How Exactly Did Bush Cause This recession?

You guys are missing the point, if all we had to worry about was the bad mortgages, that would have been paid off by now. It was what was done with the loans after they were written. Of course Glass-Steagall was gutted and of course that was the major reason the lenders were able to perpetrate this fraud, no regulation. They were not stupid in 1933, they made those rules for a good reason. The lenders were not forced to sell those loans, they sold them to make money, a lot of money, more money than ever before. The securities traders knew they were bad securities, so did the credit ratings companies and the insurance companies, they were too greedy to stop, now we are paying. This is not the first time this has happened, look up "bucket shops"

 

Notice the timeline below.

1977 - Democrats passed the CRA to coerce banks into making risky loans.

The act had little to no effect since enforcement was lax. Banks could tell auditors that they were trying to find qualified borrowers in certain previously redlined neighborhoods to qualify, but did not need to show real loans.

1994 - Obama (working for ACORN) sued Citibank for “redlining” ( later settled out-of-court in 1998 ).

1995 - Democrat Clinton changes CRA enforcement (actual guidelines passed in 1993; banks knew it was coming).

Now banks have to show real loans in real risky neighborhoods to pass FDIC audits instead of simply “trying” to find qualified applicants. Also, the Democrat Clinton administration would publish the results of such audits so groups like ACORN could sue banks (like they did Citibank) who did poorly in audits, and publically call them “racist lenders.” The change pumped MORE money (brought in NEW customers, and NEW money) in the housing market which according to the law of Supply and Demand increased all home prices.

About Paragraph 9

“CRA-covered lenders and their affiliates increased mortgage lending to low- and moderate-income borrowers and communities at more than twice the rate of increase for other borrowers. The number of mortgage loans made by CRA-covered institutions and their affiliates to these borrowers and areas increased by 39 percent between 1993 and 1998, while such institutions' loans to other borrowers increased by only 17 percent.”

http://www.treasury.gov/press-center/press-releases/Pages/ls564.aspx

1998 - Obama and ACORN settled their lawsuit with Citibank, and Citibank started making risky loans.

Other banks followed suit adding MORE liquidity to the low end, more risky housing market.

2000 - Paragraphs 12 and 13 in part

“In 2000, Cuomo (Democrat Clinton HUD Secretary) required a quantum leap in the number of affordable, low-to-moderate-income loans that the two mortgage banks—known collectively as Government Sponsored Enterprises—would have to buy… The government (Democrats) chartered these banks to pump money into the mortgage market and, while they did it, to make a strong enough profit to attract shareholders. That created a tug-of- war between their efforts to maximize shareholder value, which drove them toward high-end mortgages, and their (Democrat) congressionally mandated obligation to finance loans for those who needed help. The 1992 law required HUD's secretary to make sure housing goals were being met and, ever four years, set new goals for Fannie and Freddie.

Cuomo's predecessor, Henry Cisneros, did that for the first time in December 1995, taking a cautious approach and moving the GSEs toward a requirement that 42 percent of their mortgages serve low- and moderate-income families. Cuomo raised that number to 50 percent and dramatically hiked GSE mandates to buy mortgages in underserved neighborhoods and for the "very-low-income." Part of the pitch was racial, with Cuomo contending that Fannie and Freddie weren't granting mortgages to minorities at the same rate as the private market. William Apgar, Cuomo's top aide, told The Washington Post: "We believe that there are a lot of loans to black Americans that could be safely purchased by Fannie Mae and Freddie Mac if these companies were more flexible." (meaning if they lowered standards to make those who could not qualify, suddenly qualify for an “affordable mortgage&#8221

http://newsgroups.derkeiler.com/Archive/Rec/rec.radio.shortwave/2008-09/msg00944.html


So to wrap up, Democrats really started to add additional money in the housing market trying to give away “affordable mortgages” to high risk low income borrowers who tend to vote Democrat back in 1995. That money started slowly in 1995, and was then greatly expanded between 2000-2004 (after the Clinton Administration release of the 2000 four year Affordable Housing Goals directive to Freddie and Fannie). The Bush Administration’s HUD department had no direct control over Freddie and Fannie until they released the 2004 Affordable Housing goals; or after all Bush’s first term of office.

Now look at the chart below. As you can see the price bubble started in 1998-1999 (start of last gray bar) as the money from the new CRA enforcement reached the marketplace, and after Citibank and other such banks started to “invest” in risky neighborhoods again increasing liquidity in the housing market. Then the price “skyrocket(ed)” (favorite Democrat Obama word ) between 2000-2004 when Freddie and Fannie made it their business to greatly increase their low to moderate mortgage holdings under Democrat Clinton’s 2000 Affordable House Goals directive. Again, Bush had no control over Freddie and Fannie until 2005. Notice how the bubble starts in 1998-1999. Also one must ask yourself “why did Democrat Clinton so increase Freddie and Fannie’s housing goals right as HE was about to leave office?” Clinton certainly could have so changed the goals in 1996, but then the crash would have been on HIS watch. I believe that is a good argument for Democrat Economic Sabotage, or Democrat Economic Terrorism.

 

They couldn't redline anymore, had to loan to worthy poor. Then Bush regulators let ANYONE take out SCAM loans. Got it? Then bundled, insured, and sold them around the world...BRILLIANT!!

 

Because Bush cut money that would normally go to the states to spend it on the wars and tax cuts, so states had to cut jobs and benefits.

As mentioned above, Bush cut taxes and then cut state funding which cuts jobs.

Deregulation didn't help either, and fostering a climate of corruption where corporations though they could do anything and never be held accountable encouraged their bogus financial gambling that caused the recession.

 

He didn't. Any other questions?

 

Yup, and we're going to continue blocking everything and gridlock your policies, your ideology until eventually.. you people die. I'm glad you hate us and blame us for everything. Continue it because I know for a fact you and every other leftwinger in America is going to die miserable and unhappy becuase we're still going to be "in the world where full time workers live in poverty and have no health care". So if you don't like it, you can kiss our asses you still arn't going to change it! We'll gridlock you into eternity if necessary. We still own half the nation.

Now go away.

 

The war quotient just has to do with how things like nation building end up as large amounts of "non-discretionary" spending. It's easy to run up debts when the primary model for doing business with contractors is "cost-plus."

Companies like Halliburton are very limited in competition, so they can essentially name their price when the government comes to them. The price itself is pretty open anyway due to cost-plus contracts.

http://en.wikipedia.org/wiki/Cost-plus_pricing

It's a very non-capitalistic way of doing business, since the competition element doesn't function as a limit on the final price charged.

Beyond that, however, a lot of the blame for our recession goes much farther back than Bush. Reagan's presidency began an era of deregulation that resulted in rapid short term growth, but it came at a cost of stability.

Banking, in particular, became much more risky with fewer regulations, and the final nail in the coffin for stability came with the Gramm-Leach-Bliley Act, which essentially removed all separation between investment banking and commercial banking.

Commercial banking is what most of us think of when using the term "banking." You have your savings account, your checking, and other small investments like CDs and such. Investment banking is much riskier (and much larger) investments that companies like Goldman Sachs specialize in.

The separation between commercial and investment banking was intended to limit risk exposure to the economy overall. Investment banking was once considered a rich man's game, where only people with money to burn would throw around funds to either make huge gains or experience large failures, but either way, the people involved usually had enough money of their own that they could absorb large losses.

Once that separation was removed, then investments that were once supposed to be secure became much less that way. Retirement funds were now exposed to heavy risks, and the rich essentially had access to much greater sums of money from the working class.

After engaging in a lot of risky trading, derivatives, heavy leveraging ratios, and double insuring properties of others, the financial sector eventually crashed. The ridiculous amounts of credit being thrown around in the real estate market were a big contributor as well.

So, this isn't really a given party or administration's fault -- it's a legacy of Wall Street gaming the system through both parties.

 

[ame="http://www.youtube.com/watch?v=cMnSp4qEXNM&feature=related"]Timeline shows Bush, McCain warning Dems of financial and housing crisis; meltdown - YouTube[/ame]

Watch this.

 

Is that legal? Spamming the website?

 

IMO, Bush or clinton weren't ignorant. I think they knew full well what they were doing and full well what the eventual effects would be. But it was fast easy money and many of their friends became very very wealthy.

 

I never said F&F were soley responsible........I said without F&F the mortgage collapse wouldnt have happened........and neither would the recession.

Over half the loans that went through Wall Street.....went through F&F. And at the time of the mortgage collapse, F&F held over 5 Trillion worth of mortgage liability.......the next closest was Mortgage "giant" Bear Stearns......with 400 Billion.

The World's Largest Mortgage Underwriter was the primary cause of the collapse of the mortgage market......and the recession.
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Try again! "Redlining" simply means "too risky neighborhoods in which to invest." The bad neighborhoods in Chicago had a comparable murder rate during the time of the Citibank lawsuit than American war deaths killed in Iraq during the height of the war. That says nothing about arson (yes burning property OWNED by the bank to the ground) and other miscellaneous crimes. There was no such thing as "worthy poor!" ROTFLMAO!!!!! The increased goals to serve the "worthy poor" from Freddie and Fannie quickly found every last one of them, but the two unconstitutional Democrat creations still had lofty political goals to meet so all the standards were lowered to accommodate Democrat political goals at the expense of the entire American economy.

When Obama worked for ACORN he assisted in suing Citibank for not issuing risky loans in bad neighborhoods under the Fair Housing Act (among other ancillary points of law). The Fair Housing Act does not prohibit redlining, just individual discrimination based on race, color, national origin, religion, sex, familial status or handicap. Obama and crew sued Citibank for not making loans in some of Chicago's poorest neighborhoods during the years 1992-1995. The murder rates for Chicago during those years are below:

1992: 943
1993: 931
1994: 929
1995: 827

The number of US Troops killed in the Iraq war between 2004-2006 are bellow

2004: 900
2005: 942
2006: 918

Obama and ACORN pressured Citibank to loan money in WARZONE neighborhoods. The three things that determine the value of property are location, location, AND location. Citibank settled out-of-court (sending a chill through the entire banking industry) and started making risky loans in the warzone neighborhoods of Chicago. Citibank later collapsed and their leadership had to crawl on hands and knees to the White House and beg for mercy from Obama so he would bail them out.

I would think since Obama was a community organizer he would be more interested in stopping the violence instead of shacking down Citibank.

http://clearinghouse.net/detail.php?id=10112

http://projects.washingtonpost.com/fallen/dates/

http://en.wikipedia.org/wiki/Crime_in_Chicago

 

You make valid points. However, your one side view and blame renders your points to insignificant.
Both sides played a role, R and D, gov't and private. Everyone wanted a piece of the never ending growing pie.

 

Democrats created the "never ending growing pie." Without Democrat violations of the Constitution NOTHING Republicans would have done could have amounted to anything that would have caused the bubble and ultimate collapse. Disagree with me? Post something that was the fault of Republicans that caused the price bubble in real-estate, the catalyst for the whole collapse since all the derivatives and "casino investing" depended on the underlining asset of the home mortgage.

 

http://dealbook.nytimes.com/2009/11/12/10-years-later-looking-at-repeal-of-glass-steagall/
But 10 years later, the end of Glass-Steagall has been blamed by some for many of the problems that led to last fall’s financial crisis. While the majority of problems that occurred centered mostly on the pure-play investment banks like Lehman Brothers, the huge banks born out of the revocation of Glass-Steagall, especially Citigroup, and the insurance companies that were allowed to deal in securities, like the American International Group, would not have run into trouble had the law still been in place.

I'm sure you've seen and heard all this. But I post for you anyways.

 

OK, please explain how adding liquidity to the housing market increased the price of a home? Extra liquidity does not lower loan standards. How did the repeal of Glass-Steagall lower minimum loan standards allowing NEW customers into the home market to buy first -time homes? Unused liquidity does not increase prices. Most people have not run up their credit cards to the max buying flat screens and the like. If all credit cards were maxed out prices would be far more expensive for whatever was so charged. The principle is the same. Democrats lowered standards so otherwise and traditionally unqualified borrowers would suddenly qualify for ever inflated loans (because the price of homes kept inflating). Democrats did this by auditing banks to make sure they were loaning money in risky neighborhoods, suing banks that were not so loaning, and enticing the banks to make risky loans so their largest customers (unconstitutionally Democrat created Freddie and Fannie) could purchase the loans.

Nice try, but now please explain how the repeal of Glass-Steagall lowered loan standards. The banks WERE self regulating (not making risky loans) which is why the Democrats passed the CRA, and changed its enforcement; to FORCE banks to make risky loans.

 

Part of Glass Steagall was the requirement of mortgage lenders to keep and maintain their loans for a specified amount of time. When that rule was eliminated it didn't matter to the lenders how bad the loan was, they were going to bundle it and sell it anyway, in fact, most bundled loans were sold before the individual mortgages were sold, such was the state of the market. Credit rating agencies then rated the bundled loans AAA+and they were sold over and over. This way they could sell more loans with the profit from the previous ones. Derivatives on the loans were rated AAA+ and were sold like moonshine to hillbillies. You can say the Democrats (and Republicans) enabled the lenders, but only the greed for money made them do it.

 

One more point, in California loans made to ethnic minorities (Hispanics) have fared no worse than those to folks like me (ol' whitey), and in some cases much better. If you took all the money from the defaults of minorities and put it in a pile next to the pile of stolen money the lenders and security traders took from the economy, it would look like a pitchers mound next to Mount Everest.

 

Your "point" shows absolutely no understanding of the Law of Supply and Demand. ALL, again I write, ALL the money spent by unqualified borrowers added to the overall inflation rate of ALL other properties making them ALL more likely to turn bad. If at one point unconstitutionally Democrat created Freddie and Fannie held about half of all mortgages in the US can we assume that without Freddie and Fannie (If the Democrats not violated the Constitution in their creation) home values would be about half? If so people could pay off their mortgages easily in 15 years instead of 30, right? Again the collapse did not occur because of unused liquidity in the marketplace, or who defaulted on what, it occurred because of the high inflation rate caused by the lowering of loan standards and all the new buyers that lower standard created inflating the price of all properties, and FORCING anyone who bought a home to borrow more money to cover the inflated prices. Then one day the economy started a downturn, and there would be no way for many to keep up their inflated mortgage payments with less income.

To argue that this group was not at fault, while that group was as THEIR mortgages failed is missing the point. The Masterminds I guess were not as smart as they thought because their unconstitutional meddling set up an environment (after warping the free market for political ends) where the entire economy almost collapsed; something the free market would never have allowed.

 

The CRA was passed in the 1970's? Glass-Stegal repealled in the late 90's.
If it was the CRA as you suggest, why did it take 30+ yrs to inflate and boom? And less than 10 after the repeal of glass-stegal?

Again, your points are valid, but only part of it. You don't think the R's in congress who pushed for repeal, and clinton who signed it, didn't know what was going to happen.
IMO, the pvt sector wanted a piece of what fnm and frd had, and then off to the races we were.

 

Thank you for that link! I've been sifting through materials trying to get a handle on the the history of derivatives and their role in the 2008 meltdown for some time and this paper seems to be a pretty good find. Thanks again.

BTW - if you (or anyone) hve come across any other FACTUAL resources regarding this topic, I'd appreciate it if you could send me the link(s) - ut1880h@comcast.net.

Thanks.

 

The CRA originally had no enforcement teeth so the banks largely ignored it. THANK GOD! The legislation could do not damage for 18 years! BECAUSE the banks ignored the legislation Democrat Clinton changed the CRA enforcement between the years 1993-1995. It's all in post 77 which shows the timeline.

http://www.politicalforum.com/polit...id-bush-cause-recession-8.html#post1060859214

Please post text of Glass-Steagall that in any way lowered loan standards, or explain how EXTRA and UNUSED liquidity drives up prices in a free market.

 

What about Bush's opposition to the Fannie reform bill?

 

Progressives aren't going anywhere. History is a long series of conservative losses. Today, CBS poll: Obama approval 50%, his handling of economy up 14% in 2 months...Pub voters are starting to go suicidal- Santorum leads, beating Obama now 4th criterium...LOL.

Read my signature- pp1 the Dupes never hear the facts, pp3 total BS you believe:

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?

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.