Posted on 06/14/2011 8:15:28 AM PDT by IMissPresidentReagan
AND NOW . . . amidst billowing clouds of fragrant, aromatic first- and second-hand premium cigar smoke. . . it is time for . . . that harmless, lovable little fuzz ball, the highly-trained broadcast specialist, having more fun than a human being should be allowed to have, from behind the golden EIB microphone, firmly ensconced in the prestigious Attila-the-Hun chair at the Limbaugh Institute of Advanced Conservative Studies, serving humanity simply by showing up, and he’s not retiring until every American agrees with him, do NOT doubt him, with shrieks of joy at the mere mention of his name (that’s Rush, for those in Rio Linda),the Mandarin of Talk Radio, with talent on loan from G-d, at the cutting-edge of societal evolution, with half his brain tied behind his back — just to make it fair, the all-knowing, all-caring, all-sensing, all-feeling, all-concerned Maha-Rushie! America’s anchorman, truth detector, and doctor of democracy. A Real Man, a living legend, a way of life. Commander in Chief of U.S. Operation Chaos. Chief Waga-Waga El Rushbo of the El Conservo Tribe. Chief of the Patriotism Police. Leader of the Conservative Movement. A Weapon of Mass Instruction. El Rushbo (a little Spanish lingo, there). He is the man who is running America (you know it and I know it). He knows the Democrats like every square inch of his glorious naked body. He is ready to do what he was born to do—that’s host. Get ready to what you were born to do—that’s listen (and post your comments on the Rush Limbaugh LIVE Radio Thread).
Rush.......not one single guess is close to right
meanin no baby , no NFL , etc etc
meanin he reads FR and others
they’ve always been like that, that’s where the little man lives who tells him what to do next.. He could have, in a moment of self-doubt, decided to shave off the brows, cut himself which would produce the effect you saw last night.
Well I haven’t read Reckless Endangerment yet, it’s new.
I have read a few other books on the subject. “Chain of Blame”, “ECONned”, “Fool’s Gold”, “The Sellout”.
The Lazard “Clarifying the U.S. Mortgage Crisis” paper is a brief study of the subject that goes along with most of what I have read:
http://www.lazardnet.com/lam/us/tpd/pdfs/Inv_Research_Mortgage_Crisis.pdf
Give it a look, I don’t recall anything about the CRA in it.
Most of what I’ve seen about the credit crisis regards the CRA as a minor factor. It was headed in the same direction but wasn’t the driving force. Keep in mind that the bubble was in the trillions of dollars and large enough to shake the world economy. There simply weren’t enough CRA loans to make this happen.
“What I am trying to say here is that the subprime market that the Wall Street firms were so interested in would not have existed without the CRA.”
A subprime lending market existed long before the CRA.
Do you recall the names Household Finance and Aames Home Loans? These were hard money lenders that made small household loans with high interest rates.
Wall Street firms had been eyeing that market but it was too small for them. They needed a larger potential market than small household loans.
What large potential market existed that could also bring a high interest rate? Some wizard at one WS firm that had been watching HFC and Aames realized that people with less than stellar credit had to pay a higher interest to borrow money. And there were a lot of them who might want to buy houses. And house loans involved big money, big enough to make it worth the attention of WS.
The book “Chain of Blame” has a chapter that describes how this unfolded in detail, gives you the name of the WS firm that first entered the subprime mortgage market. Oddly enough I think that they didn’t stick with it but all of their competition did in a huge way.
That’s a good find and I’d forgotten about it.
Fanny and Freddy greatly increased their leverage during the bubble. Reducing that leverage would have made them less vulnerable to collapse.
I’m waiting for you to post your book list on the credit crisis.
“lew rock well ay? Who do you think won the debate last night? Ron Paul?”
A nice example of the Genetic Fallacy.
Unless you intentionally deal in illogic you might want to address the errors you think Bovard is making.
My analysis as to the 'Root Cause' generally agrees with the book Reckless Endangerment -- CRA was the whip the Democrats used, Fannie and Freddie the vehicle and James A. Johnson as CEO to ‘push’ regs & rules to the very edge of gray to buy voters for the Democrats.
Just got the Kindle for PC and see I can copy and paste so I'll post parts that seem to support my view:
Clinton’s public-private partnership was ramping up. Regulators were relaxing rules, Fannie and Freddie were inflating their portfolios, homebuilders and subprime lenders were flexing their muscles too. To meet the goals Fannie and Freddie had to buy riskier mortgages, such as those defined as subprime. Some $160 billion in subprime loans would be underwritten in 1999, up from $40 billion five years earlier. And in another four years, that figure would jump to $332 billion. Many of these loans wound up in Fannie’s and Freddie’s portfolios. By 2008, some $1.6 trillion of toxic mortgages, or almost half of those that were written, were purchased or guaranteed by Fannie and Freddie. In 1999, the growth trajectory that Johnson had dreamed of for Fannie was fast becoming a reality.
Morgenson, Gretchen (2011). Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon (p. 117). Times Books. Kindle Edition.
Between the loans that it held and the mortgages that Fannie Mae packaged into securities and sold to investors, the company touched fully half of all home loans originated across America. But the risks associated with Fannie Mae’s mortgage purchases were also growing. According to OFHEO’s 1996 annual report, the percentage of loans the company purchased with a loan-to-value ratio of greater than 90 percent rose from 6 percent in 1992 to 19 percent three years later. The interest Fannie earned on the loans it purchased and the revenues it generated from the securities it sold to investors translated into record earnings at the company in 1996. As the company’s earnings soared, so too did Jim Johnson’s pay. In 1995, he received $5.1 million, a compensation package lush enough to vault him into the very top tier of corporate America.
Morgenson, Gretchen (2011). Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon (pp. 77-78). Times Books. Kindle Edition.
In March 1994, Johnson announced Fannie Mae’s Trillion Dollar Commitment, a program that earmarked $1 trillion to be spent on affordable housing between 1994 and 2000. The money would finance “more than 10 million homes for low-income families, minorities and new immigrants, families who live in central cities and other underserved communities, and people with special housing needs,” the company said. Setting aside these funds meant that “Fannie Mae will transform the nation’s housing finance system by working with other industry partners to eliminate the barriers to homeownership, and promote a ready supply of affordable rental housing.” One trillion dollars. Even for a man with plans as big as Johnson’s, the figure was audacious. But it had to be, as those inside the company knew, if Johnson was going to secure the protection Fannie Mae needed. The plan, former Fannie executives say, was to commit so much money to low-income housing—“for families and communities most in need,” as the company liked to say—that no one would dare to criticize its other activities.
Morgenson, Gretchen (2011). Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon (pp. 59-60). Times Books. Kindle Edition.
Thanks to Johnson’s aggressive courting of Mozilo years earlier, Countrywide and Fannie Mae were inextricably bound. Millions of risky loans made by Countrywide and sold to Fannie Mae would contribute mightily to the downfall of Johnson’s former company. And although Countrywide’s collapse would come in 2007, a year before Fannie Mae’s, both failures had been set in motion long before by Johnson and Mozilo. * * * It was no coincidence that Countrywide’s operations were so intertwined with Fannie Mae’s and so similar. Both companies had the same goals to achieve and the same enemies to defeat. And for years, Mozilo’s friendship with Johnson had given him a front-row seat for the Fannie Mae way—the deep political focus, the co-opting of regulators, the manipulation of public opinion, and extensive granting of favors to friends and potential foes. Mozilo, a quick study, saw what Johnson had won and set out to copy it. More than any other mortgage lender, Countrywide was at heart a Fannie Mae clone.
Morgenson, Gretchen (2011). Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon (pp. 184-185). Times Books. Kindle Edition.
Many of these doctored loans were welcomed with open arms by Countrywide’s friends at Fannie Mae. Indeed, documents produced to Congress in 2010 show a concerted effort by executives at Fannie Mae in 2004 to cultivate Countrywide’s top executives. Their goal: to assure that the lender would help Fannie maintain profitability. The “Customer Engagement Plan” drawn up by Fannie Mae targeted Mozilo and fourteen top colleagues at Countrywide. The battle plan detailed the roles and goals of each Countrywide executive and recommended that top Fannie executives, from Frank Raines and Dan Mudd on down, make regular trips to “meet and greet” the lender’s management. The plan even urged Fannie Mae executives to arrange to run into Mozilo and his key Countrywide home loan lieutenants at Habitat for Humanity golf tournaments and industry conferences, such as those sponsored by the Mortgage Bankers Association. Fannie Mae’s primary objective from the “outreach strategy”: to “deepen relationship at all levels through CHL and Fannie Mae to foster alignment and collaboration between our companies at every opportunity.” The program was a success. In 2005, Countrywide sold $12.7 billion in subprime loans to Fannie Mae and was its second-biggest supplier of what would turn out to be highly toxic paper. By the first half of 2006, almost two thirds of the subprime loans underwritten by Countrywide had loan-to-value ratios of 100 percent; that meant borrowers had put no money down to secure the property.
Morgenson, Gretchen (2011). Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon (p. 195). Times Books. Kindle Edition.
I'm about 70% done reading, so there may be info that may point me to your direction. I didn't sync my first bookmarks periodically and lost them when the app crashed Sat., but I remember reading that James A. Johnson as CEO of Fannie, was so aggressive with stretching regs and policy that he ‘forced’ private lenders to relax rules. Will post if I stumble across any reference.
Again, thanks for the other book info, I hate reading books as I usually only research via the interned, but using apps like Kindle to read via computer may make me a book reader.
well, it’s either Paul or Obama, or are you one who doesn’t like any of them unless...Frum?
Investment banks in retail lending had nothing to do with why the subprime debacle occurred.
The CRA applied to all banks insured by the FDIC which for example Countrywide Credit, the single biggest offender was.
“Investment banks in retail lending had nothing to do with why the subprime debacle occurred.”
That’s not at all accurate. IBs provided the warehouse lines of credit to the thousands of independent mortgage brokers that were cranking out subprime loans. The subprimes were the raw material for the CDO industry. Yves Smith has detailed how the derivatives industry was driving the creation of subprime loans in her chapter on Magnetar Capital.
“The CRA applied to all banks insured by the FDIC which for example Countrywide Credit, the single biggest offender was.”
Countrywide was one of the largest non-depository mortgage lenders from 1969 to 2001, when it acquired a small Virgina bank. When it was acquired by BofA in 2008 it had banking outlets in Virginia and Texas. I can’t find any evidence that they had deposit taking operations in other states before BofA acquired them.
http://www.occ.gov/static/interpretations-and-precedents/may09/ca900.pdf
“well, it’s either Paul or Obama, or are you one who doesn’t like any of them unless...Frum?”
Yeah, nice insult dimwit. Try some other guessing game, you’re worthless at this one.
or you could just be an outright ahole...
What year is it that you will graduate high school?
why, are you stalking me?
“why, are you stalking me?”
Nice try. You’ve been posting to me, idiot.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.