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$700 Billion Bailout

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QUOTE (jackie hayes @ Sep 23, 2008 -> 08:37 AM)
There certainly was opposition to these mortgages. The administration preempted local and state efforts (made largely in Democratic strongholds) to regulate them. And there were a couple early critics who suggested federal regulation. But the only ones I know of were Democrats.

 

If you mean that some Democrats cheered them on, fine. I imagine there were some. But to say that this was a general position held by Dems is just wrong.

 

Seriously that is pedantic. In that case you can't use "local" and "state" efforts, nor the term "administration" because some probably opposed it. Initially it was sold by many as a chance to end the centuries of racism in the USA and give the poor and minorities more chances to have mortgages from people who usually wouldn't make risky loans. The oppositions came more later on than early on. Then again John McCain was one of the people trying to pass more regulations and getting shot down by Dems, as I posted the other day.

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QUOTE (southsider2k5 @ Sep 23, 2008 -> 09:42 AM)
Seriously that is pedantic. In that case you can't use "local" and "state" efforts, nor the term "administration" because some probably opposed it. Initially it was sold by many as a chance to end the centuries of racism in the USA and give the poor and minorities more chances to have mortgages from people who usually wouldn't make risky loans. The oppositions came more later on than early on. Then again John McCain was one of the people trying to pass more regulations and getting shot down by Dems, as I posted the other day.

No, not pedantic at all. There were Dems at the state and local levels passing actual laws, which were preempted by Republicans at the federal level. Gramlich at the Fed, calling for actual regulation. You make the claim that everybody was rah-rah about subprime mortgages, but there were people pushing against them -- all Dems, as far as I can tell.

 

If the Dems were as happy as Repubs about subprime mortgages, why were those state and local laws passed?

 

As for McCain, he did favor some increased regulation for Fannie and Freddie. If you mean that, then blaming Dems is weak. S.190 died in a GOP committee in a GOP Senate (no filibuster). Oxley, a Republican, has explicitly blamed the WH for the failure of the House legislation. If you mean that McCain tried to regulate subprime mortgage lenders but got "shot down by Dems", please provide the details.

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QUOTE (jackie hayes @ Sep 23, 2008 -> 09:28 AM)
No, not pedantic at all. There were Dems at the state and local levels passing actual laws, which were preempted by Republicans at the federal level. Gramlich at the Fed, calling for actual regulation. You make the claim that everybody was rah-rah about subprime mortgages, but there were people pushing against them -- all Dems, as far as I can tell.

 

If the Dems were as happy as Repubs about subprime mortgages, why were those state and local laws passed?

 

As for McCain, he did favor some increased regulation for Fannie and Freddie. If you mean that, then blaming Dems is weak. S.190 died in a GOP committee in a GOP Senate (no filibuster). Oxley, a Republican, has explicitly blamed the WH for the failure of the House legislation. If you mean that McCain tried to regulate subprime mortgage lenders but got "shot down by Dems", please provide the details.

 

The same people who got the subprime mortgages and loans balked after their arms started adjusting and they saw their 20%+ car loans, userous payday loans etc. They started complaining to their elected officials who tried to do something after the fact.

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QUOTE (southsider2k5 @ Sep 23, 2008 -> 10:45 AM)
userous payday loans etc.

 

I was just listening to a student talk about those. I could not believe they are allowed. The local loan sharks offer better deals.

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QUOTE (southsider2k5 @ Sep 23, 2008 -> 09:45 AM)
The same people who got the subprime mortgages and loans balked after their arms started adjusting and they saw their 20%+ car loans, userous payday loans etc. They started complaining to their elected officials who tried to do something after the fact.

And as for the line about McCain and the Dems, go back and read the Economy thread. I posted an article about this a couple/few days ago.

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QUOTE (southsider2k5 @ Sep 23, 2008 -> 11:45 AM)
The same people who got the subprime mortgages and loans balked after their arms started adjusting and they saw their 20%+ car loans, userous payday loans etc. They started complaining to their elected officials who tried to do something after the fact.

So your argument is that Dems were completely in support of subprime mortgages WAY long ago (not that you've shown this to be true, of course), then were opposed to it in the early-2000s, tried to do something then, but that doesn't matter even though subprime mortgages increased from about 3% to about 13% over that period? Is that about what you're saying?

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QUOTE (jackie hayes @ Sep 23, 2008 -> 10:00 AM)
So your argument is that Dems were completely in support of subprime mortgages WAY long ago (not that you've shown this to be true, of course), then were opposed to it in the early-2000s, tried to do something then, but that doesn't matter even though subprime mortgages increased from about 3% to about 13% over that period? Is that about what you're saying?

 

So what exactly have you "shown" to be true?

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QUOTE (southsider2k5 @ Sep 23, 2008 -> 11:47 AM)
And as for the line about McCain and the Dems, go back and read the Economy thread. I posted an article about this a couple/few days ago.

Oh, yes, Kevin Hassett. So I can just link to an Al Franken blurb to refute that?

 

The Dems were sure powerful if they were able to kill something without having a majority. They even killed the House bill, then exercised mind control over Oxley to make him believe the WH did it. Pretty sneaky...

 

And of course, Fannie and Freddie are the one and only cause of the subprime mortgage crisis. No proof needed.

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QUOTE (jackie hayes @ Sep 23, 2008 -> 10:08 AM)
You made the initial claim, not me.

 

So if you aren't making any claims, why are you arguing? Its the same old arguement. You challenge something I say with another opinion. I go dig up stuff to back my opinion. You nitpick with more questions. I post more stuff, and then you nitpick more. If you want to challenge me to "prove" something, I would love to see you "prove" something for once, with something other than asking more questions.

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$150 billion to start?

Sen. Charles Schumer (D-NY) just threw a serious gauntlet at Paulson, suggesting Congress might quickly agree to a $150 billion downpayment on the bailout -- followed by a reassessment on January 15th to see how the program is working -- and how much more cash is needed.

 

Schumer: "I'd ask you to think about this—I know ideally you want [the whole amount]—you are not going to use $700 billion in the next three months. $150 billion is a lot of money [to] have in your pocket next to your bazooka."

 

Paulson didn't like it.

 

"I think that would be grave mistake," he said.

 

"This is about market confidence and the tools to do the job," he added, saying that he needed all the money to deal with unanticipated contingencies quickly.

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QUOTE (Texsox @ Sep 23, 2008 -> 09:47 AM)
I was just listening to a student talk about those. I could not believe they are allowed. The local loan sharks offer better deals.

 

I was at a currency exchange last summer for some car-related stuff. They had a sign on the wall for their payday loans and it broke down the APR. Since it cost you $15 to borrow $100 for a week, the APR was something crazy like 450%. Insane.

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QUOTE (Athomeboy_2000 @ Sep 23, 2008 -> 10:42 AM)

 

The Democrats want delay this as long as possible so that they can spend the 'bail out' money if Obama wins.

 

either way it's only adding to the national debt and srcewing us in the long run. i read a great quote from an economist recently about the bail out;

 

"We decided to go with cancer, rather than car crash."

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QUOTE (jackie hayes @ Sep 23, 2008 -> 07:33 AM)
Balta's point is that dear Joe will be paying for something he shouldn't be paying for, one way or another. Someone's getting an undeserved handout.

Thank you for getting my point. And I'm happy to see a few people took the bait I laid.

 

You don't want to pay off the mortgages of the people who screwed up and took bigger mortgages than they deserve? Fine, I totally understand that. So why should we bail out the bankers who screwed up just as bad but who did so with an awful lot more money? It's equally unfair.

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QUOTE (Balta1701 @ Sep 23, 2008 -> 11:10 AM)
Thank you for getting my point. And I'm happy to see a few people took the bait I laid.

 

You don't want to pay off the mortgages of the people who screwed up and took bigger mortgages than they deserve? Fine, I totally understand that. So why should we bail out the bankers who screwed up just as bad but who did so with an awful lot more money? It's equally unfair.

 

In theory I agree with you 100%. I don't want to do it, espically because it was the government's own damned fault this happened. If they had stayed out of the mortgage business all together, this would have enver happened.

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QUOTE (southsider2k5 @ Sep 23, 2008 -> 09:16 AM)
In theory I agree with you 100%. I don't want to do it, espically because it was the government's own damned fault this happened. If they had stayed out of the mortgage business all together, this would have enver happened.

If by that you mean the 1999 deregulation act that allowed all these cryptic financial instruments to appear, I agree. If by that you mean the GSE's, then I disagree.

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Fannie Mae and Freddie Mac are massive failures. They are perfect demonstrations of what happens when too much power exists in one spot. It also is a perfect demonstration on what happens when business decesions are influenced by lobbyists instead of stock holders. These companies should have never existed. They shouldn't be getting put back on their feet today. They need to be destroyed and returned to the banks so that they will have to take some responsibility for the crapass loans they make. Having the governement there to bail them out is exactly why we got into this mess in the first place.

 

What ever happened to moral hazard? The government does't need to do everything for us. We don't need a super government entity to make sure that everyone gets everything in life.

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QUOTE (southsider2k5 @ Sep 23, 2008 -> 12:16 PM)
In theory I agree with you 100%. I don't want to do it, espically because it was the government's own damned fault this happened. If they had stayed out of the mortgage business all together, this would have enver happened.

Are you saying that if there was no government regulation it would be harder or easier to get a mortgage? Sorry, I'm not understanding.

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QUOTE (Texsox @ Sep 23, 2008 -> 10:33 AM)
Are you saying that if there was no government regulation it would be harder or easier to get a mortgage? Sorry, I'm not understanding.

He's saying that the fact that FNMA existed with an implicit government guarantee made companies vastly more willing to take on bad loans because they felt they could just pass them on to the government and take the profit for themselves, which is exactly how the system started working over the past decade or so. His contention is that the government being involved in the first place was why this happened, mine is that the banks would have done exactly this whether the GSE's existed or not as soon as you removed the regulations in 1999.

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QUOTE (southsider2k5 @ Sep 23, 2008 -> 11:30 AM)
They need to be destroyed and returned to the banks so that they will have to take some responsibility for the crapass loans they make. Having the governement there to bail them out is exactly why we got into this mess in the first place.

 

Definitely, these government bailouts certaily modify the risk reward scale. Just tossing 700 billion back to a bunch of failures is only going to encourage thes types of reckless buisness models. Go for the big windfall profit, as if you fail, you will get a big bailout and start over.

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QUOTE (mr_genius @ Sep 23, 2008 -> 10:38 AM)
Definitely, these government bailouts certaily modify the risk reward scale. Just tossing 700 billion back to a bunch of failures is only going to encourage thes types of reckless buisness models. Go for the big windfall profit, as if you fail, you will get a big bailout and start over.

So what you're saying is that the solution is in fact to start enacting windfall taxes on every industry we can think of? :headbang ;)

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QUOTE (Balta1701 @ Sep 23, 2008 -> 11:39 AM)
So what you're saying is that the solution is in fact to start enacting windfall taxes on every industry we can think of? :headbang ;)

 

no i'm saying if a corporation makes bad decisions and goes bust they don't get to dip into taxpayers funds to get a bailout. if they want to take a risk and fail they aren't getting a massive tax payer bailout.

 

big tax increases aren't the solution to this mess

Edited by mr_genius

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QUOTE (southsider2k5 @ Sep 23, 2008 -> 12:39 PM)
So if you aren't making any claims, why are you arguing? Its the same old arguement. You challenge something I say with another opinion. I go dig up stuff to back my opinion. You nitpick with more questions. I post more stuff, and then you nitpick more. If you want to challenge me to "prove" something, I would love to see you "prove" something for once, with something other than asking more questions.

You made a claim, I asked you to back it up, pointing out that the only examples of early action on subprime mortgages came from Dems. You didn't back it up, you simply repeated the claim. As for the Dem action on subprimes, you claimed it came too late. Now, I was talking about things that happened in 2001-2003. Then, you made the claim that McCain was trying valiantly to avert disaster by signing up for a Fannie and Freddie regulation bill in 2006, but was thwarted by the evil Dems. That, I pointed out, is wrong on many levels. Not to mention the fact that you apparently believe this was some example of foresight, when those Dem actions years earlier were way too late. And then, to back up your claims, you cite Kevin Hassett, a GOP shill who makes the same claims, but also doesn't back them up at all. Way to go!

 

You don't want to back up what you say, fine, don't. But I'm not going to go spouting off just to maintain parity in the area of baseless claims.

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