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The government did not compel investment banks like Bear Streans, Lehman Brothers, Merrill Lynch and Goldman Sachs to provide capital for mortgages. They did that all on their own without government interference.
From your link:
Most early estimates showed that the subprime mortgage boom and the subsequent crash were very much concentrated in the private market, not the public market of Fannie Mae and Freddie Mac.[20] According to an estimate made by the Federal Reserve in 2008, more than 84 percent of the subprime mortgages came from private lending institutions in 2006.[29] The share of subprime loans insured by Fannie Mae and Freddie Mac also decreased as the bubble got bigger (from a high of insuring 48 percent to insuring 24 percent of all subprime loans in 2006).[29]
Securitization began to take off in the mid-1990s. The total amount of mortgage-backed securities issued almost tripled between 1996 and 2007, to $7.3 trillion. The securitized share of subprime mortgages (i.e., those passed to third-party investors via MBS) increased from 54% in 2001, to 75% in 2006.[90] In the mid-2000s as the housing market was peaking, GSE securitization market share declined dramatically, while higher-risk subprime and Alt-A mortgage private label securitization grew sharply.[6] As mortgage defaults began to rise, it was among mortgages securitized by the private banks. GSE mortgages – securitized or not – continued to perform better than the rest of the market.[6][164] Picking up the slack for the dwindling cash CDO market[165] synthetics were the dominant form of CDO's by 2006,[166] valued "notionally"[167] at an estimated $5 trillion.[166]
The private players were not subject to government mandates. Many believed they had actually found a way to reduce the risk, via CDOs, of making risking loans. If you don't factor in the risk then the subprime loans with higher interest rates and fees are more attractive than prime loans. That is what was driving the market in the mid 2000s. BTW: the GSEs never created a CDO.
With the creation of synthetic CDOs the investment banks didn't even need to buy or sell mortgages; they were just selling bets on on whether or not a pool of mortgages owned by others would succeed.
The CDO marketplace was the creation of the Free Market (ie Capitalism). At there best the CDOs are a way to raise large amounts of capital which is the lifeblood of a Capitalist system.
Banks which failed to offer loans to under served minorities were fined.
The Fed, for instance, warned banks that failure to comply with government guidelines regarding the delivery of "equal credit" could subject them to "civil liability for actual or punitive damages in individual or class actions, with liability for punitive damages being as much as $10,000 in individual actions and the lesser of $500,000 or 1 percent of the creditor's net worth in class actions."
"Banks who made subprime loans, borrowers who obtained them, and investment bankers who packaged those mortgages together as securities and spread them across the financial system are all "private actors""
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Quote:
Originally Posted by njforlife92
The Employee Free Choice Act is a lot more complicated than that and in fact would increase the amount of power unions have.
I know, that was my point.
Quote:
From an ideological perspective, I agree with Ron Paul that government does not have the right to take your property. I also agree with him that Jim Crow laws are unconstitutional. These are very consistent with the libertarian viewpoint and the non-agression principle.
If I eat a hamburger for dinner at 5 p.m. and at 7 p.m. I say "gee, I should've had a hot dog" can I go back in time and have a hot dog instead? No. The same principle applies here. Had Ron Paul won in 2008, he would not have repealed the Civil Rights Act. His campaign was not about that issue and he never said that's what he'd do as President. The reason he was asked about the civil rights act was because the main stream media and the political establishment fundamentally misunderstand libertarianism.
And the bold is my problem with your argument. Again, Paul has always argued that he was against the 1964 CRA for multiple reasons, even using the term "special rights" a couple of times.
First off, you dont know for a fact he wouldnt repeal it, I havent seen him speak on that question.
second, If you believe he wouldnt, then you are arguing, as I said before, that he wouldnt stand by the courage of his convictions and in that case, it means Ron Paul wouldnt have done anything while in office as most of the things he is against are popular.
And the bold is my problem with your argument. Again, Paul has always argued that he was against the 1964 CRA for multiple reasons, even using the term "special rights" a couple of times.
First off, you dont know for a fact he wouldnt repeal it, I havent seen him speak on that question.
second, If you believe he wouldnt, then you are arguing, as I said before, that he wouldnt stand by the courage of his convictions and in that case, it means Ron Paul wouldnt have done anything while in office as most of the things he is against are popular.
I think it's also worth pointing out that just 11% of the U.S. workforce is unionized, compared with closer to 20% just three decades ago.
Here is where I disagree with you as it relates to what Ron Paul would have done, if elected President, as it pertains to the Civil Rights Act of 1964. Yes, Dr. Paul believes the public accommodation section of the act violates property rights. Yes, he said he'd have voted against it because of that despite also believing the Jim Crow laws were unconstitutional and needed to be repealed. But repeal of the act was not a campaign issue he frequently discussed, nor was it something he actively advocated for as a candidate. I think going on MSNBC and expressing the views he did on the issue was standing by the courage of his convictions.
Now, you seem to think that if he was President and I was correct that he wouldn't push for the repeal of the Civil Rights Act of 1964, that would mean he's really just playing politics. Presidents have a lot of responsibilities and only limited political capital. Ron Paul's campaign was focused on ending the Federal Reserve, repealing the income tax, ending unconstitutional and costly executive agencies, ending the overseas empire, balancing the federal budget, and restoring limited government to speak in broad terms. So Paul would try to advance those issues as his top priorities, I think it's safe to assume. Furthermore, the President can't repeal a law, it has to go through Congress.
For starters, three of the four Youtube videos you posted were from prior to January 20, 2017 when Donald Trump became President.
Trump is continuing Obama's illegal war in Yemen and he's continuing the overseas empire of having over 900 military bases in 130 countries. Furthermore, he is weakening our alliances with our allies and seeking to dismantle free trade.
Trump has said he's not going to look at reforming social security, medicare, and medicaid. He's continuing to subsidize agriculture, green energy, and fossil fueld. He's increasing the defense budget by $54 billion despite the pentagon not complaining about budgetary issues.
Not only is Trump not going to end the IRS, he's planning to make our tax code even more complicated with a new welfare-transfer payment he's calling a childcare tax credit. He's continuing to spy on innocent Americans. He's keeping the DOE and while his cuts to the EPA are a step in the right direction, we should be abolishing the EPA.
I'm saying, Ron Paul supports and is in awe, what Trump is doing. I love Ron Paul. He set the stage for the anti-Establishment sentiment happening in the USA, that got Trump to the Whitehouse.
Ron would have never been able to do what Trump has done.
I meant exactly what I typed.
The Civil Rights Act is just that. It is statutory legislation.
If they wanted to be serious, it would have been an amendment to the US Constitution and give it teeth.
If Republicans are as racist as you say, they have all the power needed to toss it in the trash.
Banks which failed to offer loans to under served minorities were fined.
The Fed, for instance, warned banks that failure to comply with government guidelines regarding the delivery of "equal credit" could subject them to "civil liability for actual or punitive damages in individual or class actions, with liability for punitive damages being as much as $10,000 in individual actions and the lesser of $500,000 or 1 percent of the creditor's net worth in class actions."
"Banks who made subprime loans, borrowers who obtained them, and investment bankers who packaged those mortgages together as securities and spread them across the financial system are all "private actors""
I really don't know why this fact is so hard to understand. The investment banks were demanding a supply of subprime loans for their own purposes. They were not under a government mandate to supply capital for subprime loans. They believed that had discovered a profitable way of deposing of the subprime loans. In their scheme the subprime loans made for more attractive derivative products which were in demand by their customers.
Its why subprime loans exploded in the 2000s and why the investment banks started buying up subprime loan originators. They were not forced to do this. They were doing it because it was highly profitable, at least until it started to fall apart.
When investment banks couldn't find enough subprime loans to feed into their CDO creation machines they started creating synthetic CDOs. Synthetic CDOs had the advantage in that they didn't require the creation of new mortgages; they would generate income streams based on the performance of other securitized mortgage products. Let that sink in for a while; the unrestrained free market got so hot that investors were placing bets on the performance of mortgages products owned by others.
Here is a clip from the Big Short explaining synthetic CDOs.
Synthetics did not satisfy any government housing goals or generate any new capital for mortgages. However synthetics did play a significant role in creating the liquidity crisis once the housing bubble started to burst.
I meant exactly what I typed.
The Civil Rights Act is just that. It is statutory legislation.
If they wanted to be serious, it would have been an amendment to the US Constitution and give it teeth.
If Republicans are as racist as you say, they have all the power needed to toss it in the trash.
Of course the same would be true for an amendment, perhaps more difficult to repeal or alter, but amendments are not permanent changes. The only thing that keeps the Dred Scott decision (which proclaimed African Americans did not have the rights of citizens) from being the law of the land is the 14th amendment. There are those who support repealing or altering the 14th amendment including Trump.
I really don't know why this fact is so hard to understand. The investment banks were demanding a supply of subprime loans for their own purposes. They were not under a government mandate to supply capital for subprime loans. They believed that had discovered a profitable way of deposing of the subprime loans. In their scheme the subprime loans made for more attractive derivative products which were in demand by their customers.
I don't know why this fact is so hard to understand.
Banks which failed to offer loans to under served minorities were fined.
The Fed, for instance, warned banks that failure to comply with government guidelines regarding the delivery of "equal credit" could subject them to "civil liability for actual or punitive damages in individual or class actions, with liability for punitive damages being as much as $10,000 in individual actions and the lesser of $500,000 or 1 percent of the creditor's net worth in class actions."
Quote:
Originally Posted by WilliamSmyth
Its why subprime loans exploded in the 2000s and why the investment banks started buying up subprime loan originators. They were not forced to do this. They were doing it because it was highly profitable, at least until it started to fall apart.
Banks which failed to offer loans to under served minorities were fined.
The Fed, for instance, warned banks that failure to comply with government guidelines regarding the delivery of "equal credit" could subject them to "civil liability for actual or punitive damages in individual or class actions, with liability for punitive damages being as much as $10,000 in individual actions and the lesser of $500,000 or 1 percent of the creditor's net worth in class actions."
"To add a government stick to the process, the CRA decreed that federal banking regulators would consider how well banks were doing in meeting the goal of more multiculturalism in loaning when considering requests by banks to open new branches or to merge. "
Quote:
Originally Posted by WilliamSmyth
When investment banks couldn't find enough subprime loans to feed into their CDO creation machines they started creating synthetic CDOs. Synthetic CDOs had the advantage in that they didn't require the creation of new mortgages; they would generate income streams based on the performance of other securitized mortgage products. Let that sink in for a while; the unrestrained free market got so hot that investors were placing bets on the performance of mortgages products owned by others.
Here is a clip from the Big Short explaining synthetic CDOs.
Synthetics did not satisfy any government housing goals or generate any new capital for mortgages. However synthetics did play a significant role in creating the liquidity crisis once the housing bubble started to burst.
None of what your silly video said would have happened without Congress bypassing the free market in housing and forcing banks to make horrible loans. Do you actually think Congress would pass a bill like that and not enforce it?
When the American Low Downpayment Act was passed the free market no longer mattered. Little to no down payment loans are known failures. That's why banks rarely offered them. 1989 ~1 in 240 loans were 3 percent down or less. 2007 it was 1 in 3
No intervention in the free market by congress, no boom and bust. Treat the cause.
Last edited by Loveshiscountry; 03-08-2017 at 10:03 AM..
And the bold is my problem with your argument. Again, Paul has always argued that he was against the 1964 CRA for multiple reasons, even using the term "special rights" a couple of times.
First off, you dont know for a fact he wouldnt repeal it, I havent seen him speak on that question.
second, If you believe he wouldnt, then you are arguing, as I said before, that he wouldnt stand by the courage of his convictions and in that case, it means Ron Paul wouldnt have done anything while in office as most of the things he is against are popular.
Speaking of facts. You are uninformed on this issue. Gee that's a shocker.
Ron Paul was against the Civil Rights Act for one reason and one reason only. It's called property rights. You remember those don't you? One of the cornerstones of our founding.
Government has no say so in who a private individual chooses or chooses not to do work for. It's the same reason to be against Jim Crow. It's a moral issue which government should never, ever have anything to do with.
Last edited by Loveshiscountry; 03-08-2017 at 10:15 AM..
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