FACTS on Dubya's great recession

Q When did the Bush Mortgage Bubble start?

A The general timeframe is it started late 2004.

From Bush's President's Working Group on Financial Markets March 2008

"The Presidents Working Group’s March policy statement acknowledged that turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007."




Q Did the Community Reinvestment Act under Carter/Clinton caused it?


A "Since 1995 there has been essentially no change in the basic CRA rules or enforcement process that can be reasonably linked to the subprime lending activity. This fact weakens the link between the CRA and the current crisis since the crisis is rooted in poor performance of mortgage loans made between 2004 and 2007. "

http://www.federalreserve.gov/newsevents/speech/20081203_analysis.pdf


Q Why is it commonly called the "subprime bubble" ?

A Because the Bush Mortgage Bubble coincided with the explosive growth of Subprime mortgage and politics. Also the subprime MBS market was the first to collapse in late 2006. In 2003, 10 % of all mortgages were subprime. In 2006, 40 % were subprime. This is a 300 % increase in subprime lending. (and notice it coincides with the dates of the Bush Mortgage bubble that Bush and the Fed said)

Some 80 percent of outstanding U.S. mortgages are prime, while 14 percent are subprime and 6 percent fall into the near-prime category. These numbers, however, mask the explosive growth of nonprime mortgages. Subprime and near-prime loans shot up from 9 percent of newly originated securitized mortgages in 2001 to 40 percent in 2006

https://www.dallasfed.org/assets/documents/research/eclett/2007/el0711.pdf



Q. Er uh, didn't you notice your link said the explosive growth of subprime mortgages started in 2001?

A. It did kinda say that didn't it? However, the link below clearly states subprime was 10 % in 2003. 9% in 2001 to 10% in 2003 is only a 1% increase. A 1 % increase over 3 years is flat not explosive. 10 % in 2003 to 40% in 2006 is explosive. So the explosive growth started in 2004 which lines up pretty good but not exactly with the timeframe of the Bush Mortgage Bubble.


"In dollar terms, nonprime mortgages represented 32 percent of all mortgage originations in 2005, more than triple their 10 percent share only two years earlier"



http://www.federalreserve.gov/PUBS/FEDS/2008/200859/


Nobody 'forced' bankers to do anything they didn't want to do. Congress reduced regulation -- something bankers wanted. In other words, Congress deregulated, ALLOWING bankers to do things they otherwise weren't allowed. Nobody put a gun to their heads forcing them to make no income check, no asset check, loans. The banker's greed was part of the problem -- and why not? Banks used to hold mortgages to term, meaning that if the borrower defaulted, the bank was on the hook.

Under the new financing, banks knew they were going to sell the mortgage to someone else immediately, so they took no risk if the borrower defaulted -- but they still earned all those fees and commissions. That gave the bank perverse incentives to issue mortgages to anyone that had a pulse (they made money and the risk was elsewhere.)



A large part of the failure was from areas that Congress didn't regulate at all. Bear Stern and Lehman were unregulated and nobody forced them to get into mortgage swap debentures.



Everyone was making money as long as housing prices rose.

 

I hope you realize that Congress passed the law which the president signed.

Not sure why you are giving this all to Bush...oh wait, nevermind....you cannot be expected to ever blame democrats for anything.

 

Bush Mortgage Bubble FAQs

Q Some people think you saying it started in late 2004 just to lay it all at Dubya's feet is just hyper-partisanship. Is that true?

A No. First, I'm not saying it. Bush's Working Group on Financial Markets is saying it. The Federal Reserve is saying it. The actual data on No Doc Loans and subprime loans are saying it.

DUBYA FOUGHT ALL 50 STATE AG'S IN 2003, INVOKING A CIVIL WAR ERA RULE SAYING FEDS RULE ON "PREDATORY" LENDERS!

Q I couldn’t help but notice all caps when posting the Bush Preemption policy. Can you tell me more about this ‘preemption’ rule from the OCC?

A Yes, states noticed an increase in predatory and abusive loans in the early 2000s. more than 30 states passed laws of varying degrees restricting certain types of loans. Banks complained to the OCC and the OCC enacted its Preemption policy

“Rapid growth in subprime lending over the past decade has led to rising concerns about abusive practices by subprime lenders. By early 2004, those concerns prompted Georgia and more than 30 other states to pass laws designed to eliminate abusive or predatory lending practices by the financial services firms, including those with federal charters, operating within their boundaries. In 2003, the OCC concluded that federal law preempts the provisions of the Georgia Fair Lending Act (GFLA) that would otherwise affect national banks’ real estate lending. In early 2004, the OCC adopted a final rule providing that state laws that regulate the terms of credit are preempted. “




Q Why would they do that?

A To increase subprime lending

(same link above)

“ In addition, clarification of the applicability of state laws to national banks should remove disincentives to subprime lending and increase the supply of credit to subprime borrowers. “



Q Wow, Bush preempted all state laws against predatory lending.

A thats not a question.

Q Sorry, er uh what did all 50 State Attorney Generals and all 50 State Banking Supervisors think of Bush's preemption?

A They didnt like it.

"The Conference of State Bank Supervisors (CSBS) along with a number of prominent organizations, including the National Governors Association (NGA), the National Association of Attorneys General (NAAG), the National Conference of State Legislatures (NCSL), and the North America Securities Administrators Association (NASAA), have voiced their opposition to the OCC's proposed rule that would effectively preempt all state laws that apply to the activities of national banks and their state-licensed subsidiaries. The groups are asking OCC to withdraw the controversial proposal."

States Unite to Fight Sweeping OCC Preemption

Q What did all 50 State Attorney Generals and all 50 State Banking Supervisors say would happen?

A Bad things

"
Concentrating regulatory control at the OCC ensures that regulatory and consumer protection problems that emerge will be solved with a one-size fits all approach," CSBS President and CEO Neil Milner wrote in his comment letter, adding that the proposed rule would concentrate regulatory power in the hands of a single individual, the Comptroller, with virtually no direct congressional oversight until problems or scandals emerge."



http://www.occ.gov/publications/pub...ng-papers/2008-2000/working-paper-2004-4.html



Q Did they predict in 2003 exactly what happened?
A Yes



Q I'm serious, my conservative friends are really really really adamant that policies from 1864, 1977, 1992, 1995, 1997 1999 and 2000 are to blame. What do I say to them?

A just explain the facts to them and show them the actual data that proves it didnt start until late 2004.

Q Yea, that didnt work. try again.

A Just point out to them that what they believe cannot be supported by any data whatsoever and that their empty factless rhetoric in no way changes any facts. For example, say they claim that the Bush Mortgage Bubble started in 1997 and they claim this is backed by almost every mainstream economist supported by empirical data. First ask them to back up their claims. And then ask them "how do you ignore the empirical data already posted in this thread?". Then ask them how anything from 1997 prevented Bush's regulators from enforcing proper lending standards. (of course they will do nothing but repeat their 'claims')

Q They really dont want to 'let go' of their beliefs. Why do they cling to such specious beliefs?
A Sorry, I cant explain it. Mental health issues are not my field of study



Q Where to they get such factless baseless beliefs?
A the 'conservative entertainment complex' has literally put out 1000's of lying editorials about this. What proves they are lying is not one of them has ever mentioned anything I posted in this Q&A. You cant explain Bush's working group telling you it started late 2004. So dont mention it. You cant explain away "bush protecting predatory lenders" so you absolutely can never ever mention it in an editorial. You cant explain away Bush lifting restrictions Clinton placed on GSE purchases of subprime mortgages when you are crafting a narrative that "bush tried to stop the bubble"

"(In 2000, (Clinton)) HUD restricted Freddie and Fannie, saying it would not credit them for loans they purchased that had abusively high costs or that were granted without regard to the borrower's ability to repay."

How HUD Mortgage Policy Fed The Crisis

"In 2004(Dubya), the 2000 rules were dropped and high‐risk loans were again counted toward affordable housing goals."


http://www.prmia.org/sites/default/files/references/Fannie_Mae_and_Freddie_Mac_090911_v2.pdf




Q What about the conservative 'narrative' that Bush tried to stop the bubble?

A Its simply another false narrative created by the 'conservative entertainment complex'. That narrative is 'crafted' around the statements of Bush saying fannie and freddie needed to be regulated. Lets look at the structure of this narrative

Bush said GSEs needed to be regulated (actually true)
Barney Frank and other dems said GSEs were fine (actually true)
Democrats blocked reform (false)
GSEs caused the crisis (false)

Just another mish mosh of lies spin and half truths the 'conservative entertainment complex' relies on to push their agenda. Lets deconstruct the narrative. Yes, Bush repeatedly talked about GSE reform. The problem is reform in 2003 had nothing to do with subprime mortgages. As I've already documented, Bush lifted the restrictions Clinton placed on the GSEs to limit their purchase of abusive subprime loans. Later in 2004, Bush would increase the GSE housing goals forcing them to buy more low income home loans and get them to buy 440 billion more minority home loans in the secondary market.

"•Substantially increase by at least $440 billion, the financial commitment made by the government sponsored enterprises involved in the secondary mortgage market, specifically targeted toward the minority market;"

Homeownership Policy Book - Executive Summary

"In April, HUD proposed new federal regulations that would raise the GSEs targeted lending requirements. HUD estimates that over the next four years an additional one million low- and moderate-income families would be served as a result of the new goals."

HUD Archives: HUD DATA SHOWS FANNIE MAE AND FREDDIE MAC HAVE TRAILED THE INDUSTRY IN PROVIDING AFFORDABLE HOUSING IN 44 STATES

there goes the narrative that Bush tried to stop anything

 

Q What about the second part of the "bush tried to stop the bubble" narrative when "Barney Frank and other dems said GSEs were fine "? GSE's did go bankrupt

A Yes Barney Frank and other dems said there was nothing wrong with the GSEs. And they were fine in 2003. The Bush Mortgage Bubble hadn't started yet (remember we learned that it didnt start until late 2004). Once the Bush Mortgage Bubble started, any entity that bought mortgages or invested in mortgage backed securities got hammered. Of the big five investment banks, only one survived and remained independent (it did change its charter to commercial bank to qualify for TARP funds). Numerous hedge funds went under. And yes, Freddie and Fannie went bankrupt. The difference is nobody was forcing hedge funds, investment banks, pension funds, insurance companies etc. to buy mortgages and mortgage backed securities (see above).


Oh and here's the key part of about democrats saying there was nothing wrong with GSEs: They were just repeating what Bush told them. (yea, this doesnt get mentioned in any 'conservative entertainment complex' editorials does it?).

Testimony from W’s Treasury Secretary John Snow to the REPUBLICAN CONGRESS concerning the 'regulation’ of the GSE’s Sept 2003

"Mr. Frank: ...Are we in a crisis now with these entities?

Secretary Snow. No, that is a fair characterization, Congressman Frank, of our position. We are not putting this proposal before you because of some concern over some imminent danger to the financial system for housing; far from it.“

- THE TREASURY DEPARTMENT'S VIEWS ON THE REGULATION OF GOVERNMENT SPONSORED ENTERPRISES



Q are you serious? I've heard "Barney Frank said Freddie and Fannie were fine" a million times as if it proved something and now I find out that Bush said it too. I give up. Whats my next question?

A uh you want to ask me about "dems blocking reform"

Q fine, did dems block reform?

A Well since everything else the 'conservative entertainment complex' said was a lie, why wouldnt this be a lie? Now remembering that Bush forced GSEs to buy more low income home loans, got freddie and fannie to buy an additional 440 billion in mortgage backed securities and reversed the restrictions Clinton placed on the GSEs purchases of subprime home loans this will not be much of a shock

"Strong opposition by the Bush administration forced a top Republican congressman to delay a vote on a bill that would create a new regulator for mortgage giants Fannie Mae and Freddie Mac."

Oxley pulls Fannie, Freddie bill under heat from Bush - MarketWatch

Despite what appeared to be a broad consensus on GSE regulatory reform, efforts quickly stalled. A legislative markup scheduled for October 8, 2003, in the House of Representatives was halted because the Bush administration withdrew its support for the bill,


(fyi, broad consensus means it would have probably passed. what happened to it again? oh yea bush stopped it)

 

WHICH LAW? PRETTY PLEASE?

Dubya REGULATOR failure

The Two Documents Everyone Should Read to Better Understand the Crisis

The FBI has been warning of an "epidemic" of mortgage fraud since September 2004. It also reports that lenders initiated 80% of these frauds.1 When the person that controls a seemingly legitimate business or government agency uses it as a "weapon" to defraud we categorize it as a "control fraud"




The FBI correctly identified the epidemic of mortgage control fraud at such an early point that the financial crisis could have been averted had the Bush administration acted with even minimal competence. To understand the crisis we have to focus on how the mortgage fraud epidemic produced widespread accounting fraud.


http://www.huffingtonpost.com/william-k-black/the-two-documents-everyon_b_169813.html



DUBYA FOUGHT ALL 50 STATE AG'S IN 2003, INVOKING A CIVIL WAR ERA RULE SAYING FEDS RULE ON "PREDATORY" LENDERS!

Dubya was warned by the FBI of an "epidemic" of mortgage fraud in 2004. He gave them less resources. Later in 2004 Dubya allowed the leverage rules to go from 12-1 to 33-1 which flooded the market with cheap money!



Bush drive for home ownership fueled housing bubble



He insisted that Fannie Mae and Freddie Mac meet ambitious new goals for low-income lending.

Concerned that down payments were a barrier, Bush persuaded Congress to spend as much as $200 million a year to help first-time buyers with down payments and closing costs.

And he pushed to allow first-time buyers to qualify for government insured mortgages with no money down



One president controlled the regulators that not only let banks stop checking income but cheered them on. And as president Bush could enact the very policies that caused the Bush Mortgage Bubble and he did. And his party controlled congress.

 

Sorry man, this thread is a mess.

It is not necessary to post that much stuff.

Try it again at a later date and maybe we can discuss it.

 

- - - Updated - - -

So NO, you can't refute a single thing. Thanks anyways

 

I don't feel like dissecting a 20 page paper just to find something you got wrong.

I have enough school work to do without adding to it.

 

Right-wingers Want To Erase How George Bush's "Homeowner Society" Helped Cause The Economic Collapse


2004 Republican Convention:

Another priority for a new term is to build an ownership society, because ownership brings security and dignity and independence.
...

Thanks to our policies, home ownership in America is at an all- time high.

(APPLAUSE)

Tonight we set a new goal: 7 million more affordable homes in the next 10 years, so more American families will be able to open the door and say, "Welcome to my home."


June 17, 2004

Builders to fight Bush's low-income plan

Groups ask HUD to rethink plan that would increase financing of homes to low-income people

(CNN/Money) - Home builders, realtors and others are preparing to fight a Bush administration plan that would require Fannie Mae and Freddie Mac to increase financing of homes for low-income people, a home builder group said Thursday.

But the groups will warn in the letter that the proposed rules requiring the two GSEs to finance more "affordable housing" may have "unintended consequences,"


http://money.cnn.com/2004/06/17/real_estate/lowcost_housing/

Predatory Lenders' Partner in Crime

Predatory lending was widely understood to present a looming national crisis.

What did the Bush administration do in response? Did it reverse course and decide to take action to halt this burgeoning scourge?

Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye

In 2003, during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative



http://www.washingtonpost.com/wp-dyn/content/article/2008/02/13/AR2008021302783.html


Agency's 2004 Rule Let Banks Pile Up New Debt

2004 Dubya allowed the leverage rules to go from 12-1 to 35+ to 1 which flooded the market with cheap money!


The SEC Rule That Broke Wall Street

www.cnbc.com/id/46808453#


The banks have known for 30 years the risks involved on the loan products they sold. This is why they lobbied so hard to allow them to sell the bad products to investors so they would not be holding the bad paper or the risks. The developed the products like stated income stated assets then bundled them to make it appear they were blended risks and then sold them to multiple investors. Who bought these high risk loans? Mostly pension funds and Insurances seeking higher returns who lost almost half of the pension funds value and the public that depended on those funds for retirement.




Nobody forced the big five investment banks to do what they did; they were not subject to CRA or other regulations common to depository banks. In fact, they mainly bought and sold loans rather than originate them. They did it because they thought they would make money.

 

Ad hominem definition, appealing to one's prejudices, emotions, or special interests rather than to one's intellect or reason



Why can't conservative learn from their past mistakes? Why do they have to keep doing the same thing over and over and getting the same results?

Harding/Coolidge 'believed in' laisse affaire economies, brought US the GOP great depression

Reagan ignored regulator warnings THAT STARTED IN 1984 and continued the deregulation of S&L's, about 90% of the S&L crisis could've been averted, IF Ronnie 'believed in' Gov't and it's regulators

TWENTY YEARS LATER, EXACTLY, the FBI started warning Dubya of an EPIDEMIC of mortgage fraud (2004) in the mortgage industry, but with resources they could stop what could be as large as the S&L crisis. Bush gutted them by 1/3rd instead

 

Its funny how you just skip over the democratic presidents as if they had nothing to do with it.

Your whole thread just reeks of partisanship.

You do not want an honest debate you just want to hate on republicans and I have no interest in that.

 

The entire right wing narrative is based on myths and lies.


They tend to look at things in a very simplistic way and try to put it all in terms that school children can understand. This is bad. You cannot take something very complex and look at it in a very simplistic way. You will always miss many extremely important variables that would completely change your opinion on the matter.



The Bush Mortgage Bubble wasn’t about home prices. It was about banks lowering their lending standards and Bush’s regulators cheering them on. That started late 2004 after Bush preempted all state laws against predatory lending (to name one of his many toxic housing policies) and his successful reelection campaign touting the strength of his housing market.


To create buyers out of unqualified buyers, banks literally stopped checking income in addition to using teaser rates and initial ARM rates to put people in homes they couldn't afford.


The former Federal Reserve chairman, Alan Greenspan, has conceded that the global financial crisis has exposed a "mistake" in the free market ideology which guided his 18-year stewardship of US monetary policy.


"I made a mistake in presuming that the self-interests of organisations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in the firms," said Greenspan.



Regulators and policymakers enabled this process at virtually every turn. Part of the reason they failed to understand the housing bubble was willful ignorance: they bought into the argument that the market would equilibrate itself. In particular, financial actors and regulatory officials both believed that secondary and tertiary markets could effectively control risk through pricing.


http://www.tobinproject.org/sites/tobinproject.org/files/assets/Fligstein_Catalyst of Disaster_0.pdf




Conservatives Can't Escape Blame for the Financial Crisis


The onset of the recent financial crisis in late 2007 created an intellectual crisis for conservatives, who had been touting for decades the benefits of a hands-off approach to financial market regulation. As the crisis quickly spiraled out of control, it quickly became apparent that the massive credit bubble of the mid-2000s, followed by the inevitable bust that culminated with the financial markets freeze in the fall of 2008, occurred predominantly among those parts of the financial system that were least regulated, or where regulations existed but were largely unenforced.

Predictably, many conservatives sought to blame the bogeymen they always blamed.


https://www.americanprogress.org/issues/economy/news/2010/12/21/8832/politics-most-blatant/

- - - Updated - - -

Bush's Working Group March 2008


The "turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007," the President's Working Group on Financial Markets

 

Of course they are, and the left-wing people all glide on rainbows and shoot glitter out of their ass.

 

Bush's Working Group March 2008


The "turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007," the President's Working Group on Financial Markets

 

One president controlled the regulators that not only let banks stop checking income but cheered them on. And as president Bush could enact the very policies that caused the Bush Mortgage Bubble and he did. And his party controlled congress.

 

You may want to check your "FACTS" there.

Bush did put out warnings but Congress, especially Bernie Frank, stopped Bush.

Don't believe me, then believe his own words.

[video=youtube;LPSDnGMzIdo]https://www.youtube.com/watch?v=LPSDnGMzIdo[/video]

 

The Democrats are the party that says government will make you smarter, taller, richer, and remove the crabgrass on your lawn. The Republicans are the party that says government doesn't work and then they get elected and prove it.
P. J. O'Rourke

 

Q What about the conservative 'narrative' that Bush tried to stop the bubble?

A Its simply another false narrative created by the 'conservative entertainment complex'. That narrative is 'crafted' around the statements of Bush saying fannie and freddie needed to be regulated. Lets look at the structure of this narrative

Bush said GSEs needed to be regulated (actually true)
Barney Frank and other dems said GSEs were fine (actually true)
Democrats blocked reform (false)
GSEs caused the crisis (false)

Just another mish mosh of lies spin and half truths the 'conservative entertainment complex' relies on to push their agenda. Lets deconstruct the narrative. Yes, Bush repeatedly talked about GSE reform. The problem is reform in 2003 had nothing to do with subprime mortgages. As I've already documented, Bush lifted the restrictions Clinton placed on the GSEs to limit their purchase of abusive subprime loans. Later in 2004, Bush would increase the GSE housing goals forcing them to buy more low income home loans and get them to buy $440 billion more minority home loans in the secondary market.

"•Substantially increase by at least $440 billion, the financial commitment made by the government sponsored enterprises involved in the secondary mortgage market, specifically targeted toward the minority market;"

Homeownership Policy Book - Executive Summary

"In April, HUD proposed new federal regulations that would raise the GSEs targeted lending requirements. HUD estimates that over the next four years an additional one million low- and moderate-income families would be served as a result of the new goals."

HUD Archives: HUD DATA SHOWS FANNIE MAE AND FREDDIE MAC HAVE TRAILED THE INDUSTRY IN PROVIDING AFFORDABLE HOUSING IN 44 STATES

there goes the narrative that Bush tried to stop anything


http://www.politicalforum.com/showthread.php?t=394878&p=1064711650#post1064711650


No, the GSEs Did Not Cause the Financial Meltdown (but thats just according to the data)

http://www.ritholtz.com/blog/2011/1...ampaign=Feed:+TheBigPicture+(The+Big+Picture)





Wall Street, Not Fannie and Freddie, Led Mortgage Meltdown



Government data show Fannie and Freddie didn’t take the same risks that Wall Street’s mortgage-backed securities machine did. Mortgages financed by Wall Street from 2001 to 2008 were 4½ times more likely to be seriously delinquent than mortgages backed by Fannie and Freddie

http://www.thedailybeast.com/articl...fannie-and-freddie-led-mortgage-meltdown.html



The Myth of Fannie Mae, Freddie Mac, Barney Frank, the Housing Bubble and the Recession

Start with the most basic fact of all: virtually none of the $1.5 trillion of cratering subprime mortgages were backed by Fannie or Freddie. That’s right — most subprime mortgages did not meet Fannie or Freddie’s strict lending standards. All those no money down, no interest for a year, low teaser rate loans? All the loans made without checking a borrower’s income or employment history? All made in the private sector, without any support from Fannie and Freddie.

Look at the numbers. While the credit bubble was peaking from 2003 to 2006, the amount of loans originated by Fannie and Freddie dropped from $2.7 trillion to $1 trillion


https://thelonggoodbye.wordpress.co...y-frank-the-housing-bubble-and-the-recession/

 

So you have no response to those democrats claiming there was no problem with Freddie or Fannie?

Your just going to skip over that part and put all the blame on Bush huh?

 

Yes, it's WELL known the minority party in the House where simple majority ruled, has super duper powers. lol

Barney was minority member of a GOP majority House 1995- Jan 2007, he could run nekkid through the halls and stop NOTHING

 

You mean in 2003-2004 ACCOUNTING scandals ($4 billion dollars TOTAL, lol)???

BEFORE Dubya's subprime bubble inflated OR Dubya required F.F to purchase $440 BILLION in the secondary market to buy MBS's to meet his 'affordable housing goals (2004) ? Or before he UPPED the GSE's goals from 50% to 56% (2004) to meet his goals? THE SAME YEAR, 2004 DUBYA GOT RID OF THE CLINTON ERA RULE THAT STOPPED GSE'S FROM USING SUBPRIME LOANS TO MEET THOSE GOALS???


LOL

There was ALSO no problems with the investment banks in 2003-early 2004 EITHER, lol


The "turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007," the President's Working Group on Financial Markets

 

Your entire blame Bush propaganda is entirely based on GSE's not having a role in the meltdown and what do you provide us as sources for that?

Two blogs that could have been written by anyone, certainly nothing academically peer-reviewed. That right there sinks your entire thread because we know that the Bush Administration was warning up and down about the problems with Freddie and Fannie. Here is a timeline so you can refresh your memory.

Now if you want to have any credibility than show us an official report or study that says GSE's had nothing to do with the meltdown.

Or move along.



2001
•April: The Administration's FY02 budget declares that the size of Fannie Mae and Freddie Mac is "a potential problem," because "financial trouble of a large GSE could cause strong repercussions in financial markets, affecting Federally insured entities and economic activity." (2002 Budget Analytic Perspectives, pg. 142)

2002
•May: The Office of Management and Budget (OMB) calls for the disclosure and corporate governance principles contained in the President's 10-point plan for corporate responsibility to apply to Fannie Mae and Freddie Mac. (OMB Prompt Letter to OFHEO, 5/29/02)

2003
•February: The Office of Federal Housing Enterprise Oversight (OFHEO) releases a report explaining that unexpected problems at a GSE could immediately spread into financial sectors beyond the housing market.


•September: Then-Treasury Secretary John Snow testifies before the House Financial Services Committee to recommend that Congress enact "legislation to create a new Federal agency to regulate and supervise the financial activities of our housing-related government sponsored enterprises" and set prudent and appropriate minimum capital adequacy requirements.


•September: Then-House Financial Services Committee Ranking Member Barney Frank (D-MA) strongly disagrees with the Administration's assessment, saying "these two entities – Fannie Mae and Freddie Mac – are not facing any kind of financial crisis … The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing." (Stephen Labaton, "New Agency Proposed To Oversee Freddie Mac And Fannie Mae," The New York Times, 9/11/03)


•October: Senator Thomas Carper (D-DE) refuses to acknowledge any necessity for GSE reforms, saying "if it ain't broke, don't fix it." (Sen. Carper, Hearing of Senate Committee on Banking, Housing, and Urban Affairs, 10/16/03)


•November: Then-Council of the Economic Advisers (CEA) Chairman Greg Mankiw explains that any "legislation to reform GSE regulation should empower the new regulator with sufficient strength and credibility to reduce systemic risk." To reduce the potential for systemic instability, the regulator would have "broad authority to set both risk-based and minimum capital standards" and "receivership powers necessary to wind down the affairs of a troubled GSE." (N. Gregory Mankiw, Remarks At The Conference Of State Bank Supervisors State Banking Summit And Leadership, 11/6/03)

2004
•February: The President's FY05 Budget again highlights the risk posed by the explosive growth of the GSEs and their low levels of required capital and calls for creation of a new, world-class regulator: "The Administration has determined that the safety and soundness regulators of the housing GSEs lack sufficient power and stature to meet their responsibilities, and therefore … should be replaced with a new strengthened regulator." (2005 Budget Analytic Perspectives, pg. 83)


•February: Then-CEA Chairman Mankiw cautions Congress to "not take [the financial market's] strength for granted." Again, the call from the Administration was to reduce this risk by "ensuring that the housing GSEs are overseen by an effective regulator." (N. Gregory Mankiw, Op-Ed, "Keeping Fannie And Freddie's House In Order," Financial Times, 2/24/04)


•April: Rep. Frank ignores the warnings, accusing the Administration of creating an "artificial issue." At a speech to the Mortgage Bankers Association conference, Rep. Frank said "people tend to pay their mortgages. I don't think we are in any remote danger here. This focus on receivership, I think, is intended to create fears that aren't there." ("Frank: GSE Failure A Phony Issue," American Banker, 4/21/04)


•June: Then-Treasury Deputy Secretary Samuel Bodman spotlights the risk posed by the GSEs and calls for reform, saying "We do not have a world-class system of supervision of the housing government sponsored enterprises (GSEs), even though the importance of the housing financial system that the GSEs serve demands the best in supervision to ensure the long-term vitality of that system. Therefore, the Administration has called for a new, first class, regulatory supervisor for the three housing GSEs: Fannie Mae, Freddie Mac, and the Federal Home Loan Banking System." (Samuel Bodman, House Financial Services Subcommittee on Oversight and Investigations Testimony, 6/16/04)

2005
•April: Then-Secretary Snow repeats his call for GSE reform, saying "Events that have transpired since I testified before this Committee in 2003 reinforce concerns over the systemic risks posed by the GSEs and further highlight the need for real GSE reform to ensure that our housing finance system remains a strong and vibrant source of funding for expanding homeownership opportunities in America … Half-measures will only exacerbate the risks to our financial system." (Secretary John W. Snow, "Testimony Before The U.S. House Financial Services Committee," 4/13/05)


•July: Then-Minority Leader Harry Reid rejects legislation reforming GSEs, "while I favor improving oversight by our federal housing regulators to ensure safety and soundness, we cannot pass legislation that could limit Americans from owning homes and potentially harm our economy in the process." ("Dems Rip New Fannie Mae Regulatory Measure," United Press International, 7/28/05)

2007
•August: President Bush emphatically calls on Congress to pass a reform package for Fannie Mae and Freddie Mac, saying "first things first when it comes to those two institutions. Congress needs to get them reformed, get them streamlined, get them focused, and then I will consider other options." (President George W. Bush, Press Conference, the White House, 8/9/07)


•August: Senate Committee on Banking, Housing and Urban Affairs Chairman Christopher Dodd ignores the President's warnings and calls on him to "immediately reconsider his ill-advised" position. (Eric Dash, "Fannie Mae's Offer To Help Ease Credit Squeeze Is Rejected, As Critics Complain Of Opportunism," The New York Times, 8/11/07)


•December: President Bush again warns Congress of the need to pass legislation reforming GSEs, saying "These institutions provide liquidity in the mortgage market that benefits millions of homeowners, and it is vital they operate safely and operate soundly. So I've called on Congress to pass legislation that strengthens independent regulation of the GSEs – and ensures they focus on their important housing mission. The GSE reform bill passed by the House earlier this year is a good start. But the Senate has not acted. And the United States Senate needs to pass this legislation soon." (President George W. Bush, Discusses Housing, the White House, 12/6/07)

2008
•February: Assistant Treasury Secretary David Nason reiterates the urgency of reforms, saying "A new regulatory structure for the housing GSEs is essential if these entities are to continue to perform their public mission successfully." (David Nason, Testimony On Reforming GSE Regulation, Senate Committee On Banking, Housing And Urban Affairs, 2/7/0


•March: President Bush calls on Congress to take action and "move forward with reforms on Fannie Mae and Freddie Mac. They need to continue to modernize the FHA, as well as allow State housing agencies to issue tax-free bonds to homeowners to refinance their mortgages." (President George W. Bush, Remarks To The Economic Club Of New York, New York, NY, 3/14/0


•April: President Bush urges Congress to pass the much needed legislation and "modernize Fannie Mae and Freddie Mac. [There are] constructive things Congress can do that will encourage the housing market to correct quickly by … helping people stay in their homes." (President George W. Bush, Meeting With Cabinet, the White House, 4/14/0


•May: President Bush issues several pleas to Congress to pass legislation reforming Fannie Mae and Freddie Mac before the situation deteriorates further.

◦"Americans are concerned about making their mortgage payments and keeping their homes. Yet Congress has failed to pass legislation I have repeatedly requested to modernize the Federal Housing Administration that will help more families stay in their homes, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow state housing agencies to issue tax-free bonds to refinance sub-prime loans." (President George W. Bush, Radio Address, 5/3/0


◦"[T]he government ought to be helping creditworthy people stay in their homes. And one way we can do that – and Congress is making progress on this – is the reform of Fannie Mae and Freddie Mac. That reform will come with a strong, independent regulator." (President George W. Bush, Meeting With The Secretary Of The Treasury, the White House, 5/19/0


◦"Congress needs to pass legislation to modernize the Federal Housing Administration, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow State housing agencies to issue tax-free bonds to refinance subprime loans." (President George W. Bush, Radio Address, 5/31/0

•June: As foreclosure rates continued to rise in the first quarter, the President once again asks Congress to take the necessary measures to address this challenge, saying "we need to pass legislation to reform Fannie Mae and Freddie Mac." (President George W. Bush, Remarks At Swearing In Ceremony For Secretary Of Housing And Urban Development, Washington, D.C., 6/6/0


•July: Congress heeds the President's call for action and passes reform legislation for Fannie Mae and Freddie Mac as it becomes clear that the institutions are failing.


•September: Democrats in Congress forget their previous objections to GSE reforms, as Senator Dodd questions "why weren't we doing more, why did we wait almost a year before there were any significant steps taken to try to deal with this problem? … I have a lot of questions about where was the administration over the last eight years." (Dawn Kopecki, "Fannie Mae, Freddie 'House Of Cards' Prompts Takeover," Bloomberg, 9/9/0

http://georgewbush-whitehouse.archives.gov/news/releases/2008/10/20081009-10.html

 

Once again lots of words by Frank and possibly misguided, but no link between Frank and any action he took to stop regulation. He literally would have to have super powers to stop Republicans. Is the Big Government writer suggested that the Republican majority did not have the moral will power to to withstand Frank’s words. The Republican Congress of 2003 passed any bill it wanted with simple majority votes. If Fannie or Freddie were out of control they could have reigned them in. As a matter of fact the NYT article BG links to does not say Freddie or Fannie were in trouble over leading practices such as being extended beyond their collateral, but because of accounting shenanigans,

The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac — which together have issued more than $1.5 trillion in outstanding debt — is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates.


The Myth of Fannie Mae, Freddie Mac, Barney Frank, the Housing Bubble and the Recession

https://thelonggoodbye.wordpress.co...y-frank-the-housing-bubble-and-the-recession/


LOGIC!!

 

LOL

You meant he 'warned' GOP Congress 17 times on GSE reforms, but blocked the only bill to get out of the GOP House with bipartisan support?



Bush talked about reform. He talked and he talked. And then he stopped reform. (read that as many times as necessary. Bush stopped reform). And then he stopped it again

Testimony from Treasury Secretary John Snow to the REPUBLICAN CONGRESS concerning the 'regulation OF GSE'S SEPT 2003
Mr. Frank: ...Are we in a crisis now with these entities?

Secretary Snow. No, that is a fair characterization, Congressman Frank, of our position. We are not putting this proposal before you because of some concern over some imminent danger to the financial system for housing; far from it.


October 26, 2005

STATEMENT OF ADMINISTRATION POLICY

The Administration strongly believes that the housing GSEs should be focused on their core housing mission, particularly with respect to low-income Americans and first-time homebuyers. Instead, provisions of H.R. 1461 that expand mortgage purchasing authority would lessen the housing GSEs' commitment to low-income homebuyers.

George W. Bush: Statement of Administration Policy: H.R. 1461 - Federal Housing Finance Reform Act of 2005

Yes, he said he was against it because it "would lessen the housing GSEs' commitment to low-income homebuyers"


June 17, 2004

(CNN/Money) - Home builders, realtors and others are preparing to fight a Bush administration plan that would require Fannie Mae and Freddie Mac to increase financing of homes for low-income people, a home builder group said Thursday.


Home builders fight Bush's low-income housing - Jun. 17, 2004


BUT NO, THOUGH BUSH CRUSHED F/F (AS REGULATOR), THE GSE'S DIDN'T CAUSE THE BUSH SUBPRIME CRISIS



DEMS WANT LESS REGULATION AND REPUBS MORE? LOL



The critics have forgotten that the House passed a GSE reform bill in 2005 that could well have prevented the current crisis, says Mr Oxley (R) , now vice-chairman of Nasdaq.”

“What did we get from the White House? We got a one-finger salute.”

 

So you are admitting that democrats were marching lock-step with Bush on this issue yet you only want to blame Bush?