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Old 03-31-2008, 01:40 PM #1
timmyt (Banned)
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White House unveils Wall Street overhaul

So, the party of fiscal and personal responsibility, and small government is expanding the federal government...again. Fantastic.

Now, I'm no economist, so maybe this a good thing? And why is the media comparing this move with that of the depression? Doesn't that just fuel speculation that we're headed for a ****storm the size of my weenis even more?

http://www.msnbc.msn.com/id/23880336/

WASHINGTON - The Bush administration Monday proposed the most far-ranging overhaul of the financial regulatory system since the stock market crash of 1929 and the ensuing Great Depression.

The plan would change how the government regulates thousands of businesses from the nation’s biggest banks and investment houses down to the local insurance agent and mortgage broker.
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Old 03-31-2008, 02:06 PM #2
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The government puts policies in place that help to create the sub-prime mortgage problem. Then, when the problem is serious enough, they propose regulations to expand the power and influence of politicians and bureaucrats. At the same time, they can blame the whole situation on unregulated markets, greedy capitalists and evil, profit-hungry corporations.

What a neat trick!
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Old 03-31-2008, 02:14 PM #3
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Ah yes, if only the government hadn't forced everyone into this situation.

It's perfectly reasonable to think that if lending institutions took advantage of the opportunity to take on a whole ton of bad credit, then it's only through giving them EVEN MORE freedom to do things like that will we prevent it from happening in the future. Oh save us, Cult of Laissez Faire economics!
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Old 03-31-2008, 02:14 PM #4
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Reguardless of the president we have now this finanical problem would be happening if president X, Y or Z is in office; so lets get that out of the way. There is no person X or Y to blame.

The financial industry is to blame somewhat. People who took out ARM (adjustable rate morgages) took the risk of their morgages adjusting either up or down. The financial industry knew they were over extending their lending practices to too many people with too much irresponsibility of their own personal financial well being. Both are at fault and neither are willing to fix this problem on their own.

I'm sure this thread will be swarming with people claiming this is another expansion of the federal government. But I see this is necesary intervention to a problem that the financial industry cannot be trusted to fix on their own (not that I truly trust a fed program, but more so than private).
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Old 03-31-2008, 03:04 PM #5
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Originally Posted by 2term8r View Post
Reguardless of the president we have now this finanical problem would be happening if president X, Y or Z is in office; so lets get that out of the way. There is no person X or Y to blame.

The financial industry is to blame somewhat. People who took out ARM (adjustable rate morgages) took the risk of their morgages adjusting either up or down. The financial industry knew they were over extending their lending practices to too many people with too much irresponsibility of their own personal financial well being. Both are at fault and neither are willing to fix this problem on their own.

I'm sure this thread will be swarming with people claiming this is another expansion of the federal government. But I see this is necesary intervention to a problem that the financial industry cannot be trusted to fix on their own (not that I truly trust a fed program, but more so than private).
You're wrong.

Not all presidents believe in corporate welfare.
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Old 03-31-2008, 04:17 PM #6
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You're wrong.

Not all presidents believe in corporate welfare.
I forgot one single person can cause an economic meltdown, I never learned that in economics. What have past presidents done to prevent this?

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Old 03-31-2008, 04:23 PM #7
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I forgot one single person can cause an economic meltdown, I never learned that in economics. What have past presidents done to prevent this? Explain to me how a president controlls lending practices of private business?
A president is the embodiment of a movement, a party, who with their combined force are able to lobby those that directly control the issues to make policy more inclined with their wishes.

Public pressure, especially from a high standing public official is very powerful, and ever so much more when a party faces the possibility of losing its financial backers and any presence it wishes to hold on to for the next 25 years.
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Old 03-31-2008, 04:37 PM #8
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Originally Posted by I love Impulses View Post
A president is the embodiment of a movement, a party, who with their combined force are able to lobby those that directly control the issues to make policy more inclined with their wishes.

Public pressure, especially from a high standing public official is very powerful, and ever so much more when a party faces the possibility of losing its financial backers and any presence it wishes to hold on to for the next 25 years.
Well said. But if he would've prevented this mess before it ever unfolded, everyone would be screaming he's expanding big government.

The only one to blame for this is your neighbors down the street for taking out loans that they should've never have taken. But no politician is ever going to say that.
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Old 03-31-2008, 05:01 PM #9
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Ah yes, if only the government hadn't forced everyone into this situation.

It's perfectly reasonable to think that if lending institutions took advantage of the opportunity to take on a whole ton of bad credit, then it's only through giving them EVEN MORE freedom to do things like that will we prevent it from happening in the future. Oh save us, Cult of Laissez Faire economics!
Ah yes, you do know that the banking and mortgage industries are some of the most regulated sectors of the US economy, don't you?

Twitch, have you ever heard of the "Community Reinvestment Act"? This Act requires banks to lend in high-risk areas that they would avoid otherwise. The banks that don't comply with the Act have to pay fines and have more difficulty getting approval for mergers and branch expansions.

The Fannie Mae Foundation actually singled out Countrywide Financial (the largest U.S. mortgage lender) for having the the most flexible underwriting criteria permitted. By 2003, Countrywide's loans to low-income people had grown to $600 billion. Of course, Countrywide is now in big trouble for its lax lending practices.

Strange that the federal government and many politicians now attack Countrywide for following the very policies the government wanted them to follow.

Ever hear of Fannie Mae, Freddie Mac, the Federal Housing Administration and the Veterans Administration? All of these are quasi-governmental or government agencies that subsidize mortgages and create distortions in the market. They are another way in which the government has helped to create this mess.

On top of these factors, in 2005 the government required that the minimum payments made on credit cards increase substantially, as much as doubling them in some cases. Given that many of the same people who hold lots of credit card debt are also sub-prime mortgage borrowers, this had the effect of making those mortgages even tougher to afford.

So, clearly the government played a large hand in creating the sub-prime mortgage mess.


Twitch, since you're obviously very knowledgeable about US mortgage lending practices and the secondary market for CDOs, I'll hold my breath waiting for your response.
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Old 03-31-2008, 05:20 PM #10
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Well said. But if he would've prevented this mess before it ever unfolded, everyone would be screaming he's expanding big government.

The only one to blame for this is your neighbors down the street for taking out loans that they should've never have taken. But no politician is ever going to say that.
I believe Obama's major message adresses that without even mentioning that. It goes along with his education viewpoint and the responsibility parents have for their child's success.
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Old 03-31-2008, 06:32 PM #11
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Who the hell is Timmyt?
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Old 03-31-2008, 07:02 PM #12
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Ah yes, if only the government hadn't forced everyone into this situation.

It's perfectly reasonable to think that if lending institutions took advantage of the opportunity to take on a whole ton of bad credit, then it's only through giving them EVEN MORE freedom to do things like that will we prevent it from happening in the future. Oh save us, Cult of Laissez Faire economics!
"took advantage"? The only thing they took advantage of was what minority leaders, democrats, and advocates for the poor had been yelling at them to do for decades.
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Old 03-31-2008, 09:32 PM #13
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If the White House didn't have Bush or Cheney in it, I'd probably take it more seriously, but all I see is more loopholes, more wasteful spending, and probably something to do with fear mongering politics and the encroachment of our rights out of necessity.

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The government puts policies in place that help to create the sub-prime mortgage problem. Then, when the problem is serious enough, they propose regulations to expand the power and influence of politicians and bureaucrats. At the same time, they can blame the whole situation on unregulated markets, greedy capitalists and evil, profit-hungry corporations.

What a neat trick!
Accountability? What's that?
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Old 03-31-2008, 09:44 PM #14
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If the White House didn't have Bush or Cheney in it, I'd probably take it more seriously, but all I see is more loopholes, more wasteful spending, and probably something to do with fear mongering politics and the encroachment of our rights out of necessity.



Accountability? What's that?
Because the democrats have such a good record when it comes to wasteful spending, and fear mongering politics?

All this is doing is giving the federal reserve a ton more power over the financial markets, which i think is a bad idea, they did this back around 1918, it worked well for a while until the stock market crashed. At the end of the day a lot of the responsibility lies with stupid people taking our mortgages with stupid rates which they full well knew they couldn't afford. But overall I think that less regulation is the key to a powerful economy, not more counsels or committees.
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Old 03-31-2008, 09:54 PM #15
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Because the democrats have such a good record when it comes to wasteful spending, and fear mongering politics?
Deducing every issue we face into a Democrat vs. Republican issue is a good way to get nowhere.
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Old 04-01-2008, 01:44 AM #16
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Interesting read, but I did not like this part.

''It would give the Federal Reserve more power to protect the stability of the entire financial system while merging day-to-day bank supervision into one agency, down from five at present.''

Where is the accountability of having only one?
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Old 04-01-2008, 08:54 AM #17
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Interesting read, but I did not like this part.

''It would give the Federal Reserve more power to protect the stability of the entire financial system while merging day-to-day bank supervision into one agency, down from five at present.''

Where is the accountability of having only one?

How do you figure increased bureuacracy increases accountability?
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Old 04-01-2008, 03:00 PM #18
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"took advantage"? The only thing they took advantage of was what minority leaders, democrats, and advocates for the poor had been yelling at them to do for decades.
You don't actually expect a response from him, do you? He makes a stupid statement, gets called on it and then he's nowhere to be found. Standard Operating Procedure for El Twitcho.
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Old 04-01-2008, 03:51 PM #19
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"took advantage"? The only thing they took advantage of was what minority leaders, democrats, and advocates for the poor had been yelling at them to do for decades.
I agree, the Dems and the minorities are to blame.

Even now when I see these commercials for car and home loans that claim that "Now that the market is down and interest rates are low, it's bound to come back up. This means that if you get an adjustable rate mortgage/loan, you can beat the market! Now is a PERFECT time to get an adjustable rate loan/mortgage!" all I can think about is those God-damned Democrats are at it again. Have they learned nothing?
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Old 04-01-2008, 05:17 PM #20
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You don't actually expect a response from him, do you? He makes a stupid statement, gets called on it and then he's nowhere to be found. Standard Operating Procedure for El Twitcho.
No I just don`t talk to you because you make unsubstantiated bull**** posts all the time that follow logic so ****ing perversely convoluted you can`t even respond logically to it. Your post doesn`t even acknowledge things like the existence of Mortage Backed Securities or the way the industry had shifted in such a way that allowed mortage defaults to cascade into the **** storm it eventually became, you instead came up with some crap about a reform that was passed in 1977 and the hypothesis that banks had been forced to take on all that bad credit and never had a choice in the matter.

So no, I don`t and I`m not going to make any reasonable attempt to debate with someone who takes a fact such as the government passing acts to encourage loans to low income people to mean the government forced banks to take on an unreasonable amount of bad debt. Maybe you could explain how a city like San Diego saw 80% of all new mortages being adjustable rate despite having a relatively robust economy. You know, considering the banks were doing their best to be responsible but the government forced them to give irresponsible loans to all them poor folk, it sure is strange to see them giving out more bad loans to middle income people without being forced and in light of the fact that they aren't in the business of getting willfully involved in high risk debt unless they're absolutely forced to

Don`t answer that though, it was only meant to be an example of why your logic makes little to no sense and not an earnest attempt to initiate dialogue. Like I said, with you it's easier just to plan on not bothering
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Old 04-01-2008, 07:44 PM #21
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No I just don`t talk to you because you make unsubstantiated bull**** posts all the time that follow logic so ****ing perversely convoluted you can`t even respond logically to it.
Wow, I touched a nerve, eh?
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Your post doesn`t even acknowledge things like the existence of Mortage Backed Securities or the way the industry had shifted in such a way that allowed mortage defaults to cascade into the **** storm it eventually became, you instead came up with some crap about a reform that was passed in 1977 and the hypothesis that banks had been forced to take on all that bad credit and never had a choice in the matter.
Youíve again revealed that you don't know what you're talking about. If you knew anything about the mortgage banking industry, you would have known that Fanie, Freddie, and the FHA (incidentally, all are mentioned in my post above) are largely responsible for the growth in the secondary market (hint, thatís where CMOs trade). Without the secondary market, the mortgage expansion we saw in the last 15-20 years would have never occurred.

Also, the Community Reinvestment Act was passed in 1977, but the government expanded it in 1995, right around the time that sub-prime lending began to grow rapidly. What an odd coincidence. This Act, along with the quasi-governmental and governmental agencies Iíve already mentioned encouraged banks to lend money to sub-prime borrowers. That fact is undeniable, unless you are El Twitcho.

Another fact that is simply undeniable is that this industry is already heavily regulated. Apparently the regulations failed to prevent this mess and so the solution is to pile on more regulations. Brilliant!
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So no, I don`t and I`m not going to make any reasonable attempt to debate with someone who takes a fact such as the government passing acts to encourage loans to low income people to mean the government forced banks to take on an unreasonable amount of bad debt. Maybe you could explain how a city like San Diego saw 80% of all new mortages being adjustable rate despite having a relatively robust economy. You know, considering the banks were doing their best to be responsible but the government forced them to give irresponsible loans to all them poor folk, it sure is strange to see them giving out more bad loans to middle income people without being forced and in light of the fact that they aren't in the business of getting willfully involved in high risk debt unless they're absolutely forced to.
For a college grad, you really have a reading comprehension problem. I originally stated the following: ďThe government puts policies in place that help to create the sub-prime mortgage problem.Ē And then I summed up my second post by saying this: ďSo, clearly the government played a large hand in creating the sub-prime mortgage mess.Ē

Neither of those statements absolves the mortgage banks of their share of responsibility in this matter, but thatís apparently a subtlety way beyond your ability to understand.
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Don`t answer that though, it was only meant to be an example of why your logic makes little to no sense and not an earnest attempt to initiate dialogue. Like I said, with you it's easier just to plan on not bothering
Ahh, but you did bother. You bothered because I make you look silly and thatís something you have a hard time accepting. Post again Twitch, thereís plenty more humiliation where this came from.
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