why is the American economy deteriorating?

[Greg Boyles]

Heins; Out of curiosity, did you know iNow has recently spent time in Singapore and was pleased with your Political/Governing system? For myself, you being a student and one with a couple years in economics, presumably knowledgeable in your own system, I will be looking forward to your contributions....

 

As for what's happening in the US, I do have a different take on our problems, to those of iNow, but would like your viewpoints for Authoritarian Capitalism, which is probably what your being taught. In the US, Capitalism is practiced from the individuals right to ownership and success and that would be my first question. I know China is in the top three for new Millionaires or as some say around here Billionaires but can the average person without the proper support or heritage, make out under your system? Think your economy is still growing at near 10% and we could surely use a few years of that....

 

 

 

 

CP; I agree "for the economic collapse", but it certainly illegal immigration has not helped or where there is little control over migration. Then "victims", people all over the world generally don't migrate without a reason, currently in the Middle East from unrest or in Europe and North America from basic poverty in most Mexico, Central America and a good share of Northern South America. I hardly think bettering your own life style, no matter the degree, makes the person a victim.

 

 

 

swansont; "Financial Institutions" or "US Congressional Regulations, via Fannie/Freddie" and supported by many States or City Law? However this not only involves immigrants, but the less wealthy people, who for some time after about 1996, were not required to have jobs, prove citizenship or show a means to pay on the notes they agreed to. I've verify this later, but I'm thinking you already know about this....by the way there is a hidden answer to a previous question, in my opening comments, this post.

 

 

 

Greg; In a strange sort of way, your basically correct, but US Governments are short lived and things can turn around on a dime. I'm personally seeing this daily, at least away from this forum or "main stream media" and expect the trend to keep on rolling.

 

The troubling issue, in my mind, is if the US did fail and no other Nation took up the slack, you could be talking hundreds of million deaths, as necessary items (food/water/Medical/etc.) infrastructure breaks down. As mentioned above, in the Middle East or parts of Africa, people flock to safe spots, from unrest, and that infrastructure (not all American) supports those people.

 

 

Your government may turn around on a dime but your trillions of dollars worth of debt will not. And China etc will not be able to continue accepting your government IOYs and propping up your economy indefinitely. So I think US decline is more likely in the long term than a dramatic turn around in your government and economy. I suspect that the US will take China down with it when a billion or so Chinese are flung off the US gravy train (exports to the US) and call their authoritrian government to account. No doubt there will be an enormous amount of brutal blood letting before the chinese government falls.

Edited August 3, 2011 by Greg Boyles

[swansont]

We are talking about recent history and subprime mortgages here. We are not discussing the total history of the USA. But I have little doubt that there were similar booms and busts through US history, contributed to by population growth (immigration or fertility).

 

And recent population growth in the US has been driven overwhelmingly by immigration from Mexico.

 

Immigration from Europe would amount a tiny blip on the graph.

Here's an example of something that could be checked and a source cited, rather than asserted. If one were to look at the immigration statistics, for example (table 2, page 10), one would see that in the last decade, immigration from Mexico has been between 160,000 and 220,000, while European immigration has been around 100,000-150,000 or so. Hardly a blip. Asian immigration has been mostly in the 300-400,000 range. So no, population growth has not been overwhelmingly driven by Mexican immigration.

 

swansont; "Financial Institutions" or "US Congressional Regulations, via Fannie/Freddie" and supported by many States or City Law? However this not only involves immigrants, but the less wealthy people, who for some time after about 1996, were not required to have jobs, prove citizenship or show a means to pay on the notes they agreed to. I've verify this later, but I'm thinking you already know about this....by the way there is a hidden answer to a previous question, in my opening comments, this post.

Fannie and Freddie did not and do not make the loans, they buy up loans from the financial institution. The most egregious of the predatory loans were not bought up by them — they had regulatory standards as to what loans they could purchase. If the predatory overreach by the banks had not been so dire, AFAIK it's possible that F&F could have completely skirted the problems.

 

As far as the means to repay claim, no, not so much

http://en.wikipedia.org/wiki/Conforming_loan

The Office of Federal Housing Enterprise Oversight (OFHEO) set the criteria on what constitutes a conforming loan limit that Fannie Mae and Freddie Mac can buy. Criteria include debt-to-income ratio limits and documentation requirements.

 

Here are the rules for 2006

https://www.efanniemae.com/sf/refmaterials/eligibility/pdf/eligibilitymatrix101608.pdf

Note the existence of Loan/Value limits (<100%) and credit score minimums.

[Hal.]

Some say if all our Irish diaspora came home then Ireland would sink !

 

Interesting book Swansont , thanks !

Edited August 3, 2011 by Hal.

[jackson33]

swansont; Smaller banks for the most part have been making loans for Fannie/Freddie, under their requirements and Congress has been setting those standards since privatization (late 70's) and after the Savings and Loan crisis in the late 1980's, as qualifications by reputable banks had increased, those regulations for F/F were being decreased, to buy notes. Said another way F/F via regulation were allowing loan contracts, NO BANK would have ever accepted. Here is one example on illegal's but other regulations regarding qualification to obtain a home loan were destined to create the problems, later realized. The second link one of maybe 10 major regulatory changes that eventually caused the so called "crisis"...

 

A seldom-reported fact that has greatly contributed to the nation’s financial crisis is that millions of illegal immigrants across the U.S. have fraudulent home mortgages and many have defaulted.[/Quote]

http://www.judicialwatch.org/blog/2008/oct/illegal-immigrants-hold-5-million-fraudulent-mortgages

 

In 1992, President George H.W. Bush signed the Housing and Community Development Act of 1992. The Act amended the charter of Fannie Mae and Freddie Mac to reflect Congress' view that the GSEs "have an affirmative obligation to facilitate the financing of affordable housing for low-income and moderate-income families."[15] For the first time, the GSEs were required to meet "affordable housing goals" set annually by the Department of Housing and Urban Development (HUD) and approved by Congress. The initial annual goal for low-income and moderate-income mortgage purchases for each GSE was 30% of the total number of dwelling units financed by mortgage purchases[16] and increased to 55% by 2007.[/Quote]

 

http://en.wikipedia.org/wiki/Fannie_Mae

 

(Your link number one) I'm not going to speculate on when/where/how/why many loans were approved, that did not meet with certain criteria, nor who determined, but I think I could prove beyond a reasonable doubt, fraud and corruption exist in every Government run program. However, I have no doubt people between the Bankers and Loan Applicants, could figure out how to stay within those guidelines, but again NO BANK would take any note on, without first getting approval, regarding the folks I'm talking about, the basically unqualified.

 

(Your link number two) I really don't know when fixed credit score ratings were devised as was used in 2008 (after the fact), but we're talking (at least I am) talking about the 1990's and early 2000's as the problem developed.

 

 

 

Your government may turn around on a dime but your trillions of dollars worth of debt will not. And China etc will not be able to continue accepting your government IOYs and propping up your economy indefinitely. So I think US decline is more likely in the long term than a dramatic turn around in your government and economy. I suspect that the US will take China down with it when a billion or so Chinese are flung off the US gravy train (exports to the US) and call their authoritrian government to account. No doubt there will be an enormous amount of brutal blood letting before the chinese government falls. [/Quote]

 

Greg; While the US National Debt, in my viewpoint has been too high for years, 65% of GDP has been acceptable to most economist, which it had been until 2006 and now adding the new limits and expected spending through 2012, it will go above 100% of GDP and acceptable to NO economist.

 

Actually the US owes China, a little less than a trillion dollars of the current 14.5T$. Most debt is now either held by the Federal Reserve/Americans and 10 year notes are yielding 2.77% and dropping. As for China, they are selling products or buying interest (most likely natural resources) around the world and will survive without the US, but they do have an inflationary problem which could hurt their ability to maintain what loans they do carry.

 

Yes, things can turn on a dime and to give a time line, if the right person (questionable) is elected President and the right membership of the Congress has been elected, it's my opinion if they voice their intentions after the November 2012 elections, that turn would HAPPEN before they took office, WORLDWIDE.

[Greg Boyles]

Greg; While the US National Debt, in my viewpoint has been too high for years, 65% of GDP has been acceptable to most economist, which it had been until 2006 and now adding the new limits and expected spending through 2012, it will go above 100% of GDP and acceptable to NO economist.

 

Actually the US owes China, a little less than a trillion dollars of the current 14.5T$. Most debt is now either held by the Federal Reserve/Americans and 10 year notes are yielding 2.77% and dropping. As for China, they are selling products or buying interest (most likely natural resources) around the world and will survive without the US, but they do have an inflationary problem which could hurt their ability to maintain what loans they do carry.

 

Yes, things can turn on a dime and to give a time line, if the right person (questionable) is elected President and the right membership of the Congress has been elected, it's my opinion if they voice their intentions after the November 2012 elections, that turn would HAPPEN before they took office, WORLDWIDE.

 

I suspect your country would be better served by bringing your troops home from all your overseas deployments and have them man your very porous border with Mexico. That, and the drug cartals, are a far greater threat to America than international terrorists ever will be. Even now the destructive nature of drugs and drug crime has and does have a far more destructive effect on your society than the aftermath of 9/11 is currently having. I would argue that the aftermath of 9/11 is fairly insignficant, though terrible for those who were directly involved in it, compared to illegal immigration and drug crime from across your Mexican border.

Edited August 3, 2011 by Greg Boyles

[Brainteaserfan]

I suspect your country would be better served by bringing your troops home from all your overseas deployments and have them man your very porous border with Mexico. That, and the drug cartals, are a far greater threat to America than international terrorists ever will be. Even now the destructive nature of drugs and drug crime has and does have a far more destructive effect on your society than the aftermath of 9/11 is currently having. I would argue that the aftermath of 9/11 is fairly insignficant, though terrible for those who were directly involved in it, compared to illegal immigration and drug crime from across your Mexican border.

Please, this isn't us vs them. If the US falls or suffers economically, I think we can all agree that there will be a negative impact on the rest of the world.

 

I have a different idea on drugs. (sure, I want the US meddling soldiers home too, but after the US brings them back, how about we don't kill them ) Why don't we just legalize drugs (we meaning the world and US) If we police it more, there will just be a higher profit for those involved.

 

Lastly, I want you to know that I agree that immigration is a serious problem for the US, but I just don't have time to debate it.

[amanda more]

Hi,

I have decided to call those who refuse to understand anything about the Great Depression as Hooverists.

 

The lesson learned is ,however disturbing it is to Joe sixpack who is out of work, that it deepens and lengthens a recession if government pulls back and slows spending. So somehow having this belief that if "I cut back government should too." is a kneejerk reaction that is wrongheaded.

 

Economics is called the dismal science and it can be relied on for some ability to provide an understanding. If it was extremely predictive then economists would all be millionaires independent of the funnelled money into their pockets from Wall Street.

 

Depression is something that economists do have a handle on.

 

To see what is happening now it helps if you do have one economics course. The causes of The Great depression were many. My vote goes to the sudden shift from farmworkers to farm machinery that threw millions of those laborers out of work. Cities weren't going to be able to hire them. Without work people were not able to buy goods and services. It is a vicious cycle.

 

What is happening now? What is your opinion on cause today? Any takers? What do you think?

 

 

 

[Greg Boyles]

Please, this isn't us vs them. If the US falls or suffers economically, I think we can all agree that there will be a negative impact on the rest of the world.

 

I have a different idea on drugs. (sure, I want the US meddling soldiers home too, but after the US brings them back, how about we don't kill them ) Why don't we just legalize drugs (we meaning the world and US) If we police it more, there will just be a higher profit for those involved.

 

Lastly, I want you to know that I agree that immigration is a serious problem for the US, but I just don't have time to debate it.

 

Legalising drugs......

 

I am wavering on that. I agree that it will eliminate current forms a drug crime virtually overnight. But I can't help thinking that there will also be some rather disastrous side effects.

 

E.G. There is strong link between schizophrenia and abuse of marijuana, hence a massive increase in its use could have some serious implications for national mental health. We could replace all the smoking related illnessses that we are gradually eliminating by clamping down on smokers and smoking with marijuana related illnesses, including some tabacco smoking illnesses.

[swansont]

(Your link number one) I'm not going to speculate on when/where/how/why many loans were approved, that did not meet with certain criteria, nor who determined, but I think I could prove beyond a reasonable doubt, fraud and corruption exist in every Government run program. However, I have no doubt people between the Bankers and Loan Applicants, could figure out how to stay within those guidelines, but again NO BANK would take any note on, without first getting approval, regarding the folks I'm talking about, the basically unqualified.

 

Since that's your thesis, you need to do more than speculate — you need to back up your claim with some evidence. If the banks sold all these loans to F&F, why did banks fail? They wouldn't have any bad loans in their portfolio!

 

(Your link number two) I really don't know when fixed credit score ratings were devised as was used in 2008 (after the fact), but we're talking (at least I am) talking about the 1990's and early 2000's as the problem developed.

 

Loans made in the 90's aren't the problem. People that got in early in the housing bubble made money. It's the people that got in at the end that crashed and burned. So really it's loans made in the mid 2000's that you have to be looking at.

[jackson33]

I suspect your country would be better served by bringing your troops home from all your overseas deployments and have them man your very porous border with Mexico. That, and the drug cartals, are a far greater threat to America than international terrorists ever will be....[/Quote]

 

Greg; There aren't many in the US, that would argue having troops around the World is necessary, but the question is, what deterrent would there be for "Hitler" wannabe's to show their face. My personal argument is the massive diplomatic core and general tourist alone, is a good enough deterrent, but then I'm in the political minority.

 

As for our Southern border, the drug cartels and our apparent total disregard to enforce actual US LAW, which has been around since Eisenhower, other than some desire by both American Parties to embrace a voting class, I have no answers. If nothing else, thinking your from outside the US, our Constitution limits States to Immigration issues, mandating Federal Authority.

 

I am wavering on that. I agree that it will eliminate current forms a drug crime virtually overnight. But I can't help thinking that there will also be some rather disastrous side effects.[/Quote]

 

Good point but which is worse, all the crimes committed to get drug money, the cost to prosecute and house prisoners or simply allowing them to support their habits. I think a little of this was hashed out during the prohibition era....

 

 

Since that's your thesis, you need to do more than speculate — you need to back up your claim with some evidence. If the banks sold all these loans to F&F, why did banks fail? They wouldn't have any bad loans in their portfolio![/Quote]

 

swansont; If I could prove fraud or corruption inside Government agencies, I wouldn't be setting here writing about it. However I played the game and was involved 1955-2000 and no Bank ever lost a penny. Banks have occasionally failed since banks have existed and for a variety of reasons, giving loans to unqualified applicants, simply one. What your TRYING TO IMPLY, are the Financial Institutions that in cooperation with F/F created instruments (derivatives), selling them around the World, while still backed by the US Government.

 

Loans made in the 90's aren't the problem. People that got in early in the housing bubble made money. It's the people that got in at the end that crashed and burned. So really it's loans made in the mid 2000's that you have to be looking at. [/Quote]

 

It's what lead up to that "crash and burn" you need to evaluated and frankly today we're getting close to another "crash and burn", by artificially holding up values. IMO, if no TARP was ever produced, some Financial Institutions would have dissolved (bought up by others), home values set by the markets and by now could have been back to near where they were. Keep in mind inflation alone, dollar value about 80% of what was in the late 90's, hasn't been figured into actual loses. AND, by the way if you want to talk financial greed, you might start arguing second mortgages, which had reached 125% of appraised value on many of those people that bought homes in the 1990's and DID get hurt.

[swansont]

swansont; If I could prove fraud or corruption inside Government agencies, I wouldn't be setting here writing about it. However I played the game and was involved 1955-2000 and no Bank ever lost a penny. Banks have occasionally failed since banks have existed and for a variety of reasons, giving loans to unqualified applicants, simply one. What your TRYING TO IMPLY, are the Financial Institutions that in cooperation with F/F created instruments (derivatives), selling them around the World, while still backed by the US Government.

Fraud? Derivatives? I thought we were talking about whether or not government policy was responsible for bad loans. The loans were packaged as mortgage-backed securities. Derivatives are a financial institution invention. Fraud is not policy.

 

As for what I am "trying to imply," stop it. Respond to what what I wrote — don't attempt to read in between the lines. My point is the loans primarily responsible for the crisis were NOT in cooperation with F/F. The loans that F/F bought and repackaged did not contain enough high-risk loans to have precipitated the crisis, so government policy is not the cause. It was the financial institutions one their own, making the riskier loans. Since they could not sell them to F/F, they held them or repackaged them on their own, and it was the failure of these mortgages that was the main problem. F/F's share or the mortgage market dropped from half to just over a third at the time of the bubble's peak, even as their business grew. The cause was the banks, expanding much more rapidly, making loans they could not sell to F/F. The fact that financial problems hit the rest of the world should be an indication that it was not US government policies at fault.

 

http://www.americanprogress.org/issues/2010/12/financial_crisis.html

In contrast, the market share of private mortgage securitization, a pillar of the “shadow banking system” that was not backed by the federal government and not regulated for safety and soundness in the way that Fannie, Freddie, and regulated banks and thrifts were, rose sharply and contemporaneously with the rise of the housing bubble. In 2002, the share of mortgages originated by private securitization was just over 10 percent of the total market. Over the next four years, this share grew rapidly, accounting for nearly 40 percent of all mortgage originations by 2006. As a percentage of all mortgage-backed securities, private securitization grew from 23 percent in 2003 to 56 percent in 2006.

 

 

More stuff:

http://mediamatters.org/research/201107200034

 

http://krugman.blogs.nytimes.com/2011/07/14/fannie-freddie-phooey/

 

http://www.ritholtz.com/blog/2011/07/why-wallison-is-wrong-about-the-genesis-of-the-u-s-housing-crisis/

 

F/F "serious delinquency rates" for risky mortgages are around the national average for delinquency (all being about 10%), while for the the subprime loans the rate is 28%

 

The financial crisis inquiry commission report

http://fcic-static.law.stanford.edu/cdn_media/fcic-reports/fcic_final_report_conclusions.pdf (page xxvi)

 

The GSEs participated in the expansion of subprime and other risky mortgages, but they followed rather than led Wall Street and other lenders in the rush for fool's gold. They purchased the highest rated non-GSE mortgage-backed securities and their participation in this market added helium to the housing balloon, but their purchases never represented a majority of the market. Those purchases represented 10.5% of non-GSE subprime mortgage-backed securities in 2001, with the share rising to 40% in 2004, and falling back to 28% by 2008. They relaxed their underwriting standards to purchase or guarantee riskier loans and related securities in order to meet stock market analysts' and investors' expectations for growth, to regain market share, and to ensure generous compensation for their executives and employees -- justifying their activities on the broad and sustained public policy support for homeownership.

 

The Commission also probed the performance of the loans purchased or guaranteed by Fannie and Freddie. While they generated substantial losses, delinquency rates for GSE loans were substantially lower than loans securitized by other financial firms. For example, data compiled by the Commission for a subset of borrowers with similar credit scores -- scores below 660 -- show that by the end of 2008, GSE mortgages were far less likely to be seriously delinquent than were non-GSE securitized mortgages: 6.2% versus 28.3%.

IOW, neither the worst of nor the majority of the bad loans were bought up by F/F

[jackson33]

Fraud? Derivatives? I thought we were talking about whether or not government policy was responsible for bad loans. The loans were packaged as mortgage-backed securities. Derivatives are a financial institution invention. Fraud is not policy. [/Quote]

 

swansont; Government, specifically the Congress IMO and others WAS responsible for the bad loans F/F accepted and your trying to explain "after the fact" actions, which did not exist prior to the collapse. Said another way, what lead to the Financial Crisis was most certainly from impossible regulation, even the Banks would not carry notes, without them being guaranteed or bought by F/F and yes fraud is often policy, especially with the Federal Government.

 

 

WASHINGTON — Government controlled mortgage finance companies Fannie Mae and Freddie Mac said Wednesday they will buy back troubled loans contained in securities they have already sold to investors.

The two companies are repurchasing mortgage loans for which borrowers have missed at least four months of payments. At the end of last year, Fannie had about $127 billion of such loans, while Freddie Mac had about $70 billion.[/Quote]

 

http://www.msnbc.msn.com/id/35335364/ns/business-us_business/t/fannie-freddie-start-buying-back-bad-loans/

 

But after years of winks and nods, there’s no doubt that Fannie and Freddie now enjoy an explicit guarantee, according to most observers. The U.S. government placed Fannie Mae and Freddie Mac in conservatorship in September 2008: “This means that the U.S. Taxpayer now stands behind $5 trillion of GSE debt,” according to the Congressional Research Service.[/Quote]

 

http://www.infiniteunknown.net/2010/03/10/us-taxpayers-on-hook-for-5-trillion-of-fannie-freddie-debt-no-matter-what-barney-frank-says/

 

I’ve read that some politicians want to buy Freddie and Fannie . . . but there’s one huge issue: How do we know what we’re buying? We don’t really know what mortgages these two companies really have, and therefore, we don’t know their exposure.[/Quote]

 

http://hubpages.com/hub/Fannie--Freddie---Indy

 

As for what I am "trying to imply," stop it. Respond to what what I wrote —[/Quote]

 

Is this a moderator comment, if not what makes you think, I'm not helping you to get your discussion back on track...I don't think you understand the issue or ARE arguing different issues. What has occurred since 2008, has little to do with what brought the problem on, knowing you won't like this a great deal of this comes from the same people who helped bring it on, maybe to cover up something?

[Hal.]

Here is a short post .

 

There was a documentary on the television two weeks ago here in Western Europe which was 2 hours long and it claimed that the USA can't extract Wall Streets interests from the Houses of Government . They claim that Wall Street is running your country and taking your money . That's sad , if true , but not rare in these times when a lot of governments around the world have to put billions of $ and € into banks who made large bad debt portfolios while taking commissions for themselves . The people have to run the country for the people , not the bankers for the bankers .

[amanda more]

Here is a short post .

 

There was a documentary on the television two weeks ago here in Western Europe which was 2 hours long and it claimed that the USA can't extract Wall Streets interests from the Houses of Government . They claim that Wall Street is running your country and taking your money . That's sad , if true , but not rare in these times when a lot of governments around the world have to put billions of $ and € into banks who made large bad debt portfolios while taking commissions for themselves . The people have to run the country for the people , not the bankers for the bankers .

 

Yes, they even got the supreme court to make bribing legal. (called it "speech") It is also foreign corporations have little interest in the economy of the US and they also own congress.

 

But, we took the rest of the world along. Like I mentioned about The Great Depression, history will look back at this great depression with a multifaceted eye.

 

Checkout Frontline "The Warning." Does anyone know a PHD economist who can answer this question. "Can you imagine a scenario, any scenario that will find a way to clear 1200 trillion dollars in worldwide derivatives which amounts to over 120,000 for every man, woman and child in the world?

 

So turning the US into a raw goods exporter makes it a colony of other countries who then sell us manufactured goods. I also ask economists "How can you have an economy that gets multiplying effects based on only a nurse, a doctor, a teacher and a lawyer?" Our economy then is tanking on a lack of good jobs and those that are are service jobs which depend on someone else making money.

 

But now the US is the tip of the iceberg. Our economy is deteriorating at its fundamentals and also due to whacky policy. But the worldwide derivatives thing will keep the world from recovering.

[Brainteaserfan]

Hi,

I have decided to call those who refuse to understand anything about the Great Depression as Hooverists.

 

The lesson learned is ,however disturbing it is to Joe sixpack who is out of work, that it deepens and lengthens a recession if government pulls back and slows spending. So somehow having this belief that if "I cut back government should too." is a kneejerk reaction that is wrongheaded.

 

Economics is called the dismal science and it can be relied on for some ability to provide an understanding. If it was extremely predictive then economists would all be millionaires independent of the funnelled money into their pockets from Wall Street.

 

Depression is something that economists do have a handle on.

 

To see what is happening now it helps if you do have one economics course. The causes of The Great depression were many. My vote goes to the sudden shift from farmworkers to farm machinery that threw millions of those laborers out of work. Cities weren't going to be able to hire them. Without work people were not able to buy goods and services. It is a vicious cycle.

 

What is happening now? What is your opinion on cause today? Any takers? What do you think?

Economists do not have a handle on depression IMO. There are theories, but none are certain, because it is extremely difficult to prove a cause/effect relationship in economics. However, it is easy to bend data to look like it is a cause/effect relationship.

[swansont]

swansont; Government, specifically the Congress IMO and others WAS responsible for the bad loans F/F accepted and your trying to explain "after the fact" actions, which did not exist prior to the collapse. Said another way, what lead to the Financial Crisis was most certainly from impossible regulation, even the Banks would not carry notes, without them being guaranteed or bought by F/F and yes fraud is often policy, especially with the Federal Government.

 

That's not the argument. F/F accepted bad loans. That's been true for the entire time they have been in existence. All organizations involved in lending money face that risk. I did not claim otherwise. The argument was whether it was government policy driving the massive increase in risky loans. The link provided by Greg Boyles only confirmed that financial institutions aggressively took on additional risk. The links I provided confirm that F/F were latecomers to that game, and did not participate at the level of the banks.

 

You made this claim:

swansont; "Financial Institutions" or "US Congressional Regulations, via Fannie/Freddie" and supported by many States or City Law? However this not only involves immigrants, but the less wealthy people, who for some time after about 1996, were not required to have jobs, prove citizenship or show a means to pay on the notes they agreed to. I've verify this later, but I'm thinking you already know about this....by the way there is a hidden answer to a previous question, in my opening comments, this post.

 

I'm still waiting for your verification that F/F, as a matter of policy, bought up loans under the conditions you describe.

 

If banks would not make loans unless they could sell them to F/F, why is it that they did not then sell them? How do you explain the increase in non-GSE participation in selling mortgage-backed securities? Those are mortgages not sold to F/F. That's a plain fact, and you're ignoring it.

 

Fraud is a policy of the government? In matters such as this? Do you really think you can say that without elaboration or support?

 

 

Is this a moderator comment, if not what makes you think, I'm not helping you to get your discussion back on track...I don't think you understand the issue or ARE arguing different issues. What has occurred since 2008, has little to do with what brought the problem on, knowing you won't like this a great deal of this comes from the same people who helped bring it on, maybe to cover up something?

I'm saying that it's not your function to put my (or anyone's) discussion "back on track". I never went off track. If you think I did, first consider the possibility that you have misunderstood the argument. Ask for clarification if you need it.

 

When you try and do so, by telling what I meant or am trying to imply, you are creating a straw man argument and that's against the rules. It should not take a moderator saying it; the rules are spelled out. My personal view is that telling me what I "really mean" or "mean to imply" is arrogant and insulting.

[TonyMcC]

IMHO the financial woes of both the UK and USA have a simple underlying cause. Governments who allow a national debt to increase year on year are building a house of cards that is destined to eventually collapse. The simple solution is to ensure that the national debt decreases, if only a little, year by year so that eventually over many years solvency can be obtained. The problem with this is that any government that takes the necessary steps to ensure this happens would become so unpopular that they would soon be voted out of office. I fear that this is a weakness of democracy and if "the house of cards" does collapse then democracy might collapse with it. I borrowed money earlier in my life to buy my home and sundry cars over the years but now I am retired I owe nobody anything. There was a newspaper headline the other day "Apple is richer than America". Since I am debt free I feel I can fairly claim that I, too, am richer than America!

Edited August 4, 2011 by TonyMcC

[jackson33]

There was a newspaper headline the other day "Apple is richer than America". Since I am debt free I feel I can fairly claim that I, too, am richer than America! [/Quote]

 

Tony; Yes, Apple Computer had about 78B$ in cash reserves it's last reported quarter, while the US Federal reserves fell below that figure, or was said to have, not sure how they could determine that.

 

I like your story and it reminds me of most people I've known in life, guess I was just lucky to have known so many like you. But your story, mine and their's, is dependent on that house of cards, if it were to fall, well I think you understand...

 

 

You made this claim:[/Quote]

 

swansont; I provided links for both the 5 MILLION loans to illegal's and the requirement to increase acceptance of low income applicants. Any argument should be made to them, one of which is HUD and I have no means to question there reports. I do know once while an employer in South Texas, mentioned this forum a couple times, I received a letter from the Federal Government telling me "TO HIRE MORE HISPANICS" or else, and was exonerated when they found out they were ALL Hispanic, that had been or were married to Anglos (C-Store/Bars). They can be quite insistent and this was in the 70's, mild compared to today's regulators.

 

I'm saying that it's not your function to put my (or anyone's) discussion "back on track". I never went off track. If you think I did, first consider the possibility that you have misunderstood the argument. Ask for clarification if you need it. [/Quote]

 

After so much time and seeing your treatment of so many posters, I know exactly what your doing. To change direction or claim "no citations" as mentioned this post above, is a simple debate strategy.

[amanda more]

IMHO the financial woes of both the UK and USA have a simple underlying cause. Governments who allow a national debt to increase year on year are building a house of cards that is destined to eventually collapse. The simple solution is to ensure that the national debt decreases, if only a little, year by year so that eventually over many years solvency can be obtained. The problem with this is that any government that takes the necessary steps to ensure this happens would become so unpopular that they would soon be voted out of office. I fear that this is a weakness of democracy and if "the house of cards" does collapse then democracy might collapse with it. I borrowed money earlier in my life to buy my home and sundry cars over the years but now I am retired I owe nobody anything. There was a newspaper headline the other day "Apple is richer than America". Since I am debt free I feel I can fairly claim that I, too, am richer than America!

 

wrong

 

Economists do not have a handle on depression IMO. There are theories, but none are certain, because it is extremely difficult to prove a cause/effect relationship in economics. However, it is easy to bend data to look like it is a cause/effect relationship.

 

Economics is to the mathematics of the economy as doctoring is to the science of medicine.

[Brainteaserfan]

Economics is to the mathematics of the economy as doctoring is to the science of medicine.

Perhaps, but in this case I'd say it's more like how much we know about the brain's reactions/psychology. There are more economists who disagree, IMO, on what to do when there is a depression than doctors on what to do if you have a serious cold (a depression IMO is a sort of sickness to the economy).

 

IMHO the financial woes of both the UK and USA have a simple underlying cause. Governments who allow a national debt to increase year on year are building a house of cards that is destined to eventually collapse. The simple solution is to ensure that the national debt decreases, if only a little, year by year so that eventually over many years solvency can be obtained. The problem with this is that any government that takes the necessary steps to ensure this happens would become so unpopular that they would soon be voted out of office. I fear that this is a weakness of democracy and if "the house of cards" does collapse then democracy might collapse with it. I borrowed money earlier in my life to buy my home and sundry cars over the years but now I am retired I owe nobody anything. There was a newspaper headline the other day "Apple is richer than America". Since I am debt free I feel I can fairly claim that I, too, am richer than America!

You mean that you are richer than the government of America. (Which is not strictly true, because the government can just print more money to pay its debts.)

[amanda more]

Perhaps, but in this case I'd say it's more like how much we know about the brain's reactions/psychology. There are more economists who disagree, IMO, on what to do when there is a depression than doctors on what to do if you have a serious cold (a depression IMO is a sort of sickness to the economy).

 

 

It is too bad so few have your faith in doctors.

 

The argument you make is specious. Of course any real world practitioner will fall short of the results in a laboratory. The argument here is that joining a side and attempting to have facts fit it according to politics is very self defeating. Watch Dr. Phil sometime. He tells some guy to get real. Magically through the lens of TV he does.

 

And whatever your doctor does for you- especially with the common cold then you can get lots of rest and drink plenty of fluids. One reason they can all agree is because it is incurable.

 

The current stock market crash will provide 100% agreement. Just like I've mentioned elsewhere when is a hurricane prediction 100% accurate? When it is overhead.

 

 

 

[swansont]

swansont; I provided links for both the 5 MILLION loans to illegal's and the requirement to increase acceptance of low income applicants. Any argument should be made to them, one of which is HUD and I have no means to question there reports. I do know once while an employer in South Texas, mentioned this forum a couple times, I received a letter from the Federal Government telling me "TO HIRE MORE HISPANICS" or else, and was exonerated when they found out they were ALL Hispanic, that had been or were married to Anglos (C-Store/Bars). They can be quite insistent and this was in the 70's, mild compared to today's regulators.

 

And who made the loans? The link implies that there was a program to provide loans to illegal immigrants, but never actually backs this up.

 

Your link discusses loans made by Wells Fargo. An included link says

 

Blackwell said applicants for the program will go through a rigorous identification process twice – both times in person – once when they open a bank account and then again when they apply for a mortgage. He said the company takes very seriously its responsibility to comply with the Bank Secrecy Act and all other government regulations involving safety and security.

 

The Celebrate Home program provides up to 90 percent financing on select fixed- and adjustable-rate loans up to $600,000 on the purchase of a single-family home or condominium. Potential homeowners may qualify if they have been Wells Fargo banking customers for at least six months, have paid taxes using an ITIN for at least two years and can provide proof of two years of residency.

 

Nothing here about targeting illegal aliens. Nothing that indicates they weren't checking the creditworthiness of the people getting loans. Fannie/Freddie aren't mentioned. Your claim is that it was their policy to make risky loans to people who "were not required to have jobs, prove citizenship or show a means to pay on the notes they agreed to"

 

The citizenship part is true. You don't have to be a citizen to get a loan or buy property. I've gotten loans without having to prove citizenship. It's simply not a requirement. The bank assumed that if you were paying taxes, the government would be checking you out, much like with Arizona's infamous law, where they assume that if you have a driver's license, you are here legally because a government agency was involved.

 

After so much time and seeing your treatment of so many posters, I know exactly what your doing. To change direction or claim "no citations" as mentioned this post above, is a simple debate strategy.

 

I know what I'm doing, too: trying to raise the bar of discussion. I can back up my claims with objective facts. Citations are a way of making sure people aren't making things up, or offering opinion as truth. It's part of the expected behavior around here.

 

Give Sources

If you're telling us about a study or a theory that you've heard of, try to give links to a web site about it. If you're the only person saying it, not many people are going to believe you (many scientists are skeptics). Try to provide good links which support your point, and remember, dictionary.com is not a technical resource.

[Brainteaserfan]

And whatever your doctor does for you- especially with the common cold then you can get lots of rest and drink plenty of fluids. One reason they can all agree is because it is incurable.

Okay, now let's apply that to the economy. A depression too is incurable; the government, like the doctors, should do nothing.

 

However, I would disagree that a cold is incurable, we just don't know how to cure it yet. Similarly, a depression is not/may not be incurable, we don't know how to cure it yet though. Besides, our body will get rid of it fast enough, just like the economy will get rid of a depression by itself quickly.

 

Just like we don't try out new medicines or techniques on humans first, we shouldn't try them out on the US first. Let the little economies try them out first, and we won't use them unless there is almost certain evidence that a procedure will help the economy. In the meantime, I propose the gov should leave the economy alone.

[Hal.]

If a government prints money to pay it's debts surely this will weaken it's currency exchange rates even if it makes it look like they have more money .

 

 

[amanda more]

Okay, now let's apply that to the economy. A depression too is incurable; the government, like the doctors, should do nothing.

 

However, I would disagree that a cold is incurable, we just don't know how to cure it yet. Similarly, a depression is not/may not be incurable, we don't know how to cure it yet though. Besides, our body will get rid of it fast enough, just like the economy will get rid of a depression by itself quickly.

 

Just like we don't try out new medicines or techniques on humans first, we shouldn't try them out on the US first. Let the little economies try them out first, and we won't use them unless there is almost certain evidence that a procedure will help the economy. In the meantime, I propose the gov should leave the economy alone.

 

Very odd here in this forum. A most unscientific approach. And such optimism. I have an 85 year old friend who, because of actual personal experience, does not have your pie in the sky faith. Short? Really? Why?

 

Government even in times of robber barons and before in times of landed gentry never ever left the economy alone. Such an intense radical departure would indeed be a large experiment without any scientific basis whatsoever.