This sums it up pretty well

Desh said:
Damo I really dont think Im trying to avoid laying blame at the dems feet here. I think the sub prime took off in teh way it did because of the 1999 law which freed up the consolidation of the different aspects of the lending process. They were able to package more of these types of loans in the blocks they were selling without the buyer beeing tipped off to their content which meant they could keep selling more because they could bury it and dump it quickly.
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This is a symptom of the hot potato game, it was a furthering of already bad policy. They wanted to say even more that "More <insert group here> own homes than ever before!"

It was bad policy to begin with, then they began to think they could keep getting away with it. They even made budgets without regard to changing markets or economic slowdowns because these people are not economic experts. They were playing musical chairs and they began to believe that the music would never stop.

People made bad policy because they wanted to "help" people get into homes, and because of that good intention we wind up with problems.

As I said, it points to the truism that I listed before.

Unintended consequences always follow bad policy, especially when playing around with the bank industry.
 
yeah they talked people into loans not missing the boat. LOL that's a good point kinda like used car salesman finding suckers. And ohh there were plenty of suckers to be had on real estate.
 
Desh said:
Damo I really dont think Im trying to avoid laying blame at the dems feet here. I think the sub prime took off in teh way it did because of the 1999 law which freed up the consolidation of the different aspects of the lending process. They were able to package more of these types of loans in the blocks they were selling without the buyer beeing tipped off to their content which meant they could keep selling more because they could bury it and dump it quickly.
Click to expand...

Ok, as far as the CDOs and SIVs, I am calling bullshit on the above with regards to investors understanding these. Everyone (meaning professionals)knew what type of mortgages these were. Very few, if any, were sold to individual investors directly.

They (the professionals) led themselves to believe that by consolidating these loans that somehow mitigated the risk through "diversification". Bottom line, there is not one fund manager who was unaware of the quality of the underlying securities. The error was made in judging how secure they really were. Which is why companies like MBIA etc... are in trouble right now.
 
Damocles said:
This is a symptom of the hot potato game, it was a furthering of already bad policy. They wanted to say even more that "More <insert group here> own homes than ever before!"

It was bad policy to begin with, then they began to think they could keep getting away with it. They even made budgets without regard to changing markets or economic slowdowns because these people are not economic experts. They were playing musical chairs and they began to believe that the music would never stop.

People made bad policy because they wanted to "help" people get into homes, and because of that good intention we wind up with problems.

As I said, it points to the truism that I listed before.

Unintended consequences always follow bad policy, especially when playing around with the bank industry.
Click to expand...

There would have been no insentive to make these loans if they had to hang onto them. They knew they were risky which is why they packaged them off and sold them right away. They would not have cooked the potatoe if they had to keep holding it.
 
Superfreak said:
Ok, as far as the CDOs and SIVs, I am calling bullshit on the above with regards to investors understanding these. Everyone (meaning professionals)knew what type of mortgages these were. Very few, if any, were sold to individual investors directly.

They (the professionals) led themselves to believe that by consolidating these loans that somehow mitigated the risk through "diversification". Bottom line, there is not one fund manager who was unaware of the quality of the underlying securities. The error was made in judging how secure they really were. Which is why companies like MBIA etc... are in trouble right now.
Click to expand...

http://www.financialweek.com/apps/pbcs.dll/article?AID=/20071022/REG/71022001&template=printart


Its not bullshit baby
 
Desh said:
There would have been no insentive to make these loans if they had to hang onto them. They knew they were risky which is why they packaged them off and sold them right away. They would not have cooked the potatoe if they had to keep holding it.
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Yup. Yet before that law you try to blame it on they still gave out those loans, with all the problems you note.

The reality is the loans were being made, and in their salivation and excitement politicians wanted so bad to be part of the "I caused more <insert group here> to be able to own homes!" they continued a bad policy. It didn't appear to be hurting anyone at that time. Everybody was benefiting! Then the reality of "bubble" suddenly reared its ugly head again....

It is a sad state of affairs but everybody participated in this for about a decade and a half. Each adding a few breaths to extend that bubble a bit further...

And when people were warning people about it, it just fueled the fire. Suddenly it seemed that you wouldn't be able to get these "great" deals much longer....
 
Damo these loans were helping not hurting anyone at the low levels they were being written at before the new law which gave the lenders a way to make profits off of them.

If they consolidation had not taken place these program would have been harmless like it was until they started writting en mass.

It was the number of subprime they packaged in not that sub prime was packaged in.
 
Desh said:
There would have been no insentive to make these loans if they had to hang onto them. They knew they were risky which is why they packaged them off and sold them right away. They would not have cooked the potatoe if they had to keep holding it.
Click to expand...

AGAIN, this true to a good extent. Yet again, it was BOTH parties that enabled this change to take place. The Dems could have killed it. All it would have taken is a veto from Clinton and the Dems sticking with him. Yet they did not do so.
 
you can package pig shit in a bow I'm not buying it. Greedy hedge fund managers thought they were getting something with the bow that killed the smell. As SF has pointed out. Packaging a bunch of shitty loans just makes it a big shitty package.
LET THE BUYER BEWARE
 
Superfreak said:
Again, it depends on the part of the country as to when the last time was. You above many on this board understand the local nature of the real estate environment. You have played it well according to your previous posting.

You can try to paint all lenders as crooked or sneaky blah blah blah. Bottom line, it is the responsibility of the borrower to understand the loan they are taking and whether they are capable of repaying the loan they take out. Many people bought more home than they could afford and they knew it going in. Many people took equity out of their home to buy new cars. Yet YOU continue to act like they were all tricked into it.

Similar to how Dems act like Bush (whom they continuosly call stupid/ignorant etc...) tricked them on Iraq and then again on Iran.
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YOU continue to act like none were tricked into it and you're full of shit.

there is such a thing as predatory lending, and this is so old it's new again.

Read The Jungle - Upton Sinclair.

It's nothing new. But it's real. You can go on all of your hand waiving faux outrage rants you want to go on SF.

I know history, and I fucking know what predatory lending is, ok? Good.
 
Darla said:
YOU continue to act like none were tricked into it and you're full of shit.

there is such a thing as predatory lending, and this is so old it's new again.

Read The Jungle - Upton Sinclair.

It's nothing new. But it's real. You can go on all of your hand waiving faux outrage rants you want to go on SF.

I know history, and I fucking know what predatory lending is, ok? Good.
Click to expand...

I did not say NONE were tricked. I said the vast majority were not. You and Desh are acting like people are too ignorant to understand the comparison of their income to the potential debt repayments. The vast majority of people understand that they cannot continue to take on more debt.

The only "faux outrage" being tossed around is by YOU and DESH. Acting as though it is just the lenders or the Reps that are to blame for this. What part of my saying that the lenders are equally culpable with the borrowers is so fucking hard for you to understand?
 
Darla said:
YOU continue to act like none were tricked into it and you're full of shit.

there is such a thing as predatory lending, and this is so old it's new again.

Read The Jungle - Upton Sinclair.

It's nothing new. But it's real. You can go on all of your hand waiving faux outrage rants you want to go on SF.

I know history, and I fucking know what predatory lending is, ok? Good.
Click to expand...

Since you are so aware of history.... who lowered the credit standards? Who pushed the lenders into freeing up credit that previously would not have been given?
 
Superfreak said:
I did not say NONE were tricked. I said the vast majority were not. You and Desh are acting like people are too ignorant to understand the comparison of their income to the potential debt repayments. The vast majority of people understand that they cannot continue to take on more debt.

The only "faux outrage" being tossed around is by YOU and DESH. Acting as though it is just the lenders or the Reps that are to blame for this. What part of my saying that the lenders are equally culpable with the borrowers is so fucking hard for you to understand?
Click to expand...

Many of them are not equally culpable.

If you take advantage of someone else's ignorance, ,they are not equally culpable. They are sad, but not culpable. You are. You had the intent to deceive.

Explain why blacks were steered towards these loans at a much higher rate than whites, and we are talking about people with the same credit ratings. Why was that SF?

Was that their fault?

You know why sales people make money? Because selling shit, works, if you're good at it. And these people were selling shit, and they were good at it.
 
Superfreak said:
Since you are so aware of history.... who lowered the credit standards? Who pushed the lenders into freeing up credit that previously would not have been given?
Click to expand...

SF, when Bush was bragging that the home ownership rate had gone up every year under him, and we had become an ownership society, I don't remembr you screaming

HEY, THAT STARTED UNDER BILL CLINTON!

Maybe I missed it, can you point me to those posts?

He did it more and he did it better, didn't he SF? And you didn't object until he did it too more and too better and then the whole house of cards fell down and you started yelling:

HEY THAT STARTED UNDER BILL CLINTON!
 
Desh said:
Why does it bear the name Gramm-Leach-Bliley Act?

who are these guys?
Click to expand...

Why does the Presidential signature say Clinton?

Again, yes the Reps are responsible. So are the Dems.

Do you understand that the President can veto bills?

Do you realize that the Dems could have killed this bill?

Are you aware that the mergers you are harping about had taken place on a temporary basis PRIOR to the 1999 law even taking place? That most had been completed in 1997/98? Which means that Clinton and the Dems in Congress had plenty of time to decide if they wanted to block any bill that would allow the mergers to be permanent? yet they did not.
 
Darla said:
Many of them are not equally culpable.

If you take advantage of someone else's ignorance, ,they are not equally culpable. They are sad, but not culpable. You are. You had the intent to deceive.
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They were taken advantage because of they were GREEDY. They wanted something for nothing.
 
Superfreak said:
I did not say NONE were tricked. I said the vast majority were not. You and Desh are acting like people are too ignorant to understand the comparison of their income to the potential debt repayments. The vast majority of people understand that they cannot continue to take on more debt.

The only "faux outrage" being tossed around is by YOU and DESH. Acting as though it is just the lenders or the Reps that are to blame for this. What part of my saying that the lenders are equally culpable with the borrowers is so fucking hard for you to understand?
Click to expand...


If you want to try an economy where no one buys big ticket items from fear of being ripped off than you will have a shitty society.What part of protecting the consumer is good for business are you really having so much trouble with super?
 
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