Capitalism

[Kirkland Laing]

Unemployment will rise more once taxes are raised.


The free market is just going to ride it out buddy...eventually things will turn around, they always do. Government may try to expedite the process but they are spending too much money as it is. And eventually we'll all make the same mistakes all over again and by we I mean the government.

Feel free to explain your side buddy

Unemployment will rise but not because taxes are going up. Again, that's just more GOP bs you've swallowed. When Clinton raised taxes on top earners and cut them for the middle class, dire predictions about the collapse of the US economy were made by the GOP. Instead the economy grew faster than under any president for decades and Clinton created 22 million jobs. Bush cut taxes, economic growth and revenues collapsed and he created four million jobs. Obama wants to return tax rates to the Clinton era.

Following on from my previous post, here's how the abandonment of regulation caused the current meltdown :


Here's an IM conversation between Rahul Dilip Shah and Shaun Mooney, a pair of analysts at the credit rating agency Standard & Poor's, chatting via IM back in 2007 about a deal involving securities that were made up of chunks of unregulated mortgage loans :

RDS: btw: that deal is ridiculous
SM: I know right ... model def does not capture half of the risk
RDS: we should not be rating it
SM: we rate every deal
SM: it could be structured by cows and we would rate it


Credit rating agencies rate the creditworthiness of bonds and various types of securities. They gave securities constructed of the very worst subprime loans a AAA rating, the same as US government bonds have. A AAA rating allows these bonds to be held as part of banks' asset bases, the capital base they must maintain to remain solvent. Great move, eh? This AAA worthless paper is now causing the meltdown in global financial markets.


Number two :


Among the documents uncovered by the committee was an internal board presentation delivered by [Raymond] McDaniel to Moody’s [credit rating agency] directors in October 2007. According to the presentation, he told his board: Analysts and managing directors “are continually ‘pitched’ by bankers, issuers, investors.” At times, he conceded, “we drink the Kool-Aid.”




Number three :


Mr. Waxman’s committee also cited an internal e-mail exchange between S.&P. [credit rating agency] employee [Frank] Raiter, who had been asked to rate a collateralized debt obligation [AAA worthless paper] called “Pinstripe,” and Richard Gugliada, an S.& P. managing director. Mr. Raiter had requested highly detailed data about each individual mortgage loan, known as loan level tapes, to assess the creditworthiness of the loans in the security, but Mr. Gugliada wrote: “Any request for loan level tapes is totally unreasonable!!! It is your responsibility to provide those credit estimates and your responsibility to devise some method for doing so.”
Mr. Raiter responded: “This is the most amazing memo I have ever received in my business career.”

[El Kabong]

...your failure to say the Democrats had any hand in this is amazing. I know the Republicans had their part in this but it wasn't all them...not by a long shot.

But of course I won't ever try and tell you anything different than you already believe

[Kirkland Laing]

...your failure to say the Democrats had any hand in this is amazing. I know the Republicans had their part in this but it wasn't all them...not by a long shot.

But of course I won't ever try and tell you anything different than you already believe

Show me exactly what the Democrats did to create the crisis, using facts and evidence. Don't just post a youtube of some guy blocking regulation on F and F. Explain to us exactly what part F anf F played in the crisis -- using facts and evidence now.

[El Kabong]

Just look at their fucking business models, they bough bad loans repackaged them and sold them off....they garunteed money to mortgage bankers and with Clinton demanding banks do more sub-prime loans (under threat of penalty) the banks eventually tried to make money off of F and F by making their commission and then getting money from F and F they KNEW they weren't going to get from the borrower.


But I guess that won't be enough for you....it never is

[Kirkland Laing]

Just look at their fucking business models, they bough bad loans repackaged them and sold them off....they garunteed money to mortgage bankers and with Clinton demanding banks do more sub-prime loans (under threat of penalty) the banks eventually tried to make money off of F and F by making their commission and then getting money from F and F they KNEW they weren't going to get from the borrower.


But I guess that won't be enough for you....it never is

Your above post makes no sense whatsoever. Your description of the relationship between banks, mortgage companies and Fannie and Freddie is one I've never seen before and as somebody who's worked in the financial industry for decades I can confidently say has no basis in reality. I can't even understand what you're trying to claim there.


Again Lyle, the current crisis originated in a bunch of bad loans made after 2002. Nothing to do with Clinton. Clinton called for banks to lend more to minorities (no penalties were ever threatened, if you claim they were provide facts and evidence) but so has every president since Carter including the current one. lending to monorities is actually good business for banks, very profitable. What happened after 2002 was that regulations on mortgages and what could be done with them were scrapped, resulting in a slew of bad loans.

Bush scrapped laws that made mortgage companies keep the mortgages they made for 30 years and allowed them to sell these mortgages on. This ended the mortgage peoples' need to make safe loans and resulted in an explosion of them. To sell the loans the mortgage companies gave tow or three year teaser rates that meant the mortgage payment was often less than rent money. Once the loans reset to the real rate the mortgagees' defaulted en masse causing the securities contrucrted of these loans to become toxic, worthless, causing the current mess. Here's a graph that explain this nicely. Note that the explosion in resets coincides exactly with the start of the current meltdown.




Here's a picture of the GOP fuckwits using a chainsaw and tree shears in a photo op trumpeting them scrapping mortgage and bank regulations, taken in 2002 :

[El Kabong]

....you want to think the Democrats did nothing to create this go right ahead. Barney Frank, Frank Raines, Christopher Dodd, Chuck Schumer etc.....oh they were all innocent which is why they got so much money out of Fannie and Freddie

[Kirkland Laing]

....you want to think the Democrats did nothing to create this go right ahead. Barney Frank, Frank Raines, Christopher Dodd, Chuck Schumer etc.....oh they were all innocent which is why they got so much money out of Fannie and Freddie

Again, explain exactly what these people did to precipitate the current crisis. Using facts and evidence.