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Yeah, I don't lend more money to someone who's not capable of paying it back.
Attention, Mr. Finance...if lenders could tell in advance which among thousands of potential borrowers were going to default....there would never be any defaults.
Quote:
Originally Posted by InformedConsent
I read it. It doesn't explain how knowingly extending more bad debt, purposely incurring more defaults, and racking up higher levels of foreclosures helps maintain housing values. In fact, it doesn't...
Not even this part...
Since the bottom fell out of the mortgage market, the F.H.A. has assumed a crucial role in the nation’s housing market.
The issue has polarized Congress. Republicans, who led efforts to rein in Fannie Mae and Freddie Mac before those companies ran into trouble, are now seeking to bridle the F.H.A. Many Democrats insist the F.H.A. is playing a vital role in the housing market, which is only just starting to stabilize.
"F.H.A. has stepped into the void left by the private market," Representative Maxine Waters, Democrat from California, said at the hearing. "Let’s be clear; without F.H.A., there would be no mortgage market right now."
Rep. FRANK: Let me ask you, Mr. Secretary—and again I appreciate that there is not a lot of rhetoric in here about how terrible these are. I appreciate that you think we should enhance the regulation, but I get the impression that you were talking more about guarding against potential future problems developing, rather than feeling that there is an urgent need to stave off some crisis. Are we in a crisis now with these entities?
Treas. Sec. SNOW: No, that is a fair characterization, Congressman Frank, of our position. We are not putting this proposal before you because of some concern over some imminent danger to the financial system for housing; far from it.
Imminent: close in time; about to occur
2008 is not close in time to 2003. Snow agreed that a new independent Housing GSE regulator was needed to "protect the financial system and the taxpayer." He, of course, was correct. Unfortunately, Barney Frank disagreed, Frank got his way, and Fannie and Freddie imploded in 2008.
"Mr. ROSS: Secretary Snow and Secretary Martinez, we thank you both for your testimony. And I want to share with you, I have proposed to create an independent regulator in the Treasury Department with greater enforcement powers to oversee the three housing GSEs, Fannie, Freddie and the Federal Home Loan Banks. And I think this proposal is important not only because it creates a new agency in Treasury, but also because it includes regulation of all three housing GSEs, and it mandates the new agency Director to work with other financial institution regulators through FFEIC. This country needs a world-class regulator of the housing finance sector, and I think we all know that Treasury has the expertise to create one. Experts believe that all three GSEs need to be in the mix if we want to achieve effective safety and soundness oversight. These are the largest derivative players in the world. We are talking in each case about portfolios that are in excess of half a trillion dollars in interest rate derivatives.
...So, Secretary Snow, we have an historic opportunity here to create the optimal world-class regulatory framework to protect the financial system and the taxpayer, and I think this is the time for us to show leadership. We heard from Federal Reserve Chairman Greenspan. He said we need all three GSEs included, to view GSEs in total. You have said all three should be in. We know it is the right thing to do. We know momentum is building for it. Why don't we just do it? Secretary SNOW: Well, Congressman, I am in broad agreement with everything you have said." Treasury Dept. Views on the regulation of government sponsored enterprises.
Quote:
Go back and read the history. This was entirely a dispute over whether Fannie Mae had complied properly with revised federal accounting standards even though the principles employed by Fannie had been approved by its own internal auditors and had been cleared in concept by federal auditors when an advance outline of Fannie's proposed accounting treatments was reviewed for compliance with the modified regulations.
Incorrect. The quote I provided above shows that attempts were made as early as 2003 to protect the financial system and the taxpayer. Barney Frank was an obstacle, and a successful one at that. Thanks to Barney Frank, Fannie and Freddie in 2008...
Imminent: close in time; about to occur. 2008 is not close in time to 2003. Snow agreed that a new independent Housing GSE regulator was needed to "protect the financial system and the taxpayer." He, of course, was correct. Unfortunately, Barney Frank disagreed, Frank got his way, and Fannie and Freddie imploded in 2008.
LOL.
Originally Posted by saganista
There was no financial crisis at the GSE's in 2003
Originally Posted by InformedConsent
False.
Try to change your stripes much, Tiger?
Quote:
Originally Posted by InformedConsent
Incorrect. The quote I provided above shows that attempts were made as early as 2003 to protect the financial system and the taxpayer. Barney Frank was an obstacle, and a successful one at that. Thanks to Barney Frank, Fannie and Freddie in 2008...FHA, soon to follow.
Attempts were made as early as 2003 to railroad the GSE's out of market share. All the work on real GSE reform done on Capitol Hill in 2003 was scuttled by the White House. If they'd wanted modernizations over safety and soundness issues, they could have had them. That's not what they were interested in.
Originally Posted by saganista
There was no financial crisis at the GSE's in 2003
Originally Posted by InformedConsent
False.
Try to change your stripes much, Tiger?
Hmmm... How is having to recognize a $9 Billion loss not a crisis, not to mention a pretty big tip-off that someone needs to keep a closer eye on the GSE's?
Quote:
Attempts were made as early as 2003 to railroad the GSE's out of market share. All the work on real GSE reform done on Capitol Hill in 2003 was scuttled by the White House. If they'd wanted modernizations over safety and soundness issues, they could have had them. That's not what they were interested in.
Barney Frank was President?
I know this is a foreign concept to you, but better independent oversight of "the largest derivative players in the world" beginning back in 2003 before the GSE's imploded in 2008 would have been a sound proactive course of action.
Again...
"Mr. ROSS: Secretary Snow and Secretary Martinez, we thank you both for your testimony. And I want to share with you, I have proposed to create an independent regulator in the Treasury Department with greater enforcement powers to oversee the three housing GSEs, Fannie, Freddie and the Federal Home Loan Banks. And I think this proposal is important not only because it creates a new agency in Treasury, but also because it includes regulation of all three housing GSEs, and it mandates the new agency Director to work with other financial institution regulators through FFEIC. This country needs a world-class regulator of the housing finance sector, and I think we all know that Treasury has the expertise to create one. Experts believe that all three GSEs need to be in the mix if we want to achieve effective safety and soundness oversight. These are the largest derivative players in the world. We are talking in each case about portfolios that are in excess of half a trillion dollars in interest rate derivatives.
...So, Secretary Snow, we have an historic opportunity here to create the optimal world-class regulatory framework to protect the financial system and the taxpayer, and I think this is the time for us to show leadership. We heard from Federal Reserve Chairman Greenspan. He said we need all three GSEs included, to view GSEs in total. You have said all three should be in. We know it is the right thing to do. We know momentum is building for it. Why don't we just do it? Secretary SNOW: Well, Congressman, I am in broad agreement with everything you have said." Treasury Dept. Views on the regulation of government sponsored enterprises.
But no-o-o, we did it Barney Frank's way, and got this from the GSE's in 2008:
Hmmm... How is having to recognize a $9 Billion loss not a crisis, not to mention a pretty big tip-off that someone needs to keep a closer eye on the GSE's?
Without seeking to deprecate any of the actually legitimate and important issues that were involved, it's moving numbers around on a piece of paper in order to accommodate a different interpretation of a recently revised set of accounting standards. Actual operations for the years in question were already long over and done with.
Quote:
Originally Posted by InformedConsent
I know this is a foreign concept to you, but better independent oversight of "the largest derivative players in the world" beginning back in 2003 before the GSE's imploded in 2008 would have been a sound proactive course of action.
On what basis is that judgment made? Hindsight? There is even in that case no reason to believe that the imposition of a Treasury czar to rule over the GSE's would have in any way improved or made more secure any of their operations. There is every reason to believe that the czar's role would have been to harm stockholders by reining the GSE's in out of lucrative secondary mortgage markets in order to create more room for Wall Street.
It would be prudent to note also that the GSE's did not precipitate the credit crisis, and that they did not "implode". Their doors remained open as they were wisely put into federal conservatorship -- the purpose of which is to conserve assets -- to protect them from the on-going collapse of asset markets in which they of necessity had significant exposure, a collapse that was in a nutshell precipitated by the reckless operations of a network of financial entities headed up by the Wall Street investment banks. Both the Bush administration and the Fed had been urged to take closer looks at disturbing trends arising within those networks. But we were assured that everything was well in hand. That wasn't the case.
Attention, Mr. Finance...if lenders could tell in advance which among thousands of potential borrowers were going to default....there would never be any defaults.
Usually when you don't have a job or income to justify the price, don't have a down payment or have a history of poor credit, that should clue them.
They ignored all that due to the democrats in congress wanting to be sure low-income and poor applicants wouldn't be discriminated against.
Again, they made no such claim. The claim in the projection is that unemployment would peak sooner and at a lower level with a stimulus package than without one. Period.
Never ruled out. It wasn't ruled in BY ANYONE because conditions in early January did not warrant it.
Job losses are likely to continue this year, as economists surveyed by Bloomberg News in December forecast the jobless rate to rise to 8.2 percent by the end of 2009 from 6.7 percent in November. Obama Says U.S. Must Act Swiftly to Address Economy
Apparently what you wanted was a Prophet, not a President. That's not very realisitc.
And apparently you didn't read your own link.
President-elect Barack Obama said that Democrats and Republicans need to act with urgency to address the “great and growing” economic crisis, warning of double-digit unemployment if swift action isn’t taken.
“These are America’s problems, and we must come together as Americans to meet them with the urgency this moment demands,” he said today in his weekly radio address. “If we don’t act swiftly and boldly, we could see a much deeper economic downturn that could lead to double-digit unemployment.”
He was given everything he wanted, but the spending bill did nothing to slow job loss and will, according to CBO, harm our long-term economic growth. Hundreds of billions have been tossed down a political rat hole trying to prove our money is more effectively spent by the federal government. Leftist nanny-state economic policies have never worked in the past and they have all too predictably failed again.
LOL. Keep harping on that unemployment number. It will be one of the last to turn around. You've already lost GDP, PCE, GDPI, consumer confidence, business confidence, etc., etc.,etc.,etc.,etc.,etc....
The Conference Board Consumer Confidence Index®, which had declined in September, deteriorated further in October. The Index now stands at 47.7 (1985=100), down from 53.4 in September. The Present Situation Index decreased to 20.7 from 23.0 last month. The Expectations Index declined to 65.7 from 73.7 in September.
Usually when you don't have a job or income to justify the price, don't have a down payment or have a history of poor credit, that should clue them.
You do realize that since 1980, risk-based credit pricing has been legal? You know what that is, right? That's where you adjust the costs and terms of a loan to reflect the greater risks, such that as a class, those loans end up returning a profit despite their marginally higher default rates. You can't do that for prime lending. Prime loans have to be rated as a group. If you and I both qualify, we will receive the same terms, even though I would presumably represent a much lower credit risk than you. Such individual risk-rating is what makes a loan subprime, and with any sort of rational underwriting, a lender can easily take into account the fact that large segments of the American population simply do not conform to the 9-to-5 stereotype you have in mind while still qualifying as entirely ratable, reliable, and worthwhile borrowers.
Quote:
Originally Posted by sanrene
They ignored all that due to the democrats in congress wanting to be sure low-income and poor applicants wouldn't be discriminated against.
You are very confused. Not even Republicans have spoken out lately in favor of discriminating against low- and moderate-income individuals. And no program has ever been put forward that either asked or ordered lenders to ignore what their underwriting efforts were telling them. Don't forget that nearly half of first-time CRA borrowers in the 1990's qualified at prime terms. Don't forget that in today's battered markets, one of the best-performing segments is the tens of thousands of ITIN mortgages. They have default rates that run about one-fifth of the national average, and pretty nearly every single one of them is held by an illegal immigrant. What you want to believe and what is actually the case are often two very different things.
He was given everything he wanted, but the spending bill did nothing to slow job loss...
You should pay more attention. Actually, there are about a million jobs that exist right now that woudln't have, absent the stimulus. That's an estimate, of course. The confidence interval runs from 600K to 1,500K.
Quote:
Originally Posted by momonkey
...and will, according to CBO, harm our long-term economic growth.
LOL. When does that happen again, and how much is it supposed to be? One of the worst right-wing arguments of the year. It's right up there with death panels.
Quote:
Originally Posted by momonkey
Hundreds of billions have been tossed down a political rat hole trying to prove our money is more effectively spent by the federal government.
Interesting. $288 billlion of the stimulus package is front-loaded tax cuts. That's where the government leaves money in your hands. But I guess you want to count that as more overspending by a bloated federal government. Makes for a better whining than "I'm tired of all these federal bureaucrats not taking my hard-earned money!!!"
Quote:
Originally Posted by momonkey
Leftist nanny-state economic policies have never worked in the past and they have all too predictably failed again.
Shouldn't that be cradle-to-grave nanny-state? I mean, come on...get with the program.
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Consumer confidence down again in october.
