Forums | MacLife

Pariah wrote:

The current depression was caused primarily by a large portion of the banking system going renegade due to inadequate regulation.

Yeah, I know people with cognitive issues who had no credit and were barely able to complete the app. An example of one such person obtained $30,000 of debt. Her primary income is SSI. She never held a real job or even a job that paid over $5.00 an hour. She does piece work at a specialized work site. (How did she keep getting credit cards?)  Since they changed the bankruptcy laws under bush, creditors have been pursuing legal avenues over the past two years or so. No free legal services will touch her case. This person is on their own. 

This is real life. Predatory you say?

Farmerkev wrote:

http://www.youtube.com/watch?v=_MGT_cSi7Rs

Just facts.

The suggestion that Fannie/Freddie or the CRA was the primary cause of the mortgage crisis is absurd.  We've discussed this many times here.

Yes, yes. The problem is entirely with lenders who took too many risks, not the agencies that subsidized the risk. That way it's all greedy bankers' faults. Don't stop believin'.

And it's certainly not the fault of anyone who borrowed more than they could afford, like that Edmund Andrews genius at the New York Times. He was the victim of unscrupulous greedy lenders!

I'm not saying they weren't unscrupulous and greedy. But so was Andrews, so were politicians, so was everyone. Incentives matter, and surely the fact that risk was subsidized was (is!) a big part of the problem.

So the financial system wouldn't have been grotesquely over-leveraged if it weren't for "government incentives," eh?

Oh yeah, I forgot, you laugh at the notion of regulating the market. Though perhaps you've had a Greenspanesque wake-up call on that score.

ShnickyShnack wrote:

So the financial system wouldn't have been grotesquely over-leveraged if it weren't for "government incentives," eh?

Oh yeah, I forgot, you laugh at the notion of regulating the market. Though perhaps you've had a Greenspanesque wake-up call on that score.

No, the government backed unsound business practices and cost us trillions.
I maintain if it's government backed it needs to be rock solid conservative practices.
Non government backed can do whatever they want and everyone knows- you puts your money down you takes your chances. If somebody wants to gamble everything more power to them but they are on their own when they lose.
I think the same general thing about drugs and several other aspects of life and government.

ShnickyShnack wrote:

Farmerkev wrote:

ShnickyShnack wrote:

So the financial system wouldn't have been grotesquely over-leveraged if it weren't for "government incentives," eh?

Oh yeah, I forgot, you laugh at the notion of regulating the market. Though perhaps you've had a Greenspanesque wake-up call on that score.

No, the government backed unsound business practices and cost us trillions.
I maintain if it's government backed it needs to be rock solid conservative practices.
Non government backed can do whatever they want and everyone knows- you puts your money down you takes your chances. If somebody wants to gamble everything more power to them but they are on their own when they lose.
I think the same general thing about drugs and several other aspects of life and government.

So the government told Moody's how to rate risk, and the banks how to lend like there was no tomorrow? It created CDOs and backed the derivatives market? It convinced Wall Streeters that it was possible to make loads of money with zero risk?

TARP

Farmerkev wrote:

ShnickyShnack wrote:

Farmerkev wrote:

No, the government backed unsound business practices and cost us trillions.
I maintain if it's government backed it needs to be rock solid conservative practices.
Non government backed can do whatever they want and everyone knows- you puts your money down you takes your chances. If somebody wants to gamble everything more power to them but they are on their own when they lose.
I think the same general thing about drugs and several other aspects of life and government.

So the government told Moody's how to rate risk, and the banks how to lend like there was no tomorrow? It created CDOs and backed the derivatives market? It convinced Wall Streeters that it was possible to make loads of money with zero risk?

TARP

Wow, now you're really blaming things that were behind the curve!

ShnickyShnack wrote:

Farmerkev wrote:

ShnickyShnack wrote:

So the government told Moody's how to rate risk, and the banks how to lend like there was no tomorrow? It created CDOs and backed the derivatives market? It convinced Wall Streeters that it was possible to make loads of money with zero risk?

TARP

Wow, now you're really blaming things that were behind the curve!

That would be the bailout of the risk. The brokerage houses got their loses comped by the house.

ShnickyShnack wrote:

Be prepared to laugh

"I know it's going to be the private sector that leads this country out of the current economic times we're in," the former president said to applause from members of a local business group. "You can spend your money better than the government can spend your money."

Repeatedly in his hourlong speech and question-and-answer session, Mr. Bush said he would not directly criticize the new president, who has moved to take over financial institutions and several large corporations. Several times, however, he took direct aim at Obama policies as he defended his own during eight years in office.

"Government does not create wealth. The major role for the government is to create an environment where people take risks to expand the job rate in the United States," he said to huge cheers.

"I am told, 'If you do not move strongly, Mr. President, you will be a president overseeing a depression that will ultimately be greater than the Great Depression,'" Mr. Bush said. "I firmly believe it was necessary to put money in our banks to make sure our financial system did not collapse. I did not want there to be bread lines, to be a great depression."

He said his administration sought to address the "housing bubble" before the system broke down. "We tried to reform" mortgage giants Fannie Mae and Freddie Mac, "but couldn't get it through the vested interests on Capitol Hill."

Feel free to click the link. It also has his comments on health care reform and torture/Gitmo.

Man, this guy. I still can't believe he had two freaking terms.

The first two bolded sections are 100% true. Government can do nothing more than provide a fair playing field for individuals and businesses to operate within. A good government should tax as little as possible to maintain its necessary functions - a concept lost to time.

The second two sections are dubious, but possible. It is fairly widely accepted that the lack of confidence in the banking system is what finally propelled the world into the great depression. Of course, there was no FDIC then; and in fact, it was the events surrounding the banking crash that led to its creation. That said, I think we could have been more selective. Back the deposits, but let the speculators crash. Thus, while I don't philosophically oppose all bailouts, I am pretty adamantly against what BushCo actually did.

That said, Bush apparently has better advisers as a former president than he had as the actual president. He didn't sound like a total loon this time. Maybe he really was playing up the whole retard bit while in office.

Farmerkev wrote:

ShnickyShnack wrote:

Farmerkev wrote:

That would be the bailout of the risk. The brokerage houses got their loses comped by the house.

So in your mind, bank presidents, hedge fund managers, government regulators, mortgage salesmen, pretty much everyone in the financial sector saw the risk of their practices, knew there was a danger of apocalyptic collapse, but figured, "aw hell, why worry ... Uncle Sam'll bail us out!"

That's your analysis, is it? Because I must say it's fascinating.

They got their millions in bonuses for years and are pretty much walking away scot free.
The bad asset plan gets even better for the "in" crowd.
I would encourage you to watch this series of videos starting with
http://www.youtube.com/watch?v=ervHbKa7 … mp;index=0

I notice you didn't address my post in any way.

Farmerkev wrote:

I'm not sure why you are focused only on the two GSE's.

I'm just going off of what your first post implied (and which is not an uncommon argument from many on the right).  Bush spoke of it himself in this speech.

The government backs the banks and has ended up basically backing the majority of the investment houses.
They are backing what they failed to regulate.

So we agree that greater regulation is in order?

Has no one has lost money (except for the taxpayers)?  Many have been 'bailed out' or propped up in an attempt to stave off further disaster, but government protection has not been nearly as comprehensive as you seem to be suggesting (losses "comped").  Lots has been lost by many.

Farmerkev wrote:

Greater regulation IF it's government backed.
In general I want less government but I realize I have to compromise with the socialists.

Wait a minute--we "failed" to properly "regulate" these guys, but pursuing greater regulation is simply a "compromise" on your part?