Since US Politics are so cut-throat...

[sammichoffate]

How would you fix the system, if you believe it needs to be fixed? I always hear people complain about how the 1% buy all the elections, but the other 99% can't stop them for whatever vague reason(economic status, lack of education, apathy, etc.)

[ISHGoat]

Less government influence in the economy. Let the market be free.

[MMM]

i would ban a lot of the fund raising contributions and cap others. Ban 3rd party advertisements, and have tax payers largely fund campaigns.

[KevinNYC]

I think cut-throat politics is a different issue from money in politics.

Changing the money in politics to be more broadly spread out from the 1 percent wouldn't change the cut-throated-ness.

For example, Bush and Rubio are both Republicans from Florida who both want to be President. They used to be quite, quite close, now they want they same spot and they are fighting for the supporters and donors.

There's a book coming out that talks about the tactics used in this mini-race. (Did you hear the reason Rubio's got money problems is because of his secret-second family? Oh you didn't. Well you just did.)

Are their politics significantly different? Bush is known as the Wall Street guy, but Rubio's tax plan is even better for the super rich because he wants to eliminate the capital gains tax.
79 percent of the tax take from this asset-based income comes from the top 1 percent, 5 percent from the bottom 90 percent.........12 percent of all capital gains subject to taxation was held by the richest 400 taxpayers. You often hear about the top 1 percent in these discussions. Well, those folks comprise the top 0.0003 percent.


I think this is an example of how the cutthroat nature of the politics is a separate issue from how who gives.

[KevinNYC]

Less government influence in the economy. Let the market be free.
What are your thoughts on the role of unregulated shadow banking system in the financial crisis?

[Derka]

The amounts that can be raised and spent on campaigns would be severely slashed and capped.

No single person would be allowed to hold an elected state or federal office for more than a decade.

Gerrymandering would be punishable by a live, public, televised drowning.

[KevinNYC]

No single person would be allowed to hold an elected state or federal office for more than a decade.

This would have the effect of removing the most talented, most honest people.

Let's say you're a congressman who is on a committee with oversight of the Pentagon. You're probably going to be a lot better at that job your 9th and 10th years than your first two, because you know how the bureaucracy works,you have a staff you've worked with a while.

Toss that guy out. Is the new guy going to do a better job because he's new?
If that rule, were in place, he probably would spend his 10th year looking for a cushy new job.

[NumberSix]

What are your thoughts on the role of unregulated shadow banking system in the financial crisis?
Step 1: new government regulations that forbid banks from "discriminating" against potential borrowers.

Step 2: encourage people that can not possibly afford a house to take out loans to buy houses. What could possibly go wrong?

Step 3: the government encourages banks to recklessly gamble. The only possibilities are win or break even. If your reckless gambles win, you multiply your money. If you reckless gambles lose, the government will just replace the money you lost. What kind of retard wouldn't recklessly gamble in this scenario?

Step 4: mandatory bad investments (I.e. lending to people you wouldn't have had it not been for the dumbass "discrimination" nonsense)

Step 5: uh oh. People who had no business being granted loans shockingly can't pay them back.

Step 6: people who haven't been paying attention declare that we need more government involvement.

[KevinNYC]

Step 1: new government regulations that forbid banks from "discriminating" against potential borrowers.

Step 2: encourage people that can not possibly afford a house to take out loans to buy houses. What could possibly go wrong?

Step 3: the government encourages banks to recklessly gamble. The only possibilities are win or break even. If your reckless gambles win, you multiply your money. If you reckless gambles lose, the government will just replace the money you lost. What kind of retard wouldn't recklessly gamble in this scenario?

Step 4: mandatory bad investments (I.e. lending to people you wouldn't have had it not been for the dumbass "discrimination" nonsense)

Step 5: uh oh. People who had no business being granted loans shockingly can't pay them back.

Step 6: people who haven't been paying attention declare that we need more government involvement.

Number 6, you just gave 6 steps that say nothing about the shadow banking system which means you don't understand what happened in 2008.

The 6 steps you did give are mostly myths discredited years ago. The government wasn't encouraged people who could afford loands to take out expensive loans. Subprime lenders were because that was a very, very profitable business for them. Subprime lenders were not subject to the regulations you mention.

Why was it a profitable business? Because if house prices were going up, you could convince people to refinance their mortgage and pay you a whole new set of fees. If they failed to pay their loan and houses prices kept going up, you now had an asset you could sell. In fact, you could come up with loans that made them refinance every two years.

A good part of the failed loans weren't people who couldn't afford a house. It was people refinancing their existing home loan or people going for "jumbo" mortgages that they couldn't get a bank that could only give "conforming" loans. It was middle class people being given loans for upper-middle class houses.

Look at why the housing bubble didn't take place in Texas with its heavily regulated mortgage industry.

Read the FCIC report.

[ISHGoat]

What are your thoughts on the role of unregulated shadow banking system in the financial crisis?

Do you know why the financial crisis occurred in the first place? You won't like hearing this, but it was largely because the government pushed banks to offer risky mortgages at ridiculously low rates to demographics that should never even have been considered for those mortgages.

[NumberSix]

Number 6, you just gave 6 steps that say nothing about the shadow banking system which means you don't understand what happened in 2008.

The 6 steps you did give are mostly myths discredited years ago. The government wasn't encouraged people who could afford loands to take out expensive loans. Subprime lenders were because that was a very, very profitable business for them. Subprime lenders were not subject to the regulations you mention.

Why was it a profitable business? Because if house prices were going up, you could convince people to refinance their mortgage and pay you a whole new set of fees. If they failed to pay their loan and houses prices kept going up, you now had an asset you could sell. In fact, you could come up with loans that made them refinance every two years.

A good part of the failed loans weren't people who couldn't afford a house. It was people refinancing their existing home loan or people going for "jumbo" mortgages that they couldn't get a bank that could only give "conforming" loans. It was middle class people being given loans for upper-middle class houses.

Look at why the housing bubble didn't take place in Texas with its heavily regulated mortgage industry.

Read the FCIC report.
So, lend money to buy houses at artificially rising prices, take possession of millions of houses that are severely devalued because now the market is flooded with houses you need to get off your hands in an economy where nobody has money to buy houses?

Wow. What a super awesome plan.

[KevinNYC]

So, lend money to buy houses at artificially rising prices, take possession of millions of houses that are severely devalued because now the market is flooded with houses you need to get off your hands in an economy where nobody has money to buy houses?

Wow. What a super awesome plan.

Free market at work.

They didn't plan for severely devalued. That's the whole point. They never planned for the crash. That's why coutrywide and ameriquest don't exist any more.

They knew they making risky loans, but it was super profitable for a while.
They pushed people into risky loans and they pushed people into bigger loans too. They was a epidemic of mortgage fraud at the beginning of the chain.

for the most part, they didn't have to take possession of houses, they just kept flipping the financing. Most fees and more points every time.

[NumberSix]

Free market at work.

They didn't plan for severely devalued. That's the whole point. They never planned for the crash. That's why coutrywide and ameriquest don't exist any more.

They knew they making risky loans, but it was super profitable for a while.
They pushed people into risky loans and they pushed people into bigger loans too. They was a epidemic of mortgage fraud at the beginning of the chain.

for the most part, they didn't have to take possession of houses, they just kept flipping the financing. Most fees and more points every time.
Youre hopeless. :facepalm


There never would have been a crash if the government stayed out of it.

[ISHGoat]

Youre hopeless. :facepalm


There never would have been a crash if the government stayed out of it.

This.

If you ever want to see a lazy workforce at an organization that doesn't get shit done, look no further than any govt or crown company. In Ontario, our provincial hydro provider is notorious for being a high-paying place for old asses to go jack off while they retire.

[KevinNYC]

Do you know why the financial crisis occurred in the first place? You won't like hearing this, but it was largely because the government pushed banks to offer risky mortgages at ridiculously low rates to demographics that should never even have been considered for those mortgages.

This is not true. Read the FCIC report.

Look at who the biggest lenders are.

These banks were not covered by the CRA (the government).

The risky loans were completely the decision of private businesses. Both in mortgage origination and the reseller's on Wall STreet. Wall Street bought risky loans on purpose because they made the most money on them.

In my response to Six above, I left out the fact that the mortgage originators only held the risky loans for a very short period before selling them to Wall Street. So they didn't have to repossess anything. They no longer held the loan.

You also are not mentioning the shadow banking system and if you don't understand that, you don't understand why credit markets froze up due to how a housing bubble that was only centered in a few states. If you don't understand why some people not affording their mortgage caused a bank run on the mutual fund markets, then ou really don't understand the financial crisis at all. It was this massive unregulated private market that was the real bomb. the Housing bubble was just the fuse.

If you don't understand the shadow banking system and all the things that happened on Wall Street, you don't understand why the crisis hit in 2008 when housing prices went down in early 2006.

The FCIC report is quite good on all the aspect that went into the crisis.

[KevinNYC]

Youre hopeless. :facepalm


There never would have been a crash if the government stayed out of it.
Complete and utter nonsense and easily provable.


Here's the list of the top 25 subprime lenders during the height of the bubble.
http://www.businessweek.com/bwdaily/dnflash/content/may2009/db2009056_672318.htm

How did the government influence their lending choices?

[KevinNYC]

If the CRA law is the culprit why did the bubble skip some states?

How come a federal law caused a bubble in Californian and Florida, but not Texas?

[KevinNYC]

Was it the government or the private sector that decided to weaken underwriting standards?

Was it the government or the private sector that decided that 30% of all mortgages in 2006 were made through stated income loans (aka liar loans)? Or even better the no income, no assets loans? NINA not good enough for you? How about the NINJA loan? No Income, No Assets, No Job


Was it the government or the private sector that created interest only loans?

Was it the government or the private sector that created option adjustable rate mortgages where the lender could pick the amount of the monthly payment?

how about teaser rate mortgages? Where the price jumps up in two years? (Hint, those are awesome to get people to take out a second mortgage?)

How about negative amortization loans. Where the amount you owe the bank goes UP every month?

Was it the government or the private sector that created that?

[NumberSix]

Was it the government or the private sector that decided to weaken underwriting standards?

Was it the government or the private sector that decided that 30% of all mortgages in 2006 were made through stated income loans (aka liar loans)? Or even better the no income, no assets loans? NINA not good enough for you? How about the NINJA loan? No Income, No Assets, No Job


Was it the government or the private sector that created interest only loans?

Was it the government or the private sector that created option adjustable rate mortgages where the lender could pick the amount of the monthly payment?

how about teaser rate mortgages? Where the price jumps up in two years? (Hint, those are awesome to get people to take out a second mortgage?)

How about negative amortization loans. Where the amount you owe the bank goes UP every month?

Was it the government or the private sector that created that?
It was the government that created the environment of "go ahead. Be incredibly reckless and stupid with your money. It doesn't matter. If you fcuk up, the taxpayers will bail you out".

Imagine you take your life savings to a casino roulette table. You want to bet it all on one number. It's a stupid bet. You almost certainly won't win, but casino tells you that if you lose, you get to keep your money anyway. Why wouldn't you make the stupid bet?

[Dresta]

Free market at work.

They didn't plan for severely devalued. That's the whole point. They never planned for the crash. That's why coutrywide and ameriquest don't exist any more.

They knew they making risky loans, but it was super profitable for a while.
They pushed people into risky loans and they pushed people into bigger loans too. They was a epidemic of mortgage fraud at the beginning of the chain.

for the most part, they didn't have to take possession of houses, they just kept flipping the financing. Most fees and more points every time.
:roll:

You are too much; truly and utterly delusional.

1. The term the 'free market' is a theoretical abstraction - it does not apply to the real world. The way you are using the phrase makes no sense, and is a typical example of deflective propaganda.

2. To pretend that an economy directed and run by a central authority (with a central bank), and propped up by debt-fueled spending and heavy borrowing by the Federal government, could possibly be a 'free market' is so idiotic that it is barely worth responding to. I mean, what exactly did we have when we didn't have a central bank, the 'ultra free market' or something? Perhaps the 'extreme free market?' - try and come up some other propagandism from your dictionary of Newspeak.

Talk about a manipulation of language, and of history; tis shameless.

[KevinNYC]

It was the government that created the environment of "go ahead. Be incredibly reckless and stupid with your money. It doesn't matter. If you fcuk up, the taxpayers will bail you out".

I think you're being so generic as to be meaningless. A lot of banks went out of business (https://en.wikipedia.org/wiki/List_of_banks_acquired_or_bankrupted_during_the_Gr eat_Recession) during the crisis.

Ameriquest went from having their name on the Texas Rangers Stadium and sponsoring the Super Bowl show in 2005 to being shut down in 2007. Other subprime giants like Countrywide and New Centurry are gone. Bear Stearns and Merrill Lynch got swallowed up.

My first thought to your post was Tell that to Lehman Brothers. Lehman Brothers was not bailed out and what happened. The whole financial system exploded. The bailouts were mostly in the form of buying company stock or giving loans and on the whole the bailouts worked.
They stabilized the system. As a whole the government has eventually made profits on the bailout even AIG. I would have liked to see prosecutions for fraud, but I think the bailouts are due for a re-thinking. Given where we are now, Bernanke and Paulson are owed recognition that what they did worked.

I do think you need to read the FCIC report to understand all the dimensions of the crisis and how much of the decision making was not driven by the government but by profit seeking individuals at private companies. Companies were doing what they were doing because it made them money. Proper risk management at several companies could have stopped this.

One the biggest criminals in this is ratings agencies. If they didn't bless mortgage securities with AAA ratings we wouldn't have a had a financial crisis and we would have had a smaller housing bubble, because it was Wall Street's appetite for high yield mortgages to package and sell that was the engine of the bubble. The mortgages that had the highest yield were the riskiest because those folks had less options, you could charge higher fees and rates. Wall Street only could sell their packages or mortgages if the got the AAA ratings from the credit agencies. The credit agencies have a governmental stamp in that large pension funds can only invest in high rated securities, but their decision making is not managed by the goverment.

It was these AAA ratings and the lack of risk management by the people who bought them that let this risk be woven throughout the whole system because of the shadow banking system. These AAA-rated securities were then used as collateral for loans within the shadow banking system.

The financial crisis was not caused by the Community Reinvestment Act. It was caused by all banks. Even most of AIG was not at fault for the massive losses of AIG. Many, many, many of the causes were decisions made by profit seeking individuals and companies who made their decisions to increase their profit. Government involvement and failure was mainly not enforcing existing regulations. Most folks can understand why a bank would make risky loans. They don't understand the incentives for those banks ...or that individual mortgage seller within the bank to give a risky loan. Bigger loans made you more money and if someone else was going to buy them no questions asked, well, let's go for broke. Until you understand what drove the folks at the beginning of the mortgage chain and the folks buying the mortgages from them, you can't understand the crisis. Below is the actual language used by a private loan company. HCL Finance, home of the no-doc loan:
Full/Alt Doc
Verify employment (V.O.E or Verbal).
Provide income documentation to support (e.g. W2, paystub).
Provide verification of deposit (V.O.D or Bank Statements).

Stated Income
Verbal verification of 2 years job history (in same field of job).
Stated income on 1003 (must make sense).
Provide verification of deposit (V.O.D or Bank Statements).

No Ratio
Verbal verification of 2 years job history (in same field of job).
No income stated in 1003.
Provide verification of deposit (V.O.D or Bank Statements).

SISA (Stated Income, Stated Assets)
Verbal verification of 2 years job history (in same field of job).
Stated income on 1003 (must make sense).
Bank deposit stated on 1003 but no need to provide documentation to support).

NISA (No Income, Stated Assets)
Verbal verification of 2 years job history (in same field of job).
No income stated in 1003.
Bank deposit stated on 1003 but no need to provide documentation to support).

NINA (No Income, No Assets)
Verbal verification of 2 years job history (in same field of job).
No income stated in 1003.
No Asset stated on 1003.

NINJA (No Income, No Job, No Assets)
No Job stated on 1003.
No Income stated on 1003.
No Assets stated on 1003.


This is literally a type of loan they offered. No Income. No Job. No Assets.

They were a significant player during the "boom years", averaging $24.7 million per month in 2005 (http://ml-implode.com/imploded/lender_HCLFinanceInc.-Wholesale_2008-12-08.html) offering every flavor of low- or no-doc subprime loans available. As you can see from a 2001 cached copy of the product list from their web site, we don't make this stuff up: