Traitors.

[LV426]

You have failed to address any of my points but instead just claim I miss your points.

WTF are you talking about? I address every single one of your points. I quote you in full in my responses. You're the one who isn't reading things here, not me. I take the time to carefully respond to your posts. You do not. You rush through your responses and end up missing some pretty big things when you do.

Like how I never said there was a sole cause, but several examples of juicing that Bush did.

What you haven't argued against yet, is my claim that Bush inflated this housing bubble to cover for the failure of his tax cuts. That's the salient point you have yet to even tackle. That's what has prompted all of this. Bush tied his tax cuts to the housing bubble, which means all the actions Bush took to inflate and juice that bubble were in response to the failure of the tax cut to deliver on its lofty economic promises. It is that argument that you haven't even touched. Instead, you've chosen to lazily and sloppily respond to my posts because they get under your skin.

 

[Truth Detector]

There is no compromising with Conservatism. It is an anti-democratic cult. Its members have no loyalty to the country, just to their race.

 

[LV426]

I am still waiting for you to provide the evidence that supports the rest of the crisis can be laid solely at Bush's feet.

Look, I can't help it if you don't want to accept facts when I give them to you.

I can't help it if you don't want to acknowledge the connection between Bush's tax cut failure and the sudden and jerky response of juicing the housing market to spur growth ahead of the 2004 election.

I can't help it if you don't like that I bring all this up, that I connect the dots for you, that I provide you with quotes, articles, bills, laws, data, reports that all confirm what I was saying.

So I'll just go all the way back to the start and invoke the Fed and Bush's Working Group again, because they made it clear that Bush was the one responsible for this because it was his regulators who eased lending standards for subprime loans beginning in 2004 and extending through 2007:

“The Presidents Working Group’s March policy statement acknowledged that turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007.”

So that's Bush telling you his shitty subprimes caused this.

"Since 1995 there has been essentially no change in the basic CRA rules or enforcement process that can be reasonably linked to the subprime lending activity. This fact weakens the link between the CRA and the current crisis since the crisis is rooted in poor performance of mortgage loans made between 2004 and 2007. "

And that's the Fed telling you that there wasn't a bubble before it all.

Now, you haven't actually addressed those points...instead, you chose to parse out the word "triggered", but you didn't parse out the word "turmoil".

So what happens if you do? Well, you see that turmoil didn't exist until it was triggered.

And how was it triggered? By reducing lending standards on subprimes.

And who did that? Bush.

And why did he do that? To inflate a housing market.

And why did he want to inflate a housing market? Because his tax cut didn't work.

And why didn't his tax cut work? Because it's shitty, racist policy that is designed to never work.

 

[Flash]

So you very dishonestly and with deliberate bad faith, exercise the worst of sophistry to make a lying point on a message board. A lying point, that ends up ultimately helping me prove my case that Bush took several actions to inflate a housing bubble.

Prove me wrong, otherwise. You are not a very honest person, and you routinely and regularly engage in bad faith when you debate...not just with me, but with others. It's a pretty shitty habit that can only come from one place; entitlement.

Come on LV426, quit being so lazy. You need to come up with some new insults for posters who disagree with you or who you perceive to be disagreeing.

You have been using the "sophistry" and "bad faith" name-calling for too long. And, it is very hypocritical for you to call others dishonest with all the lies and factual errors we have caught you professing. Just disagree without all the personal insults and need to question the character of the other poster.

This has nothing to do with the recession argument.

 

[Poor Richard Saunders]

Only the most dishonest and sophist reading of that article would lead you to that conclusion. So here is another example of you falling into the same bad habits.

The Net Capital Rule was definitely lowered:

Agency’s ’04 Rule Let Banks Pile Up New Debt
https://www.nytimes.com/2008/10/03/business/03sec.html

This is literally what the CNBC article says. Did you read it? I don't think you did. I think you're lying.

The 2004 amendments to the net capital rules meant that investment banks could reduce their chance of crossing important regulatory thresholds by building up their balance sheets with mortgage-backed securities as opposed to other securities that received less favorable regulatory treatment.

Now, how do you get from that above^, to this below:

The article directly contradicts your claim and states that what you are claiming is a myth that didn't really happen.

Thanks for posting a link to the myth that was debunked but you seem to still cling to.

From your original article at CNBC

What the 2004 amendments accomplished, then, was not a dramatic unleashing of leverage but a reorientation of the balance sheets of the Wall Street investment banks toward mortgage-backed securities.

and

The rules for US commercial banks were changed in 2001 to apply developing Basel II concepts. In order to encourage banks to hold more liquid assets, regulators wanted to encourage securitization and the holding of securities

...

The amendments contributed to the financial crisis not by permitting too much leverage, but by cajoling the investment banks into adopting the view of risk held by international regulators and subsequently, loading up on mortgage-related securities..

The reality is that there was no change that allowed them to pile on new debt. It's obvious you didn't read the article I posted which is what the CNBC article was based on.
http://blogs.reuters.com/bethany-mclean/2012/03/19/the-meltdown-explanation-that-melts-away/

Jacob Goldfield, a Harvard physics major turned Goldman Sachs partner (he left in 2000) noticed the claim that leverage had been limited to 12 before 2004, and then soared to 33. He thought it was strange that he hadn’t heard of this when it happened. He’d also noticed what he calls “quite a few” other pieces of conventional, but inaccurate, wisdom about the crisis, so he didn’t take for granted that this one was right. Instead, he checked. He looked at the 2003 leverage of two investment banks and found that it was much higher than 12. (In fact, there’s only one firm whose leverage in 2006 or 2007 was higher than it had ever been before 2004, and that’s Morgan Stanley. Nor was the leverage for the two firms that were hit the hardest by the crisis out of historical bounds when the world went to hell: Bear’s leverage (as measured by liabilities over equity capital) at year-end 2001 was 32, versus 32.5 at year-end 2007, Lehman’s at year-end 2001 was 28.3, versus 29.7 at year-end 2007.)

The problem was not that they piled on new debt but that they created new securities that they rated as AA or higher when they really should have been B or lower. This created a problem when the security that they classified as AAA suddenly went into default. A group of securities that they could value at 98 cents suddenly dropped to a value of 90 cents as the defaults hit. This problem wasn't a case of them taking on too much debt but in classifying it wrong so that when they had to reclassify they were showing huge losses. The sudden huge losses caused a run on the banks which they were unable to cover.

 

[LV426]

It should also be noted that there was no subprime bubble until Bush created one to help his tax cuts look good in 2004....

In 2004, 4.3% of all mortgages were No Doc loans. In 2006, over 50% of all loans were No Doc loans. That’s over a 1000% increase in loans where the borrower's income was not fully documented or documented at all.

As The Fed continues:

"Another form of easing facilitated the rapid rise of mortgages that didn't require borrowers to fully document their incomes. In 2006, these low- or no-doc loans comprised 81 percent of near-prime, 55 percent of jumbo, 50 percent of subprime and 36 percent of prime securitized mortgages."

"Another form of easing" is a nice way of saying "lowering lending standards."

And those standards were lowered to juice a housing bubble to cover for the failure of the tax cut. Otherwise, why would you do it so recklessly and carelessly? And why would you try to connect it to the housing market?

 

[LV426]

Thanks for posting a link to the myth that was debunked but you seem to still cling to.

From your original article at CNBC

What the 2004 amendments accomplished, then, was not a dramatic unleashing of leverage but a reorientation of the balance sheets of the Wall Street investment banks toward mortgage-backed securities.

It's the same thing! LOL. OMG dude. That's the same thing. Over-leveraging themselves with MBS' thanks to the change to the net capital rule! So you're parsing out...oh, they weren't overleveraged and weren't allowed to overleverage, except that they could over-leverage when it comes to mortgage securities, which the rule was changed to allow for!

So if that change didn't happen, how would they have acquired all those MBS'?

 

[LV426]

Bear’s leverage (as measured by liabilities over equity capital) at year-end 2001 was 32, versus 32.5 at year-end 2007, Lehman’s at year-end 2001 was 28.3, versus 29.7 at year-end 2007.)

Right, but what was leveraged in 2001 vs. 2007? It's not the same assets, is it?

In fact, you specifically pointed out that the asset leveraging changed from 2001 to 2007, where MBS' made up the lions' share of what was being leveraged because the change to the net capital rule allowed it!

So you're falling back into the same bad habits again, where you present only topline information but are short on the details. Yeah, it doesn't sound like banks overleveraged themselves during the housing bubble because their leverage didn't change much. But what did change was what that leverage WAS FOR. That's the other half of the story that you either don't know, didn't want me to know, or did know but wanted to keep hidden.

So in 2007, when Lehman's was leveraged at 29.7%...what was it leveraged to buy? Now compare that to what Lehman was leveraging to buy in 2001, and you'll find that what they did was simply replace the assets they had previously been leveraged to buy, with these new MBS assets that were toxic. So all they did was play around with the allocation inside that leveraging ratio. DIDN'T THEY? Why yes, they did, and the link confirms it.

What were those banks leveraging and buying in 2001 vs. 2007? MBS'? No because they couldn't do that until 2004, as what you've quoted says.

Yikes dude.

 

[LV426]

Come on LV426, quit being so lazy. You need to come up with some new insults for posters who disagree with you or who you perceive to be disagreeing..

It's not a disagreement when one side is engaging in pure bad faith, in deliberate sophistry, in laziness.

I have no patience for that shit. If you are dishonest with me, I'm gonna call you out on it. If you don't like being called out on your bullshit, then you're free to ignore me. I promise I won't care if you do.

You have been using the "sophistry" and "bad faith" name-calling for too long. And, it is very hypocritical for you to call others dishonest with all the lies and factual errors we have caught you professing. Just disagree without all the personal insults and need to question the character of the other poster.

Oh, how cute! Flash is stomping his foot and demanding I come up with other reasons for thinking he's a gigantic piece of shit. Are you gonna hold your breath until I do?

Flash, there is no other reason to think you're a gigantic piece of shit than the reasons you've already given on JPP.

If you don't want to be called a poseur, or a faker, or a fraud, or a sophist, or someone who acts in bad faith, you can very easily choose not to be those things.

 

[LV426]

The reality is that there was no change that allowed them to pile on new debt. It's obvious you didn't read the article I posted which is what the CNBC article was based on.

You're missing the point, and I'm going to give you the benefit of the doubt that it was not intentional.

I didn't say they piled up new debt, what I said what they leveraged themselves in order to buy those MBS', and the Bush White House made the change to the rule to allow them to do that.

That's why I quoted that sentence from the CNBC article: The 2004 amendments to the net capital rules meant that investment banks could reduce their chance of crossing important regulatory thresholds by building up their balance sheets with mortgage-backed securities as opposed to other securities that received less favorable regulatory treatment.

So they didn't pile up NEW DEBT, they just shifted the debt over to these new securities from the other securities, like the article fucking says.

I don't understand why that is hard to comprehend. Bush let them shift to MBS' from other securities because...wait for it...he eased the standards to allow for it.

Now why would he do that? Why would Bush, in 2004, suddenly tell Wall Street banks that they could leverage themselves to buy up MBS' without regulatory obstacles?

 

[Poor Richard Saunders]

Look, I can't help it if you don't want to accept facts when I give them to you.

I can't help it if you don't want to acknowledge the connection between Bush's tax cut failure and the sudden and jerky response of juicing the housing market to spur growth ahead of the 2004 election.

I can't help it if you don't like that I bring all this up, that I connect the dots for you, that I provide you with quotes, articles, bills, laws, data, reports that all confirm what I was saying.

So I'll just go all the way back to the start and invoke the Fed and Bush's Working Group again, because they made it clear that Bush was the one responsible for this because it was his regulators who eased lending standards for subprime loans beginning in 2004 and extending through 2007:

“The Presidents Working Group’s March policy statement acknowledged that turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007.”

So that's Bush telling you his shitty subprimes caused this.

I am more than willing to accept facts. It just seem you can't actually provide any real facts that are really and truly facts.

Let's go to the source of that statement
https://www.treasury.gov/resource-center/fin-mkts/Documents/pwgpolicystatemktturmoil_03122008.pdf
It lists 5 reasons, one of which is regulatory policies that have to do with capital and disclosure.

It goes on to say - Originators, underwriters, asset managers, credit rating agencies, and investors failed to obtain sufficient information or to conduct comprehensive risk assessments on instruments that often were quite complex.

First of all underwriting is NOT done by government regulators. Underwriting is done by the mortgage lender. The statement you quoted in no way means that regulators are at fault. The fact that lenders decided that they would reduce their underwriting standards isn't the fault of regulators. Where the issue becomes a problem is when the low standards are resold. At that point, the question becomes one of whether the purchaser of the mortgage was aware of the lower standards or not. In some cases the originator of the loan was not honest with the purchaser and in other cases the purchaser didn't do due diligence. The huge increase in the number of loans contributed to the break down in knowing the true nature of the loans. Then you add on the regulation requirements on banks and GSEs of the percentage of loans that must be Low to Moderate income. This contributes to a willingness to not look too closely at the loans so they can hit the requirement.

"Since 1995 there has been essentially no change in the basic CRA rules or enforcement process that can be reasonably linked to the subprime lending activity. This fact weakens the link between the CRA and the current crisis since the crisis is rooted in poor performance of mortgage loans made between 2004 and 2007. "

And that's the Fed telling you that there wasn't a bubble before it all.

No.That is a statement saying any attempt to blame the CRA for the crisis is without merit. It is found in this document which defends the CRA from blame for the crisis. https://www.federalreserve.gov/images/20081203_analysis.pdf

Now, you haven't actually addressed those points...instead, you chose to parse out the word "triggered", but you didn't parse out the word "turmoil".

So what happens if you do? Well, you see that turmoil didn't exist until it was triggered.

And how was it triggered? By reducing lending standards on subprimes.

One small problem. Underwriting standards are not set by government regulators.

And who did that? Bush.

No. Underwriters set the underwriting standards along with the company they work for.
Since you have probably never gone through underwriting here is an explanation-
https://www.rocketmortgage.com/learn/what-is-underwriting

And why did he do that? To inflate a housing market.

And why did he want to inflate a housing market? Because his tax cut didn't work.

And why didn't his tax cut work? Because it's shitty, racist policy that is designed to never work.

Since you started with not knowing who sets underwriting standards I won't address this as it is all based on a faulty assumption.

 

[Poor Richard Saunders]

If Bush didn't tie his housing bubble to his tax cuts, why did he campaign on that connection?

How many times do you need this explained? Politicians do things like that. They take credit where they don't deserve it. They claim the did things they didn't. Anything a politician says in the course of a campaign should not be taken at face value but should be confirmed with other sources before saying it is true. You will notice I have never used a politician as a source and I never will when it comes to objective facts. Using the words of any politician as the basis for what is factual is silly. Just because Bush tried to tie them together doesn't mean they are tied together.

 

[LV426]

The fact that lenders decided that they would reduce their underwriting standards isn't the fault of regulators.

Lenders could only come to that decision if given the space to do so.

So the regulators had to first ease their standards before the lenders could.

Regulators work for the Executive Branch.

 

[Poor Richard Saunders]

So...look at how fucking stupid this sentence is.

"Yeah, those things contributed to the bubble but they weren't the cause of the bubble."

Did I say they were the cause? NO! What I said was that they juiced the bubble. I said that at least half a dozen times.

So you have real problems when it comes to listening, to reading, to comprehending things other people say. And like I said before, you don't do this with just me...you do this with everyone. You shift goalposts, you misstate what other people say, you exaggerate, you invoke anecdotes, you twist yourself into knots trying to avoid the simple answer that you just don't really know what the hell you're talking about, but you want people to think you do.

That culminates in the sentence I quoted above...everything about that sentence is wrong, dishonest, and sophist. Everything. I gave you all these links and all this information, at your request, and the best you can do is skim through it, not thinking critically about any of it, because you just can't stand the fact that someone knows more about something than you do.

You're not exceptional in this debate.

And the fact that water is wet may have contributed to your drowning in minor ways but it is in no way close to the real cause.

 

[LV426]

No.That is a statement saying any attempt to blame the CRA for the crisis is without merit. It is found in this document which defends the CRA from blame for the crisis..

Ah, then by all means, please show me where in the 1977 or 1995 CRA it says banks can lend out to people without checking their income in 2004.

 

[Poor Richard Saunders]

Those defaults would have never happened had Bush not lowered lending standards in 2004.

You keep repeating this and don't seem to realize it is not true and has never been true. Lending standards are what the lender uses when writing the loan. Standards used by GSEs for purchasing loans are not lending standards. Perhaps the reason we are not on the same page is because you are using the wrong terminology.

 

[LV426]

One small problem. Underwriting standards are not set by government regulators.

Never said they were...what I said was lending standards, not underwriting standards.

Another example of you falling into your same bad habits.

 

[Poor Richard Saunders]

For the 20th time...I never said it was the sole reason for the bubble. What I said was that it was juicing the bubble for Bush ahead of his 2004 election. I never, ever said it was the sole factor, and actually included it in a list with half a dozen other examples.

So why are you compelled to frame it that way? Because you don't want to admit that I'm right. That Bush juiced a housing bubble to cover for the failure of his tax cuts. Again, why would he tie his tax cuts to the housing market if that wasn't the case? You're right in and of itself that the tax cut has little to do with the housing bubble except for the fact that the tax cut prompted the housing bubble as a policy fix because the tax cut didn't deliver on its promises.

You know what else? Tax cuts never do. They never deliver on any promises.

The totality of your list doesn't even come close to being half the bubble let alone a quarter of it. Much of what you claim is vague BS.

Your fixation with Bush's statement being factual borders on OCD.

Tax cuts don't deliver on their promise is fine. Your other claims about tax cuts have been not true when you claim the always result in recessions within 3 years and they always result in decreases in GDP growth.

 

[LV426]

How many times do you need this explained? Politicians do things like that. They take credit where they don't deserve it. They claim the did things they didn't. Anything a politician says in the course of a campaign should not be taken at face value but should be confirmed with other sources before saying it is true. You will notice I have never used a politician as a source and I never will when it comes to objective facts. Using the words of any politician as the basis for what is factual is silly. Just because Bush tried to tie them together doesn't mean they are tied together.

Or, it means they are tied together and that all the actions Bush took with regard to housing were to inflate a housing market that he could then credit to his tax cuts. Which is what he did.

What was the motivation of tying the tax cuts to the housing market?

 

[LV426]

And the fact that water is wet may have contributed to your drowning in minor ways but it is in no way close to the real cause.

At what point did I ever say these examples were the sole cause?

Never.

You've said this half a dozen times now, and every time you do, I correct you and you ignore it.

Why?