Obamarama - daily discussion on our 44th president
#871
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Yes, the DJIA is now Obama's fault too. Nothing bad ever happened financially before 1/20/09.
Or, we could just look at the alternative of not having bailouts, and we can watch the Dow drop even faster. Sounds great.
Or, we could just look at the alternative of not having bailouts, and we can watch the Dow drop even faster. Sounds great.
#873
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#876
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^^We have yet to see America's largest bank failure....Citi is trading at 1.23. I consider them being nationalized as a failure...thats just me, and its only a matter of time. I think the point is that no one has any faith in all of the spending Obama is doing. It isn't his "fault" but he isn't doing anything to get us out of it, despite is frivolous spending.
#877
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Uh as far as history goes, I indeed was part of the biggest bank failure. Look it up!
I'll never forget that wonderful night when I got the call.
"FDIC seized us!"
Far as faith, that was lost long before he reached office, thats why companies were and still are being bailed out, consumers are sketchy, and my 40 is costing me more.. its a ****ty situation.... and Yeah you are right, frivolous spending indeed!
Sucks... really sucks!
EDIT PS:
I am against the bailouts and stimulus plans.
I'll never forget that wonderful night when I got the call.
"FDIC seized us!"
Far as faith, that was lost long before he reached office, thats why companies were and still are being bailed out, consumers are sketchy, and my 40 is costing me more.. its a ****ty situation.... and Yeah you are right, frivolous spending indeed!
Sucks... really sucks!
EDIT PS:
I am against the bailouts and stimulus plans.
#881
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Washington Mutual.
http://www.nytimes.com/2008/09/26/business/26wamu.html
Washington Mutual, the giant lender that came to symbolize the excesses of the mortgage boom, was seized by federal regulators on Thursday night, in what is by far the largest bank failure in American history.
#882
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Ah, the CRA comes up again.
How many of these sub-prime mortgages were made by banks under the CRA's regulation? Why aren't these banks crying "The CRA made me do i"t?
A different look at the CRA's role of this crisis.
Even if the above was just a liberal conspiracy, who is contesting the percentage of subprime loans under CRA regulated banks and non-CRA regulated banks?
How many of these sub-prime mortgages were made by banks under the CRA's regulation? Why aren't these banks crying "The CRA made me do i"t?
A different look at the CRA's role of this crisis.
Fresh off the false and politicized attack on Fannie Mae and Freddie Mac, today we’re hearing the know-nothings blame the subprime crisis on the Community Reinvestment Act — a 30-year-old law that was actually weakened by the Bush administration just as the worst lending wave began. This is even more ridiculous than blaming Freddie and Fannie.
The Community Reinvestment Act, passed in 1977, requires banks to lend in the low-income neighborhoods where they take deposits. Just the idea that a lending crisis created from 2004 to 2007 was caused by a 1977 law is silly. But it’s even more ridiculous when you consider that most subprime loans were made by firms that aren’t subject to the CRA. University of Michigan law professor Michael Barr testified back in February before the House Committee on Financial Services that 50% of subprime loans were made by mortgage service companies not subject comprehensive federal supervision and another 30% were made by affiliates of banks or thrifts which are not subject to routine supervision or examinations. As former Fed Governor Ned Gramlich said in an August, 2007, speech shortly before he passed away: “In the subprime market where we badly need supervision, a majority of loans are made with very little supervision. It is like a city with a murder law, but no cops on the beat.”
Not surprisingly given the higher degree of supervision, loans made under the CRA program were made in a more responsible way than other subprime loans. CRA loans carried lower rates than other subprime loans and were less likely to end up securitized into the mortgage-backed securities that have caused so many losses, according to a recent study by the law firm Traiger & Hinckley (PDF file here).
Finally, keep in mind that the Bush administration has been weakening CRA enforcement and the law’s reach since the day it took office. The CRA was at its strongest in the 1990s, under the Clinton administration, a period when subprime loans performed quite well. It was only after the Bush administration cut back on CRA enforcement that problems arose, a timing issue which should stop those blaming the law dead in their tracks. The Federal Reserve, too, did nothing but encourage the wild west of lending in recent years. It wasn’t until the middle of 2007 that the Fed decided it was time to crack down on abusive pratices in the subprime lending market. Oops.
Better targets for blame in government circles might be the 2000 law which ensured that credit default swaps would remain unregulated, the SEC’s puzzling 2004 decision to allow the largest brokerage firms to borrow upwards of 30 times their capital and that same agency’s failure to oversee those brokerage firms in subsequent years as many gorged on subprime debt. (Barry Ritholtz had an excellent and more comprehensive survey of how Washington contributed to the crisis in this week’s Barron’s.)
There’s plenty more good reading on the CRA and the subprime crisis out in the blogosphere. Ellen Seidman, who headed the Office of Thrift Supervision in the late 90s, has written several fact-filled posts about the CRA controversey, including one just last week. University of Oregon professor and economist Mark Thoma has also defended the CRA on his blog. I also learned something from a post back in April by Robert Gordon, a senior fellow at the Center for American Progress, which ends with this ditty:
The Community Reinvestment Act, passed in 1977, requires banks to lend in the low-income neighborhoods where they take deposits. Just the idea that a lending crisis created from 2004 to 2007 was caused by a 1977 law is silly. But it’s even more ridiculous when you consider that most subprime loans were made by firms that aren’t subject to the CRA. University of Michigan law professor Michael Barr testified back in February before the House Committee on Financial Services that 50% of subprime loans were made by mortgage service companies not subject comprehensive federal supervision and another 30% were made by affiliates of banks or thrifts which are not subject to routine supervision or examinations. As former Fed Governor Ned Gramlich said in an August, 2007, speech shortly before he passed away: “In the subprime market where we badly need supervision, a majority of loans are made with very little supervision. It is like a city with a murder law, but no cops on the beat.”
Not surprisingly given the higher degree of supervision, loans made under the CRA program were made in a more responsible way than other subprime loans. CRA loans carried lower rates than other subprime loans and were less likely to end up securitized into the mortgage-backed securities that have caused so many losses, according to a recent study by the law firm Traiger & Hinckley (PDF file here).
Finally, keep in mind that the Bush administration has been weakening CRA enforcement and the law’s reach since the day it took office. The CRA was at its strongest in the 1990s, under the Clinton administration, a period when subprime loans performed quite well. It was only after the Bush administration cut back on CRA enforcement that problems arose, a timing issue which should stop those blaming the law dead in their tracks. The Federal Reserve, too, did nothing but encourage the wild west of lending in recent years. It wasn’t until the middle of 2007 that the Fed decided it was time to crack down on abusive pratices in the subprime lending market. Oops.
Better targets for blame in government circles might be the 2000 law which ensured that credit default swaps would remain unregulated, the SEC’s puzzling 2004 decision to allow the largest brokerage firms to borrow upwards of 30 times their capital and that same agency’s failure to oversee those brokerage firms in subsequent years as many gorged on subprime debt. (Barry Ritholtz had an excellent and more comprehensive survey of how Washington contributed to the crisis in this week’s Barron’s.)
There’s plenty more good reading on the CRA and the subprime crisis out in the blogosphere. Ellen Seidman, who headed the Office of Thrift Supervision in the late 90s, has written several fact-filled posts about the CRA controversey, including one just last week. University of Oregon professor and economist Mark Thoma has also defended the CRA on his blog. I also learned something from a post back in April by Robert Gordon, a senior fellow at the Center for American Progress, which ends with this ditty:
Even if the above was just a liberal conspiracy, who is contesting the percentage of subprime loans under CRA regulated banks and non-CRA regulated banks?
#883
Yeah because a bunch of car nerds on an internet forum are knowledgeable enough in economic theory that they could "figure out" what real economists haven't been able to agree on for almost 20 years.
People are so silly sometimes.
People are so silly sometimes.
#884
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Obama Has No Mandate For Radicalism
Where the U.S. government usually consumes 21 percent of gross domestic product, this Obama budget spends 28 percent in 2009 and runs a deficit of $1.75 trillion, or 12.7 percent of GDP. That is four times the largest deficit of George W. Bush and twice as large a share of the economy as any deficit run since World War II.
Add that 28 percent of GDP spent by the U.S. government to the 12 percent spent by states, counties and cities, and government will consume 40 percent of the economy in 2009.
We are not "headed down the road to socialism." We are there.
Add that 28 percent of GDP spent by the U.S. government to the 12 percent spent by states, counties and cities, and government will consume 40 percent of the economy in 2009.
We are not "headed down the road to socialism." We are there.
#885
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That's not news. That's an editorial and the author would prefer that we have no more economy than a spending spike of 40%.
... can't type any more... government... watching me....
... can't type any more... government... watching me....