(08-28-2016 06:43 PM)wahoowa Wrote:  

(08-28-2016 06:30 PM)Paul M Wrote:  Where did the Pintos come from?

He pimped his Pinto, or probably paid some Mexicans to do it for him.

That looks like it belongs to a Mexican.

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(08-28-2016 08:44 PM)Hood-rich Wrote:  

(08-28-2016 06:43 PM)wahoowa Wrote:  

(08-28-2016 06:30 PM)Paul M Wrote:  Where did the Pintos come from?

He pimped his Pinto, or probably paid some Mexicans to do it for him.

That looks like it belongs to a Mexican.

Sent from my VS980 4G using CSNbbs mobile app

Nah. That looks like something some Walterboro redneck would drive. All it needs is a Confederate flag "No Fear" sticker and a whip CB antenna.

(08-28-2016 06:31 PM)Machiavelli Wrote:  If they stay labeled as Pintos no biggie.

No.

This is what you can't seem to grasp.

If they stay labeled as Pintos, then the banks can't unload them and the banks fail. That's what the regulators didn't want, so they looked the other way.

And as UofMStateU points out, the housing market was going to crater no matter how the were labeled. To save the housing market, those Pintos had to drive like Cadillacs. And as long as they didn't, the crash was inevitable.

Once the Pintos got in amongst the Cadillacs, the crash was inevitable.

Mach, some questions to try to understand better where you are coming from on this. What if the Pintos had not been labelled as Cadillacs? You seem to think that the whole thing was caused by that step. So what if it had not occurred? What would have been the result then? And how would we have avoided the crash?

(08-28-2016 09:34 AM)Owl 69/70/75 Wrote:  

(08-28-2016 09:24 AM)QuestionSocratic Wrote:  

(08-28-2016 07:50 AM)Owl 69/70/75 Wrote:  OK, OK, I know, the left doesn't like it explained this way. They want it all about greedy Wall Street. But if you want to blame it all on greedy Wall Street, and none on bad regulation, explain this. Why do you make the loan to Annie, knowing she isn't going to pay you back? Unless, of course, somebody is making you do it.

The government forced these loans on the banking community and the people on Wall Street, who are pretty damn smart, know better than anyone how to make lemonade. And that's what some did; they figured out a "legal" way to make lots of money off this conundrum of risk.
And don't forget about the really smart guys who recognized the bubble and went short. They made billions.
By the way, I do think that the ratings agencies really were a significant contributor to the problem.

Wall Street was like sharks smelling blood in the water. They saw a crisis and they knew how to make money off it. But they didn't create the crisis. And they ultimately got burned because they misunderstimated the crisis.

Again, the whole disaster comes down to one question. Why would I loan a quarter to Annie, knowing that she is not going to repay me?

For the same reason insurance companies will insure people with a terminal disease.....The government is forcing them too....

There is one aspect of this that somewhat pisses me off. The banks fully understood that they were selling bad paper and the smart ones had NO problem dumping off that bad paper to Fannie Mae, pocketing a tidy profit.. and leaving the taxpayers holding the rest. I have a friend that I play golf with occasionally(a high up retired BB&T exec) that was scared to death about the loans his bank was holding. He saw the burst coming..as did others. He was thrilled that they were able to dump them in time. The smart banks that had this insight profited...the rest?...got ****** along with us.

They should never been forced to write these ****** loans in the first place. I guess I can't be too mad at them for looking after their stockholders and dumping them.

(08-28-2016 09:43 PM)Fo Shizzle Wrote:  There is one aspect of this that somewhat pisses me off. The banks fully understood that they were selling bad paper and the smart ones had NO problem dumping off that bad paper to Fannie Mae, pocketing a tidy profit.. and leaving the taxpayers holding the rest. I have a friend that I play golf with occasionally(a high up retired BB&T exec) that was scared to death about the loans his bank was holding. He saw the burst coming..as did others. He was thrilled that they were able to dump them in time. The smart banks that had this insight profited...the rest?...got ****** along with us.
They should never been forced to write these ****** loans in the first place. I guess I can't be too mad at them for looking after their stockholders and dumping them.

In most cases, they didn't pocket any tidy profits. The just got rid of looming disasters. I guess you could say they profited by not having to deal with the disasters, but that would be about the extent of it.

(08-28-2016 11:47 AM)Machiavelli Wrote:  Why would I loan a quarter to Annie, knowing that she is not going to repay me?
that's the easiest part, because I make money off of it.

In most cases, no, they didn't. Certainly not as much as they could have made off good loans. They had no incentive to write bad loans except the gun at their backs.

Owl, do you remember that thread? He took you out point by point. He was a little dickish. No more than a little but you should go back and reread that. He took you to task on it. He was an economics professor who knew his stuff. I even stood up for you in the thread because he was really obnoxious with you but you were saying the same things that you are saying here and he took you to task. Point by point. It wasn't pretty. Do you remember the title of the thread or the guy? H wines his stuff. His arguments used zip codes if I remember correctly. His proved his argument but he was absolutely disrespectful. That was the part that was disappointing to me. He was never going to get people to agree with him on here because of his tact, but he was right.

There are professionals in every field that don't know their stuff, often because they're partisan. This economics professor sounds like one.

(08-28-2016 10:02 PM)Machiavelli Wrote:  Owl, do you remember that thread? He took you out point by point. He was a little dickish. No more than a little but you should go back and reread that. He took you to task on it. He was an economics professor who knew his stuff. I even stood up for you in the thread because he was really obnoxious with you but you were saying the same things that you are saying here and he took you to task. Point by point. It wasn't pretty. Do you remember the title of the thread or the guy? H wines his stuff. His arguments used zip codes if I remember correctly. His proved his argument but he was absolutely disrespectful. That was the part that was disappointing to me. He was never going to get people to agree with him on here because of his tact, but he was right.

I remember the thread that I think you are talking about.

He's an accounting professor, not an economics professor, and no he wasn't right. He was always obnoxious, that was just who he was. And no, he didn't take me to task because he didn't even address the issues I raised. He just kept parroting the same talking points over and over. Part of his argument was that the CRA statute did not require banks to make bad loans. He was right on that, and I said so. It wasn't the statute that created the problem, it was the regulations issued pursuant to the statute, and more particularly the way those regulations were interpreted and enforced in the field. IIRC, he eventually admitted, I think in another thread, that once the bad loans got into the system, the crash was inevitable.

He didn't take me apart because he didn't say anything, except for the part about the CRA statute, that was accurate. I'm the one who used ZIP codes, I used them to express a specific point. He didn't prove his argument at all, because what he posted was factually incorrect. I pointed out his errors, but he never responded (I think he got banned for a while about the time, and that may have been why he didn't respond). IIRC, Hambone pretty much took his arguments apart, too.

If you think he proved his argument, that's probably because you had a pretty biased perspective.

I'll ask you again the questions that neither he nor you have ever answered. Why do I loan a quarter to Annie if I know she is not going to repay me? And what would have happened if the bad loans had not been packaged and sold?

No one was required to loan the quarter to Annie. Why don't you admit that? You keep saying it and it's not true. They did it for greed. Go back reread that thread. He absolutely proved you wrong. The CRA is a zombie lie. It keeps getting repeated and repeated.

And go back and reread that where I continually stick up for you. Loyalty...... It matters. The collapse doesn't happen if the loans weren't repackaged and sold and leveraged many times over. The CRA is the biggest zombie lie and its continually repeated. Look at this thread and how many times it was said. It's 2016!!!!!!!!!

I especially like this from umgrad2001:


Post: #153RE: Our Horrible Economy
Here's a big lesson from Lehman, Bear Stearns, Ambac, MBIA, Radian, Moody's, Fitch, etc, etc, etc. These are all financial firms whose entire existence revolved around assessing risk. They all failed to properly assess the risk in the mortgage market. If these sophisticated investors couldn't get the risk assessment right, how can you possibly assign blame to unsophisticated borrowers? That's asinine. Further, none of those institutions I listed up there are CRA governed. None of them were forced into taking the positions they took. NONE OF THEM were forced to put a single penny at risk due to the CRA. Yet they represent the epicenter of the financial sector meltdown. These are firms with trillions on the line in the mortgage and mortgage-related markets (and in the cases of Moody's and Fitch they are firms who specialize in assessing the risk associated with the risk-taking firms). None of it had to do with the CRA. It had to do with what Greenspan would have called irrational exuberance. And that's exactly why right-wingers are so desperate to blame the CRA.

If they can pin it on the CRA, then it's the government's fault. If they can't, then they have to admit it was a massive failure of private markets; and these are people who worship at the altar of free markets. Admitting that it wasn't the CRAs fault is to admit that the private sector missed in it's most fundamental responsibility - assessing risk. That's a dagger in the heart of those who believe free markets are the cure to all ills because it is to admit that it caused a major economic meltdown. That's what's this is really all about.

Owl you said that on here. They had to make the loan at gun point and that is just not true or factual.

Post #48

Absolutely not true.

(Today 12:47 PM)Machiavelli Wrote:
Why would I loan a quarter to Annie, knowing that she is not going to repay me?
that's the easiest part, because I make money off of it.

In most cases, no, they didn't. Certainly not as much as they could have made off good loans. They had no incentive to write bad loans except the gun at their backs.

The zombie lie that you keep repeating for some odd reason.

As I suspected, this umgrad doesn't know what he's talking about.

He's wrong Mach and you think he was taking everyone else apart because you want to believe the same as him.

(08-28-2016 10:45 PM)Machiavelli Wrote:  And go back and reread that where I continually stick up for you. Loyalty...... It matters. The collapse doesn't happen if the loans weren't repackaged and sold and leveraged many times over. The CRA is the biggest zombie lie and its continually repeated. Look at this thread and how many times it was said. It's 2016!!!!!!!!!
I especially like this from umgrad2001:
Post: #153RE: Our Horrible Economy
Here's a big lesson from Lehman, Bear Stearns, Ambac, MBIA, Radian, Moody's, Fitch, etc, etc, etc. These are all financial firms whose entire existence revolved around assessing risk. They all failed to properly assess the risk in the mortgage market. If these sophisticated investors couldn't get the risk assessment right, how can you possibly assign blame to unsophisticated borrowers? That's asinine. Further, none of those institutions I listed up there are CRA governed. None of them were forced into taking the positions they took. NONE OF THEM were forced to put a single penny at risk due to the CRA. Yet they represent the epicenter of the financial sector meltdown. These are firms with trillions on the line in the mortgage and mortgage-related markets (and in the cases of Moody's and Fitch they are firms who specialize in assessing the risk associated with the risk-taking firms). None of it had to do with the CRA. It had to do with what Greenspan would have called irrational exuberance. And that's exactly why right-wingers are so desperate to blame the CRA.
If they can pin it on the CRA, then it's the government's fault. If they can't, then they have to admit it was a massive failure of private markets; and these are people who worship at the altar of free markets. Admitting that it wasn't the CRAs fault is to admit that the private sector missed in it's most fundamental responsibility - assessing risk. That's a dagger in the heart of those who believe free markets are the cure to all ills because it is to admit that it caused a major economic meltdown. That's what's this is really all about.

This is getting very tiresome. If you reread the entire thread, you'll see a few posts after this where I pointed out that the institutions he referenced were INVESTMENT banks, not commercial banks that were making the loans. They misjudged the risk because we had never had this many bad mortgage loans in the market at one time before. They assumed that historical trends would be repeated, but the loans weren't the same as in the historic pools.

There is this whole false narrative on the left that somehow we were rocking along just fine until Wall Street jumped in and started repackaging mortgages for profit. The problem with that narrative is that it's nonsense. If the bad loans weren't in the system, why would Wall Street have had to get involved--or even wanted to get involved? If things had been all hunky-dory, where would their opportunity to profit have arisen? And once the bad loans were in the system, how would we have avoided the crash?

Those are questions that he has never addressed, nor have you.

There is an issue as to how much the bad loans resulted from CRA and how much they may have resulted from something else. I'm happy to have that discussion.

But the bottom line is no bad loans (or even just bad loans at no higher than historic rtes of occurrence) would have meant no crash, regardless of what Wall Street did, and bad loans at unprecedented rates meant inevitable crash, again regardless of what Wall Street did. If you want to debate the issue, refute that. Neither you, nor Grad, nor anyone else has done that. And you can't.

You were saying that the loans that defaulted were done with a gun to the back. That is simply not true. To make matters worse those defaulted loans were leveraged many many times over and the results of their default were amplified. This is also true and the crux of the matter. That is what you are not acknowledging. We do not know if the loans themselves if they were not repackaged and insured as AAA investment grade would have collapsed the system because we can't access or live in parallel universe. What we do know is the repackaged insured and sold AAA investment grade portfolios damned near brought the entire house down and 95% of those loans were not of the CRA variety that the ring wing loves to trot out as a built in excuse. I'm going to bed and yes this zombie lie is growing tiresome. Year after year after year.

(08-28-2016 11:19 PM)Machiavelli Wrote:  You were saying that the loans that defaulted were done with a gun to the back. That is simply not true. To make matters worse those defaulted loans were leveraged many many times over and the results of their default were amplified. This is also true and the crux of the matter. That is what you are not acknowledging. We do not know if the loans themselves if they were not repackaged and insured as AAA investment grade would have collapsed the system because we can't access or live in parallel universe. What we do know is the repackaged insured and sold AAA investment grade portfolios damned near brought the entire house down and 95% of those loans were not of the CRA variety that the ring wing loves to trot out as a built in excuse. I'm going to bed and yes this zombie lie is growing tiresome. Year after year after year.

I've explained it several times. YOUR zombie lies are getting tiresome.

The problem with saying that it was just the financial games that caused the problem is that there's no way for the financial games to have caused a problem without the bad loans. And there's no way not to have a crash once we had the bad loans. You can't get to a crash with financial instruments only. There has to be a problem with the underlying economics.

You say the problem is that they were packaged as AAA paper. If the loans had paid out, they would have been AAA paper and nobody would have lost a dime. The 95% of the loans were not of the CRA variety is misleading for several reasons. One, I'm saying the bad loans were the problem, whether they were CRA or not, so the percentage of non-CRA loans is irrelevant to my larger point. Two, as I've explained over and over, the way the CRA regs were enforced, the banks had to make a bunch of "non-CRA" loans in order to be found in compliance with CRA.

As for the leveraged many times over and the results of default amplified, I'm not sure you are actually understanding the way financial instruments work. I think you believe that the effect of the leverage was like 10 to 1, so that a $100,000 mortgage going bad could produce $1 million in damage. In many cases, it may have been 10 to 1, or even greater, but instead of $1 million in dame, it would better be described as the same $100,000 ten times over (so no increase in damage, just an increase in number of people affected). Let me try to explain it. I have a $100,000 loan that I'm worried about my ability to collect. If it defaults, I lose $100,000, so I do some kind of swap or other financial transaction with A. Now A has the $100,000 risk, so he does some kind of financial transaction to pass the risk along to B. Now B has the risk, so he does a deal to pass the risk to C. And so on to D, E, F, G, H, I, and J. Well A's got to pay me at some point in order for me to be whole, but B's got to pay A, and C's got to pay B, and so forth. Now assume the note goes bad in J's hands. He still has to pay I, and I pay H, and so on, for this to work. But if there's a liquidity crisis, maybe J took on more deals than he can pay for, then J stiffs I, causing I to stiff H, causing H to stiff G, causing G to stiff F, causing F to stiff E, causing E to stiff D, causing D to stiff C, causing C to stiff B, causing B to stiff A, causing A to stiff me. It's only $100,000, it didn't get leveraged up to $1 million, but the same $100,000 hit 10 people. Do you see the difference?

And there's one other thing that this whole line of discussion leaves out. All of these financial deals could have failed, and everybody on Wall Street could have cratered, and the economy could have kept going, but for one thing. When those mortgages failed to perform, the properties got foreclosed. Foreclosure sales knock 30% off the comparables that appraisers use to value your house. That meant that millions of people saw their equity in their houses vanish, and with it their borrowing capacity to start up new businesses or spend money in other ways that keep an economy going. And banks saw their lending capacity vanish when they had mark their loan portfolios to market. That's what really caused the economy to crash, and that has absolutely nothing to do with the financial instruments on Wall Street.

(08-28-2016 06:28 PM)Machiavelli Wrote:  Guys,

The crash was because they sold pintos as Cadillacs. And worse yet they were insured Pintos at Cadillac values.

Again, I'm not mad, I thought it was a funny line I read on Reddit. Nothing more nothing less. It's funny.

Then the drinking line comes in. Haven't had a drop. No veins and it's actually my belief that it's the majority of you...... who the election is getting to. I think I'm going to be fine either way. Trump is the heaviest leaning D R I can find. Honestly. His stuff on free trade plays well with me. I think Hillary runs away with it but neither one of them keep me up at night in a fit of worry. This too shall pass. Now, Trump does kind of scare me with the war mongers. I don't want his hand on the nuclear football. That's a little scary but I personally don't think it's much to worry about.

Oh, dear Lord.

A grown man, rummaging around the quarters of pimply faced, tooof-braced gleaming imbeciles getting their teen angst on.

No wonder you run into problems like a brick wall when you bring that middle-school crap to adults.

Damn, man.