wrote:
On Oct 7, 8:06 am, Stephen Trapani wrote:
...
A tiny bit of research about the banking crisis reveals that it was not
the free market that caused it, it was *over* regulation (primarily
fannie and freddie) ...

As I've said before that's a meme current mostly with folks who can't
add. I thought the following was a pretty amusing take:

http://www.newsweek.com/id/162789

From that article:

"Look. There was a culture of stupid, reckless lending, of which Fannie
Mae and Freddie Mac and the subprime lenders were an integral part."

Basically Fannie and Freddie regulations created a false market which
was then not subjected to enough oversight and hence abused. That's the
problem with market regulation, it creates the need for ever more
regulating. Calling this a failure of free market principles is asinine.
It's like saying communism would have worked if only the leaders had
been smart enough to be more brutal and squelch more of the citizens'
rights.

Stephen

On Tue, 07 Oct 2008 21:12:21 -0700, Stephen Trapani
wrote:

wrote:
On Oct 7, 8:06 am, Stephen Trapani wrote:
...
A tiny bit of research about the banking crisis reveals that it was not
the free market that caused it, it was *over* regulation (primarily
fannie and freddie) ...

As I've said before that's a meme current mostly with folks who can't
add. I thought the following was a pretty amusing take:

http://www.newsweek.com/id/162789

From that article:

"Look. There was a culture of stupid, reckless lending, of which Fannie
Mae and Freddie Mac and the subprime lenders were an integral part."

Basically Fannie and Freddie regulations created a false market which
was then not subjected to enough oversight and hence abused. That's the
problem with market regulation, it creates the need for ever more
regulating. Calling this a failure of free market principles is asinine.
It's like saying communism would have worked if only the leaders had
been smart enough to be more brutal and squelch more of the citizens'
rights.

Stephen

There you go again!

Bwhahahahaha!

On Oct 7, 9:12*pm, Stephen Trapani wrote:
....
Basically Fannie and Freddie regulations created a false market which
was then not subjected to enough oversight and hence abused. ...

What market was that? The sub-prime market? The CDO market? The CDS
market?

F&F bought a small percent of the CDO's out there and when they turned
to crap it trashed their books. I'm not going to claim that they are
victims since they should have known better but they are in no way,
shape or form the "cause" of this problem.

--Tom.

"Dave" wrote in message
...
On Tue, 07 Oct 2008 21:12:21 -0700, Stephen Trapani
said:

Basically Fannie and Freddie regulations created a false market which
was then not subjected to enough oversight and hence abused.

Fannie, Freddie and CRA were certainly all contributing factors to the
problem. However in the case of Fannie and Freddie the problem arguably
was
as much a problem of too much oversight of the wrong kind, not too little
oversight. Long after the risks had been identified (as far back at least
as
2001) you had Barney Frank and Jim Shumer standing on the sidelines
cheering
both GSEs to buy more and more mortgages so more and more homes could be
sold to people who couldn't afford the mortgages, and loudly proclaiming
that there was nothing wrong with either GSE. Their protection racket was
of
course funded by generous contributions from Fan and Fred. Anybody know
who
the biggest recipients of Fan and Fred's largesse were? Hint: number two
chose a former President of one of the organizations to run his vice
presidential selection.

Why is it people so conveniently have forgotten the root cause of the
sub-prime lending fiasco which root cause is energy prices through the roof.
For two years the world has been shelling out twice too much for it's energy
needs.

Americans will continue to put gasoline and diesel in their automobiles and
trucks and come the end of the month, lo and behold, there ain't no cash
left to pay the mortgage. None left to pay the other bills either - so they
charge up the credit cards and end up having even less with which to pay the
rent. So they default on their obligations. Fannie and Freddie were the
first to feel the effects and now it's permeating the entire economy.

But, it was and is the high cost of energy that's at fault for the mess the
whole world is in. Ask yourself why the whole world is feeling the same
pinch we are in the USA. It's because the whole world is paying the same
rip-off energy prices. And why is gasoline still $3.50 to $3.75 per gallon
when a barrel of oil has gone from $150 to less than 90 bucks? Logic
dictates a gallon of gasoline should be around $2.75 per gallon.

It is this continued high cost of energy that has driven up the prices of
groceries and other consumer items. All these inflated prices have taken too
big a chunk out of the consumers wallet. The mortgage is where the buck
seems to have stopped. Not enough left in the purse to shell out that large
sum of money.

Why is nobody but me aware this obvious root cause?

Wilbur Hubbard

"Dave" wrote in message
...
On Wed, 8 Oct 2008 11:53:34 -0400, "Wilbur Hubbard"
said:

Why is nobody but me aware this obvious root cause?

Everyone else recognizes that you're full of ****, Neal.


That's a gross generalization. Neal recognizes this, but he's unwilling to
admit it. LOL

--
"j" ganz @@
www.sailnow.com

"Dave" wrote in message
...
On Wed, 8 Oct 2008 11:53:34 -0400, "Wilbur Hubbard"
said:

Why is nobody but me aware this obvious root cause?

Everyone else recognizes that you're full of ****, Neal.


At least the Good Captain isn't the typical, brainwashed American like you,
Dave.

There is a reason why there's no attribution of blame in the right place for
the current severe downturn in the economy. Sub prime lending is getting the
blame but there is a reason why sub prime loans stopped being paid down
recently. That reason is severely reduced ability to pay because life got
really expensive for the consumer in the past two years due to high energy
prices.

When people, in a relatively short time frame, have to pay double for their
energy that money spent limits their ability to spend it on such things as
paying down mortgages.

Cheap energy greases the economic engine of this economy. When energy
becomes excessively expensive (as in twice as expensive) the economic engine
sputters to a halt. Expensive energy is the root cause of the dire straights
the economy finds itself in. It was only a matter of time and time has now
run out.

Unless and until Congress gets their heads straight and gets out of the way
so energy sources of all types can be developed by the free market until
energy prices are once more reasonable the mess we are in will continue.

Wilbur Hubbard

"Dave" wrote in message
...
On Tue, 07 Oct 2008 21:12:21 -0700, Stephen Trapani
said:

Basically Fannie and Freddie regulations created a false market which
was then not subjected to enough oversight and hence abused.

Fannie, Freddie and CRA were certainly all contributing factors to the
problem. However in the case of Fannie and Freddie the problem arguably
was
as much a problem of too much oversight of the wrong kind, not too little
oversight. Long after the risks had been identified (as far back at least
as
2001) you had Barney Frank and Jim Shumer standing on the sidelines
cheering
both GSEs to buy more and more mortgages so more and more homes could be
sold to people who couldn't afford the mortgages, and loudly proclaiming
that there was nothing wrong with either GSE.

So, what you're saying is that the Republican controlled Congress failed to
act. Thanks for the clarification.

--
"j" ganz @@
www.sailnow.com

"Dave" wrote in message
...
On Wed, 8 Oct 2008 10:06:03 -0700, "Capt. JG"
said:

you had Barney Frank and Jim Shumer standing on the sidelines
cheering
both GSEs to buy more and more mortgages so more and more homes could be
sold to people who couldn't afford the mortgages, and loudly proclaiming
that there was nothing wrong with either GSE.

So, what you're saying is that the Republican controlled Congress failed
to
act. Thanks for the clarification.

Hey, Jon, you left out part of my message. I'll add it for you:

Anybody know who
the biggest recipients of Fan and Fred's largesse were? Hint: number two
chose a former President of one of the organizations to run his vice
presidential selection.


Last I checked, it's the Congress' responsibility. Are you planning on
answering the question or are you going to try an evade it as usual?

--
"j" ganz @@
www.sailnow.com

"Dave" wrote in message
news
On Wed, 8 Oct 2008 14:07:36 -0700, "Capt. JG"
said:

Anybody know who
the biggest recipients of Fan and Fred's largesse were? Hint: number two
chose a former President of one of the organizations to run his vice
presidential selection.


Last I checked, it's the Congress' responsibility. Are you planning on
answering the question or are you going to try an evade it as usual?

Dead wrong, Jon. I guess you didn't quite know where to check.

While Congress could impose upper limits on the leverage the GSEs were
allowed to use, the responsibility in the first instance to set prudent
limits rests on those organizations' management, subject to oversight by
their boards of directors, and to any rules established by OFHEO. IOW, it
fell right on the shoulder of Mr. Johnson, the guy Obama put in charge of
choosing his VP nominee until he was forced out.

Your response reflects a common error on the pro-guvmint side--the notion
that anything the rules allow is ok, and rules should be pushed to the
limit
regardless of whether it's prudent to do so. Then when the **** hits the
fan
the cry is that if was the regulators' fault because they allowed the
reckless behavior. That's certainly the Barney Frank approach.

Here's the story as related by somebody on your side of the fence.

http://affordablehousinginstitute.or...egulation.html


Bzzzzt:

"The U.S. Department of Housing and Urban Development (HUD) carries the
oversight responsibilities for the housing mission of the GSEs. Effective
January 1, 2005, HUD established new and increasing affordable housing goal
levels for the GSEs for the years 2005 through 2008. These goals require
that a certain percentage of the mortgages purchased by Fannie Mae and
Freddie Mac support financing for housing low - and moderate - income
families."

2005 - Republicans controlled the WH and the Congress.


--
"j" ganz @@
www.sailnow.com

"Dave" wrote in message
...
On Wed, 8 Oct 2008 15:29:02 -0700, "Capt. JG"
said:

"The U.S. Department of Housing and Urban Development (HUD) carries the
oversight responsibilities for the housing mission of the GSEs. Effective
January 1, 2005, HUD established new and increasing affordable housing
goal
levels for the GSEs for the years 2005 through 2008. These goals require
that a certain percentage of the mortgages purchased by Fannie Mae and
Freddie Mac support financing for housing low - and moderate - income
families."

2005 - Republicans controlled the WH and the Congress.

Now read the rest of the article.


?? That is the rest of the article. Are you denying that Congress was in
charge?

--
"j" ganz @@
www.sailnow.com