The Buck Keeps Moving

The year's highlights in blame shifting

Jacob Sullum | December 31, 2008

Ohio recently became the sixth state to ban Salvia divinorum, a psychedelic member of the mint family native to Mexico, where it has been used for centuries as an aid to healing and divination. The legislator who introduced the ban said he did so after hearing from constituents who blamed their 12-year-old son's death on the drug.

The boy was killed by a friend who apparently had tried salvia, the Cleveland Plain Dealer reports, "although it isn't clear whether the friend was on the drug when he shot and killed the 12-year-old." The Columbus Dispatch notes "there was no direct evidence...that the shooting was drug-related."

Clearly there is something magical about salvia, since it can make questions about an adolescent killer's motives, state of mind, and unsupervised access to a loaded gun disappear. The wicked weed was one of the year's highlights in blame shifting. Here are a few more:

Stop Me Before I Borrow Again. Except in cases of fraud, people who took out risky mortgages and later had trouble making their payments should have known what they were getting into. Perhaps they were careless, or perhaps they miscalculated, assuming that home values would keep rising. In many cases they misrepresented their assets or income.

Yet when asked whether "greedy lenders" or "risky home buyers" were "at fault" in the "subprime lending meltdown," Republican vice presidential candidate Sarah Palin replied, "Darn right it was the predator lenders, who tried to talk Americans into thinking that it was smart to buy a $300,000 house if we could only afford a $100,000 house." She was notably easier on the reckless borrowers: "I think we need to band together and say never again. Never will we be exploited and taken advantage of again by those who are managing our money and loaning us these dollars."

The Litigatable Lightness of Cigarettes. The U.S. Supreme Court recently ruled that smokers in Maine can sue the major tobacco companies for misleadingly implying that "light" cigarettes are safer than regular cigarettes. The same charge figures prominently in a Justice Department lawsuit against the cigarette makers.

Yet if the tobacco companies have committed fraud by highlighting the tar and nicotine yields of their cigarettes, it's a fraud in which the federal government participated from the beginning. In 1966 the Federal Trade Commission approved the machine-based "FTC method" for measuring tar and nicotine.

The FTC conceded at the time that people do not smoke the way machines do, and research later confirmed that smokers tend to compensate for lower nicotine yields by taking more puffs, inhaling more deeply, and holding the smoke longer. Yet the FTC waited 42 years, until last July, to propose withdrawing its blessing from the machine-generated numbers, saying they are not good indicators of what smokers absorb.

Even while implicitly admitting its error, the commission disclaimed responsibility for it, saying its endorsement of the FTC method "does not require companies to state the tar and nicotine yields of their cigarettes in their advertisements or on product labels." It neglected to mention that in 1971 it threatened to require the tobacco companies to advertise the yields unless they did so "voluntarily."

San Andreas Fault. Take-Two Interactive tentatively settled a class action lawsuit over Grand Theft Auto: San Andreas, agreeing to pay customers offended by hidden sex scenes in the video game up to $35 each. Under the deal, which a federal judge rejected in July, the lawyers would have received $1.3 million, while payments to the plaintiffs would have totaled less than $30,000, since only 2,676 had filed claims.

It's impressive that even that many people signed up, since only players who deliberately used third-party software to reveal the scenes were able to see them. Theoretically, parents who bought the M-rated game (aimed at players 17 and older) for their children might have objected, assuming they think it's OK to murder fictional prostitutes as long as you don't have sex with them.

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Elemenope|12.31.08 @ 7:49AM|#

And so, yet again, a picture that has jack and shit to do with the article.

I get that election season is meat and potatoes around here, but it's fucking over and the rest of us *suffered trauma* from it. It's not cool to jump behind a guy with PTSD and make a racket, is it?

Other than that, good round-up.

nobody u no and big fan of joe|12.31.08 @ 8:06AM|#

Elemenope,

the masses need to be reminded that there is an evil witch in alaska who is anti-progressive.

|12.31.08 @ 8:46AM|#

Yeah buddy, nothing like some good ole political finger pointing now is there. Always passing the buck, its the American way!

Jess
http://www.privacy-tools.at.tc

It was a misread, Lope. The web guy thought he said, "Shifty dame" and came up with the Palin pic.

BakedPenguin|12.31.08 @ 8:48AM|#

nobody u no - actually, the article goes after Palin for espousing some rather progressive economic theory. Perhaps you could consider reading it.

JonDoe|12.31.08 @ 8:56AM|#

Blame shifting?? Hey...! Don't look at me. I didn't do anything.

|12.31.08 @ 8:57AM|#

assuming they think it's OK to murder fictional prostitutes as long as you don't have sex with them

Honestly, I vastly prefer killing the police to get my alert level up after having sex with the prostitutes and killing them.

Chuck|12.31.08 @ 9:00AM|#

You have to look for the highly coded subliminal message in the article to find the Palin connection:

Yet when asked whether "greedy lenders" or "risky home buyers" were "at fault" in the "subprime lending meltdown," Republican vice presidential candidate Sarah Palin replied, "Darn right it was the predator lenders, who tried to talk Americans into thinking that it was smart to buy a $300,000 house if we could only afford a $100,000 house." She was notably easier on the reckless borrowers: "I think we need to band together and say never again. Never will we be exploited and taken advantage of again by those who are managing our money and loaning us these dollars."

Personally, I prefer to read articles before commenting on them. But that's just boring old me.

|12.31.08 @ 9:03AM|#

mobody u no and big fan of joe-

Joe? You mean the guy who denies that Israel has a propensity to committ mass murder?

You mean the guy that supports racist affirmative action policies?

You mean the guy who thinks a person who recognizes that Dishonest Abe was a mass murderer has a "confederacy fetish"?

You mean the guy that supports the continued confiscation of private property via the income tax by his big gvt. democrat party hacks?

nobody u no, I will not attribute to you joe's values notwithstanding you being a fan of his.

Elemenope|12.31.08 @ 9:15AM|#

Personally, I prefer to read articles before commenting on them. But that's just boring old me.

Yeah, that connection had about as much to do with the overall article as the Obama cigarette picture had to do with the genetic privacy article. It would be hard to find a politician on either side of the aisle who didn't scapegoat predatory lenders.

So, jack and shit.

|12.31.08 @ 9:20AM|#

Loomin' large again.

Underzog and the Holocaust denial guy "Libertymike" both HATE me. (Yes, Holocaust denial. I never actually saw one in real life before.)

I must doing something right.

|12.31.08 @ 9:22AM|#

underzog | December 30, 2008, 9:39pm | #

It's okay, Joe. I can sympathize with you. Anti-Semites hate it when Jews fight back. In fact, the screaming of the anti-Semites is one of the most fun things about Jews fighting back against their would be mass killers.

Libertymike | December 31, 2008, 9:03am | #

mobody u no and big fan of joe-

Joe? You mean the guy who denies that Israel has a propensity to committ mass murder?

Too funny.

Elemenope|12.31.08 @ 9:23AM|#

joe and libertymike --

It's too early in the morning for this shit.

Personally I'm waiting for the Burris/Blagojevich thread. There is some wholesome entertainment value in watching Illinois politicians trip over each other to say ridiculous things.

|12.31.08 @ 9:23AM|#

Just defining the term "predatory lender" is a near-fatal challenge. Back in the early years of the decade, when anti-predatory lending legislation was all the rage, the definitions of that term and of the various "predatory" practices were all over the board, depending on who had coffee when drafting the bill.

This is not to say that some lenders didn't perform some pretty shady tricks on borrowers, but the fact is that a lot of people pushing the legislation just wanted to equate the terms "predatory" and "subprime".

All of which means that politicians who use the term are just riding the wave and don't really know what they're talking about.

|12.31.08 @ 9:25AM|#

Say, I wonder if this makes me a predatory lending denier? Uh, oh.

Elemenope|12.31.08 @ 9:26AM|#

ProL --

That's about where I'm at. Easy money encouraged both lenders and borrowers to do incredibly stupid things.

|12.31.08 @ 9:27AM|#

Joe-

I do not hate you. But, your claim of such does fit in nicely with the victim narrative.

Just trying to keep it real, Joe.

|12.31.08 @ 9:29AM|#

Elemenope-

Okay, cease fire/truce request heeded.

He started it!

Anyway, writing an article about blame-shifting in 2008 without mentioning the effort to blame the Community Reinvestment Act for lending made by companies that aren't covered by it is like...well...it's like writing a series titled "The Republican War on Science" during the Bush era without ever mentioning the squashing of climate change reports.

(Actually, Reason did that, too.)

ed|12.31.08 @ 9:30AM|#

"there was no direct evidence...that the shooting was drug-related."

But as a precaution, the parents sued Mexico.

|12.31.08 @ 9:32AM|#

Elemenope-

Speaking of the Blagojevich/Burris, did you see the press conference? That was great theatre.

|12.31.08 @ 9:34AM|#

Well, the CDA wasn't the problem, but it was part of it. However, I agree that some were bandying about the CDA as the sole cause of the current financial crisis. Meh.

|12.31.08 @ 9:35AM|#

Joe-

I agree with you on your point concerning the Community Reinvestment Act. Too many people point to that as being the reason why were are in such a mess. Particularly, too many republicans.

Elemenope|12.31.08 @ 9:38AM|#

Speaking of the Blagojevich/Burris, did you see the press conference? That was great theatre.

I missed the PC, but I found all of the comments about how they were not under any circumstances gonna seat the poor guy as pretty over-the-top.

It was like a roast, except the laugh track was provided by the at-home audience.

ed|12.31.08 @ 9:41AM|#

Bobby Rush's cameo was a hoot. He sounds like that old chicken farmer in Napoleon Dynamite.

|12.31.08 @ 9:41AM|#

Illinois is crazy good fun.

|12.31.08 @ 9:43AM|#

I feel a little bad for Burris.

All he did was do the job of Attorney General well and honestly, and now he's being looked at funny.

I think the Senate Dems might have been a little hasty.

Elemenope|12.31.08 @ 9:45AM|#

I personally love how Harry Reid is *all about* the Constitution now that it gives him power to do something politically advantageous. (I also love how the Supreme Court has already cast doubt on whether the passage means what he thinks it means.)

What a douche.

|12.31.08 @ 9:47AM|#

Illinois is crazy good fun.

You're just trying to shift attention from your state, Floridian. There's a reason your state has its own Fark tag.

How are the Gatormensch coming along, by the way?

|12.31.08 @ 9:48AM|#

Well, the CDA wasn't the problem, but it was part of it.

No, it wasn't even a part of it. The effect that the CRA had on lending was to crowd out some irresponible lending from non-banks with boring ol' bank loans. Loans made by CRA-covered banks had significantly lower default rates than loans by non-banks in the same neighborhoods. CATO actually wrote a paper a few years ago arguing for its repeal, on the grounds that the eagerness of mortgage companies to offer all sorts of novel, dynmaic loan products in these neighborhoods meant that there was no point in making the banks offer their wares there.

Which is to say, the CRA didn't contribute to the mortgage meltdown to even the slightest degree; in fact, it exerted some small amount of pressure in the opposite direction.

Just not enough to have any influence because, after all, mortgages in low-income neighborhoods are such a vanishingly small slice of the financial industry that there's no way a marginal change in practices there could have any perceivable effect on the industry or economy as a whole.

|12.31.08 @ 9:51AM|#

To blame the CRA, you would have to believe that the people who got CRA loans would have been turned away by the people who put up the fliers with little phone number tear-off slips on telephone poles next to check cashing places in the 'hood.

I find that to be somewhat implausible.

VM|12.31.08 @ 9:52AM|#

Illinois: you come for the fun. You go broke with all the taxes. You can't leave.

simple, really.

All the blame shifting kinda reminds me of Col Erhardt (Charles Durning) in the Brooks version of "To Be or Not to Be"
SCHULZ!!! Shift the blame to me? Shift shift shift.

|12.31.08 @ 9:57AM|#

Episiarch,

That was a good thread. To this day, when the Urkobold gets drunk at office parties, he asks me whether you got that cookie he asked VM to deliver to you.

In any event, the program goes well. The Urkobold sent a Gatormensch to joe on Christmas to (i) terrorize him and (ii) explain why his understanding of the CDA is inadequate. One downside to the Gatormenschen in general is that they are slow and usually are not allowed to board public transportation.

|12.31.08 @ 10:00AM|#

Oops. This is the good thread. I had forgotten about joe's fear of fauna, but, apparently, the Urkobold hadn't. He's so good at remembering vulnerabilities like that. And at detainting.

|12.31.08 @ 10:04AM|#

Then again, to be fair, mortgages in low-income neighborhoods are such a vanishingly small slice of the financial industry that there's no way a marginal change in practices there could have any perceivable effect on the industry or economy as a whole also punched a hole in the idea that predatory lending was responsible for the mortgage meltdown.

Predatory lending is a problem. Lotsa people get screwed by scumbag lenders, especially among lower income people, minorities, immigrants, and other more vulnerable groups. They lose their homes, they ruin their credit, because they get talked into something they don't really understand by some slickster.

But we're just not talking about enough loans or enough dollars to explain what happened to the financial industry.

ProL, they have trouble boarding public transport because the Urkobold's design looks like this. They should, instead, look like this.

|12.31.08 @ 10:08AM|#

Episiarch,

Ah, I think you're right. Say, you're really good at this human-alligator crossbreeding. Perhaps there is a role for you in the Urkobold's organization. Do you have a PhD in Perverse Eugenics?

|12.31.08 @ 10:11AM|#

I blame the country's financial problems on flying cockroaches.

Flying F*cking cockroaches!!! What is wrong with you people?

|12.31.08 @ 10:15AM|#

Do you have a PhD in Perverse Eugenics?

No, but I am the hereditary Marquis de Perversité. Is that adequate? I have a castle and a perverted lab already, but I mostly use it for impressing chicks.

VM|12.31.08 @ 10:17AM|#

Ding dong.

Delivery for a Mr. joe. Delivery.

Nigel Watt|12.31.08 @ 10:21AM|#

Well, I'm glad I just spent five minutes reading a thread about Gatormensch.

VM|12.31.08 @ 10:24AM|#

twas a goodie.

glad I was in an undisclosed location that day.

And SugarFree took the cookie, by the way. Naughty Sugar!

hier is an advanced prototype of Gatorfrau.

for a different angle, hier.

not to be confused with wackjob's mom, hier (we leave it to you, gentle readers to differentiate. Note: this was probably unnecessary)

|12.31.08 @ 10:24AM|#

Government Policies and the Financial Crisis
...As originally enacted in 1977, the CRA was a vague mandate for regulators to "consider" whether an insured bank was serving the needs of the whole community it was supposed to serve. The "community" itself was not defined, and the act stated only that it was intended to "encourage" banks to meet community needs. It was enforced through the denial of applications for such things as mergers and acquisitions. The act also stated that serving community needs had to be done within the context of safe and sound lending practices, language that Congress probably inserted to ensure that the law would not be seen as a form of credit allocation. Although the act was adopted to prevent "redlining"--the practice of refusing loans to otherwise qualified borrowers in low-income areas--it also contained language that included small business, agriculture, and similar groups among the interests that had to be served. With the vague compliance standard that required banks only to be "encouraged" and their performance to be "considered," the act was invoked relatively infrequently when banks applied for permission to merge or another regulatory approval, until the Clinton administration.[1]

The decisive turn in the act's enforcement occurred in 1993 and was probably induced by the substantial amount of media and political attention that had been paid to the Boston Federal Reserve Bank's 1992 study of discrimination in home mortgage lending.[2] The study concluded that while there was no overt discrimination in the allocation of mortgage funds, more subtle forms of discrimination existed in which whites received better treatment by loan officers than members of minorities. The methodology of the study has since been questioned,[3] but it seems to have been highly influential with regulators and members of the incoming Clinton administration at the time of its publication. In 1993, bank regulators initiated a major effort to reform the CRA regulations. Some of the context in which this was occurring can be gleaned from the following statement by Attorney General Janet Reno in January 1994: "[W]e will tackle lending discrimination wherever and in whatever form it appears. No loan is exempt, no bank is immune. For those who thumb their nose at us, I promise vigorous enforcement."[4]

The regulators' effort culminated in new rules adopted in May 1995 that would be phased in fully by July 1997. The new rules attempted to establish objective criteria for determining whether a bank was meeting the standards of the CRA, taking much of the discretion out of the hands of the examiners. "The emphasis on performance-based evaluation," A. K. M. Rezaul Hossain, an economist at Mount Saint Mary College, writes, "can be thought of as a shift of emphasis from procedural equity to equity in outcome. In that, it is not sufficient for lenders to prove elaborate community lending efforts directed towards borrowers in the community, but an evenhanded distribution of loans across LMI [low and moderate income] and non-LMI areas and borrowers."[5] In other words, it was now necessary for banks to show that they had actually made the requisite loans, not just that they were trying to find qualified borrowers. In this connection, one of the standards in the new regulations required the use of "innovative or flexible" lending practices to address credit needs of LMI borrowers and neighborhoods.[6] Thus, a law that was originally intended to encourage banks to use safe and sound practices in lending now required them to be innovative and flexible--a clear requirement for the relaxation of lending standards.

There is very little data available on the performance of loans made under the CRA. The subject has become so politicized in light of the housing meltdown and its effect on the general economy that most reports--favorable or unfavorable--should probably be discounted. Before the increases in housing prices that began in 2001, reviews of the CRA were generally unfavorable. The act increased costs for banks, and there was an inverse relationship between their CRA lending and their regulatory ratings.[7] One of the few studies of CRA lending in comparison to normal lending was done by the Federal Reserve Bank of Cleveland, which reported in 2000 that "respondents who did report differences [between regular and CRA housing loans] most often said they had lower prices or higher costs or credit losses for CRA-related home purchase and refinance loans than for others."[8] Much CRA lending after 2000 occurred during a period of enormous growth in housing values, which tended to suppress the number of defaults and reduce loss rates.

The important question, however, is not the default rates on the mortgages made under the CRA. Whatever those rates might be, they were not sufficient to cause a worldwide financial crisis. The most important fact associated with the CRA is the effort to reduce underwriting standards so that more low-income people could purchase homes. Once these standards were relaxed--particularly allowing loan-to-value ratios higher than the 80 percent that had previously been the norm--they spread rapidly to the prime market and to subprime markets where loans were made by lenders other than insured banks. The effort to reduce mortgage underwriting standards was led by the Department of Housing and Urban Development (HUD) through the National Homeownership Strategy published in 1994 in response to a request by President Clinton. Among other things, it called for "financing strategies, fueled by the creativity and resources of the private and public sectors to help homeowners that lack cash to buy a home or to make the payments."[9] Many subsequent studies have documented the rise in loan-to-value ratios and other indicators of loosened lending standards.[10]...

...The problem is summed up succinctly by Stan Liebowitz of the University of Texas at Dallas: "From the current handwringing, you'd think that the banks came up with the idea of looser underwriting standards on their own, with regulators just asleep on the job. In fact, it was the regulators who relaxed these standards--at the behest of community groups and 'progressive' political forces. . . . For years, rising house prices hid the default problems since quick refinances were possible. But now that house prices have stopped rising, we can clearly see the damage done by relaxed loan standards."[14] The point here is not that low-income borrowers received mortgage loans that they could not afford; that is probably true to some extent but cannot account for the large number of subprime and Alt-A loans that currently pollute the banking system. It was the spreading of these looser underwriting standards to the prime loan market that encouraged the huge increase in credit availability for mortgages, the speculation in housing, and ultimately the bubble in housing prices. ...

Nigel Watt|12.31.08 @ 10:26AM|#

WALL OF TEXT

|12.31.08 @ 10:26AM|#

Nigel,

Yes, it's amazing all the useful things you learn hereabouts.

Episiarch,

Oh, sure. The Urkobold usually waives degree requirements for applicants with castles and laboratories that look like they were last updated in 1870.

joe,

Now I know why you fear global warming.

VM,

Candygram.

VM|12.31.08 @ 10:29AM|#

LANDSHARK!!

|12.31.08 @ 10:31AM|#

Stan Leibowitz article mentioned above available here

lurker, bold|12.31.08 @ 10:33AM|#

articles are supposed to be red here? rough board. just noticed after months of reading.

|12.31.08 @ 10:36AM|#

VM,

Exactly.

Is Gatormenschen right for a new species of half-human, half-alligator? As I recall, Menschen means human being.

VM|12.31.08 @ 10:36AM|#

hell yeah - we buy the magazine for the articles.

and the letters.

definitely the letters.

lurker, bold|12.31.08 @ 10:38AM|#

articles are supposed to be red here? rough board. just noticed after months of ~~reading~~ reding.

fixd

VM|12.31.08 @ 10:39AM|#

d'oh (sorry for double)

yup in the plural

|12.31.08 @ 10:40AM|#

IBD: The Subprime Lending Bias
...By 2000, fully half of the mortgage giants' portfolios consisted of these risky loans, most of them subprime mortgages. In effect, the Clinton HUD set a time bomb that would explode years later with the collapse of home prices, which happened to occur on Bush's watch.

At the same time, HUD pressured the federally subsidized giants to lower their loan-to-value ratios and other underwriting requirements to accommodate minority borrowers. HUD Secretary Andrew Cuomo even admitted that the administration was mandating a policy of "affirmative action" lending (his words, not ours).

And it was Clinton who initially spread the subprime rot to Wall Street. To help Fannie and Freddie reach their "affirmative action" lending quotas, HUD in 1995 let them get affordable-housing credit for buying subprime securities that included loans to low-income borrowers....

VM|12.31.08 @ 10:42AM|#

*thanks 1/2 a bee for the filter*

ooh! let's blame the clintons. nay - ALL DEMOCRATS for this! that's the ticket.

lurker, bold|12.31.08 @ 10:44AM|#

should not the new year be announced as the earth rotates into jan 1 time zone by time zone?

|12.31.08 @ 10:44AM|#

ProL, I will admit to doing some other, questionable things in my lab.

Cato: What Really Happened?
...Second, Congress strengthened the Community Reinvestment Act. The CRA had initially, from its passage in 1977, merely imposed reporting requirements on commercial banks. Amendments in 1995 empowered regulators to deny a bank with a low CRA rating permission to merge with another bank-at a time when the arrival of interstate banking made such approvals especially valuable-or even to open new branches. In response to the new CRA rules, some banks joined into partnerships with community groups to distribute millions in mortgage money to low-income borrowers previously considered non-creditworthy. Other banks took advantage of the newly authorized option to boost their CRA rating by purchasing special "CRA mortgage-backed securities," that is, packages of disproportionately nonprime loans certified as meeting CRA criteria and securitized by Freddie Mac. Federal Reserve Chairman Ben Bernanke aptly commented in a 2007 speech that "recent problems in mortgage markets illustrate that an underlying assumption of the CRA-that more lending equals better outcomes for local communities may not always hold."[8]

Third, the Department of Housing and Urban Development pressured lenders for "affordable housing" loans. Beginning in 1993, HUD officials began bringing legal actions against mortgage bankers that declined a higher percentage of minority applicants than white ones. To avoid legal trouble, lenders began relaxing their down-payment and income qualifications.[9]

Fourth and likely most important, implicit taxpayer guarantees allowed the dramatic expansion of the government-sponsored mortgage buyers Fannie Mae and Freddie Mac, at a time when Congress and HUD were pushing Fannie and Freddie to promote "affordable housing" through ever-expanding purchases of non-prime loans to low-income applicants. ...

Elemenope|12.31.08 @ 10:45AM|#

As I recall, Menschen means human being.

Technically, it's all pluralized, so it means MEN (p.c. : Human beings). A "Mensch" is a man.

|12.31.08 @ 10:45AM|#

VM | December 31, 2008, 10:17am | #

Ding dong.

Delivery for a Mr. joe. Delivery.

Oh, boy, a candy-gram! I always wanted one of AAARRRRGGGGHHH!

|12.31.08 @ 10:47AM|#

VM,

So a single alligator-human would be a Gatormensch, correct? Does that apply to one of either sex?

As for the financial crisis and the government's huge contribution to it, I tend to blame the Democrats more, but the GOP sat by and did nothing to mitigate the problem in the years running up to the present. Cowards!

Episiarch,

You made movies in your lab? What are you, some kind of artificial construct of the Tyrell Corporation?

|12.31.08 @ 10:48AM|#

Technically, it's all pluralized, so it means MEN (p.c. : Human beings). A "Mensch" is a man.

Also, not to be confused with its Yiddish meaning, which is basically the equivalent of "stand-up guy".

VM|12.31.08 @ 10:50AM|#

correct.

*rubs hands together in over-the-top evil glee*

And Epi has dedicated lab assistants working on various projects.

|12.31.08 @ 10:51AM|#

Alles heil der deutsche Thread!

WSJ: Fannie Mae's Patron Saint
...Two years later, Mr. Frank was at it again. "I do not regard Fannie Mae and Freddie Mac as problems," he said in response to another reform push. And then: "I regard them as great assets." Great or not, we'll give Mr. Frank this: Their assets are now Uncle Sam's assets, even if those come along with $5.4 trillion in debt and other liabilities.

Again in June 2003, the favorite of the Beltway press corps assured the public that "there is no federal guarantee" of Fan and Fred obligations....

...In April 2004, Fannie announced a multibillion-dollar financial "misstatement" of its own. Mr. Frank was back for the defense. Fannie and Freddie posed no risk to taxpayers, he said, adding that "I think Wall Street will get over it" if the two collapsed. Yes, they're certainly "over it" on the Street now that Uncle Sam is guaranteeing their Fannie paper, and even Fannie's subordinated debt.

By early 2007, Mr. Frank was in charge of the House Financial Services Committee, arguing that he had long favored some kind of reform. "What blocked it [reform] last year," Mr. Frank said then, "was the insistence of some economic conservative fundamentalists in the Bush Administration who, to be honest, don't think there should be a Fannie Mae or a Freddie Mac." What really blocked it was Mr. Frank's insistence that any reform be watered down and not include any reduction in their MBS holdings.

In January of last year, Mr. Frank also noted one reason he liked Fannie and Freddie so much: They were subject to his political direction. Contrasting Fan and Fred with private-sector mortgage financers, he noted, "I can ask Fannie Mae and Freddie Mac to show forbearance" in a housing crisis. That is to say, because Fannie and Freddie are political creatures, Mr. Frank believed they would do his bidding.

And this is exactly what Mr. Frank attempted to prove when the housing market started to go south. He encouraged the companies to guarantee more "affordable" mortgages, thus abetting their disastrous plunge into subprime and Alt-A loans. He also pushed for, and got, an increase in the conforming-loan limits to allow Fan and Fred to securitize and guarantee larger mortgages. And he pressured regulators to ease up on their capital requirements -- which now means taxpayers will have to make up that capital shortfall.

But the biggest payoff for Mr. Frank is the "affordable housing" trust fund he managed to push through as one political price for the recent Fannie reform bill. This fund siphons off a portion of Fannie and Freddie profits -- as much as $500 million a year each -- to a fund that politicians can then disburse to their favorite special interests....

|12.31.08 @ 10:52AM|#

jsh,

The point here is not that low-income borrowers received mortgage loans that they could not afford; that is probably true to some extent but cannot account for the large number of subprime and Alt-A loans that currently pollute the banking system. It was the spreading of these looser underwriting standards to the prime loan market that encouraged the huge increase in credit availability for mortgages, the speculation in housing, and ultimately the bubble in housing prices. ...

There is nothing in the CRA that requires, encourages, or speaks at all to the lending standards of loans outside of the CRA-covered neighborhoods. The banks didn't adopt looser standards for those loans for any reason having to do with the CRA, but because they thought it was more profitable to do so.

And in fact, the lending standards of non-banks not covered by the CRA were much looser than those of banks making loans in low-mod neighborhoods, which is why their default rates were so much lower.

http://www.traigerlaw.com/publications/addendum_to_traiger_hinckley_llp_cra_foreclosure_study_1-14-08.pdf

It's difficult to argue that CRA lending standards spreading through the industry were the cause, when the CRA lending standards were much tighter than those throughout the rest of the industry.

|12.31.08 @ 10:53AM|#

Good point, VM. Did you celebrate this past Lab Whore Day, Episiarch? Not to be confused with Mammorial Day in May.

Nigel Watt|12.31.08 @ 10:53AM|#

I'm not sure what kind of person looks at gator-human chimeras and regulatory bungles and decides he'd rather talk about regulatory bungles, but jsh is that kind of man.

|12.31.08 @ 10:55AM|#

You made movies in your lab? What are you, some kind of artificial construct of the Tyrell Corporation?

No, no. Stuff like this. Wink, wink.

AEI. Wall Street Journal editorial page.

Hokay.

Elemenope|12.31.08 @ 10:56AM|#

Also, not to be confused with its Yiddish meaning, which is basically the equivalent of "stand-up guy".

The benefit of having an itinerant people settle in your area is that they make your language better.

|12.31.08 @ 10:56AM|#

Also, not to be confused with its Yiddish meaning, which is basically the equivalent of "stand-up guy".

So THAT'S how he reached the door bell.

VM|12.31.08 @ 10:58AM|#

Nigel - doesn't one take tamsulosin or dutasteride to regulate one's bungle?

And Epi's assistants tend to get wrapped up in their work...

joe - the shark with laser beam on its head taught the 'gator that move. ("Go 'way. 'gatin.")

|12.31.08 @ 10:59AM|#

AEI. Wall Street Journal editorial page.

"These sites disagree with me, and so can be rejected on that basis. Since you only get articles that disagree with me from sites that disagree with me, I win."
-- Joe

|12.31.08 @ 11:00AM|#

All our genetic creations have names with meanings within meanings within meanings.

|12.31.08 @ 11:01AM|#

Masturgating is a crime in some states, VM.

VM|12.31.08 @ 11:02AM|#

and we keep the meanings safe in the womby vaultage.

Kept safe by the librarian.

as long as you realize that masturgating is natural, and, barring any equipment malfunction, the risk of going blind is relatively low.

|12.31.08 @ 11:02AM|#

And Epi has dedicated lab assistants working on various projects.

Guilty as charged. Perversion FTW.

The benefit of having an itinerant people settle in your area is that they make your language better.

Are you talking about learning hobo signs?

"Oh, my God! How do hobos fit all their stuff into a bandanna? It doesn't make sense, man! We're gonna need, like, a towel or a tablecloth or something! But...it's not gonna look cool! We're gonna look like assholes!"

|12.31.08 @ 11:04AM|#

VM,

That sure looks like Sarah Palin, who could've been a lab whore but chose instead the seediness of politics.

lurker, bold|12.31.08 @ 11:06AM|#

i sense a spanking scene between joe and jsh is in our future. should happen before Hanoi rings in the new year.

VM|12.31.08 @ 11:07AM|#

clearly we need an updrade then...

(Upgrayydd is her, um, "manager")

|12.31.08 @ 11:07AM|#

"Lab whore" is such a derogatory term, ProL. "Cum receptacle" is much more polite and clinical.

|12.31.08 @ 11:08AM|#

i sense a spanking scene between joe and jsh is in our future

Joe has already been spanked.

|12.31.08 @ 11:12AM|#

VM,

No kidding, that looks like it was shot at my law school. Wow, things have improved there. I'm not sure we had women when I attended.

Elemenope|12.31.08 @ 11:17AM|#

Joe has already been spanked.

You citing CATO as evidence for the libertarian side of the argument is much like citing the New Testament as evidence for Christianity's validity.

So maybe it was a sexy spanking, but it was all show.

|12.31.08 @ 11:17AM|#

"These sites disagree with me, and so can be rejected on that basis. Since you only get articles that disagree with me from sites that disagree with me, I win."
-- Joe

Actually, I not only laid out argument for why those pieces were both logically and factually incorrect, but provided links to the data that refuted them.

You must have missed that part.

|12.31.08 @ 11:23AM|#

You citing CATO as evidence for the libertarian side of the argument

You, of course, only link to "objective" sites, and you know they're objective because they say something politically useful to you.

Face it, left wing vermin pushed for bad loan after bad loan, then blamed the bad loans on everyone but themselves.

|12.31.08 @ 11:24AM|#

See, jsh, look at this statement:

There is very little data available on the performance of loans made under the CRA. The subject has become so politicized in light of the housing meltdown and its effect on the general economy that most reports--favorable or unfavorable--should probably be discounted.

As a matter of fact, information on the performance of loans by deposit institutions in CRA-covered neighborhoods is widely available, such as that provided in the study I linked to - yet it is necessary to pretend that it is not in order for the AEI to make its point.

A point which, once again, is based on the idea that the lending standards encouraged by the CRA explain the mortgage defaults that set off the financial crisis.

This is the type of shoddy analysis necessary to get to the conclusion you want.

VM|12.31.08 @ 11:26AM|#

it's not about the analysis for him, obviously, it's about "the win".

maybe when he hits ninth grade, he'll get interested in girls or something...

|12.31.08 @ 11:26AM|#

You, of course, only link to "objective" sites, and you know they're objective because they say something politically useful to you.

I link to sites that use objective data, and demonstrate that the data refutes your case.

You link to sites that assert that the data isn't available, but tell us to assume it would support their conclusions anyway.

|12.31.08 @ 11:27AM|#

Episiarch,

Blame Congress. They came up with Labor Day, which etymologically inspired "Lab Whore Day".

|12.31.08 @ 11:28AM|#

Daddy, how comes there's a Labor Day, but no Capital Day?

Oh, son, every day is Capital Day.

VM|12.31.08 @ 11:29AM|#

"You link to sites that assert that the data isn't available, but tell us to assume it would support their conclusions anyway."

ah! the "austrian analysis" method.

|12.31.08 @ 11:34AM|#

As a matter of fact, information on the performance of loans by deposit institutions in CRA-covered neighborhoods is widely available, such as that provided in the study I linked to

A. A claim that studies conflict isn't refuted by pointing to one study that doesn't conflict with your views.

B. Rising prices hid the default problem (you don't default if you can sell for a profit).

C. We all know that as soon as it becomes politically useful, you will switch from "they aren't defaulting more so we deserve political power" to "they are being disproportionally hit by defaults so we need more political power to give them your money to help them".

Elemenope|12.31.08 @ 11:36AM|#

You, of course, only link to "objective" sites, and you know they're objective because they say something politically useful to you.

I rarely link to any site at all, except Wikipedia. First, because I'm lazy, but second, because political arguments are not won or lost by people tossing citations at each other, at least not in this format.

Really it's more the first reason.

Also, and just a point of etiquette, it's better to link to ye olde WALL OF TEXT, than to post the entire abomination.

|12.31.08 @ 11:52AM|#

ah! the "austrian analysis" method.

Oof.

A claim that studies conflict... is different from a claim that the data on CRA loan performance isn't available. In fact, CRA loan performance data is available, and it definitively refutes the claim that loans made under the CRA were particularly irresponsible. In fact, we know, from the data on loan performance, which once agains is widely available, that loans by lending institutions significantly outperformed loans from non-banks in CRA-covered neighborhoods.

Rising prices hid the default problem (you don't default if you can sell for a profit). Yes, they did. For a time, rising prices made it look like the non-banks were performing about as well as the banks. Since the bubble burst, however, the vast disparity in performance has become clear.

We all know... You "know" a lot of things. For example, you "know" that data on the performance of loans in low-mod neighborhoods isn't available. Except it is.

... you will switch from "they aren't defaulting more so we deserve political power" to "they are being disproportionally hit by defaults so we need more political power to give them your money to help them". Your policy preferences, your observation about the convenience of the objective data for your policy preferences, and your assumptions about what I would and would not argue have jack shit to do with the performance of loans made under the Community Reinvestment Act. And jack just sold his house for ten grand less than he paid, and is now renting a 2 bedroom above a laundromat.

|12.31.08 @ 11:54AM|#

Flying F*cking cockroaches!!! What is wrong with you people?

It's a lot easier to spray once a month than it is to shovel melonfarming snow.

It's a cold winter day here in Altamonte Springs. Forecast high 74F.

Gonna get real cold tonight though. All the way down to 50.

VM|12.31.08 @ 11:56AM|#

SORRY ISAAC. CANNOT HEAR YOU. WHAT WAS THAT???

|12.31.08 @ 11:56AM|#

Fire ants: one? Painful.

Fifty will knock a man down.

A hundred? Certain death.

I don't bother arguing much about politically charged but vague laws/programs. For example, the problem with CRA is that it means what you want it to mean, because it is so much more--and less--than what the blackletter law says it is. To put it in a nutshell, the CRA and some of the anti-discrimination laws (like ECOA) were used beyond their stated purposes to bludgeon and threaten banks (and, indirectly in the case of CRA, nonbank lenders) into "preferred" behaviors. This whole business of usury being a sin and homeownership being a fundamental right has got to go.

Anyway, I'm not interested in the CRA debate. This is the Lab Whore/Gatormenschen/joe's fear of swamp-based critters thread.

Isaac,

Tampa's battening down the hatches, as well. Fifty--mein Gott!

lurker, bold|12.31.08 @ 12:01PM|#

CRA allows empowerment of the underclass and is feard because of its progressive nature.

VM|12.31.08 @ 12:03PM|#

such as Swamp Woman, one of the scientists working on the Gatormensch project, something to distract everybody, and Georges St Pierre.

|12.31.08 @ 12:04PM|#

Libertymike@9:29am,

I owe you an apology. I slandered you in my mind. When you said, "Okay, cease fire/truce request heeded," I was certain you'd be lobbing rockets again by the time I caught up in the thread. I was wrong. I'll go sit in the corner.

VM|12.31.08 @ 12:06PM|#

that's okay maurkov. Helga will take care of you.

|12.31.08 @ 12:07PM|#

Tampa's battening down the hatches, as well. Fifty--mein Gott!

It's snowing here right now, you pansy bitches.

VM|12.31.08 @ 12:09PM|#

where are you Epi?

|12.31.08 @ 12:12PM|#

Connecticut.

Elemenope|12.31.08 @ 12:19PM|#

It's snowing here right now, you pansy bitches.

Hey fuck you man. We have white-out conditions right this minute on the roads, and about four inches of that powdery, crunchy ice-snow shit blowing around at 40 mph.

Pansy bitches my ass. This is *New England*. We are hardened by Mother Nature's bitchy temper itself.

VM|12.31.08 @ 12:20PM|#

explain that to someone in Syracuse, Rochester, watertown, Utica, Buffalo...

:)

WEATHER WAR!!!!!!!

lurker, bold|12.31.08 @ 12:22PM|#

if we had only listened to al gore you guys would not be freezing to death in the north.

VM|12.31.08 @ 12:23PM|#

2.5/10, EDWEIRDO. 2.5.

All we need to do is remember Algore in his short shorts. That'll get it hot (or look at the distracting pic above)

Nigel Watt|12.31.08 @ 12:23PM|#

I'm in Houston right now, where it's partly cloudy and 61, but I go to Cornell, where it's 14 (wind chill to -10) and snowing.

VM|12.31.08 @ 12:26PM|#

you in a house at cornell?
(I went to Hamilton, just up the road)

|12.31.08 @ 12:26PM|#

Episiarch,

New England is for wusses. Back in the 90s, I went from Tampa to Minneapolis. I experienced two Minnesota Winters™, then decided to go to law school in warm and sunny Chicago. I survived and returned to Florida on my own terms, becoming one with the various critters and the heat.

|12.31.08 @ 12:27PM|#

This year, I was unable to finish raking the leaves, because they froze to the yard. Then the torrential rains thawed them out, but then that froze. Then they were covered in a foot and a half of snow in a 2 day period. Then that melted into our basements.

This was before the recent freezing rain cut the power. I'm trying to keep it all straight.

So, to sum up, I'm glad the weather has cleared. And by "cleared," I mean "settled down to a normal six inch snow storm."

|12.31.08 @ 12:28PM|#

Nigel,

I considered a life in Ithaca when I was applying for law school. It would've been a dramatically different experience than living in a big city, that's for sure.

VM|12.31.08 @ 12:29PM|#

finishing up joe's comments:

"that one burned down, fell over, then sank into the swamp..."

[ducks]

Minneapolis can get a bit chilly, indeed. At least with Chicago, you know that the lake looks lovely today. :)

Ska|12.31.08 @ 12:33PM|#

if we had only listened to al gore you guys would not be freezing to death in the north.

But then we wouldn't have gotten to see Cartman shit fake gold and precious gems.

|12.31.08 @ 12:34PM|#

"there was no direct evidence...that the shooting was drug-related."

Can we say with any confidence that the idiot who proposed this law was not on drugs? We need to start drug-testing legislators.

Elemenope|12.31.08 @ 12:35PM|#

explain that to someone in Syracuse, Rochester, watertown, Utica, Buffalo...

In those places you know what's coming, whereas in New England weather comes from the mystery box. Two fucking days ago, the meteorologists were predicting a "dusting" for Southern New England.

We all know what "Meteorologist" means in English.

|12.31.08 @ 12:38PM|#

Pansy bitches my ass. This is *New England*. We are hardened by Mother Nature's bitchy temper itself.

I was talking to the ~~subhumans~~ non-New Englanders, dude.

But then we wouldn't have gotten to see Cartman shit fake gold and precious gems.

Or become the Time Child and give us a fantastic parody of the opening of Buck Rogers in the 25th Century.

|12.31.08 @ 12:39PM|#

A friend of mine is a TV meteorologist.

She tells me that all of the meteorologists want to work in New England, because the weather is so much more interesting than everywhere else.

What is it that the Chinese say about interesting times?

|12.31.08 @ 12:48PM|#

Episiarch,

Puh-lease. As was discussed in the Gatormenschen thread, Florida is like Salusa Secundus or Arrakis--a harsh environment where we're breeding a deadly successor race to Homo sapiens sapiens. As evidence, note my lack of fear of the various Northeastern "threats" and joe's terror of flying cockroaches. Though for him, fear is the correct response. Florida's veneer of nonbreeding, wealthy, insanely inept, old transplants will lull you into a sense of safety, until Homo sapiens floridensis along with its brethren, the Gatormenschen, crush you like, well, flying cockroaches.

Nigel Watt|12.31.08 @ 12:53PM|#

Pro L, if Florida is Salusa Secundus, why do so many stories of idiocy come from there?

|12.31.08 @ 12:55PM|#

Nigel,

They are the weak, upon whom Homo sapiens floridensis preys. Besides, if you pay attention to those stories, they almost always involve non-natives. Hmmmm.

|12.31.08 @ 12:58PM|#

Is this an example of a company providing "affordable housing" and doing so much better than everyone else?

The Real Problem With Fannie and Freddie
...For decades Countrywide Financial was a largely unsuccessful firm that was only re-listed on the New York Stock Exchange in 1985. But between 1985 and 2003 Countrywide delivered investors a 23,000% return, exceeding the returns of Washington Mutual, Wal-Mart, and Warren Buffett's Berkshire Hathaway. How did they do it? This 2000 report by the Fannie Mae Foundation provides a clue:

Countrywide tends to follow the most flexible underwriting criteria permitted under GSE and FHA guidelines. Because Fannie Mae and Freddie Mac tend to give their best lenders access to the most flexible underwriting criteria, Countrywide benefits from its status as one of the largest originators of mortgage loans and one of the largest participants in the GSE programs. …

When necessary-in cases where applicants have no established credit history, for example-Countrywide uses nontraditional credit, a practice now accepted by the GSEs....

|12.31.08 @ 1:08PM|#

Joe, you posted 2006 numbers. This is almost 2009. One of the YMMV points about current foreclosure rates (you know, once prices started taking a hit and you couldn't just sell) is that numbers are still coming in.

Elemenope|12.31.08 @ 1:12PM|#

What is it that the Chinese say about interesting times?

That during interesting times it is legal and in fact encouraged to find a meteorologist and cut out his or her tongue?

I was talking to the ~~subhumans~~ non-New Englanders, dude.

Qualify, goddamnit! Qualify!

|12.31.08 @ 1:31PM|#

Is this an example of a company providing "affordable housing" and doing so much better than everyone else?

No, that is an example of a company that is not covered by the Community Reinvestment Act, and the provision of affordable housing appears nowhere in the story you quoted.

Joe, you posted 2006 numbers. This is almost 2009. One of the YMMV points about current foreclosure rates (you know, once prices started taking a hit and you couldn't just sell) is that numbers are still coming in.

And since 2006, the problem of defaulting mortgages has steadily crept up from the subprime market into higher-rated Alt-A and Prime loans.

But that's really irrelevant. Your argument was that lending standards under the CRA were particularly weak, and spread throughout the mortgage industry. The fact that apples-to-apples default rates in 2006 were better for CRA loans than non-CRA loans in the same neighborhoods disproves this theory. If CRA lending standards were particularly loose, the CRA loans would have a higher default rate in all time periods. In fact, the opposite was true, demonstrating that the loose lending standards throughout the mortgage industry were considerably worse than those of the banks.

|12.31.08 @ 1:47PM|#

In fact, jsh, read the story you linked to, and there is precisely one criterion listed for what made Countrywide a favorite of Freddie and Fannie - their overall volume of loans.

That is to say, the same thing that made them a favorite of Wall Street as a whole.

Anyway, here's the Cato Institute arguing that the CRA does nothing to increase access to credit in low-mod neighborhoods, and the entirety of the increase in lending there was the result of non-CRA-covered lenders.

http://www.cato.org/pubs/regulation/regv23n3/gunther.pdf

|12.31.08 @ 2:05PM|#

The fact that apples-to-apples default rates in 2006

2006. Like I said, the numbers are still coming in.

Anyway, here's the Cato Institute arguing that the CRA does nothing to increase access to credit in low-mod neighborhoods

Ah, your govt program was too useless to have cause any problems. OK, if that's the defense you want to make.

|12.31.08 @ 2:06PM|#

And if the 2007-2008 numbers don't show what you want, you will use that as an excuse for more govt spending anyway ("we neeeeeed more of your money to help those being disproportionally hurt by foreclosures").

A lot of the dispute about the GSEs' role comes down the question of whether they were leading the parade, or following it. Their relationship with Countrywide is a good example

Shortly after he became chief executive (of Fannie Mae), Mr. Mudd traveled to the California offices of Angelo R. Mozilo, the head of Countrywide Financial, then the nation's largest mortgage lender. Fannie had a longstanding and lucrative relationship with Countrywide, which sold more loans to Fannie than anyone else.

But at that meeting, Mr. Mozilo, a butcher's son who had almost single-handedly built Countrywide into a financial powerhouse, threatened to upend their partnership unless Fannie started buying Countrywide's riskier loans.

Mr. Mozilo, who did not return telephone calls seeking comment, told Mr. Mudd that Countrywide had other options. For example, Wall Street had recently jumped into the market for risky mortgages. Firms like Bear Stearns, Lehman Brothers and Goldman Sachs had started bundling home loans and selling them to investors - bypassing Fannie and dealing with Countrywide directly.

"You're becoming irrelevant," Mr. Mozilo told Mr. Mudd, according to two people with knowledge of the meeting who requested anonymity because the talks were confidential. In the previous year, Fannie had already lost 56 percent of its loan-reselling business to Wall Street and other competitors.

"You need us more than we need you," Mr. Mozilo said, "and if you don't take these loans, you'll find you can lose much more."

Then Mr. Mozilo offered everyone a breath mint.

Investors were also pressuring Mr. Mudd to take greater risks.

On one occasion, a hedge fund manager telephoned a senior Fannie executive to complain that the company was not taking enough gambles in chasing profits.

"Are you stupid or blind?" the investor roared, according to someone who heard the call, but requested anonymity. "Your job is to make me money!"

http://www.nytimes.com/2008/10/05/business/05fannie.htm?pagewanted=2&_r=1

|12.31.08 @ 2:15PM|#

Like I said, the numbers are still coming in.

So what? If the CRA was causing banks to lend with worse standards than the industry standard, they would have higher default rates across the board. They would have had higher default rates in times of rising prices, they would have had higher default rates during times of falling prices.

Ah, your govt program was too useless to have cause any problems. OK, if that's the defense you want to make. OK, now move the goal post a little to the left. A little back. OK, now a little to the right. Now more. A little more. Now back more.

Anyway, I didn't claim that the Cato paper was correct, just that the flood of non-CRA lenders into low-mod neighborhoods is such an indisputable point that even those now seeking to denounce the CRA noticed it.

And since you seem to have forgotten, my defense of the CRA is based on the still unchallenged, thoroughly proven, objectively true FACT that loans made by banks under the CRA have lower default rates than those not made under the CRA, thus disproving the assertion that the CRA injected risk into the system. As the much higher levels of mortgage default in CRA neighborhoods by non-banks demonstrates, the CRA served to lower risky lending, not increase it.

And if the 2007-2008 numbers don't show what you want, you will use that as an excuse for more govt spending anyway Thank you for tipping your hand, and demonstrating that you are making these counterfactual, illogical arguments because you find the truth to be inconvenient to your political agenda. Congratulations, you finally drew a valid conclusion; it is.

VM|12.31.08 @ 2:22PM|#

"because you find the truth to be inconvenient to your political agenda"

yeah... yeah... yeah... well. it's 15 degrees hier. sure doesn't seem warmer to me.

DEMAND KURV!!!!!!

|12.31.08 @ 2:27PM|#

At least the Austrians and their loose-money theory can account for the fact that most of the dumb lending was going to middle- and upper-middle class suburban homewoners, and that the mortgage derivative market grew up in response to a demand for places to put money from Wall Street; ie, that this was a problem of the mainstream financial and housing markets.

Over half of subprime loans in the 00s were cash-out refinances. Add to that the fact that mortgages for investment properties are also categorized as subprime, and the "poor people done it!" argument looks like exactly what it is: blame shifting.

MUTT DAMON|12.31.08 @ 2:30PM|#

NOBODY ELSE. I MEAN NOBODY PREDICTED THIS. IT'S JUST THAT THE SHADOWY ELITE ECONOMICS CANON KEEPS THEM OUT. KEYNES! MONETARISM! EKON 101 EKON 101 EKON 101! STARVE THE BEAST! GAAAAAAA!!!!!

PAUL EHERLICH BE DAMMED. ONLY MISES DOOMSAYERS KNEW. IT'S THE ONLY NON POLITICAL EKONOMIKS OUT THERE.

APES DON'T READ PHILOSOPHY!

|12.31.08 @ 2:36PM|#

How does joe do it?

- He's more of a History Expert than actual History grad students

- He's more of a city planning expert than people who analyze city planning initiatives for a living

- He's more of a mortgage market expert than anyone who actually works in home loan banking

- He's more of a political expert than actual professional politicians and actual political "scientists"

- He's more of a foreign policy expert than actual State Department foreign policy experts

- He's more of a Military Affairs expert than actual Military Affairs analysts and full-time Military beat journalist

- He's more of an expert on journalism and media bias than actual professional journalists and media analysts

- And apparently he's more like that creepy girl who was thrown down the well in "The Ring" than the actress who played her, because clearly HE NEVER SLEEPS!

I hope to God someone is paying him for his time and expertise, that he isn't simply spending his whole life throwing pearls of wisdom before the dumb and ungrateful libertarian swine on this site.

(Sometimes, once in a while, he's even right...)

|12.31.08 @ 2:40PM|#

Heh. You remind me of the teachers that used to hate me, rob.

"Well, you've just got an answer for everything, don't you?"

Wanna know my secret? Lean in. Closer. Closer.

I don't know more than the experts in those fields (except city planning). I just read and listen to the experts in those fields, and don't go skylarking into implausible theories that most of them disagree with in order to believe what I want to believe.

MUTT DAMON|12.31.08 @ 2:46PM|#

WHY WOULD ANYBODY WANT TO LISTEN TO EXPERTS???

CLEARLY ADVANCED MACRO (pdf) IS BIASED AND POLITICAL. POLITICAL AGENDA.

(pdf) THIS IS ALSO BIASED. THEY'RE SHUTTING ME OUT.

BLA BLA BLA. I'M NOT LISTENING

|12.31.08 @ 3:14PM|#

Note to self: don't bring up the A-word.

|12.31.08 @ 3:34PM|#

Dude, really, you're WAY too close to me.

Besides you don't want me to snort my drink out through my nose at you for saysing things talking about how you "don't go skylarking into implausible theories ... in order to believe what I want to believe."

Seriously, I'm amazed that even at my highest levels of output, back when I posted regularly on this site, I never came close to the prolificacy of your average month's output here.

Add to that output the fact that you weigh in with something that sounds a lot like expertise - if expertise came from a blue bottle with the DNC mascot's endorsement on it, granted...

Nevertheless, you sound off with an air of expertise on everything from Brutalist architecture to the legal intricacies of divorce law and the Geneva Conventions to the role that Israel should assign to airpower in the "Middle East Peace process" when attempting to force Hamas to stop shelling the Israeli citizenry.

The breadth of your expertise is breath-taking, sir. I, unlike your former teachers, don't hate you. In fact, I'm hopeful - for the sake of your family finances - that someone is paying you for your hyper-dedicated typing.

|12.31.08 @ 3:45PM|#

Maurkov-12:04

Thank you. Truth is, I'm more of a lover than a fighter.

|12.31.08 @ 3:48PM|#

Why is any of that worth writing, rob?

What are you, Bob Costas? Or the guy spying on the lizard in the Geico ads?

|12.31.08 @ 4:01PM|#

Joe, you didn't even give 2006 default rates in the traigerlaw thing you posted.

|12.31.08 @ 4:09PM|#

Hey Joe, the very article you reference (the main Tigerlaw article) has this little tidbit.

The foreclosure crisis particularly impacts LMI borrowers:
[Lower-income borrowers] are increasingly devoting more than half of their
income to housing costs. . . It is easy to imagine that for low-income households
living at the margins of their budgets, even small increases in monthly housing
costs can have a significant effect on their ability to cover living expenses and
keep up with their monthly payments. If one considers the potential for other
payment shocks, such as unforeseen medical expenses, the risks of default and
foreclosure are even greater.

Serving the credit needs of LMI borrowers is arguably the most important facet of a CRA
performance examination, which evaluates a bank according to the number and amount of LMI
loans originated or purchased in its assessment area.

|12.31.08 @ 5:09PM|#

joe - All I can say is that, like the guy in the Geico ads, I find your HNR habits and thought processes strangely fascinating.

Like the Phil Hartmann character that the other guy in the Geico commercials is based on, I find your HNR habits "frighten and confuse" me. Well, not really frighten and confuse.. more like "stupefy and irritate."

What need does all of that effort on this web-site fill, if not financial? I just don't get it, and curiosity drives me to ask:

"Why does he do it? Why here where he'll generally find that his beliefs are anathema to the majority of people who will read his posts? Why does he post so often? Why does he post so much material on so many widespread topics?"

I suspect that in the end, persistently insisting "I must know" is likely to end with "get used to disappointment."

Then I go back to work, or back to the real world (and never the twain shall meet, hopefully!) because that's what finances me and my family.

While all of the HNR regulars have more stick-to-it than I do, you really have all of them beat.

Happy New Year to all you HNR regulars. Cheers!

nobody u no and a big fan of j|12.31.08 @ 9:17PM|#

like some wise person said after joe did, cra makes the oppressed equal to the oppressors. forgive the loans and then go on to forgiving developing world debt.

|1.2.09 @ 2:25AM|#

Forgiving developed world debt may be the concern once the cards are shown down on our current "all-in" bet on massive deficit spending and quantitative monetary easing.

I honestly do hope that I am wrong, that the Austrians are wrong, and the bet will pay out. But in my experience with all-in bets, they are usually made as a desperate gamble against the odds, and serve as the bettor's final step into destitution.

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