to nonbank financials with its Temporary Liquidity
Guarantee Program (TGLP) allowing both banks and shadow banks to issue
unsecured debt with the full faith and credit of Uncle Sam for a 75
basis points fee. No surprise some $300 billion was issued.

So,
bottom line, you had the Fed step up and provide its public good to
the Shadow Banking System. You had the FDIC step up and do the same
thing with its public good. And as Paul Volcker was noting this
afternoon, you had the Treasury step up and provide a similar public
good for the money market mutual funds, using the Foreign Exchange
Stabilization Fund." ( After the Crisis: Planning a New Financial
Structure, Paul McCulley, 19th Annual Hyman Minsky Conference, Zero
Hedge)

This is a great description of what happened, but McCulley is
a Managing Director at the country's biggest bond fund, so naturally
his perspective is different than yours or mine. From a working man's
point of view, this is what happened: The banks had been creating
dodgy loans that they knew would never be repaid because the mortgage
applicants weren't truly qualified to borrow as much money as they
did. (Many of the applicants were called Ninjas...aka--"No income, no
job, no assets") But the regulators and ratings agencies looked the
other way because there was a lot of money involved and everyone was
getting very rich. The dodgy loans were chopped up into securitized
bonds (mainly Mortgage-Backed Securities) and sold to insurance
companies, retirement funds and foreign investors. Then, on August 9,
2007, the Merry-go-round ground to a halt when Paribas Bank (BNP)
stopped redemptions on assets that no one really knew how to value.
(So, the crisis wasn't really a "panic" as much as it was a repricing
event. The market had not yet repriced these toxic assets which were
plunging in value on the ABX index.)

The problem was that the banks
had been using these toxic assets to secure funding in the repo
market. Now that their value was plunging, the banks were becoming
increasingly less liquid and less inclined to deal with other banks
that they knew were also in trouble. Keep in mind, that "according to
Thomson Reuters, nearly $14 trillion worth of complex-securitized
products were created," through this process which put the entire
global financial system at risk. So, it wasn't just subprime mortgages
(which only amounted to $1.5 trillion) that caused the meltdown, but
the trillions of dollars in complex securitized bonds that had been
traded through shadow intermediaries. As Anat R. Admati, Professor of
Finance and Economics, Graduate School of Business at Stanford
University said, "Housing policies alone, however, would not have led
to the near insolvency of many banks and to the credit-market freeze.
The key to these effects was the excessive leverage that pervaded, and
continues to pervade, the financial industry." ("Fed scholars: A run
on the repurchase market caused the financial crisis and will probably
happen again", Repowatch)

Understanding how the repo market works is
crucial, but it's also hard to grasp. So, let's use an analogy.

Let's
say I need some cash to finance some other business operations I have
going. So, I go down to the local pawn shop with my custom-built
Maserati, my original Chagall oil painting, and my collection of
Renaissance gold coins. The pawnbroker takes one look at my trove and
says he can lend me $25,000 for a week, but I'll have to pay him
$26,000 to get my stuff back. I say, "Okay", and borrow the money.
This allows me to keep my other business operations running. Then, a
week later, I return to the pawn shop and repay the money I borrowed.
Okay, so far?

So, next week I go back to the pawn shop and try to get
the same deal. Only this time, the dealer has done a little research
and discovered that my custom Maserati is actually a late-model Yugo
with a flashy paint job; my original Chagall is actually a paint-by-
numbers fake I picked up at a flea market, and my collection of
Renaissance gold coins, is actually a scattering of slot-machine slugs
with a pyrite finish. So the dealer gets all huffy and says he'll only
lend me half of what he had before, ($12,500) But that's a big problem
for me, because now I don't have the money to fund my other operations
or pay my employees. So I have to dig into savings (bank capital),
which makes it harder for me to lend money to anyone else. As time
goes on, I am forced to sell more of my personal belongings (assets)
just to stay afloat.

This is precisely what happened to the banks
during the financial crisis. Financial firms that had been providing
full-value for securitized bonds (my Maserati) got worried that those
bonds might contain toxic subprime loans (my Yugo). So they reduced
the amount of money they would lend on the bonds. These so-called
"haircuts" set-off a slow-motion panic that lasted for over a year,
draining nearly $4 trillion from the shadow banking system. The
problem was compounded by the fact that no one knew which bundles held
the worst mortgages or which banks had the biggest pile of bonds. So,
interbank lending slowed to a crawl, LIBOR skyrocketed, and the credit
markets went into a deep-freeze. When Lehman Brothers defaulted on
September 15, 2008, the downward spiral accelerated and the entire
financial system crashed. That's why Fed chairman Ben Bernanke stepped
in and provided blanket guarantees on the financial assets of banks
and shadow banks alike.

The essential problem with shadow banking is
that it allows private industry (financial institutions) to generate
as much credit as they want, thus, adding to the money supply,
increasing economic activity, inflating gigantic asset-price bubbles,
and setting the stage for a catastrophic meltdown. Economist James
Hamilton explains how this works in a recent post titled "Follow The
Money". Here's an excerpt:

"If you buy a mortgage-backed security (or
collateralized debt obligation constructed from assorted MBS), you
could then issue commercial paper against it to get most of your money
back, essentially making the purchase self-financing. This was the
idea behind the notorious off-balance sheet structured investment
vehicles or conduits, which basically used money borrowed on the
commercial paper market to buy various pieces of the mortgage
securities created by the loan aggregators. The dollar value of
outstanding asset-backed commercial paper nearly doubled between 2004
and 2007.

“Yale Professor Gary Gorton has also emphasized the
importance of repo operations involving mortgage-related securities.
If I buy a security, I can then pledge it as collateral to obtain a
repo loan, again getting most of my money back and allowing the
purchase to be mostly self-financing as long as I keep rolling over
repos. Although I have not been able to find numbers on the volume of
such transactions, it appears to have been quite substantial.

“The
question of how the house price run-up was funded thus has a pretty
clear answer: Other People's Money. Because of so much money pouring
into house purchases, the price was driven up." ("Follow The Money",
James Hamilton, Econbrowser)

This is how Wall Street pumped up
leverage to ungodly levels and steered the financial system off the
cliff. The debt-instruments and repo market were used to create a
humongous debt pyramid balanced precariously atop a few crumbs of
capital.

Consider this, from an article titled “Liquidity Crises –
Understanding sources and limiting consequences: A theoretical
framework,” by Robert E. Lucas, Jr. and Nancy L. Stokey:

"In August
of 2008, the entire banking system held about $50 billion in actual
cash reserves while clearing trades of $2,996 trillion per day. Yet
every one of these trades involved an uncontingent promise to pay
someone hard cash whenever he asked for it. If ever a system was
“runnable,” this was it." (RepoWatch)

Are you kidding me? "$2,996
trillion" in daily trading was propped up an a paltry $50 billion in
cash reserves!?! No wonder the system crashed. Even the slightest
trace of doubt in the quality of the collateral being exchanged in the
repo market, would automatically set off alarms and trigger a panic.
And it did!

So, what is the likelihood of that happening again? Are
we still in danger?

Yes, we are. In fact, another crisis is probably
unavoidable since congress has done nothing to address the repo
problem or to make the necessary changes in regulation.

Policymakers
need to raise capital requirements, toughen lending standards, and
ensure that trading takes place on public platforms that can be
monitored by government regulators. Also, financial institutions that
function like banks must be regulated like banks. Otherwise, the banks
will create more structured instruments that will (eventually) spark
another bank run forcing the public to bail out the system once more.
As economics professors T. Sabri Öncü and Viral V. Acharya, professors
say, "Leaving the repo market as it currently functions is not an
alternative; if this market is not reformed and their participants not
made to internalize the liquidity risk, runs on the repo will occur in
the future, potentially leading to systemic crises." (RepoWatch)

The
only way to prevent another financial crisis is to fix repo, but Dodd-
Frank doesn't do that.

----------------------------------------------------------------------------------------
the big lie:Repetition is all-important to spreading a Big Lie:

http://www.nytimes.com/2011/12/24/opinion/nocera-the-big-lie.html?_r=1

Op-Ed Columnist
The Big Lie
By JOE NOCERA
Published: December 23, 2011
You begin with a hypothesis that has a certain surface plausibility.
You find an ally whose background suggests that he’s an “expert”; out
of thin air, he devises “data.” You write articles in sympathetic
publications, repeating the data endlessly; in time, some of these
publications make your cause their own. Like-minded congressmen pick
up your mantra and invite you to testify at hearings.
You’re chosen for an investigative panel related to your topic. When
other panel members, after inspecting your evidence, reject your
thesis, you claim that they did so for ideological reasons. This, too,
is repeated by your allies. Soon, the echo chamber you created drowns
out dissenting views; even presidential candidates begin repeating the
Big Lie.
Thus has Peter Wallison, a resident scholar at the American Enterprise
Institute, and a former member of the Financial Crisis Inquiry
Commission, almost single-handedly created the myth that Fannie Mae
and Freddie Mac caused the financial crisis. His partner in crime is
another A.E.I. scholar, Edward Pinto, who a very long time ago was
Fannie’s chief credit officer. Pinto claims that as of June 2008, 27
million “risky” mortgages had been issued — “and a lion’s share was on
Fannie and Freddie’s books,” as Wallison wrote recently. Never mind
that his definition of “risky” is so all-encompassing that it includes
mortgages with extremely low default rates as well as those with
default rates nearing 30 percent. These latter mortgages were the ones
created by the unholy alliance between subprime lenders and Wall
Street. Pinto’s numbers are the Big Lie’s primary data point.
Allies? Start with Congressional Republicans, who have vowed to
eliminate Fannie and Freddie — because, after all, they caused the
crisis! Throw in The Wall Street Journal’s editorial page, which, on
Wednesday, published one of Wallison’s many articles repeating the Big
Lie. It was followed on Thursday by an editorial in The Journal making
essentially the same point. Repetition is all-important to spreading a
Big Lie.
In Wallison’s article, he claimed that the charges brought by the
Securities and Exchange Commission against six former Fannie and
Freddie executives last week prove him right. This is another favorite
tactic: He takes a victory lap whenever events cast Fannie and Freddie
in a bad light. Rarely, however, has his intellectual dishonesty been
on such vivid display. In fact, what the S.E.C.’s allegations show is
that the Big Lie is, well, a lie.
Central to Wallison’s argument is that the government’s effort to
encourage homeownership among low- and moderate-income Americans is
what led to the crisis. Fannie and Freddie, which were required by law
to meet certain “affordable housing mandates,” were the primary
instruments of that government policy; their need to meet those
mandates, says Wallison, is what caused them to dive so heavily into
those “risky” mortgages. And because they were powerful forces in the
housing market, their entry into subprime dragged along the rest of
the mortgage industry.
But the S.E.C. complaint makes almost no mention of affordable housing
mandates. Instead, it charges that the executives were motivated to
begin buying subprime mortgages — belatedly, contrary to the Big Lie —
because they were trying to reclaim lost market share, and thus
maximize their bonuses.
As Karen Petrou, a well-regarded bank analyst, puts it: “The S.E.C.’s
facts paint a picture in which it wasn’t high-minded government
mandates that did [Fannie and Freddie] wrong, but rather the
monomaniacal focus of top management on market share.” As I wrote on
Tuesday, Fannie and Freddie, rather than leading the housing industry
astray, got into riskier mortgages only after the horse was out of the
barn. They were becoming irrelevant in the most profitable segment of
the market — subprime. And that they couldn’t abide.
(The S.E.C., I should note, had its own criticism of my column, saying
that I conflated its allegations regarding the lack of disclosure of
subprime mortgages, with an entirely different set of charges it has
brought regarding disclosure of so-called Alt-A loans. I still
maintain that the S.E.C.’s charges are weak, and that the agency
brought the case in part for political reasons: how better to curry
favor with House Republicans than to go after former Fannie and
Freddie executives?)
Three years after the financial crisis, the country would be well
served by a real debate about the role of government in housing.
Should the government be helping low- and moderate-income Americans
own their own homes? If so, is there an acceptable level of risk? If
not, how do we recast the American dream?
To have that debate, though, we need a clear understanding of what
role the government’s affordable-housing goals did — and did not —
play in the crisis. And that is impossible as long as the Big Lie
holds sway.
Which, now that I think of it, may be the whole point of the exercise.
---------------------------------------------------------------------------------------

keep lying, its all your type has.


http://www.nytimes.com/2011/12/24/opinion/nocera-the-big-lie.html




Op-Ed Columnist
The Big Lie
By JOE NOCERA
Published: December 23, 2011

So this is how the Big Lie works.

You begin with a hypothesis that has a certain surface plausibility.
You find an ally whose background suggests that he’s an “expert”; out
of thin air, he devises “data.” You write articles in sympathetic
publications, repeating the data endlessly; in time, some of these
publications make your cause their own. Like-minded congressmen pick
up your mantra and invite you to testify at hearings.
You’re chosen for an investigative panel related to your topic. When
other panel members, after inspecting your evidence, reject your
thesis, you claim that they did so for ideological reasons. This, too,
is repeated by your allies. Soon, the echo chamber you created drowns
out dissenting views; even presidential candidates begin repeating the
Big Lie.
Thus has Peter Wallison, a resident scholar at the American Enterprise
Institute, and a former member of the Financial Crisis Inquiry
Commission, almost single-handedly created the myth that Fannie Mae
and Freddie Mac caused the financial crisis. His partner in crime is
another A.E.I. scholar, Edward Pinto, who a very long time ago was
Fannie’s chief credit officer. Pinto claims that as of June 2008, 27
million “risky” mortgages had been issued — “and a lion’s share was on
Fannie and Freddie’s books,” as Wallison wrote recently. Never mind
that his definition of “risky” is so all-encompassing that it includes
mortgages with extremely low default rates as well as those with
default rates nearing 30 percent. These latter mortgages were the ones
created by the unholy alliance between subprime lenders and Wall
Street. Pinto’s numbers are the Big Lie’s primary data point.
Allies? Start with Congressional Republicans, who have vowed to
eliminate Fannie and Freddie — because, after all, they caused the
crisis! Throw in The Wall Street Journal’s editorial page, which, on
Wednesday, published one of Wallison’s many articles repeating the Big
Lie. It was followed on Thursday by an editorial in The Journal making
essentially the same point. Repetition is all-important to spreading a
Big Lie.
In Wallison’s article, he claimed that the charges brought by the
Securities and Exchange Commission against six former Fannie and
Freddie executives last week prove him right. This is another favorite
tactic: He takes a victory lap whenever events cast Fannie and Freddie
in a bad light. Rarely, however, has his intellectual dishonesty been
on such vivid display. In fact, what the S.E.C.’s allegations show is
that the Big Lie is, well, a lie.
Central to Wallison’s argument is that the government’s effort to
encourage homeownership among low- and moderate-income Americans is
what led to the crisis. Fannie and Freddie, which were required by law
to meet certain “affordable housing mandates,” were the primary
instruments of that government policy; their need to meet those
mandates, says Wallison, is what caused them to dive so heavily into
those “risky” mortgages. And because they were powerful forces in the
housing market, their entry into subprime dragged along the rest of
the mortgage industry.
But the S.E.C. complaint makes almost no mention of affordable housing
mandates. Instead, it charges that the executives were motivated to
begin buying subprime mortgages — belatedly, contrary to the Big Lie —
because they were trying to reclaim lost market share, and thus
maximize their bonuses.
As Karen Petrou, a well-regarded bank analyst, puts it: “The S.E.C.’s
facts paint a picture in which it wasn’t high-minded government
mandates that did [Fannie and Freddie] wrong, but rather the
monomaniacal focus of top management on market share.” As I wrote on
Tuesday, Fannie and Freddie, rather than leading the housing industry
astray, got into riskier mortgages only after the horse was out of the
barn. They were becoming irrelevant in the most profitable segment of
the market — subprime. And that they couldn’t abide.
(The S.E.C., I should note, had its own criticism of my column, saying
that I conflated its allegations regarding the lack of disclosure of
subprime mortgages, with an entirely different set of charges it has
brought regarding disclosure of so-called Alt-A loans. I still
maintain that the S.E.C.’s charges are weak, and that the agency
brought the case in part for political reasons: how better to curry
favor with House Republicans than to go after former Fannie and
Freddie executives?)
Three years after the financial crisis, the country would be well
served by a real debate about the role of government in housing.
Should the government be helping low- and moderate-income Americans
own their own homes? If so, is there an acceptable level of risk? If
not, how do we recast the American dream?
To have that debate, though, we need a clear understanding of what
role the government’s affordable-housing goals did — and did not —
play in the crisis. And that is impossible as long as the Big Lie
holds sway.
Which, now that I think of it, may be the whole point of the exercise.
-------------------------------------------------------------------------------------------------------------
The vast amount of bad mortgages were generated by privately-owned
banks not government-sponsored entities:Keep that in mind the next
time your loudmouth brother-in-law starts spouting off about how the
CRA caused the financial meltdown:The banks were 100% responsible



http://www.informationclearinghouse.info/article30436.htm







The Banks Want to Dump Millions of Risky Mortgages Onto FHA
Obama’s Refinancing Swindle
By Mike Whitney
February 03, 2012 "Counterpunch" - -Barack Obama’s new housing
refinance plan has nothing to do with “lowering monthly mortgage
payments so responsible borrowers can stay in their homes”. That’s all
public relations bunkum. The truth is the banks want to offload their
garbage mortgages onto Uncle Sam to avoid hundreds of billions of
dollars in losses. That’s what this refi-ruse is really all about.
The administration estimates that 3.5 million people with private
label mortgages will be eligible to refinance into loans backed by the
Federal Housing Administration (FHA) Many of these are high risk
mortgages that will eventually go into foreclosure which is why the
banks want to get them off their books. Regrettably, Obama is only too
happy to help them achieve that goal. Here’s a little background from
the Christian Science Monitor:
“The nation now has about 30 million mortgages backed by government-
sponsored enterprises (GSEs), mainly Fannie or Freddie…. About 3
million of those are “under water,” meaning the loan is now bigger
than home value. Another 20 million or more have been underwritten
entirely by private lenders. Some 35 percent of those, 7 million or
more, are under water.” (“Obama plan to lower mortgage payments could
help, but how much?”, Christian Science Monitor)
Why are so many more “private label” mortgages underwater than loans
that were issued by
Fannie or Freddie?
Because the banks were lending money to every Tom, Dick and Harry who
could fog a mirror. It was all a big joke. The banks didn’t really
give a hoot if the borrowers were creditworthy or not because they
were bundling the mortgages together into mortgage backed securities
(MBS) and selling them off to investors around the world, so
documentation and loan standards didn’t really matter to them. They
got their pound of flesh whether the loans blew up or not. Here’s a
little refresher from the Washington Post on how we got to where we
are today:
“The biggest culprits in the housing fiasco came from the private
sector, and more specifically from a mortgage industry that was out of
control. These included lenders who originated home loans, investment
bankers who packaged them into securities, rating agencies that
misjudged these securities, and global investors who bought them
without much, if any, study…
Between 2004 and 2007, private lenders originated three quarters of
all subprime and alt-A mortgage loans. These were loans to financially
fragile homeowners with credit scores under 660, well below the U.S.
average, which is closer to 700. But only a fourth of such loans were
originated by government agencies, including Fannie, Freddie and the
Federal Housing Administration.
The dollar amount of subprime and alt-A loans made during this period
by the private sector was jaw-dropping, reaching nearly $600 billion
at the height of the lending frenzy in 2006. …. By contrast,
government lenders made just over $100 billion in subprime and alt-A
loans in 2006. Even in 2007, when the housing market was beginning its
free fall, private lenders still handed out more than $300 billion via
these very shaky mortgage loans…(“Fannie and Freddie don’t deserve
blame for bubble,” Mark Zandi, Washington Post)
The vast amount of bad mortgages were generated by privately-owned
banks, not government-sponsored entities. Keep that in mind the next
time your loudmouth brother-in-law starts spouting off about how the
GSE’s or the Community Reinvestment Act (CRA) caused the financial
meltdown. The banks were 100 percent responsible. And now they’re back
for a double-dip because they still have tons of these wilting loans
in their vaults and they need to get rid of them pronto. And that’s
where Obama comes in. The banks are counting on the dissembler in
chief to make it look like this refi-claptrap is really an effort to
“provide a bit of relief for an ailing economy” or “to help working
folks make their mortgage payment”. It’s all hogwash.
The reason the banks have waited this long (for another bailout) is
because the 50-state robosigning case has dragged on longer than
they’d anticipated. They figured the 50 state Attorneys General would
roll over and play dead like the other politicians they deal with. But
that hasn’t happened. The legal fight continues with no end in sight.
What the banks are hoping for is a ruling “that prevents states from
effectively challenging future foreclosure actions that are based on
faulty prior assignments.” In other words, they want to be able to
boot you out of your home whether they have proper documentation or
not.
Meanwhile, the backlog of homes (that’s in some stage of foreclosure)
continues to grow to record levels. When the sluice-gates  finally
open, an ocean of distressed homes will surge onto the market sending
prices plunging and leaving bank balance sheets deep in the red.
Here’s more from CNBC’s Diana Olick:
“To give you an idea of just how much the “robo” scandal is toying
with the numbers, LPS compared states that require foreclosures to go
through the courts versus states that don’t (judicial versus non-
judicial) and found the following:
- 50 percent of loans in foreclosure in judicial states have not made
a payment in two years, as opposed to 28 percent in non-judicial
states.
Foreclosure sale rates in non-judicial states are about four times
those in judicial states.” (“Robo-Reality: Final Foreclosures Fall as
Pipeline Swells” Realty Check, CNBC)
The backlog of distressed homes is much greater than the data would
indicate. Neither the official nor the shadow inventory accurately
accounts for the bulging number of homes (10 million) currently in the
pipeline.
That’s why the administration is looking for creative ways to whittle
down the supply. One idea is to sell foreclosures in bulk to deep-
pocket investors with the proviso that they convert them into rentals.
But why give Wall Street fatcats the privilege of buying foreclosures
at a discount when mom and pop investors are already scarfing them up
like hotcakes? How fair is that?
The driving force behind the foreclosures-to-rental scam is that the
banks want to remove the GSE’s stock of distressed homes from the
competition so they can fetch a better price when their REO’s hit the
market. Once again, the policy is being tailored to meet the needs of
the banks not the people. Here’s more from Olick about the risks this
poses to FHA:
“Critics will also argue that the FHA, which now has an inordinately,
historically large share of the mortgage market, is in no position to
take on any more risk. The FHA could be considered “underwater”
itself, guaranteeing about $1 trillion in mortgages but sitting on
just a $1.2 billion dollar cushion to cover losses.
To that end, officials say they could create a separate fund for these
loans, not the regular mutual mortgage insurance fund (MMI). This
would be a special risk fund, designed to handle high
losses.” (“Obama’s Mortgage Refi Plan to Go Through FHA”, CNBC)
How do you like that? The FHA is already leveraged at 100-to-1 and the
banks want to add even more debt. And they want to do it in the most
deceptive way possible, by creating an off-balance sheet investment
vehicle where the red ink can be hidden from public view.
To be eligible for Obama’s refi-program, borrowers will need a credit
score (FICO) above 580,(which is extremely low), they’ll have to be
employed, and they’ll have to be current on their mortgage payments.
(for the last 6 months) In other words, lending standards are being
eased so the banks can dump as many high-risk mortgages on the FHA as
possible. Obama breezily refers to these abysmal lending standards as
“cutting through the red tape.”
Applicants will also be able to refinance under the Obama’s program
with loan balances up to (get this) 140 percent of the value of their
home. So, even if you owe $560,000 on a home that is currently worth
$400,000–and you don’t have a dime’s worth of equity in the house–have
no fear–you can still get money from Uncle Sugar. This isn’t a good
way to keep people in their homes. It just turns them into debt
slaves.
One last thing, all the talk about a “bank tax” is pure blather. The
banks will be more than happy to cough-up $5 billion or so if it means
they’ll be able to jettison the hundreds of billions in crappy loans
on their books. As far as they’re concerned, that’s money “well
spent”.
Mike Whitney  lives in Washington state. He is a contributor
to Hopeless: Barack Obama and the Politics of Illusion, forthcoming
from AK Press. He can be reached at fergie...@msn.com

[Nickname unavailable]

[Nickname unavailable]

On May 3, 11:18 am, Sir Ray <waterboi5...@hotmail.com> wrote:
> On May 2, 10:35 pm, hippy dippy dude <""\"\"\"@bet sweet.bipy"> wrote:> Who would have thought in 08 we would have an eight dollar McDonalds
>
> We did have $8.00 McDonald's meals - heck, they were raising the

> prices on certain dollar menu items to 1.19 back thenhttp://articles.latimes.com/2008/nov/26/business/fi-mcdon26
> and $4.00/gal gas in 2008http://money.cnn.com/2008/06/08/news/economy/gas_prices/> meal or four dollar a gallon gas or elimination of profit sharing and pensions?

>
> And there were companies certainly shedding pensions in 2008 and
> before - in 2009 the GAO issued a report investigating companies
> deliberating underfunding their pensions before dumping them onto the

> Pension Benefit Guaranty Corporationhttp://www.reuters.com/article/2009/11/19/businesspro-us-pensions-gao...> Who would have thought we have people in Washington doing their damnedest to turn us into a global 3rd world economy?

>
> Everyone knew the Republicans were corrupt obstructionists way before
> the 2008 election...

and look at this. how can we be shocked by their actions anymore.
stuff like this happens daily.

how can anyone vote for these monsters:Major GOP donor arrested in
$100 million veteran charity scam:one of America’s Most Wanted
fugitives who is accused of creating a fake charity for Navy veterans
that funneled some of the $100 million collected to Republican
candidates.





http://www.rawstory.com/rs/2012/05/02/major-gop-donor-arrested-in-100-million-veteran-charity-scam/


Major GOP donor arrested in $100 million veteran charity scam

By David Edwards
Wednesday, May 2, 2012 11:17 EDT

Share on facebookShare on redditShare on diggShare on twitterShare on
farkShare on stumbleupon

268



Topics: Bobby Thompson ♦ republican candidates ♦ Thompson

The U.S. Marshal Service announced Tuesday that it had captured one of
America’s Most Wanted fugitives who is accused of creating a fake
charity for Navy veterans that funneled some of the $100 million
collected to Republican candidates.
Between the early 2000s and 2010, a man using the alias “Bobby
Thompson” collected millions from unsuspecting donors for the charity
U.S. Navy Veterans Association (USNVA), which claimed to provide
support for members of the U.S. Armed Forces. Officials believe that
very little, if any, of the money was ever used as intended, according
to the U.S. Marshal Service.
To help legitimize his charity, Thompson allegedly donated part of the
ill-gotten funds to Republican candidates like former President George
W. Bush, former Republican presidential candidate John McCain and
House Speaker John Boehner.


Republican Virginia Attorney General Ken Cuccinelli reportedly
personally pleaded with Thompson for donations and received $55,000
for his effort, making Thompson Cuccinelli’s second-largest donor.
Cuccinelli was eventually forced to turn over the tainted money to
veterans support groups.
Over the years, Thompson also attended the 2008 Republican National
Convention and numerous fundraisers. The Roanoke Times obtained photos
of Thompson posing with Bush, Boehner and McCain — as well as Rep.
Adam Putnam (R-FL), former Bush adviser Karl Rove and former
Republican New York Mayor Rudy Giuliani.
Thompson fled in 2010 after learning of a criminal investigation in
several states. He was later charged with unlawful flight to avoid
prosecution, identity theft, fraud and money laundering.
A team of Deputy U.S. Marshals captured the fugitive in Portland,
Oregon at approximately 10:30 p.m. Monday night. Authorities were
still unaware of Thompson’s real name and he refused to make a
statement.
“This was one of our most challenging fugitive investigations to
date,” U.S. Marshal Pete Elliott said in a press advisory. “Our
investigators followed up leads all over the nation. Their diligence
and dedication directly led to the arrest in Portland. I am proud of
everyone that worked on this investigation and their efforts have
brought this scam artist to justice.”
Thompson is now being held in Multnomah County Jail while he waits to
be extradited to Northern Ohio.


Watch the video below from WPRI, broadcast May, 2, 2012.

[Nickname unavailable]

On May 3, 12:36 pm, "Eddie Haskell" <uyn...@szmoplm.com> wrote:
> "Sir Ray" <waterboi5...@hotmail.com> wrote in message

>
> news:f0fa63bc-0502-42d6...@z6g2000vbz.googlegroups.com...
>
>
>
> > On May 2, 10:35 pm, hippy dippy dude <""\"\"\"@bet sweet.bipy"> wrote:
> > Who would have thought in 08 we would have an eight dollar McDonalds
> > We did have $8.00 McDonald's meals - heck, they were raising the
> > prices on certain dollar menu items to 1.19 back then
> >http://articles.latimes.com/2008/nov/26/business/fi-mcdon26
> > and $4.00/gal gas in 2008
> >http://money.cnn.com/2008/06/08/news/economy/gas_prices/
> > meal or four dollar a gallon gas or elimination of profit sharing and
> > pensions?
> > And there were companies certainly shedding pensions in 2008 and
> > before - in 2009 the GAO issued a report investigating companies
> > deliberating underfunding their pensions before dumping them onto the
> > Pension Benefit Guaranty Corporation

> >http://www.reuters.com/article/2009/11/19/businesspro-us-pensions-gao...

> > Who would have thought we have people in Washington doing their damnedest
> > to turn us into a global 3rd world economy?
> > Everyone knew the Republicans were corrupt obstructionists way before
> > the 2008 election...
>
> Oh, look. Poor dear is back to his "obstructionist" mantra now that we've
> had bad economic data. Back when employment went down he was lauding the
> success of the Hussein agenda.
>
> Don't know whether to shit or wind their watches.
>
> Sucks to be a democrat these days..
>
> -Eddie Haskell

its bushs fault, and that is a correct statement. start a new goal in
your life, become self responsible, admit that your a liar, and that
you back fascist polices that sunk the american dream.

[Nickname unavailable]

On May 3, 12:05 pm, "Eddie Haskell" <uyn...@szmoplm.com> wrote:
> "BeamMeUpScotty" <ThenDestroyEveryth...@blackhole.nebulax.com> wrote in
> messagenews:4FA2AA9C...@blackhole.nebulax.com...

you called me the "N" word. you are the racist.

you can always tell what is on the mind of a conservative, its when
they accuse others, of what they themselves have on their minds.

your problem liar, is that a lot of people are now paying attention,
and have found out your type are liars.

[Nickname unavailable]

he is hoping to convince the low information, low functioning voter.
its getting harder to do that, as they lose their homes and jobs.

[Nickname unavailable]

so well said!!!

[Nickname unavailable]

> http://news.investors.com/Article/577794/201107081851/DOJ-Begins-Bank...
>
> -Eddie Haskell

you insinuate it.

[Nickname unavailable]

> http://www.huffingtonpost.com/william-k-black/how-did-a-relatively-sm...

>
>
>
> > "In 1992, Congress mandated that Fannie and Freddie increase their purchases
> > of mortgages for low-income and medium-income borrowers. Operating under
> > that requirement, Fannie Mae, in particular, has been aggressive and
> > creative in stimulating minority gains."
>
> What is wrong with that?
>
>
>
> > "The two companies are now required to devote 42% of their portfolios to
> > loans for low- and moderate-income borrowers"
>
>  It was the other 58% of the portfolio that sunk Fannie and Freddie
> the lower income loans that were subject to closer regulatory scrutiny
> performed much better than the rest.

this is correct.

[Gary Forbis]

On May 3, 9:25 am, "Eddie Haskell" <uyn...@szmoplm.com> wrote:
> "jim" <"sjedgingN0Sp"@m@mwt,net> wrote in message
>
> news:OqOdnY06F9vmMT_S...@bright.net...
>
>
>
> > Eddie Haskell wrote:
>
> >> "Fannie Mae and Freddie Mac buy mortgages from lenders and bundle them
> >> into
> >> securities; that provides lenders the funds to lend more"
>
> > It doesn't provide funds but it does change the bank's capital
> > ratio and that does allow for more loans. But that secondary
> > market has been doing that for 80 years.
>
> Bullshit lie. Fuck off. Die.
>
> "In 1992, Congress mandated that Fannie and Freddie increase their purchases
> of mortgages for low-income and medium-income borrowers. Operating under
> that requirement, Fannie Mae, in particular, has been aggressive and
> creative in stimulating minority gains."

Is this the section you are referencing:
http://uscode.house.gov/download/pls/12C46.txt

(7) the Federal National Mortgage Association and the Federal
Home Loan Mortgage Corporation have an affirmative obligation to
facilitate the financing of affordable housing for low- and
moderate-income families in a manner consistent with their
overall public purposes, while maintaining a strong financial
condition and a reasonable economic return; and
(8) the Federal Home Loan Bank Act [12 U.S.C. 1421 et seq.]
should be amended to emphasize that providing for financial
safety and soundness of the Federal Home Loan Banks is the
primary mission of the Federal Housing Finance Board.

[BeamMeUpScotty]

Then you are saying Obama and the Liberals are all LIARS.... or you are
saying you are a liar.


Which LIAR should we believe this time?

[BeamMeUpScotty]

The minimum that could be expected is to make money for all the
investors and depositors.... to force them to lose money to help the
poor neighborhoods, will take the money from the poor neighborhoods and
invest it in losing propositions that don't make the poor any money.


Did you also mean that they should only invest the poor neighborhood's
money into poor neighborhoods? So that when the neighborhood burns in
a riot and stores are looted, the neighborhood loses all their money
since their investments all failed.


You make a shitty investment counselor.... I don't want you to have
any power over any of MY investments.

[Eddie Haskell]

"Nickname unavailable" <Vid...@tcq.net> wrote in message
news:acca48d3-6449-4e42...@2g2000yqk.googlegroups.com...

On May 3, 12:05 pm, "Eddie Haskell" <uyn...@szmoplm.com> wrote:
> "BeamMeUpScotty" <ThenDestroyEveryth...@blackhole.nebulax.com> wrote in
> messagenews:4FA2AA9C...@blackhole.nebulax.com...
>
> > On 5/2/2012 10:35 PM, hippy dippy dude > wrote:
> >> Who would have thought in 08 we would have an eight dollar McDonalds
> >> meal or four dollar a gallon gas or elimination of profit sharing and
> >> pensions?
> >> Who would have thought we have people in Washington doing their
> >> damnedest to turn us into a global 3rd world economy?
>
> >>http://www.canadafreepress.com/index.php/article/46413
>
> > Who, That would be me.... I've been telling you this was going to
> > happen... I see what Obama is.
>
> Yeah, a third-world Marxist class warfare racist anti-American.
>
> Goddamn America.
>
> -Eddie Haskell

> you called me the "N" word. you are the racist.

Who gives a fuck? You elected a racist as president, so you can cry me a
fucking river over it, you lying racist hypocrite.

"Typical white person"

-Hussein

"Judge me by the people with whom I surround myself."

-Hussein

Hussein's associations:

Rev. Wright, whose church Hussein attended and supported financially for
over
20 years:

"Barack knows what it means living in a country and a culture that is
controlled by rich white people."

Rev. Lowery, hand picked by Hussein to deliver the inaugural benediction:

"Lord, in the memory of all the saints who from their labors rest, and in
the joy of a new beginning, we ask you to help us work for that day when
black will not be asked to get in back, when brown can stick around, when
yellow will be mellow, when the red man can get ahead, man; and when white
will embrace what is right."

Sonia Sotomayor, Hussein's pick for the SC:

"I would hope that a wise Latina woman with the richness of her experiences
would more often than not reach a better conclusion than a white male who
hasn't lived that life."

From Hussein's book:

"White man's greed runs a world in need."

Prof. Gates, anti-white racist who Obama says is a friend of his.

Obama advisor Van Jones:

"Only Suburban White Kids Shoot Up Schools"

"You've never seen a Columbine done by a black child"

"White polluters steered poison into minority communities"

"Coates, who said he was testifying before the commission as a whistle
blower and in violation of his Justice supervisor's instructions, said that
there is a "hostile atmosphere" in the civil rights division that did not
"reflect race neutral policies." He said the country's major civil rights
organizations are also biased against race-neutral enforcement."

http://tinyurl.com/3x5ts8o

"In emotional and personal testimony, an ex-Justice official who quit over
the handling of a voter intimidation case against the New Black Panther
Party accused his former employer of instructing attorneys in the civil
rights division to ignore cases that involve black defendants and white
victims. "

http://tinyurl.com/3x8q42h


-Eddie Haskell

[Eddie Haskell]

"Nickname unavailable" <Vid...@tcq.net> wrote in message

news:4fc80c14-43fc-4eeb...@z14g2000vbh.googlegroups.com...

You lie like a nigger. Now, go fuck yourself, you lying pile of shit.

"In 1992, Congress mandated that Fannie and Freddie increase their purchases
of mortgages for low-income and medium-income borrowers. Operating under
that requirement, Fannie Mae, in particular, has been aggressive and
creative in stimulating minority gains."

"The two companies are now required to devote 42% of their portfolios to
loans for low- and moderate-income borrowers"

"Although Fannie Mae actually has exceeded its target since 1994, it is
resisting any hike. It argues that a higher target would only produce more
loan defaults by pressuring banks to accept unsafe borrowers."

http://articles.latimes.com/1999/may/31/news/mn-42807

"The Bush administration today recommended the most significant regulatory
overhaul in the housing finance industry since the savings and loan crisis a
decade ago."

"Under the plan, disclosed at a Congressional hearing today, a new agency
would be created within the Treasury Department to assume supervision of
Fannie Mae and Freddie Mac, the government-sponsored companies that are the
two largest players in the mortgage lending industry."

http://tinyurl.com/6lp5qu

http://www.youtube.com/watch?v=M8LA8hPgQtI

http://www.opensecrets.org/news/2008/09/update-fannie-mae-and-freddie.html

[Bret Cahill]

> "Sen. John McCain's 2006 demand for regulatory action on Fannie Mae and
> Freddie Mac could have prevented current financial crisis, as HUMAN EVENTS
> learned from the letter shown in full text below."
>
> http://www.humanevents.com/article.php?id=28973
>
> Unlike Bush and McCain, as senator, Obama did nothing, other than earn the
> distinction of becoming the second largest recipient of F&F contributions in
> the entire congress, even in his short stint there.
>
> Bill Clinton himself said it best:
>
> "I think the responsibility the Democrats have may rest more in resisting
> any efforts by Republicans in the Congress or by me when I was President to
> put some standards and tighten up a little on Fannie Mae and Freddie Mac."
>
> -Bill Clinton
>
> ''These two entities -- Fannie Mae and Freddie Mac -- are not facing any
> kind of financial crisis,'' said Representative Barney Frank of
> Massachusetts, the ranking Democrat on the Financial Services Committee.
> ''The more people exaggerate these problems, the more pressure there is on
> these companies, the less we will see in terms of affordable housing.''

Why don't you borrow some money from your folks and start a business?

-- Mitt Romney

[jim]

BeamMeUpScotty wrote:
>
> On 5/3/2012 6:41 PM, jim wrote:
> >
> >
> > BeamMeUpScotty wrote:
> >
> >>
> >> So HIGH RISK loans aren't really HIGH RISK LOANS?
> >
> > Low income loans are not high risk loans.
> >
> > If you have someone who has a long history of paying $600/mo in rent
> > and they put 10% down and get a $500/mo mortgage, how is that a
> > high risk loan?
> >
> > You have absolutely no evidence that low income loans
> > were more risky than other loans. All the evidence
> > indicates they has a lower default rate than the rest
> > of the market.
>
> Then you are saying Obama and the Liberals are all LIARS.... or you are
> saying you are a liar.

I don't know what evidence Obama or liberals have put
forward regarding the level of risk involved in low
income lending.

I know that you have given no evidence that loans
on low income housing are more risky.
A loan on a half million dollar house by someone
with $50,000 in income is more risky than a loan on a
$70K house to someone with $20k in income.

Most of the loans that went into default after
the collapse of the housing bubble were not loans
to lower income neighborhoods.

There is no federal law or regulation that ever compelled
banks to make any high risk loans. High risk that was
taken by mortgage lenders was done on their own and
was done because the lenders believed they could gamble
and win big. It was only after they lost the gambles that the
search for a scapegoat began.

[Bret Cahill]

> "In emotional and personal testimony, an ex-Justice official who quit over
> the handling of a voter intimidation case against the New Black Panther
> Party accused his former employer of instructing attorneys in the civil
> rights division to ignore cases that involve black defendants and white
> victims. "
>
> http://tinyurl.com/3x8q42h

Stop whining, borrow some money from your folks and start a business.

-- Mitt Romney

[jim]

BeamMeUpScotty wrote:

>
> The minimum that could be expected is to make money for all the
> investors and depositors.... to force them to lose money to help the
> poor neighborhoods, will take the money from the poor neighborhoods and
> invest it in losing propositions that don't make the poor any money.

But the evidence shows that banks lost money on
lending to affluent neighborhoods and did not
lose money lending to poor neighborhoods.

You would like people to believe the opposite
is true without a shred of evidence to support
that claim.

[BeamMeUpScotty]

On 5/4/2012 11:21 AM, jim wrote:
>
>
> BeamMeUpScotty wrote:
>>
>> On 5/3/2012 6:41 PM, jim wrote:
>>>
>>>
>>> BeamMeUpScotty wrote:
>>>
>>>>
>>>> So HIGH RISK loans aren't really HIGH RISK LOANS?
>>>
>>> Low income loans are not high risk loans.
>>>
>>> If you have someone who has a long history of paying $600/mo in rent
>>> and they put 10% down and get a $500/mo mortgage, how is that a
>>> high risk loan?
>>>
>>> You have absolutely no evidence that low income loans
>>> were more risky than other loans. All the evidence
>>> indicates they has a lower default rate than the rest
>>> of the market.
>>
>> Then you are saying Obama and the Liberals are all LIARS.... or you are
>> saying you are a liar.
>
> I don't know what evidence Obama or liberals have put
> forward regarding the level of risk involved in low
> income lending.
>

http://www.youtube.com/watch?v=Lr1M1T2Y314&feature=player_embedded#!
TIME STAMP 6:29

> I know that you have given no evidence that loans
> on low income housing are more risky.

http://www.youtube.com/watch?v=9rifs5PuYUM&feature=related

[BeamMeUpScotty]

On 5/4/2012 11:26 AM, jim wrote:
>
>
> BeamMeUpScotty wrote:
>
>>
>> The minimum that could be expected is to make money for all the
>> investors and depositors.... to force them to lose money to help the
>> poor neighborhoods, will take the money from the poor neighborhoods and
>> invest it in losing propositions that don't make the poor any money.
>
> But the evidence shows that banks lost money on
> lending to affluent neighborhoods and did not
> lose money lending to poor neighborhoods.
>

http://www.youtube.com/watch?v=9rifs5PuYUM&feature=related

[Eddie Haskell]

"jim" <"sjedgingN0Sp"@m...@mwt.net> wrote in message
news:gpOdnSEa5tohkz7S...@bright.net...

Eddie Haskell wrote:

> >
> > Low income loans had fewer defaults and performed better
> > than the rest of the market.
>
> The answer to every stupid assed pretense of stupidity you posted is
> right,
> you fucking idiot.
>

> You keep posting from an article that was written
> in 1998 - before the housing bubble.

So fucking what? It outlines what STARTED the housing bubble, you stupid
dissembling pathetic DNC toady bastard.

"In 1992, Congress mandated that Fannie and Freddie increase their purchases
of mortgages for low-income and medium-income borrowers. Operating under
that requirement, Fannie Mae, in particular, has been aggressive and
creative in stimulating minority gains."

"The two companies are now required to devote 42% of their portfolios to
loans for low- and moderate-income borrowers"

"Although Fannie Mae actually has exceeded its target since 1994, it is
resisting any hike. It argues that a higher target would only produce more
loan defaults by pressuring banks to accept unsafe borrowers."

http://articles.latimes.com/1999/may/31/news/mn-42807

"The Bush administration today recommended the most significant regulatory
overhaul in the housing finance industry since the savings and loan crisis a
decade ago."

"Under the plan, disclosed at a Congressional hearing today, a new agency
would be created within the Treasury Department to assume supervision of
Fannie Mae and Freddie Mac, the government-sponsored companies that are the
two largest players in the mortgage lending industry."

http://tinyurl.com/6lp5qu

-Eddie Haskell

[jim]

Eddie Haskell wrote:
>
> "jim" <"sjedgingN0Sp"@m...@mwt.net> wrote in message
> news:gpOdnSEa5tohkz7S...@bright.net...
>
> Eddie Haskell wrote:
>
> > >
> > > Low income loans had fewer defaults and performed better
> > > than the rest of the market.
> >
> > The answer to every stupid assed pretense of stupidity you posted is
> > right,
> > you fucking idiot.
> >
>
> > You keep posting from an article that was written
> > in 1998 - before the housing bubble.

>
> So fucking what? It outlines what STARTED the housing bubble, you stupid
> dissembling pathetic DNC toady bastard.

No it doesn't outline what started the housing bubble.
The housing bubble started because both borrowers and lenders
believed there was great amounts of money to be made by
leveraging to buy bigger and more expensive houses. Lower
income housing was hardly even involved in the bubble.


There is nothing in the article that even vaguely hints at
the causes of the housing bubble. It is all innuendo.

Your claim is that more loans were given to the poor
then following there was a crash in housing therefore loans
to the poor caused the crash. The simple fact that A and
B both happened does not mean A caused B.


You want everyone to never mind that the loans to
the poor performed better than the rest of the market.
You hope nobody notices that there was widespread
fraud in every part of the mortgage market except for
the affordable loans to the poor communities. You hope that
no one sees that the highly inflated home prices that was
driving the bubble was in affluent neighborhoods and not
in the lower cost housing.

[jim]

BeamMeUpScotty wrote:
>
> On 5/4/2012 11:21 AM, jim wrote:
> >
> >
> > BeamMeUpScotty wrote:
> >>
> >> On 5/3/2012 6:41 PM, jim wrote:
> >>>
> >>>
> >>> BeamMeUpScotty wrote:
> >>>
> >>>>
> >>>> So HIGH RISK loans aren't really HIGH RISK LOANS?
> >>>
> >>> Low income loans are not high risk loans.
> >>>
> >>> If you have someone who has a long history of paying $600/mo in rent
> >>> and they put 10% down and get a $500/mo mortgage, how is that a
> >>> high risk loan?
> >>>
> >>> You have absolutely no evidence that low income loans
> >>> were more risky than other loans. All the evidence
> >>> indicates they has a lower default rate than the rest
> >>> of the market.
> >>
> >> Then you are saying Obama and the Liberals are all LIARS.... or you are
> >> saying you are a liar.
> >
> > I don't know what evidence Obama or liberals have put
> > forward regarding the level of risk involved in low
> > income lending.
> >
>
> http://www.youtube.com/watch?v=Lr1M1T2Y314&feature=player_embedded#!
> TIME STAMP 6:29
>

Are you talking about the sound bite from Obama that
says mortgage lending "should have been less risky"

That kinda shoots your whole case in the foot.

Obama was referring to the bank innovations that supposedly had
solved the problem of risk in reference to mortgage lending.
The financial sector had come up with derivative instruments
and shadow banks and these innovations were so complicated that
investors did not understood them, but the bankers assured the
investors that what they had invented was going to remove all risk
from the system so that an investor could invest as much as they
wanted and never lose. Investors flooded into the mortgage securities
market and a bubble formed and the rest is history.

None of that had anything to do with any govt mandates. The financial
innovations that supposedly managed and spread risk in a new and
superior way were entirely created by the private sector and were
completely unregulated by govt. And then when the whole thing
came crashing down the bankers told Congress that there was more
than $100 trillion in these credit contracts around the world that
would all come crashing down if Congress didn't bail them out.

The simple fact is you have zero facts that even remotely suggest
that loans to poor neighborhoods had greater risk than the rest
of the mortgage market. The data now shows those low income loans did
better than the rest of the market. It doesn't matter if you can find
a talking head who 15 years ago said those loans would not do well. That
was just a prediction and that prediction turned out to be wrong.

[jim]

BeamMeUpScotty wrote:
>
> On 5/4/2012 11:26 AM, jim wrote:
> >
> >
> > BeamMeUpScotty wrote:
> >
> >>
> >> The minimum that could be expected is to make money for all the
> >> investors and depositors.... to force them to lose money to help the
> >> poor neighborhoods, will take the money from the poor neighborhoods and
> >> invest it in losing propositions that don't make the poor any money.
> >
> > But the evidence shows that banks lost money on
> > lending to affluent neighborhoods and did not
> > lose money lending to poor neighborhoods.
> >
>
> http://www.youtube.com/watch?v=9rifs5PuYUM&feature=related

Doesn't say one word about lending to the low income communities.

It mentions 25 sub prime lenders that were the first to get into
trouble. None of those lenders that got caught with too much risk
against too few assets were covered by govt mandates about
lending to lower income communities.

[BeamMeUpScotty]

On 5/4/2012 1:10 PM, jim wrote:
>
>
> BeamMeUpScotty wrote:
>>
>> On 5/4/2012 11:21 AM, jim wrote:
>>>
>>>
>>> BeamMeUpScotty wrote:
>>>>
>>>> On 5/3/2012 6:41 PM, jim wrote:
>>>>>
>>>>>
>>>>> BeamMeUpScotty wrote:
>>>>>
>>>>>>
>>>>>> So HIGH RISK loans aren't really HIGH RISK LOANS?
>>>>>
>>>>> Low income loans are not high risk loans.
>>>>>
>>>>> If you have someone who has a long history of paying $600/mo in rent
>>>>> and they put 10% down and get a $500/mo mortgage, how is that a
>>>>> high risk loan?
>>>>>
>>>>> You have absolutely no evidence that low income loans
>>>>> were more risky than other loans. All the evidence
>>>>> indicates they has a lower default rate than the rest
>>>>> of the market.
>>>>
>>>> Then you are saying Obama and the Liberals are all LIARS.... or you are
>>>> saying you are a liar.
>>>
>>> I don't know what evidence Obama or liberals have put
>>> forward regarding the level of risk involved in low
>>> income lending.
>>>
>>
>> http://www.youtube.com/watch?v=Lr1M1T2Y314&feature=player_embedded#!
>> TIME STAMP 6:29
>>
>
> Are you talking about the sound bite from Obama that
> says mortgage lending "should have been less risky"

I can't argue with stupid.... that makes you a hopeless case.


You asked for the evidence and I produced it but you stupidly ignore it.
You are destined to be terminally stupid.

[jim]

I did not ask for evidence. I stated that you have produced no evidence
that low income loans were high risk loans. You still have produced no
evidence. You clearly have little understanding of what happened in the
mortgage markets. You have let someone else do your thinking for you and
have no evidence to support what you believe.

[Nickname unavailable]

On May 4, 9:59 am, "Eddie Haskell" <uyn...@szmoplm.com> wrote:
> "Nickname unavailable" <Vide...@tcq.net> wrote in message

you have been boxed in by the truth, and now you are a Johnny One
Note. you can always tell what is on the mind of a conservative, is
when they blame others, for what they themselves are thinking.

in haskells world, debt equals revenues, and liberals are fascists.

> "In 1992, Congress mandated that Fannie and Freddie increase their purchases
> of mortgages for low-income and medium-income borrowers. Operating under
> that requirement, Fannie Mae, in particular, has been aggressive and
> creative in stimulating minority gains."
>
> "The two companies are now required to devote 42% of their portfolios to
> loans for low- and moderate-income borrowers"
>
> "Although Fannie Mae actually has exceeded its target since 1994, it is
> resisting any hike. It argues that a higher target would only produce more
> loan defaults by pressuring banks to accept unsafe borrowers."
>
> http://articles.latimes.com/1999/may/31/news/mn-42807
>
> "The Bush administration today recommended the most significant regulatory
> overhaul in the housing finance industry since the savings and loan crisis a
> decade ago."
>
> "Under the plan, disclosed at a Congressional hearing today, a new agency
> would be created within the Treasury Department to assume supervision of
> Fannie Mae and Freddie Mac, the government-sponsored companies that are the
> two largest players in the mortgage lending industry."
>
> http://tinyurl.com/6lp5qu
>
> http://www.youtube.com/watch?v=M8LA8hPgQtI
>

> http://www.opensecrets.org/news/2008/09/update-fannie-mae-and-freddie...

[BeamMeUpScotty]

You are rowing in circles and I don't care to go along for the ride.

BYE BYE.

[jim]

BeamMeUpScotty wrote:

> >>
> >> You asked for the evidence and I produced it but you stupidly ignore it.
> >> You are destined to be terminally stupid.
> >>
> >
> > I did not ask for evidence. I stated that you have produced no evidence
> > that low income loans were high risk loans. You still have produced no
> > evidence. You clearly have little understanding of what happened in the
> > mortgage markets. You have let someone else do your thinking for you and
> > have no evidence to support what you believe.
>
> You are rowing in circles and I don't care to go along for the ride.

I spect you're used to people running
circles around you

[BeamMeUpScotty]

On 5/3/2012 6:41 PM, jim wrote:
>
>
> BeamMeUpScotty wrote:
>
>>
>> So HIGH RISK loans aren't really HIGH RISK LOANS?
>
> Low income loans are not high risk loans.
>
> If you have someone who has a long history of paying $600/mo in rent
> and they put 10% down and get a $500/mo mortgage, how is that a
> high risk loan?
>
> You have absolutely no evidence that low income loans
> were more risky than other loans. All the evidence
> indicates they has a lower default rate than the rest
> of the market.

Some reading material for you to get up to speed on Risk management.



Minimum Variance and Tracking Error: Combining Absolute and Relative
Risk in a Single Strategy

During the ongoing financial crisis, it has become clear that investing
in equities with an eye toward the long-term return premium can lead to
substantial periods of drawdown. It makes sense, therefore, to see a
renewed interest in products and strategies aimed at trying to capture
this premium at a potentially lower risk level. This strategy is not
something new; the low volatility phenomenon was described in the early
1990s by Haugen and Baker. More recently we have seen a related but
slightly different approach, namely, minimum variance, as described by
Clarke, de Silva and Thorley (2006). Not only have managers deployed
these strategies, but such is their popularity that we have recently
seen these techniques being deployed by benchmark providers and provided
as commercially available ETFs.

Although the two concepts are related and share a common goal (a better
risk return profile), there are slight nuances in either approach. Low
volatility strategies describe the outperformance of stocks with a lower
price fluctuation. Minimum variance takes into account correlations
between assets and looks at the volatility of the portfolio rather than
the individual securities. Rather than selecting stocks with low and
potentially shorting securities with a high (idiosyncratic) volatility,
minimum variance focuses on constructing generally long-only portfolios
in a way that minimizes the absolute risk.

In our latest white paper, we consider minimum variance investing, not
as an advocate, but to examine some of the characteristics of these
strategies and how they can potentially be blended with traditional
passive market cap weighted investing to improve returns.

[jim]

BeamMeUpScotty wrote:
>
> On 5/3/2012 6:41 PM, jim wrote:
> >
> >
> > BeamMeUpScotty wrote:
> >
> >>
> >> So HIGH RISK loans aren't really HIGH RISK LOANS?
> >
> > Low income loans are not high risk loans.
> >
> > If you have someone who has a long history of paying $600/mo in rent
> > and they put 10% down and get a $500/mo mortgage, how is that a
> > high risk loan?
> >
> > You have absolutely no evidence that low income loans
> > were more risky than other loans. All the evidence
> > indicates they has a lower default rate than the rest
> > of the market.
>
> Some reading material for you to get up to speed on Risk management.

If you want to get up to speed on
why there was a global financial meltdown
you will want to look at risk mismanagement, because
that is what explains it.

no matter what predicted risk there was for low income
lending before the fact, we now know (after the fact)
that the risk was low compared to the rest of
the market.
In the rest of the market risk management had
gone completely haywire.