Bush Warned of the economic crisis in 2001

[Cajuncowboy]

Watch it before it gets removed. Because I'm sure it will be soon.

cMnSp4qEXNM&NR

[sbark]

but I'm sure wikipedia will include it for Historical perspectives.....:rolleyes:

[trickblue]

Watch it before it gets removed. Because I'm sure it will be soon.

cMnSp4qEXNM&NR

Bush won't get credit for anything in the near future. I had many issues with him, but he is not the doofus he is made out to be...

Those that keep putting Frank back into office need to be held accountable... he is a dunce that pads his pockets as is Schumer...

Disgraces to this country...

PS: Why would this be removed?

[Cajuncowboy]

Bush won't get credit for anything in the near future. I had many issues with him, but he is not the doofus he is made out to be...

Those that keep putting Frank back into office need to be held accountable... he is a dunce that pads his pockets as is Schumer...

Disgraces to this country...

PS: Why would this be removed?

Seems like anything that gives credit to Bush or takes the luster off Obama is removed. Check Wikipedia.

[Hoofbite]

Bush won't get credit for anything in the near future. I had many issues with him, but he is not the doofus he is made out to be...

Those that keep putting Frank back into office need to be held accountable... he is a dunce that pads his pockets as is Schumer...

Disgraces to this country...

PS: Why would this be removed?

Cause the man doesn't want us to know.......

[trickblue]

Seems like anything that gives credit to Bush or takes the luster off Obama is removed. Check Wikipedia.

Well I don't give a lot of credit to Bush... or any neo-con *******, but it will only be deleted if it violates terms of service...

[Hoofbite]

Seems like anything that gives credit to Bush or takes the luster off Obama is removed. Check Wikipedia.

So go re-edit wikipedia. Its an open forum that allows anyone to edit anything.

[ABQCOWBOY]

Cause the man doesn't want us to know.......


The funny part of this is that the Decomcratic Party is now "The Man." Based on what I've witnessed these past several weeks, I'd have to agree with you. I don't think "The Man" does want anybody to fully understand what's going on but no matter.

Hopefully in just under 4 years, a good strong Conservative candidate will surface and restore balance. Then the 60s perceptions of, "The Man" can be restored and we will all understand who's who in this shared.

:)

[Rogah]

This was an interesting article. The Republicans deserve a lot of blame for the current situation, but one thing they do not deserve as much blame as they are getting is for the mortgage crisis. The simple fact of the matter is that going back to the 90's and the Clinton Administration, the Democrats put heavy political pressure on FNMA/FHLMC to extend loans and mortgages to low income households.

I don't want to be overly critical; it is a worthwhile goal to extend the "American Dream" to families having a hard time affording it. But the simple reality is that it just wasn't a good idea to give mortgages to massive numbers of people who couldn't afford them. It's a lesson we've all learned the hard way.

[zrinkill]

Many people saw it coming.

Some of us planned for it.

[ABQCOWBOY]

It really is amazing to me how people can see this kind of information and still refuse to believe what is right in front of them. Much of this information was present before the campaigns but it didn't matter. It was talked down as party rhetoric. Instead, we allow the same screwed up bunch to run the government and pass even more laws that further compound the economic issues. We allow them to use this mess as leverage to coherse trillions of tax payer dollars out of us for the furtherment of decidedly left agendas, all the while, using scare tactics to force policy. They use this same cohersion technique to force private industry to bow to Government mandate on how to run there business, how to compensate employees and who to hire and fire.

Very difficult to watch this happen.

[Temo]

Bush passed plenty of things that liberals hated in his 8 years of office; if he felt strongly about this, he would have had the political capital necessary to get it done.

Both parties deserve blame for the crisis. There is absolutely no one who comes out well in all this.

[JBond]

Many people saw it coming.

Some of us planned for it.

Yes they did.

Some of us also understand the devastating effects massive spending on socialist programs will have on our country and who will have to pay for it.

Those that don't understand are the losers collecting the government checks.

[zrinkill]

Yes they did.

Some of us also understand the devastating effects massive spending on socialist programs will have on our country and who will have to pay for it.

Those that don't understand are the losers collecting the government checks.

I agree .... or they are just uneducated on how business works.

[ABQCOWBOY]

Bush passed plenty of things that liberals hated in his 8 years of office; if he felt strongly about this, he would have had the political capital necessary to get it done.

Both parties deserve blame for the crisis. There is absolutely no one who comes out well in all this.


I can not agree with this. Presidents don't pass laws. If you want to say that Bush was responsible for what has happened in the War, OK. If you want to say that Bush was not as fiscally responsible as he should have been, OK. If you want to say that Bush's Drug Plan was poor, OK.

But not the housing thing. That was and always has been the Democrats Poster Child IMO.

[TheCount]

It really is amazing to me how people can see this kind of information and still refuse to believe what is right in front of them. Much of this information was present before the campaigns but it didn't matter. It was talked down as party rhetoric. Instead, we allow the same screwed up bunch to run the government and pass even more laws that further compound the economic issues. We allow them to use this mess as leverage to coherse trillions of tax payer dollars out of us for the furtherment of decidedly left agendas, all the while, using scare tactics to force policy. They use this same cohersion technique to force private industry to bow to Government mandate on how to run there business, how to compensate employees and who to hire and fire.

Very difficult to watch this happen.

Left agenda? Have you not being paying attention to politics since the dawn of time? That's how they operate, doesn't matter if you're left or right or dead center. The government has always used fear and propaganda to rally their troops and to chastise their opponents.

What kind of ridiculousness is it to believe only one side operates like that?

Bush passed plenty of things that liberals hated in his 8 years of office; if he felt strongly about this, he would have had the political capital necessary to get it done.

Both parties deserve blame for the crisis. There is absolutely no one who comes out well in all this.

While I didn't really see Bush in the video, I do believe the signs were there that something like this could happen and I believe people in his administration cautioned against it. But it's hard to get support when everyone is living in huge homes they normally couldn't otherwise and taking in money by the bucketful.

Every bubble has a bursting point, history has proven it again and again. This is not the first recession we've been in since the 1930's, but people sure are acting like it is.

[Temo]

But not the housing thing. That was and always has been the Democrats Poster Child IMO.

Economic bubbles have almost never been the work of a minority of the population, but the willing ignorance of society as a whole.

(By the same token, I blame both the planning and execution of the Iraq War on both parties)

There was the tech bubble before, and the savings and loan bubble before that, and the "synergy" bubble before that, and more bubbles going back as far as human economic history goes. (This current bubble just happens to be among the most dangerous of the ones that have occurred). And within the next 20 years, there will be some other bubble that pops (of varying size and importance) and we'll all go "why didn't we do anything about this before".

(Myself, I think gold will be the next bubble, but **** do I know, right? :) )

I also like how people pretend this is the first time a government has bailed out its banks. We even did it before, in the '80s... on a much smaller scale. Governments have been tied to their financial sectors since as far as back as we can go. Hell, we learned in High School Latin class how often the Roman Emperors would solve financial problems by providing liquidity for their banks.

[Rogah]

Bush passed plenty of things that liberals hated in his 8 years of office; if he felt strongly about this, he would have had the political capital necessary to get it done.

Both parties deserve blame for the crisis. There is absolutely no one who comes out well in all this.With all due respect, that's pretty bankrupt logic. Essentially you are trying to give Bush as much blame as the "liberals" (using your term) who obstructed him because well... he just didn't try hard enough to overcome the obstructionists..!! So he is just as guilty as they are..!!

That's just not a logically sound position.

[ConcordCowboy]

http://www.inet.ba/~tbosna/b025.jpg

[ABQCOWBOY]

Left agenda? Have you not being paying attention to politics since the dawn of time? That's how they operate, doesn't matter if you're left or right or dead center. The government has always used fear and propaganda to rally their troops and to chastise their opponents.

What kind of ridiculousness is it to believe only one side operates like that?



The highest form I suppose. I do not disagree with you Count. Politicians have been guilty of this since long before you and I were ever born, it's true.

The point I was trying to make is that I do not understand how you can see all of the mounting information and still refuse to believe that it's a scare tactic. To me, that is insane. The other thing I don't understand is supporting bigger government when you know the government will not be truthful with you. You know they will abuse power. Why support giving them more power?

That does not make sense to me Count.

[Temo]

With all due respect, that's pretty bankrupt logic. Essentially you are trying to give Bush as much blame as the "liberals" (using your term) who obstructed him because well... he just didn't try hard enough to overcome the obstructionists..!! So he is just as guilty as they are..!!

That's just not a logically sound position.

Perhaps I should have been more specific. When it comes to this exact circumstance, I agree that Democrats share more of the blame than Republicans. However, I would not at all absolve Bush in anyway, because again he had the political capital and supporters to stop it if he wanted to.

However, mortgages themselves are only a part of the whole economic problem. There were a lot of enablers that resulted in the economic meltdown that we're in now, and in the end-- without doing a point-by-point who's fault is this count-- both parties are equally to blame for the crisis.

[ABQCOWBOY]

Economic bubbles have almost never been the work of a minority of the population, but the willing ignorance of society as a whole.

(By the same token, I blame both the planning and execution of the Iraq War on both parties)

There was the tech bubble before, and the savings and loan bubble before that, and the "synergy" bubble before that, and more bubbles going back as far as human economic history goes. (This current bubble just happens to be among the most dangerous of the ones that have occurred). And within the next 20 years, there will be some other bubble that pops (of varying size and importance) and we'll all go "why didn't we do anything about this before".

(Myself, I think gold will be the next bubble, but **** do I know, right? :) )

I also like how people pretend this is the first time a government has bailed out its banks. We even did it before, in the '80s... on a much smaller scale. Governments have been tied to their financial sectors since as far as back as we can go. Hell, we learned in High School Latin class how often the Roman Emperors would solve financial problems by providing liquidity for their banks.

So, I would like to get your take on something that I have wondered about for some time.

Going back to the 30s, maybe longer, our banking system used a form of "Fair Asset Value Accounting" to set worth on a given asset. Recently, our banking system went away from this and adopted a sort of "Market Value Accounting System" which basically introduces futures principles as part of the equiation. As I understand it, and I could be a bit off base here, a certain asset has a certain value in the former, while in the latter, it bares the value of what the market will pay in the here and now.

Lets assume we are talking about a home. In the old days, even if the market tanked, a home still had a certain value because the banking industry new that eventually that asset would be worth money. So lets say, a home was assigned a value of 60 cents on the dollar. Today, in a market such as this, that home may carry a value of 20 cents on the dollar. Now, you know that eventually the value of that home will come back up so the asset is not as toxic, under the old value system, as it is today. The problem with banks and lending is that regulations say you must have X amount of healthy asset dollars in order to lend more money. If we value these toxic assets under the traditional asset value system, most of these banks would not be in the red right now. Most would still be liquid and able to lend money, which is really the main issue our economy is facing. Is this true and if it is, why did we spend all the money we did when we simply could have adopted our traditional banking practices and eased the asset burden on our lending system?

Why not suspend the Mark to Market system and allow for normalization of these assets? Seems as if it would be much cheaper and much better then trying to nationalize our banking system and spend trillions of dollars trying to bail out the banks when a simple change in our accounting policies could fix this problem?

[ABQCOWBOY]

Perhaps I should have been more specific. When it comes to this exact circumstance, I agree that Democrats share more of the blame than Republicans. However, I would not at all absolve Bush in anyway, because again he had the political capital and supporters to stop it if he wanted to.

However, mortgages themselves are only a part of the whole economic problem. There were a lot of enablers that resulted in the economic meltdown that we're in now, and in the end-- without doing a point-by-point who's fault is this count-- both parties are equally to blame for the crisis.

No Temo. This is inaccurate. At what point did FP Bush have the political clout to stop this thing?

[Rogah]

Perhaps I should have been more specific. When it comes to this exact circumstance, I agree that Democrats share more of the blame than Republicans. However, I would not at all absolve Bush in anyway, because again he had the political capital and supporters to stop it if he wanted to.

However, mortgages themselves are only a part of the whole economic problem. There were a lot of enablers that resulted in the economic meltdown that we're in now, and in the end-- without doing a point-by-point who's fault is this count-- both parties are equally to blame for the crisis.Fair enough. As I said in my other post, I certainly agree there is plenty of blame to go around to both parties. But I just don't think Bush is as powerful as you think he was and I don't see how he could have pushed through the changes he wanted with such strong opposition mounted against him. It is very politically dangerous to take things away from lower income citizens.

[vlad]

This is exactly why I hate party-towers. Instead of thinking the world is two sided, why don't we just listen to ideas from everywhere and actually take the time to understand them? I swear, its like scientists don't understand science if they aren't in your party of choice, and financial administators don't understand finance for the same reason. There are people that are damn smart that pay attention to these things, bring it to the attention of professional politicians who then can promote it, but if its not in your party then its just attacked blindly. Plus Barney Frank is an idiot. How that guy still has a job...

[ChldsPlay]

http://www.inet.ba/~tbosna/b025.jpg

So what you're saying is....Obama is more of the same???

[CowboyWay]

There's a difference between getting people with low incomes into homes that they can afford and pay for, and letting people who make $50,000 a year getting mortgages for $400,000.

Thats why we're in this mess. But I do agree, there is plenty of blame to go around.

[theogt]

So, I would like to get your take on something that I have wondered about for some time.

Going back to the 30s, maybe longer, our banking system used a form of "Fair Asset Value Accounting" to set worth on a given asset. Recently, our banking system went away from this and adopted a sort of "Market Value Accounting System" which basically introduces futures principles as part of the equiation. As I understand it, and I could be a bit off base here, a certain asset has a certain value in the former, while in the latter, it bares the value of what the market will pay in the here and now.

Lets assume we are talking about a home. In the old days, even if the market tanked, a home still had a certain value because the banking industry new that eventually that asset would be worth money. So lets say, a home was assigned a value of 60 cents on the dollar. Today, in a market such as this, that home may carry a value of 20 cents on the dollar. Now, you know that eventually the value of that home will come back up so the asset is not as toxic, under the old value system, as it is today. The problem with banks and lending is that regulations say you must have X amount of healthy asset dollars in order to lend more money. If we value these toxic assets under the traditional asset value system, most of these banks would not be in the red right now. Most would still be liquid and able to lend money, which is really the main issue our economy is facing. Is this true and if it is, why did we spend all the money we did when we simply could have adopted our traditional banking practices and eased the asset burden on our lending system?

Why not suspend the Mark to Market system and allow for normalization of these assets? Seems as if it would be much cheaper and much better then trying to nationalize our banking system and spend trillions of dollars trying to bail out the banks when a simple change in our accounting policies could fix this problem?Your analysis is spot on. And that's a damn good question. It's a tough one, though. Your trade off is that if banks are simply going to "make up" a number, no one will really know what's on their balance sheets. And do we really want banks shrouded in more secrecy? Cooking their books even more?

It's a balance between truth/transparency and crisis management. That's a hard balance to strike. I think to fully answer the question you'd need to have a level of access to information that none of us have.

[Rogah]

There's a difference between getting people with low incomes into homes that they can afford and pay for, and letting people who make $50,000 a year getting mortgages for $400,000.

Thats why we're in this mess. But I do agree, there is plenty of blame to go around.Yes, but unfortunately there were all too many low income people jumping into mortgages that they couldn't afford to pay for because of all the political pressure coming down on FNMA/FHLMC to extend more lines of credit to those families.

[theogt]

Yes, but unfortunately there were all too many low income people jumping into mortgages that they couldn't afford to pay for because of all the political pressure coming down on FNMA/FHLMC to extend more lines of credit to those families.Or more precisely, mortgage originators didn't really care if they couldn't afford them, because they weren't sticking around long enough to have the time bomb go off. And the banks bought them up because investors wanted more and more to invest in.

The "political pressure" meme is complete crap. It was about $$$$. Not politics.

[ABQCOWBOY]

Your analysis is spot on. And that's a damn good question. It's a tough one, though. Your trade off is that if banks are simply going to "make up" a number, no one will really know what's on their balance sheets. And do we really want banks shrouded in more secrecy? Cooking their books even more?

It's a balance between truth/transparency and crisis management. That's a hard balance to strike. I think to fully answer the question you'd need to have a level of access to information that none of us have.

I think it would be challenging to value these assets as well but given what we've already spent, what we will likely have to spend going forward and the fact that the balance sheets reflect incorrect values for these assets already, it's difficult to see what we have to lose. Your point about Banks setting there own values is something that I think deserves consideration but the alternative is the Obama Administration taking over your business.

I think I'd bet on the Banks playing it straight based on that fact alone. You never know but at this point, it's really hard for me to see this contingency as a more serious threat then we already face. JMO.

[theogt]

I think it would be challenging to value these assets as well but given what we've already spent, what we will likely have to spend going forward and the fact that the balance sheets reflect incorrect values for these assets already, it's difficult to see what we have to lose. Your point about Banks setting there own values is something that I think deserves consideration but the alternative is the Obama Administration taking over your business.

I think I'd bet on the Banks playing it straight based on that fact alone. You never know but at this point, it's really hard for me to see this contingency as a more serious threat then we already face. JMO.110% agreed.

And I think it's finally sunk in and is why the FASB has loosened the rules a bit.

[TheSkaven]

I watched the video. Bush was part of the problem, this is hardly a Democrat/Republican thing. In 2001, the US dollar was equal to the Euro, now 1 euro buys $1.34. Gold has tripled in value since 2001. Housing prices tripled, the stock market almost doubled. Oil went up by 5x.

Basically, Bush (and the Democratic congress) pumped the economy with too many dollars, creating crazy inflation (don't believe the CPI), debasing the dollar and pushing up the cost of everything.

Most people don't know that banks don't lend only their reserves. Reserve requirements allow banks to lend at ratios of 8:1 to their reserves. When lending standards are loose, banks create money out of thin air (borrow the money from the Fed by selling bonds) and all that new money drives up the price of EVERYTHING.

Now, no one can borrow money, it can't be created out of thin air, we have the opposite problem - deflation. Just like when you get stone cold drunk, the more you drink, the worse your hangover.

So Bush and the Republicans in congress were part of the problem. Barney Frank, Reid, and the Democrats were part of the problem. And now, Obama is part of the problem by debasing our dollar even more in an attempt to get consumers to "spend", when the fact is, we should be saving, and we're really just making the hangover worse.

/endrant

[theogt]

I watched the video. Bush was part of the problem, this is hardly a Democrat/Republican thing. In 2001, the US dollar was equal to the Euro, now 1 euro buys $1.34. Gold has tripled in value since 2001. Housing prices tripled, the stock market almost doubled. Oil went up by 5x.

Basically, Bush (and the Democratic congress) pumped the economy with too many dollars, creating crazy inflation (don't believe the CPI), debasing the dollar and pushing up the cost of everything.

Most people don't know that banks don't lend only their reserves. Reserve requirements allow banks to lend at ratios of 8:1 to their reserves. When lending standards are loose, banks create money out of thin air (borrow the money from the Fed by selling bonds) and all that new money drives up the price of EVERYTHING.

Now, no one can borrow money, it can't be created out of thin air, we have the opposite problem - deflation. Just like when you get stone cold drunk, the more you drink, the worse your hangover.

So Bush and the Republicans in congress were part of the problem. Barney Frank, Reid, and the Democrats were part of the problem. And now, Obama is part of the problem by debasing our dollar even more in an attempt to get consumers to "spend", when the fact is, we should be saving, and we're really just making the hangover worse.

/endrantSo what are we supposed to believe? Money supply didn't increase in a "crazy" manner during his tenure. CPI didn't increase in a "crazy" manner during his tenure. Exactly what measure of inflation are we to believe?

FYI, just because an asset class or two experience a bubble during a given span doesn't mean it's caused by "crazy" inflation.

Also reserve requirements are 10%, not 8%.

[CowboyMcCoy]

Watch it before it gets removed. Because I'm sure it will be soon.

cMnSp4qEXNM&NR

He predicted it because he knew he was going to CAUSE it. DOH!

[Temo]

So, I would like to get your take on something that I have wondered about for some time.

Going back to the 30s, maybe longer, our banking system used a form of "Fair Asset Value Accounting" to set worth on a given asset. Recently, our banking system went away from this and adopted a sort of "Market Value Accounting System" which basically introduces futures principles as part of the equiation. As I understand it, and I could be a bit off base here, a certain asset has a certain value in the former, while in the latter, it bares the value of what the market will pay in the here and now.

Lets assume we are talking about a home. In the old days, even if the market tanked, a home still had a certain value because the banking industry new that eventually that asset would be worth money. So lets say, a home was assigned a value of 60 cents on the dollar. Today, in a market such as this, that home may carry a value of 20 cents on the dollar. Now, you know that eventually the value of that home will come back up so the asset is not as toxic, under the old value system, as it is today. The problem with banks and lending is that regulations say you must have X amount of healthy asset dollars in order to lend more money. If we value these toxic assets under the traditional asset value system, most of these banks would not be in the red right now. Most would still be liquid and able to lend money, which is really the main issue our economy is facing. Is this true and if it is, why did we spend all the money we did when we simply could have adopted our traditional banking practices and eased the asset burden on our lending system?

Why not suspend the Mark to Market system and allow for normalization of these assets? Seems as if it would be much cheaper and much better then trying to nationalize our banking system and spend trillions of dollars trying to bail out the banks when a simple change in our accounting policies could fix this problem?

I'm kinda drunk right now and it's late, so some of this may be off-- but I wanted to answer this post before I forgot since I only check this forum once a week or so.

"Section 132 of the Emergency Economic Stabilization Act of 2008 (http://en.wikipedia.org/wiki/HR1424), titled "Authority to Suspend Mark-to-Market Accounting" restates the Securities and Exchange Commission (http://en.wikipedia.org/wiki/Securities_and_Exchange_Commission)’s authority to suspend the application of FAS 157 if the SEC determines that it is in the public interest and protects investors."

So iin other words, they have suspended mark to market rules to an extent. But simple accounting problems won't fix everything, as you suggest. The fundamental problem in the market right now is that no one knows how much these assets are worth; which is why you hear "housing market stabilization" catchphrases abound. Most have a dim apprehension that these "toxic assets" (which is a funny term in and of itself, but whatever) are worth more than their current market value; but it's a long step to be able to say they're worth $X.

And with this immense lack of transparency and trust, there's the real root of the problem: a fundamental lack of integrity within the financial system due to an immense lack of confidence. And the cure-all for confidence is and always will be capital.

[theogt]

I'm kinda drunk right now and it's late, so some of this may be off-- but I wanted to answer this post before I forgot since I only check this forum once a week or so.

"Section 132 of the Emergency Economic Stabilization Act of 2008 (http://en.wikipedia.org/wiki/HR1424), titled "Authority to Suspend Mark-to-Market Accounting" restates the Securities and Exchange Commission (http://en.wikipedia.org/wiki/Securities_and_Exchange_Commission)’s authority to suspend the application of FAS 157 if the SEC determines that it is in the public interest and protects investors."

So iin other words, they have suspended mark to market rules to an extent. But simple accounting problems won't fix everything, as you suggest. The fundamental problem in the market right now is that no one knows how much these assets are worth; which is why you hear "housing market stabilization" catchphrases abound. Most have a dim apprehension that these "toxic assets" (which is a funny term in and of itself, but whatever) are worth more than their current market value; but it's a long step to be able to say they're worth $X.

And with this immense lack of transparency and trust, there's the real root of the problem: a fundamental lack of integrity within the financial system due to an immense lack of confidence. And the cure-all for confidence is and always will be capital.TARP didn't alter M2M rules. It only gave the SEC the authority to change them. The rules were "clarified" several months ago and then actually altered just this past week.

[Rogah]

Or more precisely, mortgage originators didn't really care if they couldn't afford them, because they weren't sticking around long enough to have the time bomb go off. And the banks bought them up because investors wanted more and more to invest in.

The "political pressure" meme is complete crap. It was about $$$$. Not politics.I disagree with that statement, and the video that started this thread shows a great example of the exact type of political pressure I am talking about.

[theogt]

I disagree with that statement, and the video that started this thread shows a great example of the exact type of political pressure I am talking about.You mean the political pressure provided by less oversight?

Yeah, right.

[ABQCOWBOY]

Or more precisely, mortgage originators didn't really care if they couldn't afford them, because they weren't sticking around long enough to have the time bomb go off. And the banks bought them up because investors wanted more and more to invest in.

The "political pressure" meme is complete crap. It was about $$$$. Not politics.

I don't know that I agree with this. I mean, I do agree with you that a great deal of this was driven my money but the Government had it's hand in it as well. The Government changed the rules to allow for this in the first place. The Government made it manditory for lending agencies to lend to bad risks and the Government prevented legislattion from putting a stop to much of this once they realized it was a threat.

I think that Government has it's responsabilities as well.

[theogt]

I don't know that I agree with this. I mean, I do agree with you that a great deal of this was driven my money but the Government had it's hand in it as well. The Government changed the rules to allow for this in the first place. The Government made it manditory for lending agencies to lend to bad risks and the Government prevented legislattion from putting a stop to much of this once they realized it was a threat.

I think that Government has it's responsabilities as well.The "mandatory" lending was very very small. It's almost not even worth mentioning. We're talking trillions of dollars, not millions. It's small potatoes.

The government paved the way, like you said, but it didn't "force" or "mandate" anything of significance.

[ABQCOWBOY]

The "mandatory" lending was very very small. It's almost not even worth mentioning. We're talking trillions of dollars, not millions. It's small potatoes.

The government paved the way, like you said, but it didn't "force" or "mandate" anything of significance.


But you have to admit that if the rules governing this type of lending wouldn't have been changed/lifted, this would never have happened.

I can't speak for how large the lending might have been but I can say that as small or large as it was, those bad debts have been at the root of these things, so to speak, so I think you have to say that these loans bare a significant responsability in all this. Even if you just look at it and say, that small percentage of loans was the tool in which this administration has justified the kind of spending it has, it still bares the responsability.

[Rogah]

You mean the political pressure provided by less oversight?

Yeah, right.No, the political pressure placed on FNMA by the Clinton Administration, members of the Clinton Administration and certain leading democrats in Congress to increase the amount of mortgages given to lower income citizens.

Here's a quote from a NY Times piece from 1999.

"Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people."

Also, here is a another quote from the Chairman of FNMA - a person who served in the Clinton Administration prior to taking the reigns at FNMA.

''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. "Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.''

Fannie Mae officials stress that the new mortgages will be extended to all potential borrowers who can qualify for a mortgage. But they add that the move is intended in part to increase the number of minority and low income home owners who tend to have worse credit ratings than non-Hispanic whites.

The NY Times article wraps up with one of the most brilliantly prophetic statements you will ever see in a publication:

"In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's."

http://www.nytimes.com/1999/09/30/business/fannie-mae-eases-credit-to-aid-mortgage-lending.html?sec=&spon=&partner=permalink&exprod=permalink

[theogt]

But you have to admit that if the rules governing this type of lending wouldn't have been changed/lifted, this would never have happened.

I can't speak for how large the lending might have been but I can say that as small or large as it was, those bad debts have been at the root of these things, so to speak, so I think you have to say that these loans bare a significant responsability in all this. Even if you just look at it and say, that small percentage of loans was the tool in which this administration has justified the kind of spending it has, it still bares the responsability.Oh, I definitely agree that the deregulation caused this mess.

No, the political pressure placed on FNMA by the Clinton Administration, members of the Clinton Administration and certain leading democrats in Congress to increase the amount of mortgages given to lower income citizens.

Here's a quote from a NY Times piece from 1999.

"Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people."

Also, here is a another quote from the Chairman of FNMA - a person who served in the Clinton Administration prior to taking the reigns at FNMA.

''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. "Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.''

Fannie Mae officials stress that the new mortgages will be extended to all potential borrowers who can qualify for a mortgage. But they add that the move is intended in part to increase the number of minority and low income home owners who tend to have worse credit ratings than non-Hispanic whites.

The NY Times article wraps up with one of the most brilliantly prophetic statements you will ever see in a publication:

"In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's."

http://www.nytimes.com/1999/09/30/business/fannie-mae-eases-credit-to-aid-mortgage-lending.html?sec=&spon=&partner=permalink&exprod=permalinkThe move into sub-prime lending was about $$$$, not politics. I love the quote: "But they add that the move is intended in part to increase [minority lending.]" LOL. Yeah, in part. And it was in part because they were making **** tons of money at the time off sub-prime lending.

[theogt]

George W. Bush on expanding homeownership:

But I believe owning something is a part of the American Dream, as well. I believe when somebody owns their own home, they're realizing the American Dream. They can say it's my home, it's nobody else's home. (Applause.) And we saw that yesterday in Atlanta, when we went to the new homes of the new homeowners. And I saw with pride firsthand, the man say, welcome to my home. He didn't say, welcome to government's home; he didn't say, welcome to my neighbor's home; he said, welcome to my home. I own the home, and you're welcome to come in the home, and I appreciate it. (Applause.) He was a proud man. He was proud that he owns the property. And I was proud for him. And I want that pride to extend all throughout our country.

One of the things that we've got to do is to address problems straight on and deal with them in a way that helps us meet goals. And so I want to talk about a couple of goals and -- one goal and a problem.

The goal is, everybody who wants to own a home has got a shot at doing so. The problem is we have what we call a homeownership gap in America. Three-quarters of Anglos own their homes, and yet less than 50 percent of African Americans and Hispanics own homes. That ownership gap signals that something might be wrong in the land of plenty. And we need to do something about it.

We are here in Washington, D.C. to address problems. So I've set this goal for the country. We want 5.5 million more homeowners by 2010 -- million more minority homeowners by 2010. (Applause.) Five-and-a-half million families by 2010 will own a home. That is our goal. It is a realistic goal. But it's going to mean we're going to have to work hard to achieve the goal, all of us. And by all of us, I mean not only the federal government, but the private sector, as well.

***

And so, therefore, I've called -- yesterday, I called upon the private sector to help us and help the home buyers. We need more capital in the private markets for first-time, low-income buyers. And I'm proud to report that Fannie Mae has heard the call and, as I understand, it's about $440 billion over a period of time. They've used their influence to create that much capital available for the type of home buyer we're talking about here. It's in their charter; it now needs to be implemented. Freddie Mac is interested in helping. I appreciate both of those agencies providing the underpinnings of good capital.The type of home buyer he's talking about is a sub-prime home buyer.