Author Topic: There are still tons of laws on the books whose primary purpose it to...
paulg_68 
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Subject: There are still tons of laws on the books whose primary purpose it to...
get banks to lend money to people that the free market would otherwise not deem credit worthy.

Congress (and state legislatures) can't fix this problem without admitting they caused it.

coffee

 

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Yukishiro1 
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Subject: There are still tons of laws on the books whose primary purpose it to...
What problem?

The loans that caused the financial meltdown weren't loans the government forced banks to give. Banks that weren't part of the CRA had higher default rates on their mortgages than those who were.

It seems like the gubmint's guidelines caused fewer problems than leaving things up to the free market. coffee

 

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Mastara 
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Subject: There are still tons of laws on the books whose primary purpose it to...
many times I would have liked a loan and couldnt get one with a 720 credit score :/ QQ

 

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paulg_68 
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Subject: There are still tons of laws on the books whose primary purpose it to...
Yukishiro1 posted:
The loans that caused the financial meltdown weren't loans the government forced banks to give.

How do you differentiate between loans that "caused the finantial meltdown" and loans that didn't?

Why do you focus only on loans that "the government forced banks to give" and ignore ones they merely incentivized or encouraged them to give?

thinking

 

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Yukishiro1 
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Subject: There are still tons of laws on the books whose primary purpose it to...
How did they incentivize them? If you are going to cry about the mortgage deduction feel free I guess (and I don't disagree) but that's been around for ages and may have contributed but clearly wasn't the cause of the meltdown.

The highest rate of defaults was on people buying second homes for investment purposes. Those arn't the people Congress was trying to strongarm banks into lending to.

 

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paulg_68 
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Subject: There are still tons of laws on the books whose primary purpose it to...
Yukishiro1 posted:
How did they incentivize them?

The main way was by forcing fannie and freddie to buy up pretty much every loan to poor people regardless of whether or not they were good loans. Why should banks care about someone's creditworthiness if they can just take a small up front profit and and immediately dump the loan?

Yukishiro1 posted:
The highest rate of defaults was on people buying second homes for investment purposes. Those arn't the people Congress was trying to strongarm banks into lending to.

There's a lot of opportunity to make money riding a bubble to the top. Investors who don't get out in time always get killed.

The root cause of the problem is what caused the bubble. Not who got caught in it at the end.

coffee

 

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GrilledCheez 
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Subject: There are still tons of laws on the books whose primary purpose it to...
paulg_68 posted:

The root cause of the problem is what caused the bubble. Not who got caught in it at the end.



unfortunately the truth of that argument makes everything else you've said about it moot. if getting in and riding the bubble was smart and good and getting caught at the end was understandable and the analysis of those folks is worthless then nobody is at fault. because poor people who rode the bubble and didn't default are smart, and the banks who loaned to them are smart as well. poor people who defaulted when it crashed are irrelevant.

 

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paulg_68 
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Subject: There are still tons of laws on the books whose primary purpose it to...
The government caused the bubble.

They increased demand without a commensurate increase in supply. That drove the price up which brought in the speculators.

coffee

 

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Kjarhall 
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Subject: There are still tons of laws on the books whose primary purpose it to...
paulg_68 posted:
The government caused the bubble.

They increased demand without a commensurate increase in supply. That drove the price up which brought in the speculators.

coffee


How many false premises are you going to pack into this thread? confused

 

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Ashmaele 
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Subject: There are still tons of laws on the books whose primary purpose it to...
paulg_68 posted:
The government caused the bubble.

They increased demand without a commensurate increase in supply. That drove the price up which brought in the speculators.

coffee


laugh Yeah those speculators jumped in but ONLY after all those poor people drove prices through the roof!

Sometimes you just can't argue with this kind of stupid, you have to just stand back and laugh. laugh

 

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Aerlinthian 
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Subject: There are still tons of laws on the books whose primary purpose it to...
And as usual the leftist liars show up in full force to revise history.


Same ole, same ole.

 

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Ashmaele 
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Subject: There are still tons of laws on the books whose primary purpose it to...
laugh Look it's another one!

Poor people suddenly inundated banks in droves in 2004, stinking of filth, all intent on taking advantage of programs that had been in place for decades, and ONLY THEN did the speculators decide to jump in and drive up prices to unsustainable levels!

Revisionist indeed. laugh

Jesus christ you're an idiot.

 

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Bowlartz 
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Subject: There are still tons of laws on the books whose primary purpose it to...
"Yeah those speculators jumped in but ONLY after all those poor people drove prices through the roof!"

Except the same process has been in play for the last 25 years with the student loan industry. As more and more dollars are being pumped into "the education market", private "schools aka diploma mills" have opened by the 1000s as investment vehicles to take advantage of all the "free money".

People were being priced out of homes and now the exact same thing is happening in education and the government solution is....put out even more money.

Lets all watch the student loan bubble burst over the next few years, it will be amusing to see all of the people who blame everyone but government.

 

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theredkay1 
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Subject: There are still tons of laws on the books whose primary purpose it to...
paulg_68 posted:
Yukishiro1 posted:
How did they incentivize them?

The main way was by forcing fannie and freddie to buy up pretty much every loan to poor people regardless of whether or not they were good loans. Why should banks care about someone's creditworthiness if they can just take a small up front profit and and immediately dump the loan?




This is not what fannie and freddie did.

Those two played an ever shrinking role in the securitization process through the 2000's. Fannie and Freddie were guaranteeing only 30% of new mortgages at the peak of the bubble (down from historical average of around 50%). Over the same time period private securitizers (Countrywide for example) went from 10% to 40%.

Those private companies had over 5 times the default rate that Fannie/Freddie had. And that number would have been far higher if F/F had not been turned into a hidden bank bailout vehicle in 2007 when it started buying large quantities of high risk mortgages from banks when the first signs of financial disaster started to show up.

This also ignores how the process actually works. Lenders start a mortgage, pool a bunch of mortgages together and sell them to Fannie/Freddie. The risk of repayment should show up in the price of the mortgage pool. When lenders fudge the risk numbers, they are still liable for default after Fannie/Freddie buys the mortgage.

The right has been trying very hard to turn these facts upside down as it really threatens their faith based ideology.

Fannie and Freddie are deeply flawed but the criticism here is wrong.

 

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Yukishiro1 
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Subject: There are still tons of laws on the books whose primary purpose it to...
Ashmaele posted:
paulg_68 posted:
The government caused the bubble.

They increased demand without a commensurate increase in supply. That drove the price up which brought in the speculators.

coffee


laugh Yeah those speculators jumped in but ONLY after all those poor people drove prices through the roof!


Paul is a magical thinker. When you point out that the highest rate of defaults was on investment mcmansions he just sees that as further proof that gubmint encouraging banks to lend to poor people was the real problem. There is no arguing with that sort of stupid.

 

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AzureTyger 
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Subject: There are still tons of laws on the books whose primary purpose it to...
The right's stupidity is staggering sometimes.

 

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paulg_68 
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Subject: There are still tons of laws on the books whose primary purpose it to...
Ashmaele posted:
paulg_68 posted:
The government caused the bubble.

They increased demand without a commensurate increase in supply. That drove the price up which brought in the speculators.

coffee


laugh Yeah those speculators jumped in but ONLY after all those poor people drove prices through the roof!

You think that's what I said?

Seriously?

thinking

 

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Ashmaele 
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Subject: There are still tons of laws on the books whose primary purpose it to...
paulg_68 posted:
Ashmaele posted:
paulg_68 posted:
The government caused the bubble.

They increased demand without a commensurate increase in supply. That drove the price up which brought in the speculators.

coffee


laugh Yeah those speculators jumped in but ONLY after all those poor people drove prices through the roof!

You think that's what I said?

Seriously?

thinking


I quoted what you said and responded to what you said. If you meant something other than what you said, which I assume is what you're about to claim given the obvious stupidity displayed in the actual quote, then just say so and get it over with tired

You're one of several on this board on record blaming 100% of the housing crisis on poor people and government programs, while ignoring any and all evidence that suggests it was much more complex than that and COMPLETELY absolving bankers of any wrongdoing whatsoever, so I doubt there is really any reason to keep the conversation going anyway...but I so enjoy you making an idiot of yourself every time this topic comes up so if you want to continue, knock yourself out. We'll just continue to /point and laugh

 

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paulg_68 
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Subject: There are still tons of laws on the books whose primary purpose it to...
Ashmaele posted:
I quoted what you said and responded to what you said. If you meant something other than what you said, which I assume is what you're about to claim given the obvious stupidity displayed in the actual quote, then just say so and get it over with tired

Oh I meant exactly what I said. It's your interpretation of what I said that boggles the mind.

Ashmaele posted:
You're one of several on this board on record blaming 100% of the housing crisis on poor people and government programs

Government programs yes. Poor people get an equal share with everyone else who overpaid for houses and then couldn't live up to their commitments.

Ashmaele posted:
while ignoring any and all evidence that suggests it was much more complex than that and COMPLETELY absolving bankers of any wrongdoing whatsoever

I said all bankers who committed crimes should go to jail and the ones who merely made bad decisions and lost money should have to watch as their banks fail and are liquidated. It's not people on my side of the political fence that chose to bail them out.

coffee

 

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