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Free Minds & Free Markets

When It Comes to Wall Street Regulation, Bernie Sanders Has a Short Memory

Big banks needed government help to pull off the heist.

SandersScreenshot via YoutubeDuring his interview with the New York Daily News, Bernie Sanders was asked to specify the fraud committed by Wall Street banks. He replied:

What kind of fraudulent activity? Fraudulent activity that brought this country into the worst economic decline in its history by selling packages of fraudulent, fraudulent, worthless subprime mortgages. How's that for a start?

Selling products to people who you knew could not repay them. Lying to people without allowing them to know that in a year, their interest rates would be off the charts. They would not repay that. Bundling these things. Putting them into packages with good mortgages. That's fraudulent activity.

Does Sanders really forget that it was progressives like him who demanded that banks lower lending standards so that low-income people with no, weak, or bad credit histories could get mortgages with low teaser interest rates that would later balloon? Is he ignorant of the fact that these banks had every reason to believe the government would bail them out if they failed? Does he not recall Fannie Mae and Freddie Mac, the government-sponsored enterprises championed by Barney Frank and other progressives, that were right in the middle of this action, knowing they'd be saved if they failed? Has Sanders no memory of mortgage lenders like Countrywide, which were celebrated by progressives for aggressively pushing mortgages on people who could not afford them? Is he unaware that the Department of Housing and Urban Development (HUD), under Bill Clinton (and Secretary Andrew Cuomo) as well as George W. Bush, enabled people with poor credit and low incomes to "buy" houses with little or no down payment? And finally, is he oblivious to the fact that it was all these government-pushed shaky mortgages that were bundled into the exotic investment instruments Sanders now decries?

I'm pretty sure Sanders is aware of all this. But it doesn't fit his narrative that the Great Recession was entirely the result of private-sector greed, so he can't acknowledge it. Wall Street is properly viewed with suspicion, but what makes that reasonable is that it has long been in cahoots with the national government, notably with federal deposit insurance, which rewards irresponsibility by relieving depositors of the need to judge banks' sobriety or lack thereof.

In other words, Sen. Sanders, Wall Street couldn't have done it alone. It needed people like you. 

(For details see Peter Boettke and Steven Horwitz, "The House that Uncle Sam Built.")

Photo Credit: Screenshot via MSNBC / Youtube

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  • Fist of Etiquette||

    Does Sanders really forget that it was progressives like him who demanded that banks lower lending standards so that low-income people with no, weak, or bad credit histories could get mortgages with low teaser interest rates that would later balloon?

    Forget it, Shel. It's Progressivetown.

  • CatoTheChipper||

    It wasn't just the progressives who were pushing this nonsense. It was part and parcel of Bush's "Ownership Society" and "Compassionate Conservatism" as well.

    But Sheldon is right. Countrywide was a preferred partner of Fannie Mae and the Fannie Mae Foundation lauded Countrywide to the skies for their "innovations" to increase loan originations to low-income borrowers in its 2000 report titled 'Case Study: Countrywide Home Loans, Inc.' The report praised Countrywide for its cooperation with "community organizations", particularly ACORN, in reaching out to potential low-income borrowers. Countrywide was held up by Fannie Mae as an example to which every bank should aspire.

    The leading Spanish newspaper in the US named Countrywide its "Corporation of the Year". LULAC congratuated Countrywide for its efforts to increase Latino homeownership.

  • plusafdotcom||

    recent epiphany by (from?) me...
    Notice that when tons more people are drawn into Home OWNERSHIP when they (financially) should have remained Renters... they become Less Mobile when they're laid off or otherwise lose their jobs.

    If people are anchored to/with/by their homes, they can't as easily move around the country to find jobs...
    Hence, Barney, Bernie, Bush and Carter's programs that still contribute to financial malaise in that part of the economy and citizenry today!

    Sound reasonable? I think so.
    Another missing link the MainScream Media will never figure out.

  • Michael Hihn||

    Bush's name doesn't belong on that list. How many times must I post the proof?.
    Yes, the poor were the biggest victims of Democrat policies again.
    And Obama wants to repeat it!

    If Republicans knew what the hell they're doing, they'd could own the black vote. Look at the minimum wage hike, The vast majority of losers will be young, black males. Again. Still. The disgrace of our inner-city schools. The moral atrocity pf Medicaid funding, It will take a while to assess the expansion under Obamacare/ But before that, 1/4 of our uninsured, 12 milion Americans were eligible for Medicaid/CHIP but never enrolled. Major parts of our inner cities have no doctors at all,. If they can't overcharge the privately insured to cover Medicaid.Medicare losses ... they can't treat anyone for as little as $17 per visit.

    Consequently, Medicaid/CHIP eligibles had a higher uninsured rate (18.8%) than the private market (16.3%) both pre-Medicare. That means your odds of dying with no insurance were higher in the Medicaid eligibles than in the private market.

    Proof:
    http://politicaltolerants.com/.....index.html


    .

  • plusafdotcom||

  • sarcasmic||

    Look. Home ownership, like a living wage, is a basic human right. These policies were never intended to cause the financial crisis, therefore they cannot be the cause. Just as hiking the minimum wage is not intended to cause unemployment, therefore it cannot be the cause. The cause of both of those things is corporate greed. It's rapacious capitalists who will do anything for a profit. That is the real cause, you see, because those people have selfish intentions. Progressives have good intentions. They want to help people. Therefore they can not possibly be paving the road to hell.

  • thrakkorzog||

    Hey look, banks giving out mortgages only to people who can reasonably be expected to pay down their mortgage is proof that the banks are racist. So we should force banks to loosen their spending rules so more minorities get housing loans, whether or not they can reasonably afford to pay down their mortgage.

    That's how we can prove to to minorities that we actually care about them, it's much easier to force the banks to loosen their loaning standards than to improve the economic prospects of minorities. /prog

  • Rhywun||

    I can't get that Larry David voice out of my head.

  • ||

    oooooooh.

    You've gotten very good at that.

  • pronomian||

    Home "ownership" is a fallacy. As long as there are property taxes you don't really own your home. You do have the right to stay with the obligation maintain that home with your own money as long as you pay rent to the state. Stop paying, you are kicked out. iow, you're paying hundreds of thousands of dollars for a structure you have to also pay rent for, they structure may get paid off, but the rent continues.

  • sarcasmic||

    Oh, I know. I mailed in the property tax bill with my most recent mortgage payment.

  • R C Dean||

    As long as there are property taxes you don't really own your home.

    - 1 alluvial title

  • FreeToFear||

    The Road to Hell paving project is our most Shovel-Ready jobs program to date! Why do you libertarians hate ROADZ!???

  • Michael Hihn||

    These policies were never intended to cause the financial crisis, therefore they cannot be the cause

    BRILLIANT!
    The funniest satire I've seen all year!!! (Your entire comment)

  • ||

    I have little trust in Moody's and S&P. We need more bond rating agencies to keep things honest I reckon.

  • Wizard4169||

    What we really need is raters paid by buyers, not sellers. If you're charging people for advice, your advice had better be good or they'll stop buying. If you're getting paid to polish turds, you'll put a mean shine on even the biggest turd.

  • Hugh Akston||

    So borrowers who respond to economic incentives are innocent victims, while lenders and traders who respond to market incentives are predatory monsters.

  • Eman||

    laughing all the way back into themselves?

  • See Double You||

    It's an insult to borrowers to treat them like children.

  • Scarecrow & WoodChipper Repair||

    It's an insult to people to NOT treat them as individuals. The safe spacers, the offencerati, the anti-sex-workers, the minimum wagers, all of them treat the targets of their wrath as victims of the system, when the only thing they are really victims of is the whiners who use them as political fodder.

  • sarcasmic||

    I'd like to see someone create a video of Bernie cursing "Greedy capeetaleest peegs" in a Russian accent.

  • Crusty Juggler||

    Also, Bernie Sanders is Jewish. Those people...

  • 68Whiskey||

    This. Six million times this.

  • Rhywun||

    *slow clap + narrowed gaze*

  • Swiss Servator||

    APPROVED!

  • Idle Hands||

    Are good comedians?

  • Drake||

    Would be awesome if his whole political career was really a gag.

  • SimonJester||

    No, it is a joke. It is just one that he isn't in on.

  • SusanM||

    Food for thought

    http://ccc.sites.unc.edu/files.....RAMyth.pdf

    Since its enactment in 1977, the Community Reinvestment Act (CRA) has been the subject of extensive
    debate, which has intensified in the wake of the subprime crisis. One of the pernicious myths
    surrounding CRA is that it encouraged banks to make risky loans to low‐ and moderate‐income
    borrowers. This argument has been made primarily by conservative think tanks, like American
    Enterprise Institute, who find it convenient to include CRA in their general position against
    governmental intervention in the private market. But efforts to blame CRA for the most recent crisis
    reflect a deep misunderstanding of the scope and scale of CRA and its implementation. Indeed, the
    “blame the CRA” story has been refuted by industry leaders and researchers time and time again.1
    Unfortunately, this narrative refuses to go away.
  • Lee G||

    The Fed carries most of the blame for the meltdown. A witches' brew of low interest rates, corrupt and/or ineffective ratings agencies, and a glut of foreign cash looking for a safe return created perverse incentives. The CRA certainly did not help.

  • Cyto||

    The most proximal cause was the new "mark to market" accounting rules. Because companies (including banks) were forced to value assets according to "what could you sell them for today", any market uncertainty was going to lead to a meltdown.

    Banks wrote an excess of loans based on fantastical valuations in a fast-rising market, often to people who's ability to pay was suspect. But who cares in an ever-increasing market, right? Well, when the bubble started bursting and lots of those loans started moving into upside-down (i.e. partially unsecured) territory, getting a fair valuation became impossible. The way you had to do a valuation was to actually get a price on your portfolio from an actual potential buyer.

    If your asset was gold or silver, you could just check the commodities market. But what if it was a billion dollars worth of home loans? There's not that many buyers. And since the market was unstable, there were no actual buyers. So the price of the loan portfolios went through the floor overnight. Not because nobody thought the loans were completely worthless, but because nobody knew how much the real value was going to go down. So rather than buy a pig in a poke, everyone left the market.

    So now every bank had billions in home loans on their balance sheet that had to be written down by huge percentages. Hundreds of millions of dollars at a stretch. And banking laws said they had to increase their cash, selling those assets. ergo, a bust.

  • Cyto||

    Banking regulators came in and took banks from perfect health to insolvency in hours. It happened to one of my banks. Unluckily for me it happened right in the middle of a reallocation of assets - so I had about 40k in uninsured cash in the account over the one weekend that they picked to swoop in. Nice.

    So anyway, on Friday they decided that the bank needed to write down their loan portfolio even more. And because that threw their balance sheet off with respect to cash reserves, they had to sell some assets. So over the next 12 hours they were forced to sell off a bunch of home loans. But nobody wanted to bring any of that uncertainty onto their balance sheet. So the price kept dropping. Which meant they had to liquidate more assets. By Sunday they had gutted the bank and were forcing BofA to buy it out (for pennies on the dollar). The whole thing took less than 36 hours, from perfectly healthy bank to insolvent mess.
    If they hadn't moved in.... nothing would have happened. The bank never intended to sell their loan portfolio. They intended to hang on to it and collect the payments over the years. So even if 10% went under, they still would have been fine foreclosing on those homes and selling them. Maybe they had a small net loss on that 10%.... they'd still be way cash positive on the total investment. But it was not to be. They had to sell it all at a huge loss, because if they needed to sell it they'd have had a huge loss. Nice logic, government.

  • Cyto||

    This is why "mark to market" is bad. It sounds great, but in order to have a market, you need willing buyers and willing sellers.

    In the case of the loan portfolios, there were no willing buyers at a price that any rational person would sell the assets. So absent interference in the market, the Banks would have just held on to the paper until things washed out. You certainly didn't see any of the billions in unregulated mortgage holdings being sold off during that period.

    My company had a similar issue at the same time frame. Because of the credit meltdown, one of our key holdings became impossible to sell. It was worth about 2.5 billion dollars. But we had to get a price. Nobody would issue an offer, because access to credit was impossible and they were never going to take a risk on our portfolio. Se we didn't even have a "huge discount". The accountants were insisting that the price was $0.00, since nobody would buy it.

    Well, it was billions of dollars of payments from insurance companies coming in over the next 7 years or so. We had no interest in selling it at even a penny discount. So it didn't matter what the buyers were offering, we weren't willing to sell at any discount. So there was no market.

    Didn't matter, according to the bean counters. The law now requires that you value assets based on what a willing buyer will pay, not factoring in what a willing seller will accept.

  • SusanM||

    +1. Interesting info.

  • Number 2||

    And recall: "mark to market" was a "reform" adopted in the aftermath of the Enron crisis that was supposed to punish Wall Street and make sure financial crises never happened again. That damn law of unintended consequences

  • Eman||

    Ive been reading a book about the great depression and the similarities are pretty creepy

  • See Double You||

    Oh yeah, the threat of lawsuits based on accusations of "redlining" had no effect on bank lending standards. No siree.

  • Drake||

    Lying to people without allowing them to know that in a year, their interest rates would be off the charts.

    My first mortgage was variable rate. I remember sitting in an office and signing line after line that described EXACTLY how my interest rate could change, under what circumstances, and how that would change my mortgage payment.

  • UnCivilServant||

    I did my research ahead of time, and my mortgage banker expressed surprise that I had most of my ducks in a row before I contacted him.

    I have a 3.5% fixed rate. Stability is more important to me than hoping it might eke lower.

  • Drake||

    I'm at 2.65% now. I did variable first because it was a better deal and I knew I would either sell the house or re-finance within a couple years.

  • WTF||

    Ordinary people can't be responsible for knowing all the terms of a complicated loan they're agreeing to!
    - /progtard

  • SimonJester||

    It is unfortunate, but you are right. The assumption is ALWAYS that the average person is too dumb to understand anything.

  • Toast88||

    The whole idea behind big government is that people can't be trusted to run their own lives. And half the country buys that premise hook, line and sinker.

  • Wizard4169||

    Well of course. Only Top Men can be relied on to know what is good (and therefor mandatory) and what is bad (and therefor forbidden). In Progtopia, you, the average citizen, will only be burdened by decisions that make no difference whatsoever.

  • Emmerson Biggins||

    Hey, at least this could actually constitute fraud if it happened the way he said it.

    Can't even say that about the rest of of his blathering.

  • Irish ♥s Lauren Southern||

    "Does Sanders really forget that it was progressives like him who demanded that banks lower lending standards so that low-income people with no, weak, or bad credit histories could get mortgages with low teaser interest rates that would later balloon?"

    Or that Obama is now trying to get lending standards lowered again because he claims it would help the economy...

  • Glide||

    I think that's the best part - the president actively pushing for more risky loans while his party's surprise superstar is out there decrying evil corporations and their risky loans.

  • Wizard4169||

    Corporations push risky loans because they're greedy predators. Proggies push risky loans because they're compassionate. Isn't the difference obvious?

  • commodious spittoon||

    lower lending standards so that low-income people with no, weak, or bad credit histories could get mortgages

    Uh... I have no weak or bad credit. Can I have my mortgage now?

  • UnCivilServant||

    No.

    *stamps 'Rejected' on CS's application*

  • Rhywun||

    No. Money down!

  • Steve G||

    Selling products to people who you knew could not repay them

    So, basically you're entire spending plan, right Bern?

  • Florida Hipster||

    But future generations will pay that bill. They are just hoarding future money and are too greedy to share it!

  • thrakkorzog||

    They signed that social contract.

    OK it was signed before they were born to pay pay for services they're never going to receive,and pretty much every person outside of North Korea thinks it's immoral to force a kid pay their parent's bills. But they're gonna get that social contract good and hard.

  • You Sound Like a Prog (MJG)||

    OK, that's enough Sanders content for one day, Reason. Maybe save some scorn for the Republican front-runner.

  • UnCivilServant||

    Kasich?

  • Swiss Servator||

    R...Rand Paul?

    *breaks down, sobbing for what might have been*

  • SugarFree||

    The push for widespread home ownership was magical thinking at its most destructive.

    "People who own homes are more financially stable."

    Sane people draw the conclusion: "Financially stable people own homes." Liberals draw the insane conclusion that "Owning a home makes you financially stable."

    It's the same magical thinking that is behind the "everyone should have a college degree no matter what" idea that has led to the education bubble, another economy wrecking situation just waiting to pop.

  • See Double You||

    And as with every policy progressives push, it's based on envy: it's not fair that some people can own homes while others can't afford to!

  • WTF||

    Yeah, add "cause and effect" to the list of things progressives fail to understand.

  • ||

    It's ridiculous for real.

    Some people prefer to rent. Does this make them less financially stable or rational? Of course not. Same with leasing versus owning. I know people break their heads determined to discover which is 'better' but in the end, it all comes down to what you're comfortable with.

    Housing is a complex asset to own (upkeep, property taxes, etc.) and sometimes it doesn't render you that great a return. I reckon the average historical return is probably in the area of 10%.

    Liberals are obsessed with taking something they perceive to be a right and moving to make it available to all. It's literally irrational.

  • DesigNate||

    I've always failed to see how paying the bank $300k on a house valued at $150k made any goddamn sense whatsoever. And that's not even including maintenance and upkeep or property taxes (which, surprise surprise, the government thinks your home value should always increase).

  • UnCivilServant||

    Depreciation is a real effect from neglect, but the locaity has a perverse incentive to assert that the price ratchet only moves one way. Soon the tax load on the lot is so disproportionate to the value of the property that buyers take a glance at the listing and go "Nope".

  • ||

    Some people prefer to rent. Does this make them less financially stable or rational?

    In my case, yes.

  • gimmeasammich||

    You don't own your rape van outright?

  • R C Dean||

    Some people prefer to rent.

    Unless you have some reason to believe home prices are going to be strong in your market indefinitely, renting and owning are frequently very close to being a financial wash.

    I own my home solely for irrational reasons: its a turf thing. I like saying "This is mine!" and pissing on address post. I'd probably be better off financially if I had rented my whole life and you know what? I don't care.

  • Eman||

    or giving every kid an ipad at that school in California

  • Wizard4169||

    Outstanding athletes have trophies. Therefore, I can make you a better athlete by giving you a trophy.

  • Night Elf Mohawk||

    I used to program for a subprime mortgage lender.

    It was crystal fucking clear -- I mean purposefully, plainly made clear -- how and when variable interest rate loans were subject to changing interest rates. And, almost exclusively, this was made clear using forms, layouts, and information as dictated by federal law.

    The closest thing to fraud, imo, of that who fiasco was the bundling on the secondary market. That said, if you don't understand what you're buying, don't buy it.

  • Crusty Juggler||

    if you don't understand what you're buying, don't buy it.

    I think that makes you a racist.

  • ||

    There's no question the part about 'hoodwinked' people has a strong political angle to it. What I learned in my 10 years in the bank is whatever a politician rants it's directly inverted to the reality.

    Yes, I don't doubt some were misled but if you deal with a mortgage rep or institution worth their salt everything is made clear. It's idiot proof.

    Not only that, people have the added feature and advantage of the internet now to research and learn more.

  • Cyto||

    Night Elf Mohawk is right, Every syllable on the loan documents is regulated. They are absolutely required by law to disclose the loan information in a precise format dictated by the government.

    And it isn't just the details of the loan. Even the font used is dictated by the regulators.

    Claiming that these things were not disclosed is hard to believe. Could I believe that some random sales guy spouted nonsense? Sure, that's what they do. But at some point you are going to be faced with a disclosure form that clearly states all of the pertinent details of your loan in 24 point type. And normally it is going to be a separate compliance officer filling out that document with you, not the sales guy.

    From what I can tell, most of the "bad loan decisions" were due to people refinancing their homes to take out another 40k of equity as the market jumped up and loan prices jumped down. When those two numbers reversed, people were in trouble.

  • Drake||

    Telling people that they are broke because somebody robbed them goes down much easier than explaining to them that's it's their own damn stupid fault - and they aren't entitled to a big house and a luxury SUV just because.

  • R C Dean||

    The bundling is where the fraud happened, IMO.

    Especially when you realize that those bundles held thousands of mortgages that had never actually been legally transferred to them ("Robosigning" didn't cut the mustard in many jurisdictions). There was much behind-the-scenes scrambling to retroactively change the requirements for transferring real estate.

  • ||

    I got my first home loan through FHA. It was a variable rate loan that started at 6.5%. In the roughly 200 pages of documents I had to read and sign, I distinctly remember signing and/or initialing several times that my loan was variable rate and that in 1 year's time, the interest rate would increase to 7.5% and that the loan would increase a percentage point each year. It was perfectly to me, and I would presume anyone with an 8th grade understanding of math, what was going to happen to the load over time.

    I've refinanced at least 3 times since then, all fixed interest rate loans. Even for these loans, they explicitly point out my fixed interest rate and the length of the loan and the number of payments.

  • american socialist||

    "o that low-income people with no, weak, or bad credit histories could get mortgages with low teaser interest rates that would later balloon?"

    I know, Sheldon. The responsibility for the housing crisis lies with the poors and the fact that the government once securitized some loans for Black people.

    Did private sector securitization even exist in 2003-2008?

  • Florida Hipster||

    Did private sector securitization even exist in 2003-2008?

    Why scrutinize a loan you are going to sell to a government entity that will buy it blindly? Incentives. How do they fucking work?

  • See Double You||

    AmSoc knows the power of incentives. It's why he loves the threat of force against the peaceful.

  • ||

    "Racist!"

    Fuck you.

  • LynchPin1477||

    The responsibility for the housing crisis lies with the poors

    Didn't you leave taxpayers on the hook for your own mortgage? I'd say the responsibility lies with you.

  • ||

    Shhh. He's eating an Eggo. Don't disturb him too much.

  • LynchPin1477||

    I'm pretty sure Sanders is aware of all this

    I'm not. The more I hear from him, the more obvious it becomes that he is extremely ignorant and simple minded.

  • Eman||

    I was thinking the same thing. If he was some kind of evil (of beneficent, if you've ignored the past century and still think communism is the best idea ever) genius he'd be a little quicker on his feet.

  • ||

    Cut him some slack, the movie 'The Big Short' didn't explain the government's part in the mess.

  • ||

    I had a friend who made the spacious claim that it was the GOP that caused the financial meltdown because of deregulation. After shaking my head at him, I told him that if the GOP tried to rein in the government from interfering in the housing market and creating the perverse incentives, you and your ilk would have thrown a fucking fit and say, "The GOP hates poor people because they don't want them to be able to own houses."

  • ||

    There's a Canada Revenue Agency scandal up here where CRA coddled and protected powerful interests like KPMG from tax collection. Progressives are blaming Harper. Think about that for a second and how supremely retarded a person has to be to publicly make such a comment.

    http://www.cbc.ca/news/canada/.....-1.3526618

    This coincided, by the way, with CRA increasingly its efforts on smashing up the little buy and business. Same with Rev Quebec. When they come and determine you owe them more money than you have, good luck because they'll ruin you.

  • ||

    It's like that in Chicago and Cook County. If you owe any money or are in violation of any of their regulations, they will destroy you unless of course you know someone on the city council. The ironic part is that Mayor Rahm is always boasting about making Chicago a business friendly place while keeping laws that virtually make it difficult to run a business in Chicago.

  • bpuharic||

    Between 1997 and 2006, the credit default swap market increased by 20,000%. It was the GOP that destroyed the economy

  • ||

    When my parents refinanced their house, they had a lawyer look over the documents before refinancing because they knew that some of the stuff in the contract was difficult to understand and didn't want to risk being cheated. They also took the time to explain to me the difference between adjustable and fixed rate mortgages so I could never ever get myself into the predicament that a lot of people that we knew got themselves in during the 2000's . The best part is that my parents aren't college educated and are blue collar workers but apparently knew that you never signed anything without understanding it.

  • ||

    " my parents refinanced their house, they had a lawyer look over the documents before refinancing because they knew that some of the stuff in the contract was difficult to understand and didn't want to risk being cheated."

    Prudence is always well advised. Smart. I get the notion that the apple didn't fall far from the tree.

    Back when the market was on fire a co-worker bragged to me about buying a 300K house in a fancy neighborhood. My wife and I were looking at buying then also but we refused to pay the insane prices or get into a loan we couldn't pay. I asked the guy if he had added up the payments on his 300K loan. Yep and it came to nearly a million bucks. I couldn't help myself..."You do realize that you are paying a million bucks to live in Alexandria, Louisiana, right? If I pay a million for a house I want an ocean view."

    Poor guy. He was crushed. That had never occurred to him. He rarely spoke to me after that.

  • ||

    We had a family friend that kept on borrowing against the equity of their home during the 2000's. They bought a BMW and Mercedes, sent their children to private schools and lived the high life. When the crash happened, they were stuck with huge amount of debt that they couldn't even remotely deal with and probably just this year, they finally are back on track with their finances even though they will most likely always remain in debt till they are dead.

    It's nuts how people aren't suspicious when the value of their house goes up significantly and borrow against the equity while never ever thinking. "What happens if this all ended and am I prepared for that moment?"

  • R C Dean||

    "You do realize that you are paying a million bucks to live in Alexandria, Louisiana, right? If I pay a million for a house I want an ocean view."

    Eh. Present value that million, and its a lot less.

    Still more than you might want to pay, but not a million.

  • toolkien||

    It's short?

    Maybe he was in the pool? Also, it mightseem longer depending on the angle and lighting.

  • thrakkorzog||

    I remember back 2004 There were signs and ads all over the placeall over the place telling me I should stop renting, and buy a house no matter your credit. I figured it had be a scam of some sort. I was right. I was just wrong about who was getting scammed.

  • ||

    Want to meet a girl?

    Depends. Is she pre-menarche? If yes, then please contact me so that I can contact her.

  • PapayaSF||

    Don't forget that these "exotic investment instruments" were then bought by government and union pension funds. They're complicit as well.

  • bpuharic||

    They were promised by rich Wall Street bankers that valuation of securities, guided by David Li's Gaussian Copula Formula, was as scientific as quantum physics...another fraud perpetrated by a deregulated Wall Street. The fact Li himself said his formula couldn't be used this way? Ignored by Wall Street

  • Tornado16nb||

    So this let's them off the hook? You are very partisan.

  • Uncle Jay||

    RE: When It Comes to Wall Street Regulation, Bernie Sanders Has a Short Memory
    Big banks needed government help to pull off the heist.

    I'm sure the SEC and all their merry morons will make sure there is no fraud in the banking industry.
    One only has to look at the SEC's track record in stopping financial fraud to recognize that more government intrusion in the banking industry will stop any and all fraudulent behavior.

    For those who believe the above statement, please email me.
    I have a bridge in Brooklyn I'd like to sell you.

  • bpuharic||

    The head if the SEC at the time was a Bush appointee who thought banking regulations were counter productive

  • Tornado16nb||

    Can you cite evidence that the SEC got rid of these regulations that led to this?

  • Eman||

    wow. that was almost coherent and on topic. still dumb, but it sorta sounded like something a dumb person might say.

  • Eman||

    lost your train of though halfway through?

  • Eman||

    lost your train of though halfway through?

  • onebornfree||

    "If voting changed anything, they'd make it illegal." -Emma Goldman.1869 – 1940.

    Elections are "an advance auction of stolen goods." H.L. Mencken

    Bottom line: It really makes no difference which clown gets elected, the deep state will carry on exactly as before.

    In other words:" New boss same as the old boss" as Pete Townsend once said:

    Or, "Dream On"?:

    "......In your dream, Donald Trump is not a fraud,
    In your dream, Sanders is not a fraud,
    In your dream, all the rest are not frauds,
    In your dream, Obama is not a fraud,
    In your dream, Reagan was not a fraud,
    In your dream, all the rest were not frauds,

    In your dream, the constitution was not a scam,
    In your dream, the Supreme court is not a scam,
    In your dream, 9/11 was not a scam"
    In your dreams, the war on terror is not a scam,
    In your dream, al -qaeda was not a scam,
    In your dream I.S.I.S. is not a scam"

    Lyrics excerpted from "Dreams [Anarchist Blues]":
    https://www.youtube.com/watch?v=QMXtoUtXrTU

    Regards, onebornfree
    Financial safety &Personal; freedom consulting:
    onebornfreeatyhoodotcom

  • Richie||

    I click the link every time I see it. Nice song.

  • AD-RtR/OS!||

    Don't even ask him about Franklin Raines -
    Or the time spent at Fannie and Freddie by Jamie Gorelick and Rahm Emanuel.

  • Michael Hihn||

    Franklin Raines!
    Clinton's CBO Chairman, paid $25 million to settle fraud charges for his role in the Fannie Mae debacle.

    This video of hearings shows Maxine Waters defending Franklin Raines ... and the vicious assaults on the regulator who blew the whistle ... LOVE to see him fight back!

    Wait for the testimony that Fannie and Freddie were UNREGULATED by Sarbannes-Oxley.
    But had the authority to commit taxpayers on their own. And Barney Frank again.

    https://www.youtube.com/watch?v=UIjoW_IXos4

  • Grant||

    Sanders' problem is either economic, moral - or both.

  • Michael Hihn||

    I have better sources than Richman. ORIGINAL sources.

    First. the New York Times! (News) Traces it all from Clinton using Carter's Community Reinvestment Act to FORCE more subprime loans. The banks objected that it was impossible to do so within Fannie and Freddie's loan standards. So, the Times reports, Clinton then pressure Fannie and Freddie to lower their standards -- standards with had protected taxpayers for many decades. In effect, Clinton made trash mortgages a safer investment (guaranteed) than Google.

    The New York Times predicted that Clinton's pressure to increase junk mortgages could create a major taxpayer bailout like the 1980s. Not Fox, the Times..

    http://nyti.ms/1hl1A9N

    Obviously, it was not just the Times scared. Dubya warned about the risk in his first budget, and took multiple efforts to regulate Fannie and Freddie, in this video of Congressional hearings, even Alan Greenspan testified on the need for world class regulation!

    https://www.youtube.com/watch?v=cMnSp4qEXNM

    If sharing with friends, tell them to ingore the Fox news content and focus on the actual hearings.
    (SOME libertarian ideologues attack Dubya for promoting housing. Well, that was to offset the Democrats screeching about a war on the poor.)

  • bpuharic||

    Rarely am I disappointed by a piece in Reason. This is one such time. The CRA had NOTHING to do with the banking crisis. The TOTAL mortgage market in 2006 was $10 trillion, the total Credit Default Swap market was SIXTY TWO TRILLION, over 600% larger. That is what doomed the economy.. The right sat back, guided by libertarian mythology, and did nothing. It was the CFMA, authored by radical libertarian Phil Gramm, that deregulated derivatives, aided and abetted by Alan Greenspan.

    Please, libertarians, don't invent history just to cover th failure of your radical myths!

  • Michael Hihn||

    The CRA had NOTHING to do with the banking crisis.

    Bullshit I posted the proof directly above you ... half hour earlier. Actual Congressional hearings and Democrat obstruction. Plus those rightwing plutocrats at ... the New York Times ... who PREDICTED that Clinton's reckless actions could cause a MASSIVE taxayer bailiut. Guess what?

    The right sat back, guided by libertarian mythology, and did nothing.

    Bullshit The video in my comment above shows the congressional hearings ,... and how the Democrats attacked the Bushies for ... what else? ... picking on the poor ... and racism.

    THIS next video shows how Democrats VICIOUSLY attacked the regulator who exposed the fraud at Fannie and Freddie. Hysterically, they defend Franklin Raines, fellow Democrat, Clinton's CBO Director, later paid $25 million to settle FRAUD charges.

    https://www.youtube.com/watch?v=UIjoW_IXos4

    Please, libertarians, don't invent history just to cover the failure of your radical myths!

    Were you EAGER to be manipulated like a puppet on a string?
    PLEASE tell us that Obama inherited a worse recession than Reagan. PLEASE.
    Or that we had a postwar boom at 91% interest rates. (In fairness. Reason and Gillespie got suckered on that one too)

  • bpuharic||

    Sorry. Numbers don't lie. The credit default swap market was 600% larger that the mortgage market. The mortgage market could not have done the same Wall Street did. And the GOP ran BOTH houses of Congress 2003-2008 so your video about the Dems is irrelevant.

    The numbers show you're wrong.

  • Michael Hihn||

    I asK: "Were you eager to be manipulated like a puppet on a string?"
    Obviously yes.

    Number must be relevant.

    MORE bullshit!You're laughablyt wrong on partisan control of Congress
    http://uspolitics.about.com/od.....sion_2.htm

    The mortgage market could not have done the same Wall Street did.

    More bullshit. How were Fannie and Freddie demolished by credit default swaps???(lol)

    Tribal loyalty causes you to close your eyes to actual videos of Congressional hearings!
    You're also a Birther, right?

    OMG I even baited you on the Great Recession!!!

  • bpuharic||

    By the way, Obama DID inherit a worse recession...the worst since the Great Depression. GDP contracted 9.9%. A depression is 10%

  • Michael Hihn||

    Reagan v Obama, Part 1

    GDP contracted 9.9%. A depression is 10%

    Bullshit. There is no such standard. And as my bonus, I'll also prove the Depression was over when FDR took office! (OMG)

    Reagan vs Obama, fully sourced
    One link has to be in part 2. Reason;s 2-link limit

    Reagan's stock market was still crashing to 70%. Obama's had fallen 65% and already rebounded to -46%.

    100 year market history.

    Reagan tax policy began with 10.8% unemployment and was down to 5.8% in only TWO years, with full labor force utilization. Obama's stimulus passed with unemployment at 8.3%, increased to 10.0%, was 9.8% after two years and didn’t hit 5.8% until 69 months.

    See Part 2 for unemployment history

    Reagan inherited the highest prime-rate ever at 21.5% Obama had 3.25%

    Prime rate history

    (The prime rate declined by 3.1% not 9.9% .... and has NOTHING to do with business cycle dating!

    Reagan started with a far worse recession, but at the end of his first term real GDP had increased 12.6% in four years combined. Obama's first four years saw only 3.3% total.

  • Michael Hihn||

    Part 2

    First the unemployment history from part 1
    Prime rate history

    Business Cycle.
    Official dates for business cycles since the 1850s are maintained by the independent National Bureau of Economic Research .. who has DECIDED these dates since the end of WWII.

    When the economy Peaks and Troughs is economics-speak Looking down the Troughs column we see March, 1933, which is when FDR took office (original constitution)… before a single penny of New Deal “stimulus” (OMG)

    Nobody knew it was over at them time because it was not announced until much later – just like the 2008 recession

    Now look down to the Postwar Boom … primed by wartime spending, liberals say. OOPS We had FIVE recessions, back to back, between 1945 and 1957.

    1957 was the worst of the five. It began immediately after the Interstate Highway Project was launched … had not full recovered when JFK took office in 1961 … ANOTHER failed Keynesian stimulus

    JFK's SOTU says we had fallen from the only industrial base left on earth after the war to .... among the slowest in economic growth. FUCK Stimulus ... Kennendy cut taxes and launched the first of only two postwar booms. (Reagan copied Kennedy exactly for the 2nd one)

    Anything else?

  • Michael Hihn||

    P.S. Obama ... to equal Reagan's recovery from a far worse recession ... needs GDP growth this year of ... 19%. What are the odds? (lol)

  • Michael Hihn||

    Ooops. The link to the unemployment history in Part 2 doesn't work. And this may be too long.

    http://research.stlouisfed.org.....UNRATE.txt

  • bpuharic||

    I've noticed that right wingers are all hat and no cattle. To make an argument you have to have metrics. You say there's NO STANDARD?? Let's look at what the conservative Economist has to say, via Wikipedia:

    (A) proposed definition of depression includes two general rules:[3][4]

    a decline in real GDP exceeding 10%, or
    a recession lasting 2 or more years.

    Was the recession Obama inherited worse than Reagan's? According to the Fed, yes

    Real gross domestic product (GDP) fell 4.3 percent from its peak in 2007Q4 to its trough in 2009Q2, the largest decline in the postwar era (based on data as of October 2013)

    And if you've ever heard of James Pethokoukis of the LIBERTARIAN AEI, he's shown that EVERY recovery in the last 40 years was slower than the previous one. Not to mention Reinhart and Rogoff's study of 800 years of economic activity showing that FINANCIAL sector recoveries are slower than others..

    You're comparing apples and trucks. Reagan was fighting hyper inflation. Obama wasn't so comparing prime rates is useless.

    So everything you said is wrong. No surprise for a right winger. But the FACT is this:

    the WALL STREET credit default swap market DWARFED the mortgage market. The MORTGAGE market could NOT have doomed the economy because there simply was not enough money there. The DERIVATIVES market, deregulated by right wing libertarians, COULD and DID doom the market

    Just like right wingers are doing TODAY.

  • Tornado16nb||

    If what you say is true, why did the mortgage bubble burst lead to the financial crisis?

  • bpuharic||

    Because Wall Street KNEW it had IMPROPERLY valued mortgage backed securities, based on the ratings agencies' evaluations. The ratings agencies were paid by the very people whose securities they were evaluating, USING a method (David Li's Gaussian Copula formula) that they knew did not apply to valuing MBSs.

    So a MINOR blip in the housing market led to a MAJOR financial crisis.

    As Paul Volcker pointed out, when financial sector profits hit 40% of all corporate profits, a recession occurs. The financial sectors starts to suck resources from other areas of the economy. This amount of money can't be used PRODUCTIVELY so, as we saw, Wall Street invents lies, like synthetic derivatives, to soak up money.

    That's what happens when the right deregulates bank robbery.

  • Tornado16nb||

    There was no deregulation. We had this discussion the other day that it was actually regulation. Please stop spouting these talking points.

    How did the "right" deregulate bank robbery and in what way? Who actually did this?

  • Michael Hihn||

    The Gramm-Leach-Bliley Bill (all Republicans) repealed the Glass-Steagall portion that had kept commercial and investment banking separate. That's deregulation. Now the fun part.

    The mixing of commercial and investment banking had been proposed by Clinton, said it was obsolete. Gramm-Leach passed with almost all the Republicans and a majority of Democrats. Clinton signed it.

    No surprise that, come the crash, each side blamed the other!

    Hysterically, considering our liberal troll, even Clinton insists repeal had NOTHING to do with the financial crisis. Clinton, that dastardly rightwinger. (lol)

    bitly.com/1S7oimv

  • Michael Hihn||

    Not sure what happened to that link of Clinton insisting his repeal of Glass-Steagall had nothing to do with the financial crisis. Link is to Washington Post.

    The first link works perfectly when I copy-paste into my browser. I'll try a longer version.. If it's not orange, copy-paste

    http://bitly.com/1S7oimv

    It's orange in the Preview. and goes to the Post's report.

  • bpuharic||

    GLB had little to do with the banking crisis. It was the Commodity Futures Modernization Act, authored by Ted Cruz's financial adviser Phil Gramm, that deregulated derivatives.

  • Michael Hihn||

    Umm, he didn't author it. And for while, he was the SOLE Senator blocking passage.

  • bpuharic||

    Uh no. The Commodity Futures Modernization Act removed regulations from derivatives, which allowed the shadow banking industry to 'self regulate'.

    Which it did.

    Phil Gramm authored the CFMA which deregulated derivatives. He's now Ted Cruz's chief economics adviser. See how the right places dogma over facts? They keep doing the same thing over and over again.

  • Michael Hihn||

    Phil Gramm authored the CFMA which deregulated derivatives

    It was first proposed by Clinton and passed with a majority of Democrats.

    Congress does work that way at times. The 1986 tax reform, considered Reagan's second accomplishment. But it was authored by Democrats, Bill Bradly in the Senate, Dick Gephart in the House. And it wound up destroying our industrial base, many of our best-paid union jobs, thus a major cause of the inequality which began then,

  • Michael Hihn||

    Yet another lie
    In May of 2000, Rep. Thomas Ewing (R-IL introduced his Commodity Futures Modernization Act.

    http://wapo.st/1S8lDce

    Congress returned into session for two days in mid-November, the sponsor of H.R. 4541, Representative Thomas Ewing (R-IL), described Senator Gramm as the "one man" blocking Senate passage of H.R. 4541.

    http://bitly.com/1S8lMML

    Second link has history of Clinton’s Presidential Working Group (PWG) in 1998 and 1999, 2 years before the bill “...on October 19, 2000, the White House announced its "strong support" for the version of H.R. 4541 scheduled to reach the House Floor that day.[59] The House approved H.R. 4541 in a 377-4 vote.” (Senate passed by unanimous consent.)
    “The PWG issued letters expressing the unanimous support of each of its four members for the CFMA.[73]H.R. 4577, including H.R. 5660, was signed into law, as CFMA, on December 21, 200o”
    Added to documented lies:
    Obama’s inherited GDP
    Definition of Depression,
    Gramm authored CFMA
    Subprime lending began in 2003, was 1999.
    Attacked WaPo as a source because it’s run by a former Reagan staffer (lol) hired 14 years later.
    Claim WaPo is rightwing, owner Jeff Bezos is VERY liberal.
    NEVER a linked source, just babble and proven bullshit

  • Tornado16nb||

    Can you be consistent? You keep saying deregulation was actually regulation which makes no sense.

  • bpuharic||

    The right SAYS 'deregulation' is the key to growth. But they REGULATE when it's in the interests of the 1% and they DEREGULATE likewise. They call BOTH 'deregulation'. The main goal is to protect the 1% under the guise of protecting 'job creators'.

  • Michael Hihn||

    (LOL) You IGNORED my question, how can Fannie and Freddie hit receivership from losses on credit default swaps???

    Fannie and Freddie got $180 billion in bailouts. Actual lender bailouts went to HUNDREDS of banks, including small ones, to provide temporary liquidity.

    https://projects.propublica.org/bailout/list

  • bpuharic||

    GSE's (Fannie Mae and Freddie Mac) were late comers to the situation and, while requiring a bailout, did not CAUSE the financial collapse

    They didn't start underwriting sub prime mortgages until 2003

  • Michael Hihn||

    They didn't start underwriting sub prime mortgages until 2003

    Bzzzt.. Wrong again.It was 1999. Once again the same story in the New York Times, not Fox News. This time I have room for an excerpt (my emphasis)

    http://nyti.ms/1hl1A9N

    WASHINGTON, Sept. 29, 1999 — In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders
    .
    ¶The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

    ¶Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people

    I will give you credit. You are a very persistent troll.

  • Michael Hihn||

    So a MINOR blip in the housing market led to a MAJOR financial crisis.

    (sigh) One more time, Fannie and Freddie were driven into receivership, and took $180 billion in baailout money. Fannie included outright fraud, and Franklin Raines -- former Clinton CBO Directior -- paid $25 million to settle FRAUD charges for his role at Fannie ... as reported by those rightwing plutocrats, the Washington Post

  • bpuharic||

    First, the WaPo is run by Fred Ryan, a former Reagan staffer. So yes, the WaPo IS right wing.

    And GSE's were bit players in the right wing engineered collapse of the economy.

  • Michael Hihn||

    First, the WaPo is run by Fred Ryan, a former Reagan staffer. So yes, the WaPo IS right wing.

    (snicker) That was published In 2008. You lose AGAIN!

    In September 2014, Jeff Bezos, owner of The Washington Post, named Ryan Publisher and CEO, signaling a new digitally-focused direction for the publication.[4]

    Hate to squash another of your conspiracy theories, but Bezos is fairly private in his political vies. However, he's a large donor to gay marriage in WA ... and a major donor to DEMOCRATS. Per that rightwing rag, The Atlantic.

    I'll allow you to freak out that a major liberal wouldl hire .... a former Reagan staffer (gasp)
    I'm feeling guilty, as if I've been kicking a cripple.

  • Michael Hihn||

    Let's look at what the conservative Economist has to say, via Wikipedia:

    OMG You cite a PROPOSED definition. YOU shot yourSELF in the foot!
    Your bullshit of a 9.9% GDP decline is exposed below.

    Liberal troll REJECTS the OFFICIAL arbiter of recessions for a magazine!!!

    Was the recession Obama inherited worse than Reagan's? According to the Fed, yes

    More bullshit. PROVE IT like I do.

    Now your bullshit about the 9.9% reduced GDP
    Federal Bureau of Economic Analaysis. An interactive table.
    http://1.usa.gov/1qlzK4s
    Go there. Click #1 for GDP
    On next page, click 1.1.1 for percent changes.
    You’re at recent GDP, so click “Modify”
    Click for “annual” and enter, say 2007-2012
    What do we see (laughing)
    2007 +1.8%
    2008 (0.3%)
    2009 (2.8%)
    2010 +2.5%
    2011 +1.6%
    2012 +2.2%

    I see a total -3.9% GDP decline … so your 9.9% loss is ALSO proven bullshit

    Reagan was fighting hyper inflation. Obama wasn't so comparing prime rates is useless.

    OMG, A 21.5% prime rate on borrowed money plus the worst market crash since the 1930s. Money TOTALLY unavailable to business is .... USELESS?

    I'll give you the benefit doubt and still assume you were brainwashed. Somebody else fed you those lies. No, I am NOT a Kenyan.

    I've noticed that right wingers are all hat and no cattle

    Stop drooling, puppet.

  • bpuharic||

    You need to keep up my man. From creditwritedowns.com July 31, 2011

    "And the revisions to the worst quarters of the "Great Recession" were even more depressing, with 4Q-2008 pushed down an additional 2.12% to an annualized "growth" rate of -8.90%. The first quarter of 2009 was similarly downgraded, dropping another 1.78% to a devilishly low -6.66% "growth" rate."

    By the way, the Economist is hardly a socialist newspaper. They're on YOUR side.

    The credit markets had FROZEN under Bush which is why the bailout was necessary. You seem unaware of the fact CREDIT markets had been destroyed by right wing greed on Wall Street.

    But you're STILL avoiding the FACT the Wall Street credit default swap market was SIX HUNDRED PERCENT larger than the mortgage market

    Sorry dude. The numbers prove you wrong.

  • Michael Hihn||

    AGAIN NO SOURCES .... RIGHT BELOW BEING EXPOSED FOR MULTIPLE LIES .

    http://reason.com/archives/201.....nt_6049077

    Now he denies the official data by the Federal Bureau of Economic Analysis! ... with NO links. EVERYTHING I've posted is linked to an official data source.

    (But I guess he's done posing as a libertarian, eh?)

    By the way, the Economist is hardly a socialist newspaper.

    I said NOTHING about their politics and -- go look --- quoted YOU saying they're conservative.
    I ridiculed you, deservedly, for challenging THE official voice for recession dates ... with a . fricking magazine.

    Okay I've documented plenty of lies by you, so I'll just respond with links to the proof
    Again, suffers SEVERE denial, FAR worse than even the Birthers.

  • ||

    I haven't seen anyone pwned like this in a long time. Most especially seeing a troll receiving a mic drop right after his own trollish comment.

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  • gah87||

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  • gah87||

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    Socialism - especially Bernie's fascist interpretation - is a parasite on us the people. Pity the naive voters who think he will help them. Bernie is Trotsky in sheeps' clothing. Hillary is Stalin.

    Have fun, Millennials! The bread lines await you!

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