PDA

View Full Version : Found This Tesimony, Some Would Like To Read



Gayle in MD
09-29-2010, 02:03 PM
<span style="color: #FF0000">This testimony by Bernake, is probably the most thorough explanation I've read so far on the causes of the Financial Crisis.

Indeed, there were a range of causes. </span>



<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">2. Indeed, in the end, losses on subprime mortgages would not have been nearly so great if vulnerabilities in the financial system had not led to such large adverse effects on economic activity and house prices.
</div></div>


http://www.federalreserve.gov/newsevents/testimony/bernanke20100902a.htm

pooltchr
09-29-2010, 03:32 PM
IOW, if Fannie and Freddie hadn't propped up the sub prime business by guaranteeing bad paper, it would not have been so bad??

Steve

cushioncrawler
09-29-2010, 06:42 PM
Read.... "our system iz fukked".
mac.

Gayle in MD
09-30-2010, 01:23 AM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: cushioncrawler</div><div class="ubbcode-body">Read.... "our system iz fukked".
mac. </div></div>


<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">Triggers of the Crisis
In discussing the causes of the crisis, it is essential to distinguish between triggers (the particular events or factors that touched off the crisis) and vulnerabilities (the structural weaknesses in the financial system and in regulation and supervision that propagated and amplified the initial shocks). Although a number of developments helped trigger the crisis, the most prominent one was the prospect of significant losses on residential mortgage loans to subprime borrowers that became apparent shortly after house prices began to decline. With more than $1 trillion in subprime mortgages outstanding, the potential for losses on these loans was large in absolute terms; however, <span style='font-size: 20pt'>judged in relation to the size of global financial markets, prospective subprime losses were clearly not large enough on their own to account for the magnitude of the crisis. </span>(Indeed, daily movements in global equity markets not infrequently impose aggregate gains or losses equal to or greater than all the subprime mortgage losses incurred thus far.) <span style='font-size: 14pt'>Rather, the system's vulnerabilities, together with gaps in the government's crisis-response toolkit, were the principal explanations of why the crisis was so severe and had such devastating effects on the broader economy. </span>
</div></div>

Chopstick
09-30-2010, 01:14 PM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Gayle in MD</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: cushioncrawler</div><div class="ubbcode-body">Read.... "our system iz fukked".
mac. </div></div>


<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">Triggers of the Crisis
In discussing the causes of the crisis, it is essential to distinguish between triggers (the particular events or factors that touched off the crisis) and vulnerabilities (the structural weaknesses in the financial system and in regulation and supervision that propagated and amplified the initial shocks). Although a number of developments helped trigger the crisis, the most prominent one was the prospect of significant losses on residential mortgage loans to subprime borrowers that became apparent shortly after house prices began to decline. With more than $1 trillion in subprime mortgages outstanding, the potential for losses on these loans was large in absolute terms; however, <span style='font-size: 20pt'>judged in relation to the size of global financial markets, prospective subprime losses were clearly not large enough on their own to account for the magnitude of the crisis. </span>(Indeed, daily movements in global equity markets not infrequently impose aggregate gains or losses equal to or greater than all the subprime mortgage losses incurred thus far.) <span style='font-size: 14pt'>Rather, the system's vulnerabilities, together with gaps in the government's crisis-response toolkit, were the principal explanations of why the crisis was so severe and had such devastating effects on the broader economy. </span>
</div></div> </div></div>

<span style="color: #000099">That paragraph doesn't really say anything. I haven't finished with it yet but I did find this to be particularly interesting.</span>

Bernanke: "Central banks, such as the Federal Reserve, can mitigate liquidity problems by lending against less-liquid but nevertheless sound collateral; indeed, serving as "lender of last resort" has been central banks' key weapon against financial panics for hundreds of years."

<span style="color: #000099">I'm just up to the part where he is talking about commercial paper and stuff. I know they call it the Shadow Banking system but how can it be considered in the shadows when the firms have a hundred story building right in the middle of downtown.

I had to learn about the financial instruments he is talking about to pass the test. What he is talking about is how they all fit together, which I do not fully understand. Thanks for posting it and I will post some comments about it when I am finished.</span>

cushioncrawler
09-30-2010, 06:39 PM
There might be some good medicine somewhere in theusofa system -- but its a bit like giving aspirin to a crazy -- and krappynomix iz mostly a mental disease.
Allso i doubt that that medicine iz real -- its probly just a placebo -- not forgetting that placebos aktually work better than lots of medicines in theusofa that are making billions for their makers.
But a placebo can do only so much.
Krappynomix iz full of (a) throwing anchors to the drowning (drowned?? drowned?? -- well, the anchor woz too small and too late!!!) -- and (b) giving poizon to the ill (died?? died?? -- well, we should hav given more poizon!!!).
mac.

Gayle in MD
10-01-2010, 12:56 AM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: cushioncrawler</div><div class="ubbcode-body">There might be some good medicine somewhere in theusofa system -- but its a bit like giving aspirin to a crazy -- and krappynomix iz mostly a mental disease.
Allso i doubt that that medicine iz real -- its probly just a placebo -- not forgetting that placebos aktually work better than lots of medicines in theusofa that are making billions for their makers.
But a placebo can do only so much.
Krappynomix iz full of (a) throwing anchors to the drowning (drowned?? drowned?? -- well, the anchor woz too small and too late!!!) -- and (b) giving poizon to the ill (died?? died?? -- well, we should hav given more poizon!!!).
mac. </div></div>

<span style="color: #FF0000"> LOL, Max, you crack me up! To me, his last mess seemed more like the greedy pirates dug the gold teeth out of their cpators, tied them to anchors, and threw them overboard, before they realized there would be no one left to pull on the paddles, or raise the sails, LOL... </span> /forums/images/%%GRAEMLIN_URL%%/grin.gif

Gayle in MD
10-01-2010, 01:07 AM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Chopstick</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Gayle in MD</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: cushioncrawler</div><div class="ubbcode-body">Read.... "our system iz fukked".
mac. </div></div>


<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">Triggers of the Crisis
In discussing the causes of the crisis, it is essential to distinguish between triggers (the particular events or factors that touched off the crisis) and vulnerabilities (the structural weaknesses in the financial system and in regulation and supervision that propagated and amplified the initial shocks). Although a number of developments helped trigger the crisis, the most prominent one was the prospect of significant losses on residential mortgage loans to subprime borrowers that became apparent shortly after house prices began to decline. With more than $1 trillion in subprime mortgages outstanding, the potential for losses on these loans was large in absolute terms; however, <span style='font-size: 20pt'>judged in relation to the size of global financial markets, prospective subprime losses were clearly not large enough on their own to account for the magnitude of the crisis. </span>(Indeed, daily movements in global equity markets not infrequently impose aggregate gains or losses equal to or greater than all the subprime mortgage losses incurred thus far.) <span style='font-size: 14pt'>Rather, the system's vulnerabilities, together with gaps in the government's crisis-response toolkit, were the principal explanations of why the crisis was so severe and had such devastating effects on the broader economy. </span>
</div></div> </div></div>

<span style="color: #000099">That paragraph doesn't really say anything. I haven't finished with it yet but I did find this to be particularly interesting.</span>

<span style="color: #000000"> I'm not sure which part you mean. </span>

Bernanke: "Central banks, such as the Federal Reserve, can mitigate liquidity problems by lending against less-liquid but nevertheless sound collateral; indeed, serving as "lender of last resort" has been central banks' key weapon against financial panics for hundreds of years."

<span style="color: #000099">I'm just up to the part where he is talking about commercial paper and stuff. I know they call it the Shadow Banking system but how can it be considered in the shadows when the firms have a hundred story building right in the middle of downtown.

<span style="color: #000000"> I think that he is talking about the things that go on in those offices, in those buildings, which are not done in the open, and not easily uncovered, by investors, or even by top investigators. </span>

I had to learn about the financial instruments he is talking about to pass the test. What he is talking about is how they all fit together, which I do not fully understand. Thanks for posting it and I will post some comments about it when I am finished.</span> </div></div>

<span style="color: #000000"> I will be interested to learn your take on it. </span>
G.

Qtec
10-01-2010, 03:35 AM
Too long G.

Most of those who reply to your posts are 'one liners'. They ignore the subject/, make a smarmy remark and run.

Keep it simple like, the TP sucks!..........LOL

Q.

Gayle in MD
10-01-2010, 07:37 AM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Qtec</div><div class="ubbcode-body">Too long G.

Most of those who reply to your posts are 'one liners'. They ignore the subject/, make a smarmy remark and run.

Keep it simple like, the TP sucks!..........LOL

Q. </div></div>

/forums/images/%%GRAEMLIN_URL%%/grin.gif


LOL, You are right. I should just sign on everyday and scroll along and attack and insult all of the trolls, and then sign off, like they do.

/forums/images/%%GRAEMLIN_URL%%/smirk.gif
These wingnuts on here use the same tactics to justify their own cyberstalking, ignorance and relentless personal attacks, as the Republicans use to deny their own incompetence and corruption, they just incorrectly assign all of their own failures, slimey aggressive, relentlessly vicious behavior, rule breaking and lack of knowledge, to the left.

What is so hilarious is that none of their presumed "Gotchas" are even pertinent to the discussions at hand.

One sentence covers all of their brilliant retorts, "WTF does that have to do with anything?"

/forums/images/%%GRAEMLIN_URL%%/grin.gif

G.

Gayle in MD
10-03-2010, 05:46 AM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: cushioncrawler</div><div class="ubbcode-body">There might be some good medicine somewhere in theusofa system -- but its a bit like giving aspirin to a crazy -- and krappynomix iz mostly a mental disease.
Allso i doubt that that medicine iz real -- its probly just a placebo -- not forgetting that placebos aktually work better than lots of medicines in theusofa that are making billions for their makers.
But a placebo can do only so much.
Krappynomix iz full of (a) throwing anchors to the drowning (drowned?? drowned?? -- well, the anchor woz too small and too late!!!) -- and (b) giving poizon to the ill (died?? died?? -- well, we should hav given more poizon!!!).
mac. </div></div>

Good one Mac, and lets not leave out the latest rightwing, Republican "Christian" addition to the Ten Commandments, designed and marketed by their hero Reagan, and gulped up by all of the lovers of the Fascist/American Corporations, their Grand oil Party of Neogreed transition to the Bible of fraud is good and the end justifies the means, aka, "Greed Is Good"

A nice diversion away from the silly former honorable American convictions such as "Bad for my country, bad for me."


Yep, we can surely see the huge advantages to all American grunts, the Middle Class and poor, thanks to the vast, RW devotion to corporate greed... now elevated to Socialized Free Market sainthood, with subsidies for that illustrious top one percent, while the greed zombies of the Great Bush Recession, the outsourcers of tomorrow's dreams, suuch grand Oil Patriots, are laughing all the way to their hidden foreign accounts!

Anything, but that we commit the sin of protectionism!

Yeah, why protect America? Better yet, why protect her jobs, or the health of her people, or the value of her natural resources, or the quality of her air, water, health care.
I mean really, who needs it~!

Nah, we can throw all that out, and surely, the trickle is coming....if we just keep up with our various contributions to, and worship of, the top greedy hogs, who have bought and paid for our government, and our country, we can't go wrong.

I just hope Ammerica doesn't fall back on her moral debts to the wonderfully generous environmental pigs, whose unprecedented greed and deceit, bilked us all on Wall Street, and in florida, Arizona, California, on street corners in resorts, and all over this country.

Oh, and do enjoy your vast increase in wealth, on our backs, we all worked so hard for that money, and hey, what's a little fraud between buddies, anyway!

We'd hate to see you filthy rich, fail to enjoy counting every last one of our dollars which you stashed into your various accounts, after you took our money, built your parachutes, yeah, the one in your new Jet, and the one in your Carribean safe.

/forums/images/%%GRAEMLIN_URL%%/crazy.gif

Chopstick
10-03-2010, 09:49 AM
<span style="color: #000099">OK. One of the things I never understood about the whole TARP goat rodeo was the statement that if immediate action was not taken the economy would freeze up. The answer turns out to simple. I just never made the connection before. It has to do with a financial instrument called Commercial Paper. Commercial is an unsecured promissory note with a maximum maturity of 270 days. The reason it is 270 days is because any longer and it would have to be registered with the SEC which is an expensive and time consuming process.

Commercial paper is not that complicated. Take a company that uses a just in time inventory system, like Dell that could have seasonal surges in sales like at Christmas. Why commit capital, that can be applied more profitably elsewhere, to fund a temporary surge in inventory demands? Commercial paper can be a very cost effective alternative and many companies use it. Another important variation of this is the bankers acceptance note. Suppose Sony wants to ship a ship load of TVs to Best Buy and Sony wants to be paid in Yen at todays spot price for that currency. Sony does not want to ship them until they are paid. Best Buy does not want to pay until they receive them. The ship could sink. Also the ship would take a week to arrive and in that time the currency values between the dollar and yen could change a significant amount. The answer is a bankers acceptance which is guaranteed by a bank. Sony gets paid. When Best buy receives the shipment, they buy in the note. Currency fluctuations are taken out of the equation and both companies know the exact price they will pay and receive.

The connection to the mortgage crisis is that when people started hearing about the rising levels of mortgage defaults they became concerned about the solvency of their financial institutions. In ever increasing numbers they began withdrawing their money from money market accounts and short term CDs, etc. Where I did not make the connection is that institutions that specialize in short term debt instruments are also heavily involved in commercial paper and bankers acceptances. It makes perfect sense that they would be.

When these companies started having tens of millions walking out the front door every day this put a great deal of stress on their currency reserves and they were forced to cut back on the issuance of commercial debt instruments. They had to maintain a larger in house reserve to cover the people coming withdrawing their money. At the time of the crisis, the market for commercial paper had all but dried up completely. That means that load of TVs doesn't ship and the shelves at Best Buy go bare. When Americans walk into their stores (and God forbid their grocery stores) and start seeing bare shelves, that would trigger wide spread panic and a run on all of the banks and other financial institutions which would utterly destroy the entire financial infrastructure of the the country, just as it did in 1929.

Even though many of these companies were not directly involved with the longer term debt securities, as you can see, they were none the less indirectly affected to a large degree. I also note in this next section, Bernanke confirms something that I have said from the beginning.
</span>
<span style='font-size: 11pt'>Throughout the period, virtually all derivatives contracts settled according to their terms, and there were few reported instances of bankruptcy or financial stress resulting from speculative use of interest rate, foreign exchange, commodity, or equity derivatives, which taken together form the vast majority of contracts outstanding. In many cases, derivatives allowed financial and nonfinancial entities to better hedge their risks.</span>

<span style="color: #000099">The instruments themselves are not good or evil nor are they the work of devious minds to deceive innocent investors. (I am aware that Greenspan said he did not understand them. This does not surprise me. What surprises me is how that loopy old geezer managed to tie his shoes and make it to work in the morning.) If you invest in a collateralized debt obligation, buying a credit default security is not a short or a bet that a mortgage security will fail any more than buying insurance on your house is betting that it will burn down.

I also agree with his next statements.</span>

<span style='font-size: 11pt'>However, some entities did use credit derivatives as a tool for taking excessive risks, most notably the insurance company American International Group (AIG). In that case, the problem was perhaps less the use of derivatives than a massive failure of risk management, especially by the parts of AIG that took large positions in credit derivatives. <span style="color: #FF0000">AIG neither hedged nor provided adequate capital against the large, correlated risks that it was taking.</span> AIG's actions were facilitated by gaps in prudential regulation, as I will discuss. The consequences for the broader system were so severe because AIG was a large financial firm closely interlinked with other systemically important financial institutions and markets.</span>

<span style="color: #000099">Greed, probably. Stupid, absolutely! In fact, more stupid that greedy. Not hedged, no capital reserve, correlated risk (especially correlated risk. As arbitrageurs we spend a significant amount of time examining uncorrelated risks. The idea of an unhedged correlated risk is inconceivable to me.) WTF were they thinking? I can't think of anything else to say about that.

I could write more but I have to do a bunch of securities analysis reports for the team today and I need to get started.</span>

cushioncrawler
10-04-2010, 03:37 AM
Read.... "our system iz fukked".
mac.

LWW
10-04-2010, 04:32 AM
Chop ... TARP was a smokescreen and still is.

Since the regime of Imam Carter we have had FANNIE/FREDDIE buying up and selling off substandard loans.

The only reason this paper was marketable was because it carried the implied guarantee of the US taxpayer.

For years they both did what banks with out of control delinquency always do ... they paper it over by adding even worse paper. Paper that they know WILL go bad, but since it's knew it hasn't gone bad yet.

Once virtually every non qualified borrower in America had a home loan they invented Ponzi schemes such as OPTION-ARMS to refi people out of the loans they were beginning to default on into new loans with artificially low payments for the next 5 years.

When that started to blow up the cabal of Raines/Gorelich/Johnson did what all crooked business folks do ... they cooked the books.

When Obama/Dodd/Frank/Waters et all were seen to be bought off by crooks they did what democrooks always do ... they blamed the free market capitalists who had warned against such insanity.

IOW ... the gubmint bailed out the banks because they were already oin the hook as tacit cosigners on trillions in bad paper. The difference is that if they would have just let FANNIE/FREDDIE fail ... at far less cost than the ensuing debacle ... the banks would have been made whole but the leftist establishment would have been held accountable.

By using TARP they were able to create a totem boogity man to blame ... and the nutty 25% accepted the lie and embraced it without qualm nor trepidation.

LWW

Gayle in MD
10-04-2010, 06:05 AM
Sack,
Thanks for the very well presented response.

So, do you then agree with this:

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">2. Indeed, in the end, losses on subprime mortgages would not have been nearly so great if vulnerabilities in the financial system had not led to such large adverse effects on economic activity and house prices.
</div></div>

Also, it was my understanding that after Fannie and Freddie got out of sub prime, in 03, there followed a huge incease of predatory lending, which led to a huge increase in sub prime mortgages, much of that action for by investors, buying up multiple properties.

This is why, I suppose, I have heard so many knowledgable people say, that blaming the CRA, for our collapse, is incorrect, and that the problem was far deeper than the relatively few defaults from Fannie ad Freddie, this, of course, not inclulding the actions F and F took to buy or accept toxic loans, after the fact.

So, what I'm asking you, is this, am I wrong when I say that Fannie and Freddie, were not the central cause of the crash, and that the huge rise in predatory lending, from loads of fly by night lending companies, who jumped in when that void opened, after F and F got out, was really when sub prime really took off, and reached extreme and threateing levels?

IOW, without the stupidity and greed on Wall Street, we'd never have found ourselves in the midst of the threat of complete collapse, and the threat of a decade long Depression?

<span style='font-size: 14pt'>We already know that Lehmann Brothers had several other investment banks artificially conceal the size of their liabilities. We already know that Merrill Lynch and other investment banks engaged in self dealing to artificially prop up the prices of the securities they were selling. We already know that Goldman Sachs and other investment banks made tens of billions of dollars by betting against the very securities that they were selling to their customers as safe. It is impossible that all of those things were being done, DURING THE BUSH ADMINISTRATION, without crimes being committed.</span>

G.

cushioncrawler
10-04-2010, 06:32 AM
Gayle -- The usofa haz a financial system where a few baddys can stop the system.
The system iz fukked.
mac.

What u we need iz a system that givs near'nuff full employment -- dunn well this will rezult in a big cake.
What u we need iz a system that givs a fair slicing of that large cake.
The usofa system duz neither az well az it kood.
Krappynomix iz the real enemy.

Gayle in MD
10-04-2010, 06:44 AM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: cushioncrawler</div><div class="ubbcode-body">Gayle -- The usofa haz a financial system where a few baddys can stop the system.
The system iz fukked.
mac.

What u we need iz a system that givs near'nuff full employment -- dunn well this will rezult in a big cake.
What u we need iz a system that givs a fair slicing of that large cake.
The usofa system duz neither az well az it kood.
Krappynomix iz the real enemy. </div></div>

Exactly, and what you call Krappynomix, is actually the Republican "Trickle down Voodoo Economics"

No nation thrivves when the top two percent are the only ones moving forward, a direct result of Republican policies.

We already know that Lehmann Brothers had several other investment banks artificially conceal the size of their liabilities. We already know that Merrill Lynch and other investment banks engaged in self dealing to artificially prop up the prices of the securities they were selling. We already know that Goldman Sachs and other investment banks made tens of billions of dollars by betting against the very securities that they were selling to their customers as safe. It is impossible that all of those things were being done, DURING THE BUSH ADMINISTRATION, without crimes being committed.

Not one person has been arrested! Not one! What is totally aabsurd, is to contend that a thirty year old Community ReInvestment act, or that Fannie and Freddie, were the central cause of the financial collapse, yet, Republicans are anti-REgulation! Anti Regulation of Oil, anti regulation of the financial Institutions, IOW Corporate Fascist PIGS, and anti-regulation of thhe polluting pigs of the world!

They depend on the Bubba ignorance in order to continue, distracting them with BS about guns and abortion, Gay marriage and Mosques near ground zero!


And The sheep say Bah Bah Bah....still syaing it to thhis day. NOTHING is wake them up until the Republicans get back in there, and they all end up in a soup line, that's what it took the last time the Republicans turned this country into a country of poverty, hunger, and desperation.

G.
G.

Chopstick
10-06-2010, 12:59 PM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Gayle in MD</div><div class="ubbcode-body">Sack,
Thanks for the very well presented response.

<span style="color: #000099">Thanks but Mr Sack isn't in this thread.</span> /forums/images/%%GRAEMLIN_URL%%/laugh.gif

So, do you then agree with this:

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">2. Indeed, in the end, losses on subprime mortgages would not have been nearly so great if vulnerabilities in the financial system had not led to such large adverse effects on economic activity and house prices.
</div></div>

<span style="color: #000099">Yes. </span>

Also, it was my understanding that after Fannie and Freddie got out of sub prime, in 03, there followed a huge incease of predatory lending, which led to a huge increase in sub prime mortgages, much of that action for by investors, buying up multiple properties.

<span style="color: #000099">I wondered why you keep saying that. I happened to run across it. That comes from a research report done by UC Irvine's Paul Merage School of Business Center for Real Estate. The term they used was pull back, not pull out. Fannies market share was reduced by other lending institutions getting into the game in 2003. They have never stopped handling sub prime paper. To this day FHA is issuing housing loans for $1000 down and sending them straight to Fannie.</span>

This is why, I suppose, I have heard so many knowledgable people say, that blaming the CRA, for our collapse, is incorrect, and that the problem was far deeper than the relatively few defaults<span style="color: #000099"> you mean a relatively few million defaults </span> from Fannie ad Freddie, this, of course, not inclulding the actions F and F took to buy or accept toxic loans, after the fact.

<span style="color: #000099">I have heard those people as well and I have heard many more say the exact opposite. There is a mountain of evidence that the changes made to CRA in 1995 started this snowball down the hill. It's going to to take more than someones opinion to change my mind no matter how many acronyms they have behind their name. I read the bills. I saw the number of mortgages that Fannie and Freddie have on their books explode by hundreds of percent a year beginning in 1995 after showing stable growth for years.</span>

So, what I'm asking you, is this, am I wrong when I say that Fannie and Freddie, were not the central cause of the crash, and that the huge rise in predatory lending, from loads of fly by night lending companies, who jumped in when that void opened, after F and F got out, was really when sub prime really took off, and reached extreme and threateing levels?

<span style="color: #000099">Fannie and Freddie were not the central cause. They are just the biggest and most corrupt of the bunch because they had an entire congressional committee in their back pocket.
</span>

IOW, without the stupidity and greed on Wall Street, we'd never have found ourselves in the midst of the threat of complete collapse, and the threat of a decade long Depression?

<span style="color: #000099">It wasn't restricted to Wall Street. It extend to the local banks on the street corner. There were other legislative actions that paved the way and no it wasn't the republicans. Both sides had a hand in creating this disaster. Those predatory lenders would never have existed if congress had not opened the door for them. Actually congress held the door for them.</span>

We already know that Lehmann Brothers had several other investment banks artificially conceal the size of their liabilities.

We already know that Merrill Lynch and other investment banks engaged in self dealing to artificially prop up the prices of the securities they were selling.

We already know that Goldman Sachs and other investment banks made tens of billions of dollars by betting against the very securities that they were selling to their customers as safe.

<span style="color: #000099">Do you really know these things or is it that you know someone said those things? I am not trying to be a smart alec. I am just saying that a certain amount of skepticism is prudent until one conducts their own analysis. </span>

It is impossible that all of those things were being done, DURING THE BUSH ADMINISTRATION, without crimes being committed.

<span style="color: #000099">You are quite correct. I have traced the beginnings to the Clinton administration and their continuation through the Bush and Obama administrations. I suspect it may go back even farther than that. That is one reason I say democrats and republicans are all the same thing. Taking one side over the other is just silly. I say fire em all.</span>

</div></div>

Deeman3
10-06-2010, 01:13 PM
That is one reason I say democrats and republicans are all the same thing. Taking one side over the other is just silly. I say fire em all.


Chopstick,

I think in reality, all on here except the extream partisans would agree with this statement of yours.

If we would just vote out all the incumbents in both parties, we'd have a good start.

Problem is, beyond this next election, I don't thnk people will stay mad enough to continue the trend.

All of us have no frineds in Washington, just few who will do less damage than another may.

Here, we rapidly moving out the Democrat crooks but will soon replace them with republican crooks. /forums/images/%%GRAEMLIN_URL%%/frown.gif

pooltchr
10-06-2010, 04:19 PM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Chopstick</div><div class="ubbcode-body">[quote=Gayle in MD]Sack,
Thanks for the very well presented response.

<span style="color: #000099">Thanks but Mr Sack isn't in this thread.</span> /forums/images/%%GRAEMLIN_URL%%/laugh.gif

</div></div>

LOL...You white boys from the south all look alike!!!

/forums/images/%%GRAEMLIN_URL%%/wink.gif

Steve

Gayle in MD
10-07-2010, 07:20 AM
Sorry Chop, was thinking Chop, and wrote Sack...

Well, all that I can say is that your info, doen't match what I have read, four books, on this subject, and hours of recoded programming, of live testimony.

Are you saying that Fannie and Freddie did not have an accounting scandal in 03, and did not get out of sub prime, and that it was NOT after their exit from sub prime, that the number of fly-by-night, predatory mortgage companies, expanded sub prime, tremendously?

And are you claiming also, that it was not the shadow banking, and corrupted rating system, along with false solvency claims of the major institutions on Wall Street, and their massive gambling with other people's money, while betting against the very investments they sold and portrayed as solid, while knowing damn well they weren't, and then racking up the profits for themselves?

Maybe, I should ask you this way, as regards the huge crash we faced, what measure of responsibility, do YOU think Wall Street, was responsible for?

I must say that the one continuing theme, in everything I've studied, has been that without the criminal activities of the Wall Street crooks, shadow banking practices, that were surely not backed by enough money behind them, along with corrupted rating practices, we'd never have faced the collapse which resulted.

I've heard dozens of economists, and watched a number of documentaries, several very thorough books, all of which make the statement, that to place the blame of what happened, on Fannie and Freddie, is sheer ignorance. Not my words, their words. This, also, has been a continuing theme, in everything I've studied, and from all sides of economic philosophies.

One other question, if you will, is it not true that the vast excellerated build up of the causes of the crash, both on Wall Street, in the banking, lending, rating and intentionally complex instruments, occured mostly between 03 and late 06, and that during that time, our so called Regulators, knew exactly what was coming? What part do you think the President's, Ownership society, played, in the failure to divert the growing threats, early enough to prevent a complete collapse?

I don't know how many economists I've heard, state that it was a done deal, by late 06, and they also say that if the Bush Administration, Paulson, had not allowed Lehman Bros., to fail, the whole crash may have been diverted, or at the vey least, reduced to something far less pervasive, and prevented the huge panic which led also to a much more devastating result.

I'd be interested in your views on those issues.

G.

jimmyg
10-07-2010, 11:38 AM
While many of the G's claims are correct, it is clear that she does not know exactly that, or how, Freddie and Fannie operate in the secondary mortgage market. F & F are not primary mortgage originators, they purchase mortgages in the secondary mortgage market that are required to conform to certain lending standards which are then implied to have a government guarantee. Had they not laxed their conforming loan standards, no (implied) government guarantee would have existed.

To absolve Fannie & Freddie of major direct fault is absurd.

The sad and unfortunate truth is that this was a unified effort by the major banking interests, in partnership with the politicians that are owned by them, to defraud the public. Members of both political parties were complicit, and the entire system is corrupt.

J

Gayle in MD
10-07-2010, 01:20 PM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Chopstick</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Gayle in MD</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: cushioncrawler</div><div class="ubbcode-body">Read.... "our system iz fukked".
mac. </div></div>


<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">Triggers of the Crisis
In discussing the causes of the crisis, it is essential to distinguish between triggers (the particular events or factors that touched off the crisis) and vulnerabilities (the structural weaknesses in the financial system and in regulation and supervision that propagated and amplified the initial shocks). Although a number of developments helped trigger the crisis, the most prominent one was the prospect of significant losses on residential mortgage loans to subprime borrowers that became apparent shortly after house prices began to decline. With more than $1 trillion in subprime mortgages outstanding, the potential for losses on these loans was large in absolute terms; however, <span style='font-size: 20pt'>judged in relation to the size of global financial markets, prospective subprime losses were clearly not large enough on their own to account for the magnitude of the crisis. </span>(Indeed, daily movements in global equity markets not infrequently impose aggregate gains or losses equal to or greater than all the subprime mortgage losses incurred thus far.) <span style='font-size: 14pt'>Rather, the system's vulnerabilities, together with gaps in the government's crisis-response toolkit, were the principal explanations of why the crisis was so severe and had such devastating effects on the broader economy. </span>
</div></div> </div></div>

<span style="color: #000099">That paragraph doesn't really say anything. I haven't finished with it yet but I did find this to be particularly interesting.</span>

Bernanke: "Central banks, such as the Federal Reserve, can mitigate liquidity problems by lending against less-liquid but nevertheless sound collateral; indeed, serving as "lender of last resort" has been central banks' key weapon against financial panics for hundreds of years."

<span style="color: #000099">I'm just up to the part where he is talking about commercial paper and stuff. I know they call it the Shadow Banking system but how can it be considered in the shadows when the firms have a hundred story building right in the middle of downtown.

I had to learn about the financial instruments he is talking about to pass the test. What he is talking about is how they all fit together, which I do not fully understand. Thanks for posting it and I will post some comments about it when I am finished.</span> </div></div>


June 3, 2010, 4:35 am
Things Everyone In Chicago Knows
Which happen not to be true.

It was deeply depressing to see Raguram Rajan write this:

The tsunami of money directed by a US Congress, worried about growing income inequality, towards expanding low income housing, joined with the flood of foreign capital inflows to remove any discipline on home loans.

Thatís a claim that has been refuted over and over again. But what happens, I believe, is that in Chicago they donít listen at all to what the unbelievers say and write; and so the fact that those libruls in Congress caused the bubble is just part of what everyone knows, even though itís not true.

Just to repeat the basic facts here:

1. The Community Reinvestment Act of 1977 was irrelevant to the subprime boom, which was overwhelmingly driven by loan originators not subject to the Act.

2. The housing bubble reached its point of maximum inflation in the middle years of the naughties:

Robert Shiller
3. During those same years, Fannie and Freddie were sidelined by Congressional pressure, and saw a sharp drop in their share of securitization:

FCIC
while securitization by private players surged:

FCIC
Of course, I imagine that this post, like everything else, will fail to penetrate the cone of silence. Itís convenient to believe that somehow, this is all Barney Frankís fault; and so that belief will continue.



Excellent charts here:

http://krugman.blogs.nytimes.com/2010/06/03/things-everyone-in-chicago-knows/