December 2019

Sun Mon Tue Wed Thu Fri Sat
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 25 26 27 28
29 30 31        

Stats

Blog powered by Typepad
Member since 04/2004

« Palin parallels | Main | Not in my lifetime »

October 08, 2008

Comments

jorod

Obama wants to create 5 million jobs by subsidizing alternative fuels(No one knows where he gets these numbers). McCain should have said that he can create 10 million jobs by letting the oil companies drill and it won't cost the taxpayers a nickel.

When Obama attacked tax cuts for oil companies, McCain also should have said that Exxon Mobil paid $30 billion in income taxes last year, not including payroll taxes, and they employ over 80,000 people. They paid taxes equal to 1% of the Federal budget. That an oil pipeline like the one they are bulding in Alaska costs $40 billion.

When Obama says that earmarks are only $18 billion if we cut them, McCain should have pointed out the at Obama wants to spend $15 billion on alternative fuels and wants to invade Pakistan and Darfur, so where's the savings?

Obama says we can keep private medical insurance. But once the government gets involved in a business, it crowds out all competition. Government insurance spells the doom of private insurance. The government will also try to dictate prices rather than letting the market set prices. This will cause shortages and result in hoarding of medical supplies. In some parts of the old Soviet Union, some clinics didn't even have thread for stitches. If you want to see how it works, go to Cook County Hospital in Obama's Chicago. See how the Democrats load up the bureaucracy with their friends and relatives.

Obama plans the same health care as government employees for 46 million uninsured people and will cost $12,000 per household at today's market prices. That's about $550 billion. Who's going to pay for that? He didn't mention that. Of course, McCain was too stupid to call him out on that.

Medicare doesn't process claim forms for now. That's done by private insurance companies and doctors' offices. The claims are submitted to medicare for payment. When medicare starts processing its own claims, it will have to hire millions of people for that purpose.

Everyone knows that you don't raise taxes during a recession. If Obama wants to raise taxes in a recession, either he doesn't believe we are in a recession or he is an idiot. Either way, it's bad for the US.

Obama came across as a 1960s retread. McCain tried not to lose but doesn't understand the basic issues.

Tom Bowler

"When Obama attacked tax cuts for oil companies, McCain also should have said that Exxon Mobil paid $30 billion in income taxes last year, not including payroll taxes, and they employ over 80,000 people. They paid taxes equal to 1% of the Federal budget"

That's a very good point. It's also one that McCain could easily attack by asking just about anybody in the audience if they think that the additional cost in taxes won't be passed on to the consumer. It's been a great sound bite for Obama to claim he plans to boost taxes on corporations who can afford to pay them. But those added taxes on the oil companies will actually be paid by consumers.

Smithington

Fannie Mae and Freddie Mac bought individual loans, guaranteed those loans, and bundled those loans for sale in the form of mortgage backed securities.

It has become common knowledge that those are NOT the loans and mortgage backed securities that caused this mess.

Subprime loans were bundled into mortgage backed securities by the private mortgage lenders that initiated them, and put on the market by those lenders with a deceptive triple A rating. It is those loans and those mortgage backed securities that caused this mess. And it was due to a complete lack of oversight of the private mortgage lenders.

Fannie and Freddie, and a number of other institutions bought those securities believing them to be legitimate triple A securities. And so Fannie and Freddie along with a number of other buyers got screwed.

But the loans used to back them had nothing to do with Fannie and Freddie guaranteed loans. And legislation with regard to policies affecting Fannie and Freddie loans would not have affected these securities.

Link with actual facts here.

http://www.businessweek.com/investing/insights/blog/archive s/2008/09/fannie_mae_and.html

Smithington

Link:


http://www.businessweek.com/investing/insights/blog/archives/2008/09/fannie_mae_and.html

Tom Bowler

"It has become common knowledge that those are NOT the loans and mortgage backed securities that caused this mess."

It is most certainly NOT common knowledge that subprime mortgages from Fannie and Freddie are not the cause of this mess. National Review has a great write up, Planting Seeds of Disaster.

However much pressure ACORN put on banks to lower credit standards, tough requirements in the “secondary market” run by Fannie Mae and Freddie Mac served as a barrier to change. Fannie Mae and Freddie Mac buy up mortgages en masse, bundle them, and sell them to investors on the world market. Back then, Fannie and Freddie refused to buy loans that failed to meet high credit standards. If, for example, a local bank buckled to ACORN pressure and agreed to offer poor or minority applicants a 5-percent down-payment rate, instead of the normal 10-20 percent, Fannie and Freddie would refuse to buy up those mortgages. That would leave all the risk of these shaky loans with the local bank. So again and again, local banks would tell ACORN that, because of standards imposed by Fannie and Freddie, they could lower their credit standards by only a little. (my emphasis above)

So the eighties taught ACORN that a high-pressure, Alinskyite outside strategy wouldn’t be enough. Their Washington lobbyists would have to bring inside pressure on the government to undercut credit standards at Fannie Mae and Freddie Mac. Only then would local banks consider making loans available to customers with bad credit histories, low wages, virtually nothing in the bank, and even bankruptcies on record.

Fannie and Freddie were clearly packaging and selling subprime loans, and the Community Reinvestment Act put great pressure on them to ramp up the practice. Private mortgage companies would have added to the problem because of being forced to conform to Fannie's and Freddie's low standards in order to survive. But the problem originated with Fannie and Freddie.

Smithington

"Back then, Fannie and Freddie refused to buy loans that failed to meet high credit standards."

What is your point? They refuesed to buy them.

Smithington

"Fannie and Freddie were clearly packaging and selling subprime loans"

No. They refused to buy them.

What is your problem?

Smithington

So again and again, local banks would tell ACORN that, because of standards imposed by Fannie and Freddie, they could lower their credit standards by only a little."

That is correct. Fannie and Freddie would NOT guarantee those loans.

What is your problem?

Smithington

Fannie and Freddie REFUSED to buy and guarantee those loans.

Those loans were made DESPITE the REFUSAL of Fannie Mae and Freddie Mac to guarantee those loans.

Those loans were made, not because ANYBODY at Fannie Mae and Freddie Mac twisted arms, but out of greed.

Those loans were made OUTSIDE THE SCOPE of Freddie Mae and Fannie standards.

THANK YOU FOR CLARIFYING THAT MATTER.

Tom Bowler

'"Back then, Fannie and Freddie refused to buy loans that failed to meet high credit standards."

What is your point? They refuesed to buy them.'

The point is that they stopped refusing under pressure from ACORN and Democrats. You seem unwilling to go read the article, so let me copy in more of it for you.

"Dixon gave credibility to ACORN’s accusations of loan bias, although these claims of racism were disputed by Missouri Republican, Christopher Bond. ACORN’s spokesman strenuously complained that his organization’s efforts to relax local credit standards were being blocked by requirements set by the secondary market. Dixon responded by pressing Fannie and Freddie to do more to relax those standards — and by promising to introduce legislation that would ensure it. At this early stage, Fannie and Freddie walked a fine line between promising to do more, while protesting any wholesale reduction of credit requirements.

By July of 1991, ACORN’s legislative campaign began to bear fruit. As the Chicago Tribune put it, “Housing activists have been pushing hard to improve housing for the poor by extracting greater financial support from the country’s two highly profitable secondary mortgage-market companies. Thanks to the help of sympathetic lawmakers, it appeared...that they may succeed.” The Tribune went on to explain that House Democrat Henry Gonzales had announced that Fannie and Freddie had agreed to commit $3.5 billion to low-income housing in 1992 and 1993, in addition to a just-announced $10 billion “affordable housing loan program” by Fannie Mae. The article emphasizes ACORN pressure and notes that Fannie and Freddie had been fighting against the plan as recently as a week before agreement was reached. Fannie and Freddie gave in only to stave off even more restrictive legislation floated by congressional Democrats.

[...]

In early 1994, the Clinton administration floated plans for committing $1 trillion in loans to low- and moderate-income home-buyers, which would amount to about half of Fannie Mae’s business by the end of the decade. Wall Street Analysts attributed Fannie Mae’s willingness to go along with the change to the need to protect itself against still more severe “congressional attack.

[...]

In the end of course, Clinton’s plan cost taxpayers an almost unimaginable amount of money. And it was just around the time of his 1995 announcement that the Chicago papers started encouraging bad-credit customers with “dog-food” wages, little money in the bank, and even histories of bankruptcy to apply for home loans with the help of ACORN. At both the local and national levels, then, ACORN served as the critical catalyst, levering pressure created by the Community Reinvestment Act and pull with Democratic politicians to force Fannie Mae and Freddie Mac into a pattern of high-risk loans.”

You seem desperate to shield congressional Democrats from any blame.

Smithington

"The point is that they stopped refusing under pressure from ACORN and Democrats."

Whatever changes Fannie and Freddie made with regard to loans they underwrote, it had no serious affects on the default rates for those loans. Default rates for Fannie and Freddie guaranteed loans are perfectly acceptable.

It is the default rates for an explosion of loans made between 2002-2006 that were NOT underwritten by Fannie and Freddie that are the problem.

This is a stark fact that you and anything you source refuses to deal with.

To this day, you are unwilling to acknowledge that there are two groups of loans. Those guaranteed by Fannie and Freddie and those that are not.

And the vast majority of the ones that are not don't have anthing to do with low-income people.

Smithington

"You seem desperate to shield congressional Democrats from any blame."

NOTHING I have written shields Democrats. You and a number of other partisan hacks incorrectly assume that anybody who points out the deplorable state of the current Republican Party must be a liberal.

I don’t recall members from either party initiating any serious follow-up regarding the reckless behavior on the part of private mortgage lenders between 2002-2006 regarding loans they made outside the scope of government policies and not guaranteed by Fannie and Freddie.

It is your rank partisanship that appears to be interfering with an understanding that what occurred here was a fraud on the part of the sellers -- the private mortgage lenders. And that the sellers were able to perpetrate this fraud because of a complete lack of oversight.

Tom Bowler

Here's an interesting bit in wikipedia:

Although under Raines, Fannie Mae invested in some securities backed by subprime loans, it didn't start buying subprime and Alt-A loans directly (and bundling them into securities) until late 2004 after the accounting scandal. Purchasing of subprime and alt-A mortgages expanded exponentially under the guidance of Raines's successor Daniel H. Mudd.

Smithington, you've said earlier that Fannie Mae refused to buy subprime mortgages, but many, many other sources have established that Fannie Mae did buy subprime loans, and in fact invested massively. Now you have a new story: It doesn't matter if they did.

Thank you for your comments, but your analysis is weak and seems very much designed to shield Democrats from any blame for their refusal to allow any regulatory oversight of Fannie and Freddie. You exonerate Fannie Mae and shift all blame to the greed of private lenders. The Washington Post took a different view.

Fannie Mae engaged in "extensive financial fraud" over six years by doctoring earnings so executives could collect hundreds of millions of dollars in bonuses, federal officials said yesterday in a report that portrayed a company determined to play by its own rules.

There was fraud at Fannie Mae. It is at the root of our credit crisis.

Smithington

Wikipedia Tom?

There is a lot of loose talk when labeling loans.

By definition, a lot of people simply define subprime loans as loans that do NOT meet Fannie Mae and Freddie Mac standards. When I talk about subrpime loans, I am talking about loans that do NOT meet Fannie Mae and Freddie Mac standards, loans that were NOT underwritten by Fannie Mae and Freddie Mac -- loans that you continue to want to ignore as if they don't exist.

The bottom line is this.

There are loans underwritten by Fannie and Freddie, and there are loans that are NOT.

The default rates for loans underwritten are fine.

The default rate for loans that were NOT underwritten are not.

And the great majority of loans that were NOT underwritten by Fannie and Freddie had NOTHING to do with low-income housing.

Smithington

"Fannie Mae engaged in "extensive financial fraud" over six years BY DOCTORING EARNINGS"
(I added the caps)

I don't have a problem with that statement.

Doctored earnings have NOTHING to do with the subprime loans that were NOT underwritten by Fannie and Freddie.

Therefore, the Washington Post does NOT take a different view from my statements about those loans because that statement has NOTHING to do with those loans.

You don't seem to want to understand the subject matter these writers are talking about out of blind partisanship.

Tom Bowler

"By definition, a lot of people simply define subprime loans as loans that do NOT meet Fannie Mae and Freddie Mac standards"

That's not the definition of subprime and nobody thinks it is.

Smithington

I did not say it was an exact defintion.

This type of pedantic silliness shows that it's obvious you are not willing to address the real problem.

The actual definition of a subprime loan is a side issue.

But we'll put it this way. The group of loans, whether "subprime" or otherwise, that were underwritten and guaranteed by Fannie Mae and Freddie Mac have acceptable default rates.

Meanwhile, there is a completely different group of loans that were NOT underwritten and guaranteed by Fannie Mae and Freddie Mac -- most of them subprime loans.

You do NOT want to acknowledge that these loans exist. They exploded from 2002-2006 when subprime loans went from 2% of total mortgages to 30% of total mortgages. They did NOT meet Fannie Mae and Freddie Mac standards. They were a fraud perpetrated by private mortgage lenders because there was no oversight of them.

I don't know of ANY leader from either party that spent any significant time trying to do something about them. And it's too bad.

Tom Bowler

"You do NOT want to acknowledge that these loans exist. They exploded from 2002-2006 when subprime loans went from 2% of total mortgages to 30% of total mortgages. They did NOT meet Fannie Mae and Freddie Mac standards. They were a fraud perpetrated by private mortgage lenders because there was no oversight of them."

But they did meet Fannie Mae and Freddie Mac standards because Fannie and Freddie lowered their standards at the insistance congressional Democrats who very happily knuckled under to the pressure from ACORN. The subprime market was driven by Fannie Mae and Freddie Mac. Nobody was interested in providing regulatory oversight, particularly congressional Democrats who resisted anything that might slow the flow of money into the subprime market and make it more difficult for low income borrowers to get loans.

Was there fraud by private lenders? Sure. Should private lenders have been more closely regulated? Maybe so, but there were reasons why they weren't and they were the same reasons that drove Fannie and Freddie into the subprime market.

'The Connecticut Senator has been out front denouncing the "companies that form the foundation of our financial markets," for "their insatiable appetite for risk." He has also decried "reckless, careless and sometimes unscrupulous actors in the mortgage lending industry" and he has proclaimed that "American taxpayers deserve to know how we arrived at this moment." To that end, we propose he take the stand -- under oath.

Former Countrywide Financial loan officer Robert Feinberg says Mr. Dodd knowingly saved thousands of dollars on his refinancing of two properties in 2003 as part of a special program the California mortgage company had for the influential. He also says he has internal company documents that prove Mr. Dodd knew he was getting preferential treatment as a friend of Angelo Mozilo, Countrywide's then-CEO.

That a "Friends of Angelo" program existed is not in dispute. It was crucial to the boom that Countrywide enjoyed before its fortunes turned.'

Usually Democrats are smart enough to launder their bribery income through the mechanism of campaign contributions. They pander for massive campaign contributions then hire their relatives to work on the campaign. By the looks of things, Dodd was careless and took his bribes directly. I have no doubt that you believe greed is a uniquely Republican characteristic, but let me assure you it is universal. Do wake up Smithington.

Smithington

I don’t see why you keep harping on this.

First, let me say that perhaps you should be congratulated for doing yeoman’s duty in sticking up for the Republican Party given its current state.

Second, you are at a distinct disadvantage. While you put effort into sticking up for Bush and McCain, I don’t have any use for Bush, McCain or Obama.

Personally, my view is that Congress needs Republicans that will actually pursue a Conservative agenda, and I do not see how this happens with a McCain victory.

Now the view you are putting forth on these subprime loans has at least 3 problems.

First, the group of subprime loans that caused this mess were NEVER underwritten and guaranteed by Fannie Mae and Freddie Mac -- to this day. They were not up to Fannie Mae and Freddie Mac standards EVEN AFTER THOSE STANDARDS WERE RELAXED. You seem to want to contend that the only loans ever oput on the market were loans underwritten and guaranteed by F&F. Not only is that false, but the real nasty junk was simply outside of their scope.

Second, the directives to Fannie and Freddie to purchase more loans and Mortgage backed securities from 2004-2006 were done unilaterally by the Secretary of Housing and Urban Development under Bush -- not Congress.

Third, the Secretary decided to do it because Fannie and Freddie were losing huge chunks of market share to their competitors because F&F were restricted on what they could buy. How could Fannie and Freddie be losing market share over this if as some argue, but for the sake of their existence, this problem could not have existed?

Tom Bowler

Oh, right. You're the guy that comments under various names, claiming to be conservative while parroting the Democratic party line. Give it a rest.

Smithington

The sources I use are almost always from places like The American Conservative and the CATO institute -- two sources that you have made clear by their absense you have no use for.

The sources I use are almost always from places like The American Conservative and the CATO institute -- two sources that you have made clear by their absence you have no use for.

The comments to this entry are closed.