Who's fault is subprime.............

[Gringinho]

Quote from Mav88:

You can't blame bankers who were ceorced by race politics, and many of them were. And you have to lay most of the balme with the democrats as well as the poeple who took out the loans.
...

Exactly! You can blame the democrats or the republicans - and you should all fill your heads with details of who to blame, details on political bickering - and don't you stop to see the bigger picture, because the main stream media will fill in your blanks of your brain within your skull and bones.

"Don't worry, be happy."

A 101 message from the Ministry of Love, co-sponsored by the Ministry of Truth.
http://en.wikipedia.org/wiki/Room_101
http://en.wikipedia.org/wiki/History_of_the_Federal_Reserve_System

http://www.elitetrader.com/vb/showthread.php?threadid=137613

 

[slapshot]

Quote from Mecro:

This is a naive outlook.

3) Mortgage brokers would do ANYTHING and say ANYTHING to get a consumer to take a mortgage. If you don't think they were lying & convincing people to finance & re-finance against their best judgement, you are wrong. Standard sociopath salesman personality, these people are what they are.

4) The people who took upon them mortgages that they could not and would not pay off should face responsibility and ARE facing responsibility.

5) Blaming the consumer is idiotic. They had nothing to do with the banks writing out worthless paper and selling it to pension funds (foreign & domestic). They are getting theirs via foreclosures & dropping RE prices.

The only thing idiotic and naive is your post. You don't have a clue.

Let's get something straight: If demand is high enough, a supply will develop. If no demand, no supply - period.

People were CLAMORING, BEGGING and PRAYING to get into homes during the real estate rush. They called bank after bank until someone put their marginally qualified ass into a loan that got them what they wanted. The underwriters at mortgage companies responded to the massive consumer pressure to create exotic mortgages, which drove prices to absurd levels. Combine that with Greenspan monetary stupidity + poor regulation of derivitives and you have the current mess.

Mortgage loans are repeatedly disclosed - in writing. Multiple times. From when you do your initial application all the way until closing. You have to be a complete dumbshit to sign your name about 50 times along the way and not know what you are getting into. "Yes, I too am a victim of those evil brokers - I didn't know!" What a crock. And Brokers only explain what the program offerings are, they don't decide them. Blaming them overall for this mess is just plain ignorant. It's like blaming the car salesman for you picking out the wrong car.

You think people are taking responsiblity? They are fleeing homes in droves! At the drop of a hat! Never before in history has their been so many people saying "Oh well, I guess I have a foreclosure now." It used to be that people would take a second and third job to pay the mortgage. Now they bail when it suits them or if they made a bad investment they don't like. It has become almost fashionable. Combine that with George W signing the bill that relieved people of owing capital gains taxes on foreclosing a primary residence, and people are flocking for the exits if they paid too much for their house.

So please take your victim-mentality bleeding heart somewhere else.

 

[Mav88]

Check out this 1999 New York Times article:

http://query.nytimes.com/gst/fullpa...sec=&spon=&partner=permalink&exprod=permalink


"Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

...

''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.''



this is amazing for 1999:


In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.

''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.''

 

[Mav88]

In the blame game though I have to ask what was the catalyst, after all subprime people were not clamoring for mcmansions in the 80's, so what changed them?

I think the only reasonable answer was the 1995 revisions to the CRA by the Clintonites. That started banks looking for subprime, which started people thinking 'hey why not me' which started the buck passing securitization, repeal of Glass-Steagall, faulty ratings ect.

When forced to consider sub-primes by Clinton, this was the markets answer . Naturally everyone is going to act in a way that benefits them, but what began this market distortion- that's the question.

Bill Clinton and the demo left, that's who.

 

[gnome]

Quote from Mav88:

Check out this 1999 New York Times article:

http://query.nytimes.com/gst/fullpa...sec=&spon=&partner=permalink&exprod=permalink


"Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

...

''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.''



this is amazing for 1999:


In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.

''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.''

Isn't it amazing?

Some said, "Bad idea".

Others recognized the risk as it unfolded but were rebuffed in their efforts to reign it in or regulate.

DemoCraps VEHEMENTLY opposed ANY policy or regulation to throttle.

And now we have what many observant, intelligent people saw coming.

And we ELECTED people to do this crap to us?

 

[Mav88]

Exactly! You can blame the democrats or the republicans - and you should all fill your heads with details of who to blame, details on political bickering - and don't you stop to see the bigger picture, because the main stream media will fill in your blanks of your brain within your skull and bones.

"Don't worry, be happy."

A 101 message from the Ministry of Love, co-sponsored by the Ministry of Truth.

Gringinho, I am sorry for your life.

 

[Mav88]

gnome,

What's really amazing is the politics, the democrats will disown everything they did as if it never happened, and it will sell!

 

[gnome]

Quote from Mav88:

gnome,

What's really amazing is the politics, the democrats will disown everything they did as if it never happened, and it will sell!

Fortunately, there are video clips from C-Span.. The DemoCraps vehemence is almost startling. They couldn't have been more angry about regulating the policy or FNM if you'd raped their sister.

It's all VERY clear.

 

[Humpy]

Quote from Humpy:

It pains me to see you guys teetering on the edge of disaster BUT.
The banks can't really issue billions of new shares because hardly anybody wants to buy them. The underwriters certainly don't want to be lumbered with them.
The rescue package may not be perfect but it's ALL the USA has got to get back on track imho. The barn door is half shut now but must have the House of Reps close it before what's left of the economy disappears.
The "religious nut" view that the economy must somehow heal itself without any medicine is plainly ridiculous and highly dangerous.
If the world's economic driving force commits suicide then we are all f*cked good and proper.
Buffett is happy grabbing large slices of GE etc. but it's definately not the answer to the man in the street wanting to meet his bills. It's the rednecks that say tough luck to the "trailer trash" !!
Do the decent thing US Reps for the majority of Americans and it's the right thing to do too luckily.

Happy to see good sense overcame the anger and the bill was passed.
Of course people should take responsibility for their actions. This could be built in to a NEW setup once the crisis is over.
Another bad result of the "dog eat dog" mentality is that there are too few big banks left. This is bad for competition. I would say 10 is about the optimum amount, that is if enough honest people can be found to manage them properly. Sadly regulators are needed for even this !! The results of the culture of GREED are now obvious.

 

[runningman]

Quote from gnome:

Fortunately, there are video clips from C-Span.. The DemoCraps vehemence is almost startling. They couldn't have been more angry about regulating the policy or FNM if you'd raped their sister.

It's all VERY clear.

thank g-d i'm happy to see someone here with a brain. i hate how the democraps made the i-banks lever up to 30 to one and made them create those derivatives that no one (including the i-banks) actually understood. then they threatened greenspan with exposing photos of him in his bathtub reading so he would slash interest rates and also be on record supporting the use of adjustable rate mortgages.

ps they also went out and made all those white, middle class tycoons go out and try to flip properties.