How Exactly Did Bush Cause This recession?

Nice strawman, but I never argued that repealing Glass Steagall was a culprit in this mess. I swear, people have a reading problem around here. The systemic rise that the financial industry was posing was evident even if Glass-Steagall was still enacted.

Plus, you have no idea what the free market is. Just because you take out Fannie and Freddie from the equation does not equate into a free market. To claim that the free market is Wall St minus Fannie and Freddie is absurd and the funniest thing I have heard all day.

In addition, CDS were around before Clinton. Smithson (2003) identified three stages in the evolution of credit derivatives activity. The first, “defensive” stage, during the late 1980s and early 1990s, was characterized by ad hoc attempts by banks to lay off some of their credit exposures. In addition, products such as securitized asset swaps boresome resemblance to credit default swaps in that they paid investors a credit spread while providing for delivery of the underlying asset to the investor in the event of a
default (Cilia 1996).

Stage two, which began about 1991 and lasted through the mid-to-late 1990s,saw the emergence of an intermediated market, in which dealers applied derivatives technology to the transfer of credit risk while investors entered the markets to seek exposure to credit risk (Spinner 1997)
http://www.frbatlanta.org/filelegacydocs/erq407_mengle.pdf

 

Private Wall Street Companies Caused The Financial Crisis — Not ...
Oct 14, 2011 ... Thanks to decades of financial deregulation, capped by President Bush's
decision to appoint Wall Street regulators who believed their job was ...

politicalcorrection.org/factcheck/201110140001 - Cached - Similar

There's a million of em...and Clinton only SIGNED the repeal of Glass etc, passed by Pubs and a few Dems.

Bush was a TOTAL catastrophe, like Reaganism.

 

Thank you for posting this study. It will be interesting to see how much Glass-Steagall contributed to the rise of financial innovations. Of course, it was Howard Sosin, aka Dr.Strangelove of derivatives that created the first dangerous financial weapons of mass destruction.

 

How did the repeal of "Glass etc" INCREASE demand? See, increasing lending institutions, or allowing them to make mortgage loans only increases SUPPLY, not demand. IF people don't qualify for the abundant money no bubble is formed in the housing (or any other) market. The laws of Supply and Demand defeat any Leftist Liberal Utopian argument that they know better.

 

From 2004 To 2006, Fannie And Freddie's Share Of Subprime Market Fell From Almost Half To Just Under One-Quarter. As reported by McClatchy: "But these loans, and those to low- and moderate-income families represent a small portion of overall lending. And at the height of the housing boom in 2005 and 2006, Republicans and their party's standard bearer, President Bush, didn't criticize any sort of lending, frequently boasting that they were presiding over the highest-ever rates of U.S. homeownership. Between 2004 and 2006, when subprime lending was exploding, Fannie and Freddie went from holding a high of 48 percent of the subprime loans that were sold into the secondary market to holding about 24 percent, according to data from Inside Mortgage Finance, a specialty publication." [McClatchy, 10/12/08, emphasis added]

http://politicalcorrection.org/factcheck/201110140001

Conclusion: Pubs lie like rugs, are great salesmen, have MANY misled voters...

 

Franco, the only criticism you can make towards the Bush administration in regards to Fannie and Freddie was that they decided to do essentially nothing. No offense, but that is a weak criticism. If you want to find something to harshly criticize the administration, look into the Fed's policy.

 

Private Wall Street Companies Caused The Financial Crisis — Not Fannie Mae, Freddie Mac Or The Community Reinvestment Act
October 14, 2011 7:28 am ET

In the four years since the housing bubble burst, triggering a collapse in global financial markets whose value had been propped up through the repackaging and trading of home loans via complex financial instruments, there's been plenty of blame to go around. The Occupy Wall Street protests have called new attention to the root causes of the crisis, and led Republicans to reiterate their claim that government-backed lenders Fannie Mae and Freddie Mac were the primary villains. The facts about the subprime mortgage market prove that claim false: Private firms dominated the subprime market boom of 2004-06, and were not even subject to the 1977 Community Reinvestment Act some Republicans vilify. Thanks to decades of financial deregulation, capped by President Bush's decision to appoint Wall Street regulators who believed their job was to help banks rather than curb banking abuses, financial giants were able to turn the mortgage market into a high-stakes casino. As investigative reporters and Congress' Financial Crisis Inquiry Commission have all shown, it was deregulation mixed with irresponsible and potentially illegal practices by private firms on Wall Street that caused both the bubble and the collapse.

http://politicalcorrection.org/factcheck/201110140001

 

This chart proves it all. If the Govt would just prevent the greedy bankers from destroying this country everything would have been fine. The CRA, F&F were all doing great until glass-steagall allowed greedy ass Wall Street to get involved.

The private sector destroys the country, the Govt has to rescue it, and then the Govt gets the blame, lol. Republican's have no shame.

 

You are simply stating the obvious, Franco. Any intellectually honest individual understands that the subprime market went through a boom in 2004-2006, and that the decisions of the financial sector were partially caused by deregulation. However, it is disingenuous to throw around these elementary explanations when describing such a complex disaster as the financial crisis. By the way, your source is rather biased.

 

Federal Reserve Board data show that:
· More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions.
· Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.
· Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that's being lambasted by conservative critics. [McClatchy, 10/12/08, emphasis added]

http://politicalcorrection.org/factcheck/201110140001

The repeal of Glass led to all kinds of banking no no's- Pubs behind ALL of it...

 

The real question is how many of those subprime loans/mortgages were combined to create the various forms of MBS's. While those loans and mortgages alone are risky, MBS's use leverage to multiply the risk of those loans. According to akphidelt's data, from 2001-2007, the GSE's involvement in MBS's was at the least 44% in 2006 to at most 80% in 2001. It is absolutely right that in the short-run, a private sector boom in MBS's from 2004-2006 contributed to the crisis, but so did the years of substantial MBS creation by the GSE's.

 

Ah, if the "free market" could not act like Freddie and Fannie and securitize all that bad debt (passing along the hot potato to other unsuspecting "investors") the entire financial sector of the United States would have gone bankrupt as they were FORCED to make bad loans due to Democrat enticement and coercion.

See, again it is a bad idea to loan people money that are of a high risk. Such a thing would never occur if the banks were being run according to sound business principals which was the case before, and the reason behind the CRA and the changing of the CRA enforcement. Of course only those on the Left could make such a ridiculous argument that the Free Market does not work only after they destroy every aspect of that “free market.”

 

Derivatives have been given a bad rep by the "wmd" portion of the game. The vast majority of this enormous market actually do serve a very useful purpose in helping agents of commerce to distribute risk - much as we use insurance to do the same. This is different than "hiding" risk for the purpose of deception. We should be careful not to ascribe the goings on during the mania that culminated in the meltdown to the entire "industry" (for lack of a better term). It's the wild, high-rolling, speculative side of the market that should bear the brunt of the criticism - and the regulatory reform.

 

I agree, but that side of the market is pretty substantial:

http://www.occ.treas.gov/topics/capital-markets/financial-markets/trading/derivatives/dq311.pdf

Those trillions of dollars in credit derivatives were the economy's demise. I like to focus on derivatives as a whole as relatively unnecessary, at least in their current form to the United States economy, and would therefore like to regulate them and tax them in a different manner for a better purpose.

 

Doesn't matter a hill of beans. Had the bubble not popped all the MBSs and derivatives, and the like would have never gone bust. They were all dependent on the underlining investment of the home. Had people kept paying their mortgages none of those investments would have gone bad. The prices kept going up, and up, and up because of unconstitutional Democrat housing policies that enticed and coerced banks into making risky loans and lowing standards. Anytime you "pay whatever price" the price will go up. Gee, just today I heard Obama start talking about the government will lean on colleges to keep their tuition down since the federal government is backing all those loans. Gee, you think? College never goes on sale because those with no credit or income (students) can borrow any amount of money needed (in some way almost ALL funded or guaranteed by the federal government). Of course this unconstitutional intervention (again started by Democrats) has led to nothing but a huge bubble in the education market. Now Obama is continuing to inflate the bubble, while telling the college NOT to increase their prices. Again the Democrat Treasonous Masterminds will destroy yet another fine American institution and industry.

 

Tap dance all you want, toxic loans, the housing bubble, and the DEPRESSION were the product of pub deregulation and cronyism, much like the BP oil spill, and all Reaganism.

And now they're doing all they can to retard the recovery.

 

Explain the Commodity Futures Modernization Act, the Depository Institutions Deregulation and Monetary Control Act, and the 1995 changes to the Community Reinvestment Act in the context of the financial crisis. By the way, I am not tap dancing. I have acknowledged every single one of your posts as valid, yet have simply provided a more intelligent and equitable perspective.

 

Kindly mange le merde, LOL

 

The USA is the only modern country in the world where full time workers live in poverty and have no health care (750k bankruptcies a year, most HAVE insurance - crap insurance!)After 30 years of Voodoo: worst min. wage, work conditions, illegal work safeguards, vacations, work week, college costs, rich/poor gap, upward social mobility, % homeless and in prison EVAH, and in the modern world!! And you complain about the victims? Are you an idiot or an (*)(*)(*)(*)(*)(*)?

Pubs have blocked EVERYTHING since 2/4/2010- don't be duped...again. Stimulus worked-ran out in 2010.

Total Pub Propaganda BS: ACORN, Kenyan Muslim Marxist,Tides, Mosque, Death Panel, lose your doctor, huge costs, DEBT CRISIS, Obama Recession, stimulus failed, Barney Frank, Nazi Soros, Nazi socialists etc etc etc.

I'm sorry- dupes are lovely people- but I can't take their lazy, ignorant, careless, stupid politics a minute longer. Sorry.

 

You seem to be some kind of accountant LOL

 

So you cannot explain such legislation and how it contributed to the financial crisis? What a shame. I am more than willing to provide you with some starter's material:

http://prospect.org/article/conservative-origins-sub-prime-mortgage-crisis-0
http://cei.org/cei_files/fm/active/0/Michelle Minton - CRA - FINAL_WEB.pdf
http://www.huduser.org/publications/txt/hdbrf2.txt
http://www.cftc.gov/ucm/groups/public/@lrrulesandstatutoryauthority/documents/file/ogchr5660.pdf

 

I'll explain- it's irrelevant minutia. LOL

 

Yeah, sure you would...

[ame="http://www.youtube.com/watch?v=kNqQx7sjoS8"]Home Ownership and President Bush - YouTube[/ame]

 

How so? We are not just discussing the contributions of the Bush Administration to the crisis, but the overall causes. The three pieces of legislation all contributed to the financial crisis, or do you truly not understand the inner workings of all these policies?

 

Just like Reagan, he kept supported spending more money, which obliged the Treasury to get into more and more debt. The USA did not have the money to go to war and "protect" the nation against terrorism without making cuts elsewhere. Bush refused to support raising taxes.

Bush also strongly supported free trade agreements that sent many jobs overseas, as resulted in reduced wages to American workers. Not to mention that he purposely allowed in illegal immigrants because he thought "they are doing the jobs Americans do not want to do." (he actually said this)