Miscellaneous And Off Topic Subjects

[froot loops]

I don't see much of a point. If one investment bank is the biggest winner then it doesn't offset the fact that there have been other big winners from other sectors, nor does it lend much support to your conclusion that the stock market rally is due to speculation over the repeal of one banking law.

You are the one objecting to my placce your bets post.

[Hannibal]

JMO but what businesses want more than light-touch regulation is stable regulation.

Depends somewhat on the situation and which regulations, specifically, you are talking about. For a lot of regs the 25% chance of a repeal and the associated uncertainty is better than a 0% chance of repeal. I would say this emphatically aboout Obama's carbon emission rules, which have already had some devastating consequences and are still only in their infancy. Certainty is more of a consolation prize for when you lose the battle, which has been the case for most of corporate America for most of my life. Or, at the very least, all of what I have been exposed to.

[froot loops]

Not really. 2% or less GDP growth, spiraling budget deficits, and plunging workforce participation doesn't really excite me. I'm glad that we have a President who hasn't accepted this as the new normal.

You are the one talking about job killing government growth, when in fact government jobs were shed by nearly 750k at its nadir from the crash. The recovery was solely from private jobs, no economy killing government jobs.

[entropy]

froot.. I guess I disagree. All those things I listed enabled the crash to happen. If those laws did not happen and the Fed acting like it had in the past, I'm of the opinion the housing crash is more of speed bump and hence the subsequent market crash becomes a bear market or a down turn and not a crash.

Gov't certainly encouraged the behavior and promoted riskier loans than in the past.

we'll just have to disagree...

[froot loops]

froot.. I guess I disagree. All those things I listed enabled the crash to happen. If those laws did not happen and the Fed acting like it had in the past, I'm of the opinion the housing crash is more of speed bump and hence the subsequent market crash becomes a bear market or a down turn and not a crash.

Gov't certainly encouraged the behavior and promoted riskier loans than in the past.

we'll just have to disagree...

The government didn't invent Swaps and CDOs, that's my point. They were the cause of the financial panic.

And if you want 4 percent GDP like Hannibal and DJT want it only gets there by a growing population, loose money and some sort of government spending. The Fed sets a target for 2 percent inflation and gets nervous if comes within a .5 percent of the target.

Since Dodd Frank, it's a lot harder to get a loan for a house. Banks require a lot more capital to buy a house. So you should be satisfied by that, Dodd Frank ensured that is would avoid what you thought the government was encouraging. The flipside is that will slow down your economy.

[entropy]

I don't disagree with the slow down comments.


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[hack]

I don't know that that counts as the type of growth one should want. The headline GDP number is pretty useless if you're not asking where the gains are going.

[Hannibal]

Thank God we got Dodd Frank to make it harder to buy a house after decades of regulations aimed at making it easier to buy a house. It's almost as if all of those regulations weren't a good idea in the first place!

Like I said earlier -- it's a fucking Cloward-Piven masterpiece. I wish that it didn't do so much damage because then I could admire it. I wish my side had that kind of balls. Well -- we do now. At least some of us.

[froot loops]

Thank God we got Dodd Frank to make it harder to buy a house after decades of regulations aimed at making it easier to buy a house. It's almost as if all of those regulations weren't a good idea in the first place!

Like I said earlier -- it's a fucking Cloward-Piven masterpiece. I wish that it didn't do so much damage because then I could admire it. I wish my side had that kind of balls. Well -- we do now. At least some of us.

Again, the financial panic was a direct result of credit default swaps and synthetic CDOs. Read up. You were complaining that minorities were able to buy houses, Dodd Frank made it harder, you should be happy.

And remember, George W. Bush made a big, big push to increase home ownership. Remember that? The ownership society.

Nine if these rules or laws forced banks to issue Ninja loans. That was the banks doing as they needed more loans to package up as a CDO so the other side could short it.

[Da Geezer]

Hannibal:

I read an article about a week ago in NR that made me think of you and your view of the pre-Trump Republican party. It closed with a statement very much like the following:

For at least 20 years now, partisans of the two major political parties in the US have published articles predicting the inevitable split and decline of the opposition party.

With the Election of Donald Trump, both groups of partisans may be proven correct.

[Hannibal]

Again, the financial panic was a direct result of credit default swaps and synthetic CDOs. Read up. You were complaining that minorities were able to buy houses, Dodd Frank made it harder, you should be happy.

And remember, George W. Bush made a big, big push to increase home ownership. Remember that? The ownership society.

Nine if these rules or laws forced banks to issue Ninja loans. That was the banks doing as they needed more loans to package up as a CDO so the other side could short it.

Froot -- I think that Bush was, by-and-large, a poor President. His adoption of watered down versions of Democrat ideas was one of the reasons. There are many more, and you can probably predict what most of them would be. I only voted for him once. I was lukewarm on him for most of his presidency, and my opinion of him has declined considerably since 2008 as I reflect on his legacy and the immense damage that he did to the Republican Party and the Conservative movement. Republicans do bear some share of the guilt for their participation in social engineering or rather their refusal to stand up and oppose it.

[froot loops]

It wasn't just Bush, it was a GOP measure. There is a very legitimate reason why you want to boost housing, it is one the largest sectors of the economy is housing. Depending on the how you group sectors together, it can be considered the largest. You are worried on some moral scale that minorities might be able to buy a house, but complain about GDP. You aren't getting 4 percent GDP without a housing boom.

If you decrease home ownership and slash government jobs, you are hard pressed to get you DJT'S promise if 4 percent. Even harder if you deploy the mass scale deportation force.

I would argue that 4 percent is impossible no matter what given the demographics. The population is aging.

[hack]

I thougt was 70s-era conservative thought -- that owning a house would make them grown up. In truth it coincides with a period of exceptional banking liquidity when Saudi money began to pile in to US banks. Lenders needed new sources of demand, so it was dressed up in societal benefit.

[Hannibal]

Damn. It's shame that we never had 4% GDP growth in the country until we had open borders, trillion dollar deficits and a housing bubble.

[Da Geezer]

hack:

Agreed. Still, not sure how you blame 11% of loans in the system for 100% of the problem. I'm not even sure how many of that 11% went into default. The actual figure is less, to whatever degree.

I don't know the exact numbers, but if the 11% of loans is correct, it is possible that 11% of all loans is maybe 50% of mortgage-backed loans.

But, whatever the actual percentages, Entropy and Hanni are correct. What the CRA did, continuing on with other pieces of earlier legislation, was to encourage banks to loan to people who would not qualify under "ordinary" circumstances. A typical MGIC loan in the 80s was 10% down, 30-year payoff at about 9% APR to people with good credit and a good job. What the CRA did was have the government "buy" the loans that the CRA encouraged banks to make that were directed toward "non-traditional" clients; those with no credit, job, or down payment.

The House, and Barney Frank in particular, felt that offering home ownership to non-traditional borrowers was a prudent risk, and Barney said so publically and often. At this stage, it was not a matter of political payoff by the big banks. The payoff came later with TARP and the too-big-to-fail nonsense.

Once the poor risks were added to the pool of mortgages, and those mortgages were securitized to "spread the risk", it was inevitable that some of the poor loans would go bad. Without the government intervention in several ways, the banks would have had to keep the loans they generated, and, so, would not have made the loans. There was a reason banks were not making loans to people with no job, no credit and no down payment in the first place. No amount of magical thinking could turn bad credit risks into good risks.