Just WHAT did you expect from him?

[silverscreenselect]

If you thought this up on your own, you can explain to me how their loans failed at a much lower rate than non-CRA-regulated loans, but yet they "contributed to the mess".

"Loans failed." A contributing factor. Thank you for the confirmation.

Loans have failed for as long as people have been loaning money. Traditionally, home mortgages have been about the least risky loan banks have made thanks to careful underwriting, shifting some of the risk back to the buyer with downpayments and PMI, and the fact that banks traditionally made loans to hold onto them, not repackage them as quick moving commercial paper.

The failure rate of the CRA loans would have been manageable. It would have been somewhat higher than traditional mortgages, but the interest premium would have covered that. Many of them were traditional mortgages, issued with somewhat but not completely relaxed underwriting standards at a slightly, but not exorbitantly higher, interest rate. The non-CRA loans had no underwriting guidelines and were invitations to default.

Blaming the crisis on these relatively few failed loans is like blaming an insurance company's failure on people dying.

[silverscreenselect]

No, I led with the Treasury:

As for the government keeping an eye on the economy, who's eye? The Treasury? Or the House and Senate Banking Committees? Loans made by Freddie/Fannie that were made via direct pressure from Barney Frank or Chris Dodd have now gone south because they were made with people who obviously couldn't afford it. Those are the ones you want to look out for us?

followed by the two Congressional Committees. The same group, Executive and Legislative, that were in charge during the current mess. minie wanted the government to watch for her. Then the example about Freddie/Fannie, so at best it was a third point. Hence, a contributing factor.

I just happen to dislike Barney Frank's and Chris Dodd's hypocrisy so I used them for effect. As they are the chairs of the respective committees, it fit nicely with my post.

The vast majority of the loans that went south were not made by any entity that Barney Frank or Chris Dodd had any control over, and they were not made because of direct or indirect government pressure. Companies were fighting each other tooth and nail to make these loans and banks were fighting each other tooth and nail to buy up the paper that resulted from them.

These companies roped in buyers with the promise of being able to afford ridiculously exorbitent houses, trying to persuade them to buy the absolute biggest house they could manage a line of credit for. The buyers exercised poor judgment in many cases, but they were eagerly led astray by the finance companies.

The overwhelming majority of this bad paper was issued during the Bush years. There was no government oversight on the companies making the loans and far too little oversight of those buying up the paper and far too little attention paid by the ratings companies that completely overrated the paper.

But it wasn't Barney and Chris who pressured companies into making the loans that went sour and no one pressured companies to make loans under the ridiculous conditions that these were issued under.

[Jeemie]

No, I led with the Treasury:

As for the government keeping an eye on the economy, who's eye? The Treasury? Or the House and Senate Banking Committees? Loans made by Freddie/Fannie that were made via direct pressure from Barney Frank or Chris Dodd have now gone south because they were made with people who obviously couldn't afford it. Those are the ones you want to look out for us?

followed by the two Congressional Committees. The same group, Executive and Legislative, that were in charge during the current mess. minie wanted the government to watch for her. Then the example about Freddie/Fannie, so at best it was a third point. Hence, a contributing factor.

I just happen to dislike Barney Frank's and Chris Dodd's hypocrisy so I used them for effect. As they are the chairs of the respective committees, it fit nicely with my post.

The vast majority of the loans that went south were not made by any entity that Barney Frank or Chris Dodd had any control over, and they were not made because of direct or indirect government pressure. Companies were fighting each other tooth and nail to make these loans and banks were fighting each other tooth and nail to buy up the paper that resulted from them.

These companies roped in buyers with the promise of being able to afford ridiculously exorbitent houses, trying to persuade them to buy the absolute biggest house they could manage a line of credit for. The buyers exercised poor judgment in many cases, but they were eagerly led astray by the finance companies.

The overwhelming majority of this bad paper was issued during the Bush years. There was no government oversight on the companies making the loans and far too little oversight of those buying up the paper and far too little attention paid by the ratings companies that completely overrated the paper.

But it wasn't Barney and Chris who pressured companies into making the loans that went sour and no one pressured companies to make loans under the ridiculous conditions that these were issued under.

And the root cause of all that? The Fed keeping rates ridiculously low for too long after 9/11- because suddenly the Fed decided (actually not suddenly because they did the same thing in the 90s) that its job was to prevent recessions (which are a normal and healthy part of the business cycle, no matter how "painful" they are short-term) from occurring rather than prevent the panics caused by speculative bubbles that were rampant in pre-Fed days.

I.e. they forgot their charter to maintain money supply stability.

Too much easy credit = too much worthless paper being generated, rather than capital for worthy economic pursuits

[eyégor]

Where to start?

If Obama granted his 1st interview with ANY American journalist, everyone would be divining who his "us" is by the politics of the interviewer. By granting to someone who was a definitive "them" should solve that problem. I believe it has for most.

I reserve comment on Middle East policy until I can determine if there is any real change.

It has always amazed me how people continue to believe the rhetoric long past the election. Prior to his election Reagan called for the abolition of the Dept of Education. It grew exponentially during his administration.

Libertarians tend toward the conservative choice if there is no true libertarian choice (which is the norm). Does anybody think the government isn't more intrusive in their lives now than in any other time in history? Yet this was spawned by the neo-cons in the name of security. Liberty has become quaint, like the oaken bucket atop the well. Government hasn't just moved in tou our houses, it sleeps in the master suites.

As for the economy, we spent so many years keeping the wolf from the door with minor corrections, we forgot that the wolf still existed. Now that the house of cards has been blown down, we just have further to fall during this correction. Throwing money at the problem isn't the solution. Not when 10 of the largest 13 banks who partook of the government teat the 1st time it was offered have since tightened lending. Now I seldom endorse more government intervention, but money has to be put back into circulation quickly, what with close to 80,000 jobs lost yesterday alone. Put the money in public works instead of giveaways to the banks. Even if it doesn't work, at least we will have something to show for the effort/

Finally, as for the press, they are acting like characters from a bad Allan Drury novel. If it continues much longer, I expect a significant increase in 'end times' rhetoric.

[Flybrick]

Well done!

[Jeemie]

Put the money in public works instead of giveaways to the banks. Even if it doesn't work, at least we will have something to show for the effort

I agree with everything except this.

We need to be investing in the next growth industries, not in "make work" projects.

Otherwise, all we'll have to show for this at the end is massive inflation.

[TheCalvinator24]

Jeez Louise!

I am just as Conservative as I have ever been, and I didn't want Obama to become President, but GOODNESS, people! We didn't like it when the loony left picked everything Bush did apart from January 20, 2001, through September 11, 2001, (the completely insane portion of the loony left continued even then), and they at least had the rationale that they (incorrectly) believed that he had stolen the election.

President Obama won by a large margin. There is no whiff of illegitimacy to his Presidency, so the bottom line is that he gets to do what he wants to do to the extent that Congress goes along.

I haven't liked a handful of what he has done in the past week, but he has done nothing that wasn't to be expected.

My biggest problem is with the people who believed that he really is different than other politicians, who, now that evidence is here that shows he is not, keep their heads in the sand and excuse things for which they would excoriate other Presidents (not aimed at anyone on the Bored).

[Jeemie]

My biggest problem is with the people who believed that he really is different than other politicians, who, now that evidence is here that shows he is not, keep their heads in the sand and excuse things for which they would excoriate other Presidents (not aimed at anyone on the Bored).

Why not?

Beebs told us to be honest!

[Flybrick]

What Cal digits said!

[silverscreenselect]

Now I seldom endorse more government intervention, but money has to be put back into circulation quickly, what with close to 80,000 jobs lost yesterday alone. Put the money in public works instead of giveaways to the banks. Even if it doesn't work, at least we will have something to show for the effort.

When FDR took office, he had two immediate goals. One was to get the banks back open under reasonably stable conditions. The other was to get people back to work sooner rather than later with a lot of public works programs. He managed to get that done within the first few months and the economy began to recover.

Much of what we now associate with FDR, social security, wage and hour laws, the Wagner Act, didn't take place until considerably later in his administration.

Obama's package looks pretty much like a grab bag of goodies including some short term relief, a lot more typical Democratic initiatives that are being front burnered under the guise of stimulus, and lots of good old fashioned earmarks. There is little coherence to it, little true enthusiasm for it as a whole from anyone in Congress, and, worst of all, little overriding pressure from the top. Unlike FDR, who made the New Deal happen, Obama seems to be content to go with the flow. This has allowed the Republicans, within one week of his taking office, to regroup and take targeted potshots at bits and pieces of the plan with a lot of success. To make matters worse, the lack of results from Bush's stimulus package is very apparent to the American people.

If Obama really wants to sell his plan, he has to sell it to the American people. Get on TV for a half hour or so and outline it in detail, then get Pelosi, Reid and the rest on board. But that's not his style. He prefers waving the hope and change magic wand. To do that, he has to show he really believes in this package and it's not just something that is being put out there for the mere sake of doing "something." He's never had to run anything in his entire life, he doesn't know how to run anything, and now he's running the biggest economy in the world. To make matters worse, he's being "aided" by a couple of Congressional leaders who have a miserable record in managing Congressional majorities and he's being opposed by some people who got quite good at what they are doing the last two years.

[BigDrawMan]

brilliant idea

it shows the arabs that their concerns are important to us, without spending any money or time on them.

i intuit the knuckle dragging/mouthbreathing/kneejerking reactionary types will miss the thoughtfulness of this idea.