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Please let me know when Barney Franks opinions become actual reality.
He was Chair of the House Financial Services Committee, which oversees the entire financial services industry, including the securities, insurance, banking, and housing industries. He knows what he's talking about. He admitted HUD's culpability on C-Span.
Rep. Frank was the Ranking Member of the Financial Services Committee between 1995 and 2007. That means he was in the MINORITY. He had no power to do anything but talk. If some are so taken by his opinions however, it has long been his opinion that the malfeasance of Republicans caused the Great Recession. Most knowledgeable people share in that opinion. Partisan excuse-makers of course do not.
Clinton had a NICE idea:..... help the poor and the minority to own homes
clinton had his directors of HUD :1) henry cisneros..then 2) Andrew Cuomo readjust the QUALITY STANDARDS, of the loads...fannie,freddie,ginnie(all GSE's) are the QUALIFIERS of ALL LOANS
by reducing the standard...people NO LONGER had to CONFORM to what was considered """too high of standards""" for the poor and the minority population....instaed of 20% down, having you payment less than 30% of your gross income, verifying income, credit history...everyone had the AVAILABILITY of getting a loan..even if they would not have ualified under the original rules
who is to blame...the government for mandating...the lenders for stupidly following what the government told them...the realtors, who wanted even bigger commisions..the sellers who whated to get thiers..and the buyers, for not knowing what they could afford
and yes a majority of the blame does go to the consumer and the seller too
fact the liberals changed the rules to MANIPULATE that more people bought home.. making it EASIER to get homes...causing housing to skyrocket
sellers wanted TOP dollar..even if it was UNREASONABLE
buyers had EASY CREDIT and LOWINTEREST LOANS with NO DOCUMANTATION to back it up...ie no- doc or low doc loans...to whom...the poor and self employed
what is the NORMAL yearly inflation rates for home...about 5% a year, so that a house will double in 20 years...what we got..houses tripled in less than 10 years
it was the government and the stupid buyers, with the greed of the sellers and their agents
anyone going to buy a home, SHOULD know what they can afford...ie if you make 50k..the TOP house would be 200k...not a 700k house
anyone buying a house SHOULD know that a mortgage payment is not just the principle and interest...but ALSO the HOI(home owners insurance) and the PROPERTY TAXES
anyone buying a house (or anything else on credit) SHOULD KNOW that an ADJUSTABLE RATE ..adjusts...and if the CONTRACT says 4% for the first 18 months then it will set to 6%+prime...dud its going to be ATLEAST 9% or more
anyone going for a mortgage SHOULD KNOW that the house is the collateral
when I bought my house I was OFFERED a 80/20, a 3 yr ARM,, and a few others to include an interest only...I KNEW what I wanted...a 20 or 30 yr FIXED with no pre-payment penalty
--------------------
a good consumer goes in educated
as a local clothing company once said..."an educated consumer is our best customer"
buyers had EASY CREDIT and LOWINTEREST LOANS by reducing the standard...people NO LONGER had to CONFORM to what was considered """too high of standards""" for the poor and the minority population....instead of 20% down Because of Congress. The little to no down payment is the kicker.
American Dream Downpayment Act of 2003
ZeroDownpayment Act
If you want to say which Administration is at fault how far back do you want to Go? Ike Or Carter? It grew legs under Clinton and got on steroids under Bush.
Mr. Greenspan said that he had publicly warned about the “underpricing of risk” in 2005 but that he had never expected the crisis that began to sweep the entire financial system in 2007.
“This crisis,” he told lawmakers, “has turned out to be much broader than anything I could have imagined. It has morphed from one gripped by liquidity restraints to one in which fears of insolvency are now paramount.” Many Republican lawmakers on the oversight committee tried to blame the mortgage meltdown on the unchecked growth of Fannie Mae and Freddie Mac, the giant government-sponsored mortgage-finance companies that were placed in a government conservatorship last month. Republicans have argued that Democratic lawmakers blocked measures to reform the companies. But Mr. Greenspan, who was first appointed by President Ronald Reagan, placed far more blame on the Wall Street companies that bundled subprime mortgages into pools and sold them as mortgage-backed securities. Global demand for the securities was so high, he said, that Wall Street companies pressured lenders to lower their standards and produce more “paper.”
“The evidence strongly suggests that without the excess demand from securitizers, subprime mortgage originations (undeniably the original source of the crisis) would have been far smaller and defaults accordingly far lower,” he said.
The problem is it's not actually analysis about jobs. It's making assumptions about jobs on the basis of sectors.
What assumptions? That less high paying jobs are available?
Quote:
Originally Posted by TheCityTheBridge
The difference between a college bubble (which may or may not exist) and the last real estate bubble is that the college bubble creates real skills that benefit young people for their entire career. Even with the rising cost of college, the income gap between college grads and high school-only grads suggests that college is a good deal for grads. There will, of course, be grads with tough times. Usually those tough times will get better, but in some cases they won't.
I wonder how many don't get a job in their field? I wonder how much in debt students are. And of course there is a college bubble. Look at the rising cost. Gee do you think government intervention with their guaranteed loan process is the culprit?
Quote:
Originally Posted by TheCityTheBridge
The National Center for Education Statistics suggests that grads are far more successful in attaining employment than non-grads: Fast Facts
In the 20-24 age range--a range with ~15% unemployment overall at the end of 2014--college grads had an unemployment rate of ~8%. Compare to ~19% unemployment for high school grads, and that is not counting the fact that bachelor's degree holders also earn higher salaries, in the aggregate, than college-only grads.
Wonder what The National Center for Education Statistics says about using high school grade point average instead?
Quote:
Originally Posted by TheCityTheBridge
Staying in the work force longer, yes. But still driving up the absolute number of retirees.
And working longer because the dollars purchasing power continues to drop.
Quote:
Originally Posted by TheCityTheBridge
For some jobs, yes, the minimum wage is the prevailing market rate. Markets are impacted by laws, minimum wage being one of those impacting laws. In the absence of a minimum wage, those companies might pay certain positions less. With a minimum wage law, they are not able to pay those positions less.
It''s a forced rate that only has meaning if it somehow lands on the actual free market rate.
Quote:
Originally Posted by TheCityTheBridge
Easy credit does not only come from the government. It also comes from the financial markets, which are imperfect and suffer from misconceptions and flawed assumptions. Investors heavily leveraged themselves to trade securitized, mortgage-backed assets. It worked great, producing huge returns, and then it didn't.
Small company based sure, the economy as a whole, easy money comes from government.
One can make an argument heavily leveraged themselves to trade securitized, mortgage-backed assets in housing, made it worse, but Government is the cause, anything else after that is a symptom.
Quote:
Originally Posted by TheCityTheBridge
The three crashes, housing, 1929, and 1837, are all tied with one common thread: rising asset prices leading to over-exuberant investment and leveraging--all eventually upset by a fall in the asset price. In 1837, the government actually tried to avoid the "easy credit" problem as the Central Bank refused to get into the lending business for speculation on western lands (the west at this point meaning portions of the Louisiana Purchase). Yet slavers borrowed from banks in New Orleans or New York (which themselves borrowed from banks in Paris and London) to buy land and slaves to produce cotton to sell to Britain, as the price per pound of cotton continued rising in the early 19th century. And then it didn't. The immense capital investment in slaves and land in the Deep South created a tremendous oversupply of cotton, which caused cotton's market price to collapse. When it collapsed, slavers were faced with selling their cotton at near-transport prices, vastly insufficient to repay their debts. US banks were faced with mass defaults by slavers on the cotton frontier and were unable to repay their loans from European banks. And when US banks tried to repossess slaves bought on credit from slavers, the resulting abundance of slaves for sale caused the price in slaves to collapse (slaves were in many cases the "assets" backing slavers' loans).
Temin was off base.
The increase of the money supply.
The total money supply
1830 $109 million
1833 (fall) $159 million in 1833, +45.9 percent
roughly the same time the number of banks increased from 330 to 506, +53%
and
1833 (spring) $150
1837 (spring) $267 million +84 percent
roughly the same time, the number of banks increased from 506 to 788, +56%
and Gresham's Law - bad money chases out good money, Debased Mexican copper coins which the Mexican government tried to keep at par value with silver.
Government intervention at it's finest. Government, foreign and domestic, was the cause.
If the United States had sound banking, meaning no BUS, and a monetary system founded fully on specie reserves, the drop in cotton prices and the almost non existent British credit would have been a temporary inconvenience
1929 Easy Money and Credit expansion
Keep those interest rates low even though the economy is booming right?
Lets flood Wall Street because the attractive low call(easy money on top of easy money) is a sure bet for stability right?
The greatest margin debt driven stock market bubble in history. Margin debt on Wall Street, in 1929, had jumped to 12% of GDP or the equivalent of $2 trillion in today’s economy compared to $450 billion in 2014.
Should I bring up the government manipulated gold prices too?
Housing rising asset prices? Gee wonder how that started?
Yes lets bypass the free market in housing and lower standards, because as we all know lowering standards doesn't change things. May as well allow little to no down payment loans while we're at it. Won't matter if those default, right? Because lenders love it when home owners have a low equity. The lenders in 1990 who made 1 in 243 mortgages little to no money down didn't know squat compared to the 1 in 3 loans in 2006 that were little to no money down, right?
In order to solve a problem, look at the cause not the symptoms.
Quote:
Originally Posted by TheCityTheBridge
Keep ignoring the issues and pretending that it's all the government's fault.
Government is the cause of all our bubbles. Keep ignoring history and you'll be doomed to repeat the same mistakes.
Last edited by Loveshiscountry; 09-09-2015 at 10:40 PM..
buyers had EASY CREDIT and LOWINTEREST LOANS by reducing the standard...people NO LONGER had to CONFORM to what was considered """too high of standards""" for the poor and the minority population....instead of 20% down Because of Congress. The little to no down payment is the kicker.
American Dream Downpayment Act of 2003
ZeroDownpayment Act
If you want to say which Administration is at fault how far back do you want to Go? Ike Or Carter? It grew legs under Clinton and got on steroids under Bush.
Actually, the reverse is true. It grew on steroids under Clinton's/Cisneros's HUD, and grew slightly under Bush.
Last edited by InformedConsent; 09-10-2015 at 01:19 AM..
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Look at the rising cost. Gee do you think government intervention with their guaranteed loan process is the culprit?
