Is Trump impeached yet?

R I G H T . . .

Let's see... Bush was handed a budget surplus, and he cut the taxes for millionaires that would have otherwise paid down the deficit to zero by 2013, he started two wars which cost $4 trillion or more, and left the country worse off with a nasty recession but it could have been worse?

Trump could have been elected in 2000?

 

I recall the sales pitch very well.

 

Bush 43 increased the percentage of Fannie and Freddie mortgages from 50% under Clinton to 55%. Bush also attempted to reform Fannie and Freddie but was blocked by Barnie Frank. Here is a synopsis of what happened:


The housing bubble and financial crisis are actually two different things although the collapse of the housing bubble resulted in the financial crisis. The housing bubble was caused by the lowering of lending standards due to the HUD requirement that Fannie and Freddie make a set percentage of loans to low income borrowers. This policy was initiated by Bill Clinton and was based on an interpretation of the Community Reinvestment Act. At the end of Clinton's term that percentage was 50%. This was increased to 55% by the Bush administration. The lowering of the lending standards was used by unscrupulous mortgage lending firms like Countrywide and New Century to make many other high risk loans. Adding to the housing bubble was the easy money policy of the Fed which made loans easier to afford due to low interest rates. The housing bubble suddenly burst in 2008. This was similar to the dot.com bubble which burst in 2001 and recovered from by 2003 but why was the financial industry so terribly affected this time.


The financial crisis triggered by the housing bubble collapse was the result of a combination of financial and banking regulations going back to 1936 (See the list below). Mortgage backed securities have been around for years before the 00's. They are securities formed by conglomerating home mortgages and are a way for investors to earn a return through the housing market. They have historically been very safe investments. The HUD housing policies however resulted in a portion of the MBS's created in the 90's and 00's to consist of the subprime and other low standard loans. The Basel rules were based on the assumption that securities consisting of home mortgages were of very low risk. Therefore the reserve requirements for MBS's were set at a very low rate of 5%. This meant that for every $50K of MBS's that a commercial or investment bank had it could make loans totaling $1M. Since banks make money from loans they would use the investment vehicles with the lowest reserve requirement. And very many of them did. They bought AAA rated MBS's (the ratings were determined by the National Ratings Agencies - Fitch, Moodys, and Standard and Poors). This was required by gov regulation. But the ratings agencies were not doing due diligence on the make up of the MBS' which was unknown to the banks involved who trusted the ratings and Basel guidelines. Collapse of the housing bubble caused foreclosures in the subprime mortgages especially. This created fear and uncertainty in the value of the MBS's even though they were still paying ~ 90% of their returns. The market price dropped (in some cases a price could not be determined because no one was interested in buying). This is where the mark to market rule came in resulting large paper and consequently the banks reserves falling below the already low 5%. The bailout from the gov started out as TARP which was passed to buy up all these MBS's which had now large paper losses due to mark to market. It was quickly changed however to give money directly to the banks so that they could bring their reserves up to the 5% level. Bear Stearns was bailed out but Lehman was allowed to fail. This resulted in uncertainty and the credit markets froze (none of the banks wanted to lend to other banks who might not be bailed out). Some commercial banks like WaMu also had MBS's in reserve and ended up being taken over.



The analysis of what happened is contained in the book by Friedman and Kraus – “Engineering the Financial Crisis” – 2011. As can be seen these rules were issued over the years with no analysis on how they might conspire together to set up a catastrophic house of cards situation due to the homogenization of asset mix held by many of these investment houses. Collapse of the housing bubble which affected these assets including MBS’s (whose contained loans were still paying at ~ 80%) then lost value due to the market price dropping way below value triggering large paper losses due to mark to market accounting rules. This reduced the capital and lending capacity of the banks due to Basel I and the Recourse Rule (an adoption in the U.S. of part of what later became Basel II), which specify those capital requirements. The conflation of all of this resulted in the financial (really the banking) crisis. The authors also show that the repeal of Glass Steagal had nothing to do with the financial crisis. Glass Steagal prevented the mixing of private deposits with investments and that was not a factor. Here are the set of regulations:




1. SEC Regulations from 1936 requiring mandated minimum ratings for a growing number of institutional investments.


2. SEC decision in 1975 to confer NRSRO on the big three ratings agencies.


3. Basel 1 from 1978 which established favorable risk weighting for mortgages and GSE issued MBS’s.


4. Mark to market accounting established by FAS 115 in 1993 and refined by FAS 157 in 2006.


5. HUD targets for mortgages to low-income families in the late 1990’s resulting in reduction of down payment requirements for the GSE’s.


6. Recourse Rule issued by the FED, FDIC, and Office of the Comptroller of the Currency, and the Office of Thrift Supervision.






Here are some excerpts from an editorial from the WSJ:



Tim Geithner, then head of the New York Fed, opined that "financial market data" gave off no sign of trouble. Kevin Warsh, a fellow Fed governor, agreed: "Capital markets are probably more profitable and more robust . . . than they have perhaps ever been." What idiots. And yet they were right. Jobs, consumption and stock prices were holding up smartly despite the well-recognized turn in housing markets. Then came the financial panic. Did the housing bubble cause the panic—or was the panic somehow separate, making everything worse, including the housing crunch? Good question


Gratifying, then, is the attention showered on a recent book by Jeffrey Friedman and Wladimir Kraus, "Engineering the Financial Crisis." Their work is refreshing for many reasons: It does not assume the housing bubble is the whole story. It allows that honest ignorance (especially about the interaction of complex regulations) might explain the behavior of bankers and regulators. It asks especially interesting questions about the triple-A mortgage derivatives at the heart of the financial meltdown


Basel tried to make banks safer by prescribing capital levels, and by steering them toward "safe" assets. Experience had shown that mortgage-backed securities were among the safest, safer than business and consumer loans and even whole mortgages. So the Basel rules strongly favored mortgage-backed securities. Alas, this became an incentive to over-produce these assets until they became very dangerous indeed to the entire financial system (a formula also implicated in Europe's sovereign debt crisis).


http://online.wsj.com/article/SB10001424052970204468004577166723093578272.html


Google – The Meltdown Remains a Whodunit




Here is a Reading list for you - The top 8 are in my unofficial order of importance:



Engineering the Financial Crisis - Friedman & Kraus - 2011

Fannie Mae & Freddie Mac - McDonald - 2012

Senseless Panic - William Isaac - 2010

Bad History, Worse Policy - Peter Wallison - 2013

“Government Housing Policies in the Lead-up to the Financial Crisis: A Forensic Study” - Pinto

http://www.aei.org/wp-content/uploa...-to-the-Financial-Crisis-Word-2003-2.5.11.pdf


What Caused the Financial Crisis - Edited by Friedman - 2011

Reckless Endangerment - Morgenson - 2011

Bull by the Horns - Sheila Bair - 2012

All the Devils are Here - McLean - 2010

The Housing Boom and Bust - Dr. Thomas Sowell - 2009

Getting Off Track - Taylor - 2009

Bail Out Nation - Ritholtz - 2009

The Great American Bank Robbery - Sperry - 2011

Shakedown - Malanga - 2010

A Capitalism for the People - Zingales - 2012

Debacle - Norquist - 2012

America's Ticking Bankruptcy Bomb - Ferrara - 2011

 

Bush was handed a dot.com recession (the interest rates inverted within a week of his inauguration). And then 9/11/01. In the four years after the recession 2004 - 2007 the greatest four year increase in tax revenues in history was generated by the Bush tax rate cuts.

 

I guess people who were here know otherwise.
Dot com recession?


HAHAHAHAHAHAHAAH!

I'll remember the Bush faking the results to come up with an excuse to go to war
to get a leg up in an election he would have otherwise lost that would cost the lives
of 200,000 human beings.

 

What a shame he decided to not look into the terror group he was told about
that was going to hijack jets and fly them into American landmarks.

To be fair, he was on his month long annual vacation six months into the job.

 

It's obvious that you know very little about economic history.

 

It's obvious that you know very little about history.

 

June 3rd 2017 another day, another holler. No Impeachment and not even close to attempting it.

 

AND, the world hasn't been destroyed by global warming. Phew!!!

 

It's obvious that you know very little about economic history.

 

Is Trump impeached yet?
Not yet. But the liberal media is looking worse by the day....more hemmed in and enslaved to pettiness and deceit. I wish they weren't so incensed because our nation really needs a fair and free press. And such a power can do much evil.

 

Because if you use a giant font, it must be true.

 

Me or the subject which I cut and pasted? (from which sprang my large font, minus the bold.)

 

It's a real thing, as opposed to narrow minded, left wing, anti Bush, dogma. http://www.investopedia.com/terms/d/dotcom-bubble.asp

 

Are you talking about hair brushes made in Wiener Arkansas, or businesses like Microsoft, Intel and Harley Davidson which are made all over the world?

 

Indeed -- amazing you're still here.

Now tell us again about that $18T figure you made up.

 

More made up numbers.

 

June 4th 2017. Nope no impeachment of Trump yet. Nothing even remotely close to it. Another day, another Holler. All knew the left, wouldn't be putting up that dollar.

 

Thursday is almost upon us, and I predicict this: Comey will again claim he's "mildy nauseated" by his Trump memo. Cummings will claim it's grounds for impeachment. Graham has already said he anticipates Comey will attempt to perform a political hit job on Trump. I suspect it may be Comeys only means of delaying his own trial for perjury, and espionage.

 

The Gingrich/Kasich budget surplus which was created by tax rate cuts and welfare reform were shrinking as we went into a recession if Gore had been elected the surpluses would have disappeared. The Bush tax rate cuts when fully implimented cause a HUGE SOAR in tax revenues and a final Republican budget deficit of $161B in FY2007 heading towards surplus.

THEN the Democrats won back the house and they quickly reversed that increasing spending 9% in FY2008, only that low because Bush threatened veto of any higher and then with Bush pushed out of the way an 18% increase in FY2009 resulting in a $1,400B deficit, an almost NINE FOLD increase in the deficit in just two years. And the recession could have been alot better had the Democrats not taken over and turned to anti-business anti-growth policies and simply made the Bush tax rates permanent. As it was they never even came close to the WORST Bush/Republican deficit.

And the special appropriation in 2007 for the wars was $88 billion, add that to the deficit that year and the Democrats STILL never even came close even with Obama ending the wars and that spending.

 

Any day now. The secret service should code name him "Arctic Ice". Anyday now the ice will melt. Al Gore said so.