Traitors.

[Poor Richard Saunders]

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.

You quote me in full?
That's funny.
https://www.justplainpolitics.com/showthread.php?156317-Traitors&p=4109005#post4109005
https://www.justplainpolitics.com/showthread.php?156317-Traitors&p=4109034#post4109034

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.

I thought that was what we were arguing every time you claim Bush made that claim and I point out that just because Bush says it doesn't make it true. Your argument is nothing more than an ipse dixit. You have presented little to no evidence that Bush inflated the housing bubble let alone that he did it on purpose to cover for his failed tax cuts.

 

[LV426]

Lending standards are what the lender uses when writing the loan.

Right, and by invoking the OCC rule to wipe out state protections against predatory lending, those lending standards are suddenly fungible, aren't they? Had Bush NOT wiped out those state protections, would there have even been NINJA loans? No.

 

[LV426]

thought that was what we were arguing every time you claim Bush made that claim and I point out that just because Bush says it doesn't make it true. =.

Then why did he say and do the things he did?

Your argument is nothing more than an ipse dixit. You have presented little to no evidence that Bush inflated the housing bubble

I have presented plenty of evidence he inflated the housing bubble, and you even acknowledged that yourself when you said that his actions "accelerated" it.

I can rattle off the statistics that show the bubble inflating as Bush was taking all these actions on housing....

1. No Doc loans went from 4.3% of all loans in 2004 up to 50% of all loans by 2006.
2. Subprime loans went from 10% in 2003 to 40% by 2006.
3. By 2005, 32% of all mortgage originations were NONprime, an increase from 10% in 2003.

So there was a 300% increase in subprime lending from 2003 to 2006. How? Why?

 

[Poor Richard Saunders]

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.

Where can I find this?

According to your link there were
No- and Low-Documentation Loans

The share of subprime mortgages with no or low documentation of income or assets rose modestly from 32 percent of originations in 2003 to 38 percent in 2007. (We combine no- and low-documentation loans because only a small number of loans are identified as "no-doc" in the data.) The no- and low-doc share for Alt-A loans rose more steeply from 62 percent in 2004 to 81 percent in 2007. No- and low-doc loans were originally devised as a solution for borrowers, such as self-employed workers, who have income that is variable or difficult to document. However, over time these loans may have provided a mechanism for borrowers or lenders to mask the fact that the borrowers might not have the resources to repay the loans.

Considering the number of alt-A and subprime loans did not even double between 2003 and 2006, I am curious how you got your numbers.

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?

Bush was not a lender that lowered their standards. Bush was not a mortgage company. What part of that don't you get? You can't blame Bush for the fact that lenders reduced their lending standards. The only thing they were fighting was the ability to resell the loans so they could continue to make loans. As long as they could resell the loans they could pocket the origination fees and move on to the next loan and not have to worry about whether the borrower was able to repay or not. Most of the loans were being bought by corporate entities which were repackaging them into securities to sell to clients. Then Fannie and Freddie got into the act later.

 

[Poor Richard Saunders]

Right, and by invoking the OCC rule to wipe out state protections against predatory lending, those lending standards are suddenly fungible, aren't they? Had Bush NOT wiped out those state protections, would there have even been NINJA loans? No.

First of all the state predatory protections were only removed in the states that have such protections. I think I saw the number 34 for states that might be affected by this. The removal only applied to banks. The largest supplier of predatory home loans was mortgage companies. Countrywide being the worst. So, NO! It really had little to do with the availability of NINJA loans. NINJA loans in and of themselves are not predatory. NINJA loans usually mean the borrower is paying a slightly higher rate but that rate isn't necessarily predatory. NINJA loans existed in the 90s and earlier. They were just not as prevalent because the lenders saw them as a risk. One of the things that happened is the rejection for NINJA loans dropped as lenders were still able to offload the loans with no problems even if the underwriting was horseshit.

Predatory loans are when the lender puts out the loan for a higher interest rate than allowed by law or when the lender pushes the borrower into a loan that they know can't be repaid. States used to set a maximum interest rate. The reason credit card rates are so high is because SD dropped their usury laws in order to get the credit card companies to move there.

 

[Poor Richard Saunders]

Then why did he say and do the things he did?




I have presented plenty of evidence he inflated the housing bubble, and you even acknowledged that yourself when you said that his actions "accelerated" it.

I can rattle off the statistics that show the bubble inflating as Bush was taking all these actions on housing....

1. No Doc loans went from 4.3% of all loans in 2004 up to 50% of all loans by 2006.
2. Subprime loans went from 10% in 2003 to 40% by 2006.
3. By 2005, 32% of all mortgage originations were NONprime, an increase from 10% in 2003.

So there was a 300% increase in subprime lending from 2003 to 2006. How? Why?

Using percentages of a total that is different for each year to declare a percentage increase is a specious use of the numbers.

From your source -

TABLE 1: Number of subprime and Alt-A mortgage originations by year
Collateral Type 2003 2004 2005 2006

Subprime 1,081,629 1,669,594 1,921,637 1,445,425
Alt-A 303,969 712,056 1,093,797 921,212

Clearly there is not a 300% increase in subprime loans from 2003 to 2006. There is a 70.8% increase on the total number of subprime and Alt-A loans.
2,366,637/1,385,598 = 1.708026

But then you also have to be careful of the data since home loans for purchases may be separate from home loans for refinancing.
For instance in 2003 when you include all home loans there were 43 million home loans - Table 2
https://www.federalreserve.gov/pubs/bulletin/2010/articles/HMDA/

I hardly think that there were 16.7 million no doc loans in 2006 which would be the 50% of total home loans that year.

You can rattle off all the statistics you want but without the actual numbers we can not know what you are really talking about.

 

[Poor Richard Saunders]

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.

First thing you need to understand is what leverage is defined as when it comes to banks. Until you understand that, you are right, "Yikes, dude."

 

[Poor Richard Saunders]

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?

OMFG. You have no clue as to what leverage means when it comes to banks.

Like the article fucking says, they switched to different ASSETS. The didn't pile on new debt. When you own a loan it is an asset not a debt. (OMFG, you should stop making yourself look like such an idiot.) Different assets have different capital regulatory requirements. But as was pointed out, their leverage was the same in 2007 as it was in 2000. Simply because they changed to assets with a different capital requirement is not evidence that their leverage changed which is calculated using a formula that doesn't change just because the assets change. All it means is they are less likely to cross that threshold because they can point to assets that have a 2% threshold instead of 5%.


Here, read this and don't come back until you understand what the article and math fucking says.
https://www.investopedia.com/terms/t/tier-1-leverage-ratio.asp\

Then read this on Bear Sterns
https://en.wikipedia.org/wiki/Bear_Stearns
The section on 2007 clearly talks about capital to assets for leverage ratio.

The real problem you have in blaming Bush for this is that the capital requirement measures actually came from Europe with changes to the international banking requirements. Look up Basel 2.
You can start with wiki - https://en.wikipedia.org/wiki/Basel_II
Why would Bush suddenly tell the banks they had to follow international banking rules? Perhaps because the US does banking internationally.

 

[Nordberg]

The Soviets were right to laugh in Ronald Reagan's face when he attempted to lecture them on the benefits of democracy and free and fair elections.

Republicans have never believed in democracy.

This unprecedented Republican attempt to thwart the will of the voters is exactly what Vladimir Putin and Alexsandr Lukashenko would think about doing.

We still have free and open elections. The Repubs do not want them and are trying to destroy them.

 

[Nordberg]

True Patriots fighting for the people of the United States. Outstanding!

Nancy should refuse to seat them due to their sedition.