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(CNN)   Who's ready for another subprime mortgage crisis? Say it with me, people: BUT HER EMAILS   ( cnn.com) divider line
    More: Scary, Subprime mortgage crisis, subprime mortgage, Fed, subprime mortgage payments, weak subprime mortgages, subprime mortgage issuance, financial crisis, subprime mortgage mess  
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2686 clicks; posted to Business » on 15 Mar 2017 at 12:20 PM (30 weeks ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2017-03-15 11:24:38 AM  
How is that even possible? Hasn't everyone refinanced? Lowest interest rates in a generation and all that. I'm paying like 3.9%.
 
2017-03-15 11:33:12 AM  
You can "but her emails" all you want, but the dates in TFA tell me this is not a recent development.   Trump is a buffoon, but not everything wrong in this country is his fault.

/just sayin'
 
2017-03-15 11:34:38 AM  

Dr.Fey: You can "but her emails" all you want, but the dates in TFA tell me this is not a recent development.   Trump is a buffoon, but not everything wrong in this country is his fault.

/just sayin'


img.fark.net
 
2017-03-15 12:25:11 PM  
When there is a question in the headline....
 
2017-03-15 12:27:29 PM  
Is there anyone who actually knows people that are bringing up Hillary's emails, other than those that still don't understand how we got president cheeto?
 
2017-03-15 12:28:20 PM  

iheartscotch: How is that even possible? Hasn't everyone refinanced? Lowest interest rates in a generation and all that. I'm paying like 3.9%.


Not if you were busy in 2008 losing your house.  It's a giant game of 3 card Monty (who was Monty anyway?).  Freddie and Fannie guarantee the loans, lenders keep lending until its too obviously reckless, and borrowers borrow because what the hell else were they going to do?
 
2017-03-15 12:31:32 PM  
Oh, for subby- thanks
img.fark.net
 
2017-03-15 12:35:20 PM  

doomjesse: iheartscotch: How is that even possible? Hasn't everyone refinanced? Lowest interest rates in a generation and all that. I'm paying like 3.9%.

Not if you were busy in 2008 losing your house.  It's a giant game of 3 card Monty (who was Monty anyway?).  Freddie and Fannie guarantee the loans, lenders keep lending until its too obviously reckless, and borrowers borrow because what the hell else were they going to do?


By cheaper home that they could actually afford the mortgage on. However I do remember that the banks were the ones encouraging people to buy bigger and borrow more, pretty much lying on what would be affordable for them. I wonder if that's still happening.
 
2017-03-15 12:38:52 PM  
BUT IT WAS HER TURN!
 
2017-03-15 12:41:29 PM  
FTA "Today, the Fed is again ignoring the GSEs and their potential contribution to future instability. According to Freddie's 2016 annual report, "Expanding access to affordable mortgage credit will continue to be a top priority in 2017." Fannie/Freddie have redefined "subprime" to a credit rating of below 620; previously, these firms and banking regulators had used 660 as the dividing line that defined a subprime borrower. Now by using the lower number, they may be buying even weaker mortgages than before the financial crisis. "

"In Freddie's 2016 Annual Report, the agency says 36% of its obligations are "credit enhanced," meaning they carry mortgage insurance of one sort or another, which is typically used for weaker mortgages. The insurance against default is only as good as the enhancing firms, and none is rated above BBB+. If these weak subprime mortgages begin to fail in large numbers, so also will the insuring companies. "


Housing prices are nearly as high as they were in 2006, too. It's not the same as 2008 because:

"There is one critical difference between today's situation and that of 2008: There is very little private capital that would be at risk if there's another subprime mortgage bust. Before the crisis, there was some market discipline, however imperfect it was, because potential buyers of mortgages would look at their quality carefully. Now only Fannie and Freddie are examining the quality of the mortgages. And it is taxpayers who would carry the burden of bailing out Fannie and Freddie, since their obligations are guaranteed by the US government. "

Nothing has really changed since 2008, it's just that there isn't as much private capital at risk if those securities collapse. But, since the government doesn't create jobs, that's fine.
 
2017-03-15 12:49:08 PM  
Wrong Clinton.  Thank Bill for pissing on the ashes of Glass-Steagle.  That's where the real root of the subprime crisis was.

It's why I couldn't believe that Trump was talking about reinstating it.
 
2017-03-15 12:49:32 PM  

Dr.Fey: You can "but her emails" all you want, but the dates in TFA tell me this is not a recent development.   Trump is a buffoon, but not everything wrong in this country is his fault.

/just sayin'


You expect subby to read the article and have a basic grip on economics?
 
2017-03-15 12:57:45 PM  
BUTTERY MALES!
 
2017-03-15 01:02:22 PM  

Dead for Tax Reasons: BUTTERY MALES!


Where?

I mean, uh.....gross.

get back to me on that
 
2017-03-15 01:13:38 PM  

AngryDragon: Thank Bill for pissing on the ashes of Glass-Steagle.


Please elaborate on how you believe Glass-Steagal would have prevented 2008.

Start by listing which of the major financial institutions involved were ever subject to it in the first place.
 
2017-03-15 01:17:08 PM  

phygz: Is there anyone who actually knows people that are bringing up Hillary's emails, other than those that still don't understand how we got president cheeto?


Gee, you think a candidate who record numbers of voters find to be untrustworthy shouldn't spend the year before the election lying to the public, thereby assuring it constantly stayed in the news?


Mika: It Feels Like Hillary Clinton Is Lying Straight Out | Morning Joe | MSNBC
Youtube bkJE0U8Qby4


When even MSNBC, the network the most likely to give Democratic politicians the benefit of the doubt, says you've been lying straight out, you have officially screwed the pooch.

I believe the term "political malpractice" was generously thrown about.
 
2017-03-15 01:21:30 PM  

BMFPitt: Please elaborate on how you believe Glass-Steagal would have prevented 2008.


LOL.

FDIC insured banks should totally be allowed to gamble with with everybody's deposits, amirite?

It's totally excusable for Clinton to put the final nail in Glass-Steagall, and let's also give him a pass for blocking the regulation of the derivatives that the banks were gambling with when they farked the economy.
 
2017-03-15 01:25:51 PM  

BullBearMS: phygz: Is there anyone who actually knows people that are bringing up Hillary's emails, other than those that still don't understand how we got president cheeto?

Gee, you think a candidate who record numbers of voters find to be untrustworthy shouldn't spend the year before the election lying to the public, thereby assuring it constantly stayed in the news?


[iFrame https://www.youtube.com/embed/bkJE0U8Qby4 - 480x270]

When even MSNBC, the network the most likely to give Democratic politicians the benefit of the doubt, says you've been lying straight out, you have officially screwed the pooch.

I believe the term "political malpractice" was generously thrown about.


The sad part to me is that there are people out there who consider themselves very knowledgeable on politics who don't understand that nothing has been done to prevent Wall Street from - perfectly legally, mind you - tanking the economy for fun and profit again.  They think that 2007/2008 was it and that it can't happen again.  And they got very mad when anyone would point out that Hillary Clinton was on board with giving them that ability decades ago and since the crash was not on board with doing anything to stop it going forward.

It's why some people were wondering why she spent so much time giving rah-rah speeches to Goldman Sachs after they farked the nation so hard and were wondering what exactly she said there.
 
2017-03-15 01:27:05 PM  

BMFPitt: AngryDragon: Thank Bill for pissing on the ashes of Glass-Steagle.

Please elaborate on how you believe Glass-Steagal would have prevented 2008.

Start by listing which of the major financial institutions involved were ever subject to it in the first place.


You're right.  It wasn't just that.  It was also the expansion of the Community Reinvestment Act (also a Clinton special) that encouraged banks to lend to people who couldn't possibly pay them back.  The elimination of the boundary between commercial and investment banks simply let them package those shiatty loans up and sell them as AA investments.  Luckily that just spread the risk to everyone on the planet instead of just the banks making shiatty loans.  But at least we got to bail most of them out so that's something.

So yeah, totally not Clinton's fault at all.
 
2017-03-15 01:31:10 PM  

phygz: Is there anyone who actually knows people that are bringing up Hillary's emails, other than those that still don't understand how we got president cheeto?


The only one bring up the emails are those who think thats the or among the reasons she lost.
 
2017-03-15 01:44:09 PM  

AngryDragon: It was also the expansion of the Community Reinvestment Act (also a Clinton special) that encouraged banks to lend to people who couldn't possibly pay them back. The elimination of the boundary between commercial and investment banks simply let them package those shiatty loans up and sell them as AA investments.


Don't be silly.

Those subprime loans were made by the banks because making them was exceptionally profitable in the short term, and the bankers were given huge bonus checks because of those profits.

As a regional vice president for Chase Home Finance in southern Florida, Theckston shoveled money at home borrowers. In 2007, his team wrote $2 billion in mortgages, he says. Sometimes those were "no documentation" mortgages.

"On the application, you don't put down a job; you don't show income; you don't show assets," he said. "But you still got a nod."

"If you had some old bag lady walking down the street and she had a decent credit score, she got a loan," he added.

Theckston says that borrowers made harebrained decisions and exaggerated their resources but that bankers were far more culpable - and that all this was driven by pressure from the top.

"You've got somebody making $20,000 buying a $500,000 home, thinking that she'd flip it," he said. "That was crazy, but the banks put programs together to make those kinds of loans."

Especially when mortgages were securitized and sold off to investors, he said, senior bankers turned a blind eye to shortcuts.

"The bigwigs of the corporations knew this, but they figured we're going to make billions out of it, so who cares? The government is going to bail us out. And the problem loans will be out of here, maybe even overseas."


Sure, some banks ended up going under like IndyMac, but since when do psychopaths care about long term consequences when there are short term gains to be had?

Typically, nobody goes to prison and the fines are a tiny fraction of the profits the bank made and those fines are paid by the bank's shareholders and not those guilty of the fraud in the first place.
 
2017-03-15 01:51:06 PM  

BullBearMS: Those subprime loans were made by the banks because making them was exceptionally profitable in the short term, and the bankers were given huge bonus checks because of those profits.


Agreed.  The government incentivizing the practice was just retarded though.
 
2017-03-15 01:52:44 PM  

AdmirableSnackbar: here are people out there who consider themselves very knowledgeable on politics who don't understand that nothing has been done to prevent Wall Street from - perfectly legally, mind you - tanking the economy for fun and profit again.


I would invite them to watch the Frontline episode linked above. The derivatives expert who tried to regulate them under Clinton as the head of the Commodity Futures Trading Commission makes it quite clear that not only can this happen again, she fully expects it to happen over and over and over until we correct the problem.

Frontline: The Warning
 
2017-03-15 01:53:55 PM  

Best Princess Celestia: phygz: Is there anyone who actually knows people that are bringing up Hillary's emails, other than those that still don't understand how we got president cheeto?

The only one bring up the emails are those who think thats the or among the reasons she lost.


Idiots, in other words.
 
2017-03-15 01:54:03 PM  
CATO Institute: "Ignore outright fraud by private actors like Bear Stearns. I was all the govrrnments fault"
 
2017-03-15 01:59:58 PM  

AngryDragon: BullBearMS: Those subprime loans were made by the banks because making them was exceptionally profitable in the short term, and the bankers were given huge bonus checks because of those profits.

Agreed.  The government incentivizing the practice was just retarded though.


The government didn't twist anybody's arm to get them to write loans to people without verifying the borrower's income, assets, or even employment status, yet that was a common practice in the run up to the financial crisis.

Also, after the fact analysis shows that the loans you're upset were just not a significant factor.
 
2017-03-15 02:07:21 PM  

BullBearMS: FDIC insured banks should totally be allowed to gamble with with everybody's deposits, amirite?


Absolutely not.

But go on, tell me what that had to do with the non-FDIC insured non-banks that caused the meltdown.
 
2017-03-15 02:09:46 PM  

AngryDragon: You're right.  It wasn't just that.  It was also the expansion of the Community Reinvestment Act (also a Clinton special) that encouraged banks to lend to people who couldn't possibly pay them back.


The CRA didn't even amount to a rounding error in the whole scheme of the collapse.
 
2017-03-15 02:14:52 PM  

BMFPitt: BullBearMS: FDIC insured banks should totally be allowed to gamble with with everybody's deposits, amirite?

Absolutely not.

But go on, tell me what that had to do with the non-FDIC insured non-banks that caused the meltdown.


Besides their defrauding the FDIC-insured banks who risked their customers' money?
 
2017-03-15 02:15:11 PM  

Gaddiel: doomjesse: iheartscotch: How is that even possible? Hasn't everyone refinanced? Lowest interest rates in a generation and all that. I'm paying like 3.9%.

Not if you were busy in 2008 losing your house.  It's a giant game of 3 card Monty (who was Monty anyway?).  Freddie and Fannie guarantee the loans, lenders keep lending until its too obviously reckless, and borrowers borrow because what the hell else were they going to do?

By cheaper home that they could actually afford the mortgage on. However I do remember that the banks were the ones encouraging people to buy bigger and borrow more, pretty much lying on what would be affordable for them. I wonder if that's still happening.


Cheaper home?  I live in WV.  There are no cheaper homes, and still they cost 100k or more for anything habitable.  If your choice is homelessness or borrowing more than you can afford...
 
2017-03-15 02:15:45 PM  

AngryDragon: the Community Reinvestment Act


whoever told you that is an idiot
 
2017-03-15 02:16:36 PM  

BMFPitt: BullBearMS: FDIC insured banks should totally be allowed to gamble with with everybody's deposits, amirite?

Absolutely not.

But go on, tell me what that had to do with the non-FDIC insured non-banks that caused the meltdown.


The non-FDIC insured financial institutions did not cause the meltdown on their own.

I believe I just mentioned IndyMac a couple of posts ago. The FDIC had to bail them out after their fraudulent bullshiat took them down.
 
2017-03-15 02:20:15 PM  
Whenever I read about this kind of shiat happening again, I go back and watch these two movies, which help me understand  what the fark is happening (I suck at econ). I highly recommend both of them.
img.fark.net

img.fark.net
 
2017-03-15 02:20:38 PM  

AdmirableSnackbar: Besides their defrauding the FDIC-insured banks who risked their customers' money?


Is there an actual thing you're referring to, which you can make some kind of case for Glass-Steagal bring able to prevent?
 
2017-03-15 02:24:46 PM  
2nd time in as many days I'll post it:

The Business tab is not a dumping-ground for rejected Politics tab greenlights, subby.
 
2017-03-15 02:31:37 PM  

BMFPitt: AdmirableSnackbar: Besides their defrauding the FDIC-insured banks who risked their customers' money?

Is there an actual thing you're referring to, which you can make some kind of case for Glass-Steagal bring able to prevent?


Was IndyMac not one of the largest bank failures in history in your twisted little world of alternative facts?
 
2017-03-15 02:32:31 PM  

BullBearMS: The non-FDIC insured financial institutions did not cause the meltdown on their own.


False.

I believe I just mentioned IndyMac a couple of posts ago.  The FDIC had to bail them out after their fraudulent bullshiat took them down.

Which was one of the largest failures the FDIC has ever had to deal with.  It was roughly 4% as big as the Fannie & Freddie bailout.
 
2017-03-15 02:33:08 PM  

BMFPitt: AdmirableSnackbar: Besides their defrauding the FDIC-insured banks who risked their customers' money?

Is there an actual thing you're referring to, which you can make some kind of case for Glass-Steagal bring able to prevent?


Glass-Steagall would have limited the damage just to investment banks and just to investors.  A meltdown happened because banks risked money that Glass-Steagall would have prevented them from risking in investments.  With G-S, there's still a bubble and a burst but that bubble is contained.  But because there was no containment that made the bubble that much bigger and helped to ensure that EVERYONE was affected, not just people who made the investments.

With a fully functioning G-S the bubble would have been smaller and the losses would have been much, much less.  Although a few people wouldn't have made off with so much money, they only would have gotten a small fraction of that.  And that was the problem and that is why G-S had to die - a small amount of people making a huge amount of money at the expense of the entire farking economy is much more important than protecting everyday Americans from losing their money because their bank farked them over by buying fraudulent investments with their money and without their approval or notification.
 
2017-03-15 02:38:24 PM  

Frank N Stein: 2nd time in as many days I'll post it:

The Business tab is not a dumping-ground for rejected Politics tab greenlights, subby.


And yet, here we are.

The Business tab is the minor leagues for Polititards
 
2017-03-15 02:42:11 PM  

BMFPitt: BullBearMS: The non-FDIC insured financial institutions did not cause the meltdown on their own.

False.

I believe I just mentioned IndyMac a couple of posts ago.  The FDIC had to bail them out after their fraudulent bullshiat took them down.

Which was one of the largest failures the FDIC has ever had to deal with.  It was roughly 4% as big as the Fannie & Freddie bailout.


What the fark do you imagine triggered the Fannie and Freddie bailout?

Hint, they buy a huge percentage of the mortgages made by FDIC insured banks across the country.

On Friday, the FDIC seized control of the failed California-based IndyMac Bank. It was second largest bank failure in US history. Analysts project another 150 banks could collapse. On Sunday, Treasury Secretary Henry Paulson announced extraordinary moves to bail out the mortgage giants Freddie Mac and Fannie Mae, which hold nearly half of the nation's mortgages.

Bank makes subprime loan without bothering to verify the borrower's income, assets, or employment status then sells it to Fannie and Freddy and we end up having to bail out the banks and Fannie and Freddy.
 
2017-03-15 02:45:03 PM  

Big Beef Burrito: Frank N Stein: 2nd time in as many days I'll post it:

The Business tab is not a dumping-ground for rejected Politics tab greenlights, subby.

And yet, here we are.

The Business tab is the minor leagues for Polititards


Political Science, Philosophy and Economics are joined at the hip. This is not a "pick two" kind of decision... each influence and limit the others.
 
2017-03-15 02:45:33 PM  

AdmirableSnackbar: Glass-Steagall would have limited the damage just to investment banks and just to investors.  A meltdown happened because banks risked money that Glass-Steagall would have prevented them from risking in investments.  With G-S, there's still a bubble and a burst but that bubble is contained.  But because there was no containment that made the bubble that much bigger and helped to ensure that EVERYONE was affected, not just people who made the investments.


I'm sure that it makes you feel better to think that, but actual FDIC insured banks by and large weren't exposed in any significant way to such investments.

The example above, for instance, was IndyMac.  Which failed by making its own shiatty loans and holding them, not by buying CDOs.
 
2017-03-15 02:46:55 PM  

Tr0mBoNe: Big Beef Burrito: Frank N Stein: 2nd time in as many days I'll post it:

The Business tab is not a dumping-ground for rejected Politics tab greenlights, subby.

And yet, here we are.

The Business tab is the minor leagues for Polititards

Political Science, Philosophy and Economics are joined at the hip. This is not a "pick two" kind of decision... each influence and limit the others.


Yeah but when we start getting headlines likes "Subprime auto loans driving Americans into debt. This is Drumphf's Amerikkka" or whatever, it starts getting a bit ridiculous.
 
2017-03-15 02:47:37 PM  

BullBearMS: What the fark do you imagine triggered the Fannie and Freddie bailout?


Exactly what your said.  Now explain how you believe Glass-Steagal factors into that.
 
2017-03-15 02:50:05 PM  

BMFPitt: AdmirableSnackbar: Glass-Steagall would have limited the damage just to investment banks and just to investors.  A meltdown happened because banks risked money that Glass-Steagall would have prevented them from risking in investments.  With G-S, there's still a bubble and a burst but that bubble is contained.  But because there was no containment that made the bubble that much bigger and helped to ensure that EVERYONE was affected, not just people who made the investments.

I'm sure that it makes you feel better to think that, but actual FDIC insured banks by and large weren't exposed in any significant way to such investments.

The example above, for instance, was IndyMac.  Which failed by making its own shiatty loans and holding them, not by buying CDOs.


They were only holding them as long as it took to sell them on to some other sucker.

It's just that they got caught with a shiatload of them still on hand when the jib was up and investors knew those CDO's were completely fraudulent.

Also, are we pretending that the various public and private employee pension funds did get completely farked over by those fraudulent derivatives cooked up by the banks, requiring us to bail them out too?
 
2017-03-15 02:52:37 PM  

BMFPitt: BullBearMS: What the fark do you imagine triggered the Fannie and Freddie bailout?

Exactly what your said.  Now explain how you believe Glass-Steagal factors into that.


Do you think the banks would have ever made loans without verifying the borrower's income, assets, or employment status if they were still required to be paid back by the borrower instead of getting caught up in risky and fraudulent side investments an FDIC insured institution has no business taking part in?
 
2017-03-15 02:55:04 PM  

BullBearMS: It's just that they got caught with a shiatload of them still on hand when the jib was up and investors knew those CDO's were completely fraudulent.

Also, are we pretending that the various public and private employee pension funds did get completely farked over by those fraudulent derivatives cooked up by the banks, requiring us to bail them out too?


I have repeatedly pointed out that none of the things you're saying would have been prevented by Glass-Steagal.

You never seen to address that, you just bring up more things that wouldn't have been prevented by Glass-Steagal.
 
2017-03-15 02:57:08 PM  

BullBearMS: Do you think the banks would have ever made loans without verifying the borrower's income, assets, or employment status if they were still required to be paid back by the borrower instead of getting caught up in risky and fraudulent side investments an FDIC insured institution has no business taking part in?


Glass-Steagal prohibited them from buying stuff like that, not from selling it.
 
2017-03-15 02:57:27 PM  

BMFPitt: I have repeatedly pointed out falsely claimed that none of the things you're saying would have been prevented by Glass-Steagal.


Fixed that for everybody.
 
2017-03-15 02:59:34 PM  

Frank N Stein: Tr0mBoNe: Big Beef Burrito: Frank N Stein: 2nd time in as many days I'll post it:

The Business tab is not a dumping-ground for rejected Politics tab greenlights, subby.

And yet, here we are.

The Business tab is the minor leagues for Polititards

Political Science, Philosophy and Economics are joined at the hip. This is not a "pick two" kind of decision... each influence and limit the others.

Yeah but when we start getting headlines likes "Subprime auto loans driving Americans into debt. This is Drumphf's Amerikkka" or whatever, it starts getting a bit ridiculous.


Agreed. Clickbaiters gotta clickbait, I guess. Next they'll start randomly tagging threads with MAGA or something like that.
 
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