APP - Obamanomics failure worse after revisions.

[apple0154]

You just do not get it, do you? The amount of money made available for loans was a direct result of the government coming at the situation from two directions. On the one hand we had the democrats pushing CRA regulations which required lending in sectors that were high risk. From the other direction we had republicans pushing new regulations that made high risk lending profitable.

And it was the HIGH RISK aspect of the loans, not the amounts, that tipped over the apple cart. One more time for the "I don't care what the truth is, it's all the conservatives fault anyway" crowd:

If those loans had been paid back then the crisis never would have happened. The banks that bought the packaged mortgages would have gotten their money back, plus interest. The banks that made the loans would have gotten their money. The people that got the loans would have gotten their houses, and everuyone would have been happy.

Proof: the crisis did not rear it's ugly head until AFTER mortgage defaults shot through the roof. And when that happened, examination of the books showed that the number of the types of mortgages which were being defaulted on were too numerous to be supported by the mortgages being paid. When those figures became apparent, the house of cards came tumbling down.

It was the high level of DEFAULTS, not the loans themselves that triggered the crisis. And the level of defaults was the result of who the loans were made.

Addendum:
Another factor was the artificially low interest rates. Had rates been higher, the good mortgages would have stood a better chance of carrying the bad paper. Yes, bank profits would have been way down, even showing heavy losses, and prices of bank stocks would have reflected those figures. But the incidence of outright failures would have been much lower, and it would not have hit the rest of the economy as hard as it did - if at all.

Of course, higher rates would have negated any chance of making high risk loans in low income sectors, so both parties strongly approved of (still do for that matter) artificially depressed interest rates.

Let's try an analogy.

Mr. and Mrs. Smith have a son and he's starting a business. Mrs. Smith tells Mr. Smith to loan their son money.

"How much money", asks Mr. Smith

As much as we can afford as I'm sure this business will be a great moneymaker", replies Mrs. Smith.

So, Mr. Smith loans all the couple's savings and realizes he can mortgage the family home, as well, and get more money to loan. So that's what he does.

As fate would have it the son's business goes belly-up. No money. Now Mr. and Mrs. Smith have lost all their savings AND their mortgage payment is much higher than before because Mr. Smith borrowed against the house.

Let's do the connection. Mrs. Smith is the government. Mr. Smith is Fannie May/Freddie Mac and their son is the homeowner. Mrs. Smith (the government) had no idea Mr. Smith (Fannie May/Freddie Mac) was getting money through "unusual" means. Mrs. Smith/the government's thinking was that even in the worst case scenario the loss could be handled. There wouldn't be a crisis because Mrs. Smith/the government had a rough idea of the amount of money in question.

Sure, if the mortgages had been repaid there wouldn't have been a problem, however, if the amount of money loaned was obtained through usual means the amount wouldn't have been nearly as much which would have also averted the crisis.

The topic "today" is not so much who was responsible. It's now about Obama wanting more oversight/control and some people charging "Socialism". If the government does not have sufficient oversight who knows what may happen in the future. What other "financial instrument" will appear?

That's the problem and it's the Conservatives who are crying Socialism. It was a gamble helping people buy a home but it wouldn't have ended in a crisis if the government had known what was happening; where the money was coming from and how much money was involved.

 

[NOVA]

Well I guess where I differ from you is I never believed in Supply Economics. It has never been demonstrated to work, where as Keynesian system has passed the test of time. Though it certainly understandable why wealthy persons in upper economic brackets would detest the Keynesian model, there's no question it does work.

George H. W. Bush was right that SSE is Vodoo Economics and his son proved it.

Wonder why its always been called,
The Keynesian System, the Economics of Illusion?

...because it is.

 

[NOVA]

Let's try an analogy.

Mr. and Mrs. Smith have a son and he's starting a business. Mrs. Smith tells Mr. Smith to loan their son money.

"How much money", asks Mr. Smith

As much as we can afford as I'm sure this business will be a great moneymaker", replies Mrs. Smith.

So, Mr. Smith loans all the couple's savings and realizes he can mortgage the family home, as well, and get more money to loan. So that's what he does.

As fate would have it the son's business goes belly-up. No money. Now Mr. and Mrs. Smith have lost all their savings AND their mortgage payment is much higher than before because Mr. Smith borrowed against the house.

Let's do the connection. Mrs. Smith is the government. Mr. Smith is Fannie May/Freddie Mac and their son is the homeowner. Mrs. Smith (the government) had no idea Mr. Smith (Fannie May/Freddie Mac) was getting money through "unusual" means. Mrs. Smith/the government's thinking was that even in the worst case scenario the loss could be handled. There wouldn't be a crisis because Mrs. Smith/the government had a rough idea of the amount of money in question.

Sure, if the mortgages had been repaid there wouldn't have been a problem, however, if the amount of money loaned was obtained through usual means the amount wouldn't have been nearly as much which would have also averted the crisis.

The topic "today" is not so much who was responsible. It's now about Obama wanting more oversight/control and some people charging "Socialism". If the government does not have sufficient oversight who knows what may happen in the future. What other "financial instrument" will appear? What bullshit

That's the problem and it's the Conservatives who are crying Socialism. It was a gamble helping people buy a home but it wouldn't have ended in a crisis if the government had known what was happening; where the money was coming from and how much money was involved.

Are you ever gonna believe your own freakin' eyes and ears ?

Timeline shows Bush, McCain warning Dems of financial and housing crisis; meltdown
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The Democrats and Obama caused the financial crisis of 08 by supporting Fannie Mae and Freddie Mac
------------------

Democrats in their own words Covering up the Fannie Mae, Freddie Mac Scam that caused our Economic Crisis
-----------------
2004 Dem. coverup of Fanny and Freddie

Fannie Mae CEO calling Obama and the Dems the "Family" and "Conscience" of Fannie Mae
------------------

Clinton administration's "BANK AFFIRMATIVE ACTION" They forced banks to make BAD

 

[USFREEDOM911]

Let's try an analogy.

Mr. and Mrs. Smith have a son and he's starting a business. Mrs. Smith tells Mr. Smith to loan their son money.

"How much money", asks Mr. Smith

As much as we can afford as I'm sure this business will be a great moneymaker", replies Mrs. Smith.

So, Mr. Smith loans all the couple's savings and realizes he can mortgage the family home, as well, and get more money to loan. So that's what he does.

As fate would have it the son's business goes belly-up. No money. Now Mr. and Mrs. Smith have lost all their savings AND their mortgage payment is much higher than before because Mr. Smith borrowed against the house.

Let's do the connection. Mrs. Smith is the government. Mr. Smith is Fannie May/Freddie Mac and their son is the homeowner. Mrs. Smith (the government) had no idea Mr. Smith (Fannie May/Freddie Mac) was getting money through "unusual" means. Mrs. Smith/the government's thinking was that even in the worst case scenario the loss could be handled. There wouldn't be a crisis because Mrs. Smith/the government had a rough idea of the amount of money in question.

Sure, if the mortgages had been repaid there wouldn't have been a problem, however, if the amount of money loaned was obtained through usual means the amount wouldn't have been nearly as much which would have also averted the crisis.

Plus you left out where the Government put preassure on the lending institution to make the loans.

The topic "today" is not so much who was responsible. It's now about Obama wanting more oversight/control and some people charging "Socialism". If the government does not have sufficient oversight who knows what may happen in the future. What other "financial instrument" will appear?

That's the problem and it's the Conservatives who are crying Socialism. It was a gamble helping people buy a home but it wouldn't have ended in a crisis if the government had known what was happening; where the money was coming from and how much money was involved.

Your attempt fell apart, when you tried to equate a family loan and Mrs.Smith to that of Freddiee and/or Fanny Mac and the Government.

 

[NOVA]

Let's try an analogy.

Mr. and Mrs. Smith have a son and he's starting a business. Mrs. Smith tells Mr. Smith to loan their son money.

"How much money", asks Mr. Smith

As much as we can afford as I'm sure this business will be a great moneymaker", replies Mrs. Smith.

So, Mr. Smith loans all the couple's savings and realizes he can mortgage the family home, as well, and get more money to loan. So that's what he does.

As fate would have it the son's business goes belly-up. No money. Now Mr. and Mrs. Smith have lost all their savings AND their mortgage payment is much higher than before because Mr. Smith borrowed against the house.

Let's do the connection. Mrs. Smith is the government. Mr. Smith is Fannie May/Freddie Mac and their son is the homeowner. Mrs. Smith (the government) had no idea Mr. Smith (Fannie May/Freddie Mac) was getting money through "unusual" means. Mrs. Smith/the government's thinking was that even in the worst case scenario the loss could be handled. There wouldn't be a crisis because Mrs. Smith/the government had a rough idea of the amount of money in question.

Sure, if the mortgages had been repaid there wouldn't have been a problem, however, if the amount of money loaned was obtained through usual means the amount wouldn't have been nearly as much which would have also averted the crisis.

The topic "today" is not so much who was responsible. It's now about Obama wanting more oversight/control and some people charging "Socialism". If the government does not have sufficient oversight who knows what may happen in the future. What other "financial instrument" will appear?

That's the problem and it's the Conservatives who are crying Socialism. It was a gamble helping people buy a home but it wouldn't have ended in a crisis if the government had known what was happening; where the money was coming from and how much money was involved.

It was a gamble? Well no shit Dick Tracy......
Giving people a mortgage of 125% of the value of a home, with NO down payment and not even a cursory proof of ability to make payments,,,,????

Yeah...thats a fuckin' gamble all right.....
and they were warned three times early in the Bush Admin. but ignored it....and then they have the balls to blame Bush and republicans?
and you have balls to believe it....??????????????????????
What a joke....