CO-04 (Special Election)
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(R) Greg Lopez
(R) Trisha Calvarese
90%
10%
President (To Win Colorado)
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(D) Joe Biden*
(R) Donald Trump
80%
20%↓
CO-01 (Denver)
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(D) Diana DeGette*
90%
CO-02 (Boulder-ish)
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(D) Joe Neguse*
90%
CO-03 (West & Southern CO)
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(D) Adam Frisch
(R) Jeff Hurd
(R) Ron Hanks
40%
30%
20%
CO-04 (Northeast-ish Colorado)
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(R) Lauren Boebert
(R) Deborah Flora
(R) J. Sonnenberg
30%↑
15%↑
10%↓
CO-05 (Colorado Springs)
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(R) Dave Williams
(R) Jeff Crank
50%↓
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CO-06 (Aurora)
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90%
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(D) Brittany Pettersen
85%↑
CO-08 (Northern Colo.)
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(D) Yadira Caraveo
(R) Gabe Evans
(R) Janak Joshi
60%↑
35%↓
30%↑
State Senate Majority
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DEMOCRATS
REPUBLICANS
80%
20%
State House Majority
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DEMOCRATS
REPUBLICANS
95%
5%
August 18, 2010 11:00 PM UTC
57 Comments
Lax regulation by the Fed of financial markets encouraged dubious subprime mortgages. Easy credit engineered by the Fed further inflated the housing “bubble.”
Who ran the Fed during the Dubya years? Good Old Alan Greenspan!
However, I do give this crooked bastard some credit – he actually admitted his role in the collapse:
“Alan Greenspan, lauded in Congress while the economy boomed, conceded under harsh questioning from lawmakers that he had made mistakes during his long tenure as Federal Reserve chairman that may have worsened the current slump.”
“In a four-hour appearance before the House Oversight Committee Thursday, Mr. Greenspan encountered legislators who interrupted his answers, caustically read back his own words from years ago, and forced him to admit that, at least in some ways, his predictions and policies had been wrong.”
“Returning to Capitol Hill amid a financial crisis rooted in mortgage lending, Mr. Greenspan said he had been wrong to think banks’ ability to assess risk and their self-interest would protect them from excesses. ”
http://online.wsj.com/article/…
But since you go to the Libertad school of YouTube Posting, here:
Ignore the evidence, blame it on someone else. If there hadn’t been a push for “affordable housing”, giving loans to those who couldn’t pay them back, there would have been no need for regulation in the first place; the free market would have worked just fine. It’s just typical of Dems to use government intervention to create a problem and then blame the problem on lack of government intervention.
Swipe phrases and arguments I’ve used against you. You haven’t a thought of your own, have you?
You’re not bright enough to come up with anything useful.
http://latimesblogs.latimes.co…
“The idea encompassed a range of policies — from healthcare to house buying — in which Republicans believed government should get out of the way and empower individuals to make their own financial decisions.” (emphasis mine)
“The president did promote homeownership, especially minority homeownership, which went up at an amazing rate. The president never recommended risky loans. And in fact, we were trying to put the kibosh on that for a long time, and we didn’t have a willing partner in Congress.”
Thanks for making my point. Bush tried to regulate Fannie and Freddie but couldn’t get support in congress.
Congress remained in GOP hands until 2007.
That quote is from a Bushie, not written as an objective analysis. It carries as much weight with me as my posting a Rep. Frank video denying culpability would with you.
‘self-aware’?
There, I fixed it for you.
That’s right, Dems. And it’s not like Dems have been able to get everything through congress they wanted either.
As you said a few posts up the thread, Bush was pushing home ownership, especially minority home ownership, and was very proud of the fact that home ownership among minorities and working folks increased a lot during his administration.
The righties keep saying “It was the Community Reinvestment Act that caused the housing bubble!” I remind you that the CRA was passed in 1977. Odd, isn’t it, that it took 30 years for the CRA to cause a bubble and subsequent collapse. Odder, isn’t it, that the lousy mortgages that caused the collapse were made in the early 2000s.
I don’t blame Bush for this, honestly. I blame greedy brokers and lenders, and the lack of regulation that allowed them to go nuts making loans that they knew were no good, then sliced-&-diced them to sell to others. The folks who wrote and sold the bad loans made their money up front, then sold the risk downstream. Divorcing loan decisions from the risk of bad loan decisions is, shall we say, not a good idea. The deregulation that led to this began during the Clinton administration (Gramm-Bleach-Liley Act) and continued under Bush, but he didn’t set the wheels in motion.
I found this interesting item from a 1999 article at http://www.nytimes.com/1999/09…
The banks wanted to make subprime loans because they made a whole lot more in interest, commissions, and other charges from those loans. I’ve written before about how my niece and nephew, who were well qualified for a conventional loan, were pressured by their mortgage broker to take an interest-only, neg-am, adjustable rate mortgage when they bought their first house in 2004. Their mortgage broker would have made a lot more money off that loan than his commission on a conventional loan. Fortunately they stuck with the conventional loan, and they have been able to make their payments and stay in their home. My nephew’s brother bought a house in the same neighborhood and did use the exotic subprime loan that my nephew refused. He lost his home earlier this year.
My opinion? The housing bubble and collapse were caused by greed untempered by effective regulation. It’s human nature, baby! Grab what you can while you can, and don’t look back at the heartache and suffering of the people you sucked in to make your pile.
cf ‘ownership society’
Even the “you’re not bright enough” line was something you swiped from me.
But it’s the right one.
Deregulate the banks. Phil Gramm’s mantra. How did that work out?
Not so good for the U.S., but damned well for Gramm. He’s now vice-Chairman of UBS AG’s Investment Bank division.
“It’s just typical of Dems to use government intervention to create a problem and then blame the problem on lack of government intervention.”
Crimes are committed everyday so we should fire the police.
OK.
which is the point I make about your logic fail. If we apply your line of thinking those pesky Dems are using government intervention to create a crime problem !
Which is why policing the streets is a legitimate function of government, unlike over-regulating the markets in response to problems caused by the government in the first place.
is a legitimate function of government, except when it applies to Wall St. Gotcha.
Gotta protect those CEOs from the liberal thugs trying to destroy their businesses.
Inevitably some asshole in the 3-piece suit is going to need backup when he jams an annuity on grandma and fleeces her out of her life savings.
You are a corporate dupe Beej. Regulation isn’t going to destroy a Wall St CEO’s business. In fact, lack of regulation has destroyed a few recently.
It is amazing to me that even after all this bullshit with our economic implosion that you believe your interests and the interests of CEO’s and Wall St. types are the same.
Dupe.
Democrats are the party of corporatism now. Obama, Bennet, Hickenlooper, etc. The pattern is clear.
‘Americans for Prosperity’
‘US Chamber of Commerce’
Newscorp millions to RGA, etc. etc. etc.
BJ said it, thus it must be…
total bullshit.
why is it that years of Republican rule are always capped by recessions and scandals?
1929 – Great Depression begins after a decade of Republicans occupying the White House.
1975 – Economy crashes and stagflation occurs after Nixon leaves office and Ford takes over.
1989 – S&L crisis occurs after Reagan’s terms are over.
2008 – Bush’s two terms result the worst recession in 70 years.
Keep in mind that economic policies are set by the White House, not Congress.
Reagan saved the economy; Carter killed it. I could go on and on.
But keep in mind that you’re not entitled to your own facts. Each of the events I listed happened in the years I gave, and not only were all those years preceded by GOP control of the White House but also DURING years the GOP was holding the White House.
Face it – since World War I, the only Republican president (or series of Presidents) who left office without either a complete meltdown of the economy (my first, second and fourth examples) or a major financial crisis (the third example) was Eisenhower. That’s a losing track record.
Clinton benefited from Reagan; Bush was hamstrung by a Democrat congress, etc.
For two years? If I’m to believe that, then Bush’s policies were even flimsier if that’s all it took to bring them down. LOL! (BTW, you’re using a noun to modify a noun again – time to return that degree in letters, eh?)
You really should learn a thing or two about politics and economics before you talk about them. I mean, how little do you really know about this stuff?
Doesn’t it just have a nice ring to it? You telling me to learn about politics and economics is laughable.
Just don’t let me catch you supporting “offical English” laws, since you apparently hate our language.
As The Beej notes:
It’s laughable if we think you might learn something from our lessons. We have all been disabused of this silly notion. Our responses to you are for the benefit of those who are lurking. You, dear Beej, merely serve as a foil.
Saved puppies! Fixed potholes across the land! Defeated commies (Grenada, 1983)!
Ronald Reagan–Conservation Action Figure President (positions from actual president, tax-and-spender Ronald Reagan, 1981-1989, may vary).
Go here for the Subprime Primer slide show.
But if you need to have things read to you, you can try this:
and a weaselly basement blogger voice. Definitely the work of the left. It was actually pretty accurate, except they left out the big part at the beginning where Barney Frank scared the banks into giving out the crappy loans in the first place. What business would normally make such bad decisions? (No the answer is not “they’re greedy b**tards”; the answer is “not one”.)
you would need to have it read to you.
1. Barney Frank was in the minority. He was in no position to impose his will on anyone.
2. Banks weren’t forced to give out risky loans. They chose to do that because money was free to borrow and they could avoid all risk through derivatives.
imposed on them by the “affordable housing” push via Fannie and Freddie, which, as I have pointed out umpteen times, Bush tried to regulate. So you’re the idiot. Nanny nanny boo boo.
Bush had majorities in the House and Senate.
He could have changed it if he gave a damn.
The idea that banks were forced to make risky loans has been refuted so many times that claiming so is willful ignorance.
I’ve given you all the evidence, there’s nothing more I can do if you refuse to believe the truth.
There is an old saying Beej; “People who use profanity are inarticulate motherfuckers”.
Feel free to use it. I’m pretty sure it is public domain.
And, as a bonus, there are even fewer written words AND no “gratuitous” profanity to offend your delicate (non)senses.
but it still ignores the role of the government, via Fannie and Freddie, pushing the bad loans in the name of “affordable housing”. Under normal circumstances, lenders wouldn’t have made so many risky loans. Underwriters have jobs for a reason, you know.
But that would have been survivable. What made this awful was we then had all kinds of financial paper that sliced these puppies up and then had bets on the paper, and then bets on the bets on the paper. By the time they were done each mortgage actually had several dollars riding on it for each dollar in the original mortgage. This multiplier is what made the crash so awful.
As to who was responsible – both parties. Giving the banks everything they wanted was a bipartisan affair. But the final disaster built up and crashed under the regulatory system run by George Bush.
that it would have been far cheaper just to pay off the bad mortgages than to bail out the banks.
That was either impossible because of the derivatives or it looked too much like the government giving money to Real People, which is far less preferable than giving money to banks.
But if we did that Citi would definitely have gone bankrupt and a couple of others might have gone down too. And all the major banks would have lost hundreds of billions and the Senate would not allow that.
They buy mortgages originated by other lenders and then package them into mortgage backed securities.
While they did start investing in somewhat lower credit grade loans, their underwriting standards were still relatively conservative compared to the most toxic loans.
The really toxic ones, subprime ARMs with an interest only term equal to the fixed rate period (at the end of the 2 or 3 year teaser, not only did the rate reset, but it also became fully amortizing – talk about payment shock!) all went into private label securities issued by the likes of Countrywide and New Century. Volume really started to take off in 2003 and 2004, so by 2006, all these high risk borrowers got clobbered when their monthly payments skyrocketed.
Defaults started increasing rapidly at the end of 2006. All the little mom & pop subprime lenders started to go out of business leaving the investors with no recourse on the bum loans. By early 2007, lenders started tightening their underwriting standards again making it impossible for these risky borrowers to refinance. And so begins the vicious cycle.
The Subprime Primer, by the way, is an excellent illustration of what happened, regardless of your tolerance for profanity.
The original housing crisis had very little to do with derivatives. It was about making loans to people who couldn’t pay them and then laying off the risk by selling the stinking piles of shit, cleverly disguised as investment grade securities, to ill-informed investors.
Where the derivatives mucked things up was when everybody started trading credit default swaps, which are like an insurance policy on risky securities. CDS defaults created a sort of chain reaction leading to the broader systemic crisis.
I guess the behavior of the free market must offend the delicate foundations of your ideological crutches, Beej.
When actors are enabled to externalize their costs and risks, they do so. The truth of this statement was borne out in the credit crisis debacle. As we are all now aware, this behavior causes great harm to the rest of us.
Someone not blinded by the catechism of anti-government fundamentalism would recognize that a regulated market is necessary to force actors to be responsible for their own risks and to ensure that the prices on products adequately reflect the true costs of production.
or go bankrupt much earlier. But it was the government that forced them to take on that risk in the first place. You’re not going to get away with blaming lack of government regulation for a problem caused by the government in the first place.
Ha ha ha ha ha ha ha ha ha ha ha ha … hee hee … whew!
Gasp!
Externalizing costs is exactly what corporations do whenever the absence of regulation allows them to.
This is true whether it’s toxic spills or toxic assets.
None the less, you are in fine fundamentalist form today, Beej.
See my note about the CRA below.
Even after the video evidence I posted? Get your head out of the sand man.
I believe the argument is that the push for ‘affordable housing’ (since you love to put it in scare quotes) did not cause the collapse.
But BJ, if you want to imagine that the ’cause’ was damn poor people and Democrats trying to help poor people, I know that fits into your cardboard cutout world, so proceed along in your blissful ignorance. All is exactly how you imagine it to be, pesky contradictory evidence (in great quantities) notwithstanding.
Many conservatives try to blame Clinton for the housing crisis because he encouraged expanding the CRA programs to better serve inner city borrowers.
The CRA had nothing to do with the housing crisis. Here’s a nice piece by the uber-conservative Randall Kroszner, who resigned from the FRB the day Obama was innaugurated, explaning exactly that.
http://www.frbsf.org/publicati…
Disclaimer: I can’t view the videos during the day, but will make the bold assumption that they’re useless, partisan drivel.
The US Gov’t (taxpayers) could have paid every residential mortgage loan on the books in 2006 and not bailed out one bank and the big players still would have failed.
It wasn’t because your neighbor or mine got into a loan they couldn’t pay or defailted for the more common medical reasons or loss of job. It was because the banks were over levereaged.
Data is starting to emerge, and will continue to do so, but the melt down was not caused by higher default rates.
Pop quiz (mathmeticians only)
Who has a higher rate of return:
a) the investor who buys $1billion dollar asset with $1billion dollars cash and sees their asset appreciate 10% in 30 days and sells.
or
b) the investor who buys $1billion dollar asset with $100 million dollars cash and $900million of cheap short term loan and sees their asset appreciate 10% in 30 days and sells.
So much leverage is great on the up side. But to round out the quiz
Who has the lower rate of return:
a) the investor who buys $1billion dollar asset with $1billion dollars cash and sees their asset decline 10% in 30 days and sells.
or
b) the investor who buys $1billion dollar asset with $100 million dollars cash and $900million of cheap short term loan and sees their asset decline 10% in 30 days and sells.
The big players were wayyyy overleveraged.
The depositors mostly didn’t care because deposits are mostly insured. Then Fed Chair Alan Greenspan has since admitted he was “wrong” about deregulation which didn’t work. see http://coloradopols.com/showCo…
Oh and bonus points for correctly calculating the ROI from above and calculating the ratio of the required US reserve ratio from 2001 – 2006 to the actual reserve ratio for the same period. (hint ratio is >1, and required reserve is < 10%)