Quote :

"And guess what? I have exactly as much evidence to support my view as you have to support yours"

Progress. You have given up presenting your opinion on the matter as fact. This just leaves the fact, as your own numbers proclaim, the bailouts have so far been bad for tax payers, with the future perhaps less certain than either of us believed.

10/25/2011 4:42:14 AM

Ah, just in the news. Here is what is causing all the confusion. Freddie Mac and Fannie Mae are now required every quarter to pay the treasury dividends. In your pdf, it is assumed they are going to succeed in paying these dividends every quarter and never need another dime from the treasury through 2021, which would mean the treasury only lost $73 billion (dividend payments going towards interest on the debt). However, the problem is that the GSE's have been getting further bailouts from the treasury every quarter in order to pay both operating losses and this dividend to the treasury.

Quote :

"This time around Fannie Mae is asking for $5.1 billion to cover its losses. That is lower than last quarter's $8.7 billion bailout need, but it pushes Fannie over the $100 billion bailout threshold for the first time...Freddie Mac also saw losses for the second quarter of 2011, and asked for a $1.5 billion bailout from Treasury earlier today."

http://reason.org/blog/show/newly-downgraded-fannie-mae-reaches
http://www.housingwire.com/2011/08/08/freddie-mac-returns-to-loss-in-2q

So far the GSE bailout looks like this:
Fannie Mae: $103.8 billion
Freddie Mac: $65.2 billion
Total: $169 billion

Quote :

"The Congressional Budget Office recently estimated that we are likely to see $51 billion more losses for the GSEs over the next 10 years. "

[Edited on October 25, 2011 at 11:31 AM. Reason : .,.]

10/25/2011 11:30:10 AM

Wow, you are really grasping at straws now. First off,

Quote :

"You have given up presenting your opinion on the matter as fact. This just leaves the fact, as your own numbers proclaim, the bailouts have so far been bad for tax payers, with the future perhaps less certain than either of us believed."

What the fuck? The only matter of opinion is whether or not the bailouts were necessary. Myself, the treasury, historical record, and basically every economist on the planet says that they were. You say they weren't, saying instead that we would have been better off just letting the world economy die in 2008, a claim supported by no one except the usual bunch of libertarian kooks. None of that has anything to do with the FACT that,

Quote :

"Based on current market conditions, Treasury estimates that the government’s emergency financial stabilization programs will earn a profit of approximately $24 billion for taxpayers"

Secondly, after being proven wrong on every facet of your argument that the bailouts were bad, you seem to have narrowed your focus on Fannie and Freddie.

Quote :

"However, the problem is that the GSE's have been getting further bailouts from the treasury every quarter in order to pay both operating losses and this dividend to the treasury. "

So what? The Treasury never said they wouldn't need more money, they just gave an estimate on what they thought the net loss would be. As you posted, they asked for nearly $4 billion less this quarter than last, which seems to conflict with the idea that we'll be propping them up for infinity. As long as the economy continues to improve, we should see the Treasury's investment in them winding down, which is exactly what they predicted. Again, nothing you've posted refutes the Treasury's position that the bailouts were a net monetary positive.

I'll add that those entities were taken over before TARP, before AIG, and before the Fed/Treasury started buying MBS's (all of which you've given up arguing against), so the fact that you've fallen back on them as your only argument against the bailouts is pretty telling. Let me also remind you that they control over 50% of the single family home mortgages in this country, with only ~2% of the mortgage debt on their books being "sub-prime" (a much better ratio than the market at large by the way). So the alternative to the federal takeover would have been the lender for half the responsible home loan borrowers in this country going bust.

10/25/2011 1:06:22 PM

Quote :

"The central banking system is an intentional scheme to funnel wealth from the people to the power elite. "

That's called Capitalism, bro

10/25/2011 1:47:48 PM

Quote :

"Myself, the treasury, historical record, and basically every economist on the planet says that they were."

Except for the GAO, "historical record, and basically every economist on the planet says" that they caused more harm than good by destroying value, suppressing competitors, imposing regime uncertainty, insuring this will all happen again, and destroying confidence in the bankruptcy process.

Quote :

"you seem to have narrowed your focus on Fannie and Freddie."

Let me quote you my very FIRST post in this thread, the second post after the OP: "Fannie, Freddie Narrow Losses, But Want More Government Aid" Now, that article was old. The more recent articles I just posted show that Freddy's situation is getting worse.

Quote :

"As you posted, they asked for nearly $4 billion less this quarter than last, which seems to conflict with the idea that we'll be propping them up for infinity."

And freddy asked for about $4 billion more than in the previous quarter (going from a 0.5B profit to 3.5B losses), which conflicts with the idea that we won't be propping them up for infinity. Especially when you realize the lending standards they are using right now are WORSE than the lending standards that got us into this mess. Which is quite telling because "The GSEs (Fannie Mae and Freddie Mac) and FHA bought or guaranteed 95% of all new mortgages in fiscal year 2011", which is because no private lender would dare under-price risk as much as these government sponsored enterprises. So, will there be losses in the future? You bet your ass there will. According to their actions, every bank in America now clearly believes every mortgage made, on average, will lose money for the GSEs.

Quote :

"Again, nothing you've posted refutes the Treasury's position that the bailouts were a net monetary positive. "

Except the fact that, as your own links showed, the quotes you keep using specifically did not include losses on the GSEs or AIG or the other bailouts, as if TARP turning a profit combined with enron accounting (blatantly assuming profits for the next decades, all evidence to the contrary) somehow excuses all the other losses, or including them with unrelated income such as Federal Reserve operations which had nothing to do with the bailouts. I am repeating myself here, you did not address this complaint except to yet again quote the same damn text with no comment. You seem to know you're right because you found a couple quotes which out of context agree with you. Stop it.

[Edited on October 25, 2011 at 2:05 PM. Reason : .,.]

10/25/2011 2:03:42 PM

Quote :

""historical record, and basically every economist on the planet says" that they caused more harm than good by destroying value, suppressing competitors, imposing regime uncertainty, insuring this will all happen again, and destroying confidence in the bankruptcy process. "

Really? Show me one who isn't some fringe kook anti-Fed lunatic that thinks we would have been better of letting the whole global economy crash in 2008.

Quote :

"Especially when you realize the lending standards they are using right now are WORSE than the lending standards that got us into this mess."

Bull fucking shit. Fannie and Freddie were about the only lenders that had any standards. As I said, only ~2% of the mortgages on their books are sub-prime. Their losses came from the decline in the housing market due to the lending practices of the private sector. Don't come in here and tell me that because private lenders (most of which were wiped out between 2007-2008) aren't giving out loans somehow proves that mortgages are automatically a bad investment. All it means is that banks no longer believe in mortgages as a way to create money out of thin air, which is a good thing, since that's what got us into this mess in the first place.

Quote :

"Except the fact that, as your own links showed, the quotes you keep using specifically did not include losses on the GSEs or AIG or the other bailouts, as if TARP turning a profit combined with enron accounting (blatantly assuming profits for the next decades, all evidence to the contrary) somehow excuses all the other losses, or including them with unrelated income such as Federal Reserve operations which had nothing to do with the bailouts."

What the fuck are you talking about? The Treasury takes into account all those things, and the evidence that assumes profits ARE THE ACTUAL PROFITS. Do I have to actually post the chart for you?

Quote :

"You seem to know you're right because you found a couple quotes which out of context agree with you. Stop it."

Out of context? Dude, you've really gone off the deep end. Given the graph I just posted, how exactly is the following quote, out of context?

Quote :

"Based on current market conditions, Treasury estimates that the government’s emergency financial stabilization programs will earn a profit of approximately $24 billion for taxpayers."

10/25/2011 3:59:28 PM

Quote :

"Really? Show me one"

Here is a list of 192 economists:
http://faculty.chicagobooth.edu/john.cochrane/research/Papers/mortgage_protest.htm

Quote :

"As I said, only ~2% of the mortgages on their books are sub-prime."

Just showing your ignorance. "Those loans which do not meet Fannie Mae or Freddie Mac underwriting guidelines for prime mortgages"
Understand what you are saying: only 2% of the loans on fannie/freddy's books fail to satisfy fannie/freddy's guidelines. It says nothing about what their guidelines are.

Quote :

"Don't come in here and tell me that because private lenders (most of which were wiped out between 2007-2008)"

Complete bullshit and you should know it. A tiny fraction of the lenders in this country were even in any danger of being "wiped out".

Quote :

"The Treasury takes into account all those things, and the evidence that assumes profits ARE THE ACTUAL PROFITS. Do I have to actually post the chart for you?"

READ IT. The ($73) billion assumes the losses end, which they certainly did not when the chart was created ($6.6 billion in more losses have accrued since your chart was created). $110 billion on your chart comes from Federal Reserve operations, which had nothing to do with the bailouts. I know why the Treasury wants to bake the numbers to make themselves look good by taking credit for the revenue from the Federal Reserve which they had nothing to do with, and I know why you want to let them do that, but why do you think we would?

[Edited on October 25, 2011 at 5:19 PM. Reason : .,.]

10/25/2011 5:07:54 PM

Quote :

"So what? The Treasury never said they wouldn't need more money"

So what? IT'S PART OF THE STINKIN BAILOUTS, YOU STUPID FUCK!!! In other words, you are, AGAIN, leaving out massive parts of the bailouts and then claiming victory with the fudged numbers.

Quote :

"Bull fucking shit. Fannie and Freddie were about the only lenders that had any standards."

AHAHAHAHAHAHAAHAHAHAHAHAHAAHAHAHAHAHAHAAHAHAHA
breathe
AHAHAHAHAHAHAAHAHAHAHAHAHAAHAHAHAHAHAHAAHAHAHA
breathe again
AHAHAHAHAHAHAAHAHAHAHAHAHAAHAHAHAHAHAHAAHAHAHA
Did you actually say that with a straight face. They had standards. That's why the bought up practically every mortgage sent their way, right? That's why they have taken a shit ton of bailout money and are still hemorrhaging cash. god damn, son.

[Edited on November 29, 2011 at 9:28 AM. Reason : scroll bars]

10/26/2011 7:19:41 PM

^You are a complete fucking idiot and there really no point in arguing with you at all. I can't fucking wait to see your lunatic raving when Obama wins again 2012.

Now for the people with at least a couple brain cell whom are willing to think, here's some more evidence to chew on.

http://online.wsj.com/article/SB10001424052970203687504577001653467422674.html

Quote :

"The latest forecast shows that, three years after they were taken over by the government, Fannie and Freddie will stop losing money and could begin returning money to taxpayers in the next year or two. "

Quote :

"The new forecast shows that Fannie could begin returning money to the Treasury in 2013 as a result of those dividends. Already, Freddie, which has cost taxpayers $52 billion, has paid out more money to the Treasury than it has taken in each of the last four quarters. Fannie's tab is larger, at $89 billion, for a total of $141 billion for the two companies, but the ultimate figure is likely going to be less because of the dividends."

LoneSnark, paging LoneSnark, can you go ahead and admit you were wrong please?

[Edited on October 27, 2011 at 11:44 AM. Reason : :]

10/27/2011 11:42:40 AM

That's really great news. Like most government figures, projected spending estimates are settled fact, and anyone that questions them is an idiot. After all, there's no conflict of interest there, and the people generating those estimates in no way have a vested interest in making it appear like they're not fucking over the taxpayer.

I assume that they will begin paying back the 141 billion that they've already cost us, right?

10/27/2011 12:08:25 PM

Quote :

""The new forecast shows that Fannie could begin returning money to the Treasury in 2013 as a result of those dividends. Already, Freddie, which has cost taxpayers $52 billion, has paid out more money to the Treasury than it has taken in each of the last four quarters. Fannie's tab is larger, at $89 billion, for a total of $141 billion for the two companies, but the ultimate figure is likely going to be less because of the dividends.""

So as it stands, we've still lost $141B? How is this profit again? And when do I get my share?

10/27/2011 1:14:29 PM

Quote :

"can you go ahead and admit you were wrong please?"

Do you have no reading comprehension?

Quote :

"Already, Freddie, which has cost taxpayers $52 billion, has paid out more money to the Treasury than it has taken in each of the last four quarters."

So, over the past year Freddie has paid the Treasury more in dividends than it took in bailouts. Over the years prior, of course, Freddie "cost taxpayers $52 billion" more in bailouts than it paid in dividends. Did you seriously think this sentence means that Freddie had paid $52 billion in dividend payments to the treasury in one year? I'm stunned.

Of course, this statement excludes Fannie because Fannie has run up further bailouts far in excess of dividend payments to the treasury. Which, BTW, the dividend payments should not be considered repayment of principle but payment of interest on the bailout money. The dividend payments are paltry compared to the funds used, a rate of interest somewhat close to what the Government is paying to borrow the funds used. As such, all the quote means is that Freddie didn't need to borrow all the money it used to pay interest on the bailouts.

Quote :

"Fannie and Freddie will stop losing money and could begin returning money to taxpayers in the next year or two. "

So you accept that they have and will continue losing money at least until that time? Can you please go ahead and admit you were wrong? This is getting ridiculous.

[Edited on October 27, 2011 at 4:43 PM. Reason : .,.]

10/27/2011 4:38:16 PM

LoneSnark a few posts up:

Quote :

"So, will there be losses in the future? You bet your ass there will. According to their actions, every bank in America now clearly believes every mortgage made, on average, will lose money for the GSEs. "

smart people:

Quote :

"Fannie and Freddie will stop losing money and could begin returning money to taxpayers in the next year or two. "

WHO AM I TO BELIEVE?????????? You, along with aaronburro (terrible company to be in by the way), d357r0y3r, and anyone else opposed to the bailouts have literally been wrong on every single facet of this issue. You say the bailouts were a waste of tax payer money, they obviously were not. You say they will lead to a deeper recession and an eventual depression, they obviously have not and will not. You say they cost us hundreds of billions, if not trillions of dollars, when every estimate says they will in fact return a profit in the tens of billions. I have data from various sources supporting my claims, you have nothing except tea leaves and goat entrails supporting yours. Get the fuck off my nuts. Every single one of you lost. Eat a dick.

10/27/2011 4:51:19 PM

you know, your language and temper would make you look like a fool in any kind of debate that wasnt an internet forum right?

[Edited on October 27, 2011 at 5:02 PM. Reason : ,]

10/27/2011 4:58:48 PM

Do you know that what some agency says "will" happen is very different than pointing to things that have happened? One is conjecture, one is fact.

10/27/2011 5:03:14 PM

Quote :

"estimate says they will in fact return a profit in the tens of billions"

No they don't. They say the losses can be buried with other unrelated revenues from the Federal Reserve to look like profits. They also say the losses might end in a few years. I'll freely admit they might stop needing even more bailouts far enough in the future, at least until the next crash in a decade or two.

Quote :

"I have data from various sources supporting my claims"

More accurately, you have various sources supporting my claims:

Quote :

"Fannie and Freddie will stop losing money and could begin returning money to taxpayers in the next year or two."

So you accept that they have and will continue losing money at least until that time? Can you please go ahead and admit you were wrong? This is getting ridiculous.

[Edited on October 27, 2011 at 5:14 PM. Reason : .,.]

10/27/2011 5:12:45 PM

^^Except I am pointing to things that have happened. The TARP money used to bailout the banks has returned a profit. The MBS's that the Fed/Treasury bought and sold have returned a profit. We certainly haven't encountered a double dip recession, or a depression. The economy has in fact improved since the bailouts by every credible measure. Everything else is a prediction based on those facts, which is basically all economics is. If you don't agree, than you better damn well offer up some facts that counter those predictions. Otherwise, you're just pissing into wind.

^^^

Quote :

"AHAHAHAHAHAHAAHAHAHAHAHAHAAHAHAHAHAHAHA breathe AHAHAHAHAHAHAAHAHAHAHAHAHAAHAHAHAHAHAHAAHAHAHAHA breathe again AHAHAHAHAHAHAAHAHAHAHAHAHAAHAHAHAHAHAHAAHAHAHAHAH"

Quote :

"So you accept that they have and will continue losing money at least until that time?"

Not me, not the Treasury, not anyone has said otherwise. I mean, my god man, mortgages are a 30 year investment in most cases. Losing money during any 1-3 period of that isn't indicative of anything. You're really grasping at straws here buddy.

[Edited on October 27, 2011 at 5:28 PM. Reason : :]

[Edited on November 29, 2011 at 9:28 AM. Reason : scroll bars]

10/27/2011 5:16:07 PM

Quote :

"Except I am pointing to things that have happened."

But you aren't. You very clearly aren't. This is what you bolded:

Quote :

"Fannie and Freddie will stop losing money and could begin returning money to taxpayers in the next year or two."

Do you know what "will" means? They didn't say Fannie and Freddie have stopped losing money. They said they will stop losing money. Those are based on projections from the same people that would look very bad if money continued to be lost.

Quote :

"We certainly haven't encountered a double dip recession, or a depression. The economy has in fact improved since the bailouts by every credible measure. "

What are you basing this off of? By some measures we've stagnated. By some, we've added jobs in some sectors but lost them in others.

What you're doing is exactly what Bush supporters were doing in 2005-2008: insisting that everything is fine and that the administration is doing good things. In reality, the administration has very little control over the economy, at least directly. Obama kept a terrible Fed chairman in office, but other than that, factors that are beyond his control are causing the economy to stall out. He could very easily cut spending from things like the wars and enforcing shitty drug laws, but he won't because he's a shill.

10/27/2011 5:39:56 PM

ok shrike, so this is how you debate openly?

say, in a college class?

somehow i doubt that, i also doubt all the "hahas."

10/27/2011 5:44:48 PM

Quote :

"Those are based on projections from the same people that would look very bad if money continued to be lost."

Projections based on hard numbers, not theoretical factors like your prediction of a doomsday scenario that's looking less and less likely every day.

Quote :

"By some measures we've stagnated. By some, we've added jobs in some sectors but lost them in others."

Employment lags output during recovery from a recession, as an expert economist, you should know this.

^Uh, I work in a extremely technical field surrounded by people with mostly advanced degrees. Coincidentally, most of them are also progressives who agree with most of my views, leaving me with little to debate about. I post on TWW because its a nice outlet for my frustrations with the part of the American population who consistently hold positions that are counter to their own interests. And yes, it's fun to act like a jack ass on the webs, its part of the reason for it's existence.

[Edited on October 27, 2011 at 6:02 PM. Reason : better phrasing]

10/27/2011 5:57:14 PM

Shrike, the shit you've posted is so god damn fucking stupid that it just has to be trolling.

10/27/2011 6:05:54 PM

Quote :

"Projections based on hard numbers, not theoretical factors like your prediction of a doomsday scenario that's looking less and less likely every day."

Projections based on hard numbers that will still vary based on human behavior. You can't predict when the market will sell off or rally, because it all depends on who decides to make what announcement and when, who decides what "is news" and what "isn't news," and how the markets react.

These are chaotic systems that you cannot accurately model or predict. That's something that is hard for you to come to terms with, but it's the truth.

Quote :

"Uh, I work in a extremely technical field surrounded by people with mostly advanced degrees. Coincidentally, most of them are also progressives who agree with most of my views, leaving me with little to debate about. I post on TWW because its a nice outlet for my frustrations with the part of the American population who consistently hold positions that are counter to their own interests. And yes, it's fun to act like a jack ass on the webs, its part of the reason for it's existence."

In other words, you work in an echo chamber. When you're faced with legitimate arguments against your entrenched world view, you become angry/frustrated and start lashing out, going so far as to suggest the purging of your political opponents. It's pretty normal, we see it all the time here. You need to get a grip, though.

[Edited on October 27, 2011 at 6:18 PM. Reason : ]

10/27/2011 6:17:10 PM

Quote :

"Shrike, the shit you've posted is so god damn fucking stupid that it just has to be trolling."

Quote :

" you become angry/frustrated and start lashing out, going so far as to suggest the purging of political opponents from the United States. It's pretty normal, we see it all the time here, but you need to get a grip."

Godwin's Law.

Quote :

"These are chaotic systems that you cannot accurately model or predict."

Then stop trying. Just look at the actual facts directly from the source, like I have.

10/27/2011 6:24:32 PM

well now if i could only get mcdanger to say a similar fucking stupid thing then i could comfortably ignore both of them.

or maybe theyre the same person?

**shrug**

[Edited on October 27, 2011 at 6:25 PM. Reason : -]

10/27/2011 6:24:58 PM

Quote :

"Godwin's Law."

Damn, this is almost as good as that time you didn't know what moral hazard was. What do you think Godwin's Law is, and how are those two quoted comments examples of it?

Quote :

"Then stop trying. Just look at the actual facts directly from the source, like I have."

But...a projection is a estimate of future revenue/spending. So, it's not a simple matter of facts. Yes, the figures used in the estimate are facts, but the estimates are estimates.

[Edited on October 27, 2011 at 6:30 PM. Reason : ]

10/27/2011 6:30:15 PM

Quote :

"What do you think Godwin's Law, and how are those two quoted comments applicable?"

Just replace "Nazi" with "troll", not a hard leap to make. Or in the case of your quote, you have no facts to counter the economic projections I'm using to support my claims, so you just attack my, I dunno, argumentative decorum? It's the same damn thing.

Quote :

"Yes, the figures used in the estimate are facts, but the estimates are estimates."

So then produce some facts that show why Treasury's estimates, in your view, are not credible. It's basically what I've been saying all along, put up or shut up.

10/27/2011 6:45:51 PM

Are you asking us to produce numerous examples looking backwards where estimates were...to put it nicely...so fucking off that people should have been arrested for them?

10/27/2011 6:53:22 PM

^ I know, right? The word "Medicare" comes to mind. hell, the word "Social Security" also comes to mind, lol.

Quote :

"WHO AM I TO BELIEVE?????????? You, along with aaronburro (terrible company to be in by the way), d357r0y3r, and anyone else opposed to the bailouts have literally been wrong on every single facet of this issue. "

yeah, you've "proven it's wrong". as long as you take out all of the actual expenses and shit. Enron accounting works wonders, dude.

Quote :

"The MBS's that the Fed/Treasury bought and sold have returned a profit."

riiiiiiiiiiiiiight. then why were the banks so eager to get rid of them? exxxxxxxxxactly.

Quote :

"Just replace "Nazi" with "troll""

The word "troll" was not in anything you quoted when you responded "Godwin's Law". damn, you are failing hard.

Quote :

"Or in the case of your quote, you have no facts to counter the economic projections I'm using to support my claims"

And your economic projections, AS HE ALREADY SAID, aren't facts, either. you have two standards here. one for yourself, where you use fantasy numbers, and one for your opponent, where you demand facts.

Quote :

"So then produce some facts that show why Treasury's estimates, in your view, are not credible. "

It's actually incredibly simple. The first, that he has mentioned time and time again, is that the Treasury is mixing in non-bailout-related revenues with bailout-related revenues and expenses to make the picture rosier. he's said it at least twice now, probably three times. The second is also something he said: the FACT that the Treasury is assuming there will be no more losses, in spite of the fact that Fannie and Freddie are STILL asking for money. The third is even more obvious: the Treasury is projecting profits on the MBS that were so fucking toxic they brought down major banks. That literally makes no sense. On one hand, you are saying they were massively toxic and the banks needed to be bailed out by getting rid of them on a dollar-for-dollar match; then on the other, you are saying they will be wildly profitable for the Treasury. You can't have it both ways, and neither can the Treasury.

10/27/2011 7:48:22 PM

[Edited on October 27, 2011 at 10:15 PM. Reason : wrong thread]

10/27/2011 10:14:38 PM

Quote :

"So you accept that they have and will continue losing money at least until that time?"

Quote :

"Not me, not the Treasury, not anyone has said otherwise."

Here, let me quote you:

Quote :

"but you simply can't dispute that the cold hard math of it all worked out strongly in the American tax payer's favor."

You found one fact, that TARP paid off, and your world-view jumped to the conclusion that "the bailouts were bad for tax payers" was a myth. As your own numbers show, this is no myth, it is fact.

10/28/2011 10:03:25 AM

Moral hazard sets in quick with very perverse behaviors: Bailed-Out Banks Immediately Take More Risk

Quote :

" Ran Duchin and Denis Sosyura of the University of Michigan looked at the U.S.’ Capital Purchase Program. You may recall that this became the centerpiece of TARP once Hank Paulson decided that the money would be better spent directly buying into the banks as opposed to overpaying them for dodgy asset-backed bonds. (Mind you, other parts of TARP were spent overpaying for dodgy asset-backed bonds.) The CPP lasted a little more than a year and invested $205 billion of taxpayer funds into various qualifying institutions. Not every bank that filled out the 2-page application was successful in gaining access. Others were approved but ultimately decided not to take the funds (probably because of the attached restrictions on pay and on paying out dividends.) In the end, 707 financial institutions received the funds. Duchin and Sosyua looked at a sample of 529 public firms that were eligible for CPP and slotted them into categories based on whether they applied, whether they were approved and whether they ultimately took the money. They controlled for non-random selection (via measures of the banks’ financial condition, performance, size and crisis exposure); for changes in national and regional economic conditions; and finally for potential distinctions in credit demand. “after CPP capital infusions, program participants tilted their credit origination toward higher-risk loans by tightening credit standards for the relatively safer borrowers and slightly loosening them for riskier borrowers.” –while at the same time ensuring that they didn’t trip off any alarms “This pattern would be consistent with a strategy aimed at originating high-yield assets, while improving bank capitalization ratios, since the key capitalization ratios do not distinguish between prime and subprime mortgages.” Likewise, for corporate loans “the fraction of CPP recipients in loans to borrowers with lower credit ratings has increased after CPP compared to nonrecipients.” Finally, not only did the CPP recipients buy more investment securities than non-bailout recipients, but also riskier ones at that! “[T]he total weight of investment securities in bank assets increased by 5.3% after CPP relative to non-recipient banks. More importantly, the increase in the allocation to investment securities at CPP participants was primarily driven by higher allocations to riskier securities, which increased at CPP banks by 6.2% after CPP relative to nonrecipients.” Looking specifically at CPP recipients vs. those who applied but were rejected from the program, the authors found that the average yield on the bailed-out banks portfolios increased by 9.4%! “Overall, the analysis of banks’ investment portfolios suggests that CPP participants actively increased their risk exposure after being approved for federal capital. In particular, CPP recipients invested capital in riskier asset classes, tilted portfolios to higher-yielding securities, and engaged in more speculative trading, compared to nonrecipient banks with similar financial characteristics.”"

http://www.zerohedge.com/news/guest-post-hard-evidence-bailed-out-banks-take-more-risk

11/9/2011 2:51:03 PM

Fannie and Freddie is a huge red herring

http://www.ritholtz.com/blog/2011/07/why-wallison-is-wrong-about-the-genesis-of-the-u-s-housing-crisis/

So is the CRA

http://www.jchs.harvard.edu/publications/governmentprograms/n08-2_park.pdf

Stop parroting the Limbaugh narrative from 3 years ago for what caused the crisis. Just because Bloomberg did doesn't make it any less false.

11/9/2011 2:57:13 PM

If you are going to ignore the evidence and proclaim they had nothing and could never have had anything to do with the housing crisis then I'm also going to ignore the evidence and proclaim they and only they hold any blame for the crisis.

11/9/2011 6:00:00 PM

Here's some more

http://www.newdeal20.org/2011/11/03/six-rebuttals-to-the-argument-that-congress-or-fannie-and-freddie-caused-the-crisis-63556/

http://andrewsullivan.thedailybeast.com/2011/11/dish-check-who-caused-the-financial-collapse-not-fannie-and-freddie.html

11/10/2011 10:20:13 AM

Also Loneshark you're cracking me up. I was pointing out long-standing rebuttals the claims made by many, many right wingers that Fannie and Freddie were key cause to the crisis. Now you're saying "Hm how dare you proclaim that they had nothing and could never have had anything to do with the housing crisis" Do I really have to explain what disingenuous tactic you're using?

If you actually look at the links I posted, you'll see none of them deny F&F being at least part of the crisis. Thing is, the F&F loans were nowhere near a majority of the subprimes, and they didn't even make up the majority of the worst ones. Same with CRA, plus the CRA loans were actually among the safest.

See, there's a thing called "data" and "evidence". Sometimes you consult these things to draw conclusions. Rather than hearing Limbaugh say "Well CRA forced the banks to make loans to black err I mean poor people and so now we have a crisis" then think to yourself "Hm, that means it's the government's fault for being too hard on the banks, makes sense to me, must be right!"

[Edited on November 10, 2011 at 10:25 AM. Reason : .]

11/10/2011 10:21:44 AM

No, see, here's the problem. If it is your position that "none of them deny F&F being at least part of the crisis" then we have no disagreement. It is merely a disagreement of scale. No discussion necessary. We agree government contributed to the problem and we agree how to fix it.

So, let us end all this angry speak and join forces to call for the elimination of both F&F and the CRA because none of us "deny F&F being at least part of the crisis"!

And no, as a libertarian I never think the government is being too hard on the banks. It is being too lenient, by bailing the fuckers out. A sensible government would keep its money separate from such a corrupting industry. Yet here we are, government funded agencies (F&F, CRA, etc) mixing public funds with private funds.

[Edited on November 11, 2011 at 11:36 AM. Reason : .,.]

11/11/2011 11:34:04 AM

Just because some mortgages backed by F&F or related to the CRA were brought down in the crash doesn't mean they were somehow responsible for the crash itself. F&F operated mostly unchanged for over 70 years, CRA for over 30. Yet, sub-primes went from 5% of the loan market in the late 90's to 30% of the market by 2007, then came the crash. So how did F&F and the CRA, which both ran smoothly for decades, suddenly cause this? It's pretty clear they were dragged down. I'd add that the beginning of massive growth of the sub prime market just happened to coincide with the massive bank mergers that occurred in the past 15 years, particularly those between investment and commercial banks...

11/11/2011 11:54:54 AM

Quote :

"So how did F&F and the CRA, which both ran smoothly for decades, suddenly cause this?"

Stop flip flopping. Which is it? Are they innocent bystanders or "none of [us] deny F&F being at least part of the crisis"?

11/11/2011 12:06:15 PM

I'm not flipping, my position from the start has been that F&F and CRA-affected loans were indeed part of the crisis, in so far as those loans made up a proportion of those later qualified as "subprime" and were part of the bubble that burst.

But, because those loans were both a small fraction of the ones affected by the crisis, and were in fact among the safest and least-risky, it's very questionable to assert the crisis occurred as a result of them.

That is to say, my position is that other factors (such as Glass Steagall and other deregulations that let the mortgage backed securities market grow to unsustainable levels) caused a crisis that, had those factors not occurred and F&F and the CRA had operated as they had been, wouldn't have happened.

In other words, F&F and CRA loans were dragged down with the rest. So I guess to make this easy on you, since your mind has serious difficulty with nuance, I'll just go ahead and round my position to "F&F and CRA were trivial factors in the crisis."

11/11/2011 12:14:51 PM

Look, you'll never get any of these people to admit F&F and the CRA were relatively minor players in the sub-prime mortgage crisis, because that would be getting them to admit that government makes better decisions than private business. That basically goes against line one of their ideology. They simply can't accept facts and evidence that are contrary to that mindset, you've seen it all throughout this thread. To them, every single negative outcome can be traced back to government meddling, and that all problems can be solved via faith in the free market. It's a religion, and like any religion (like we've seen at Penn State), it can lead to extremely adverse consequences. You'll never get them to see that though until the day the free market bends them over and rapes them in the shower.

Some good debunking here:

http://www.mcclatchydc.com/2008/10/12/53802/private-sector-loans-not-fannie.html

Quote :

"More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions. Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year. Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that's being lambasted by conservative critics."

Quote :

"Between 2004 and 2006, when subprime lending was exploding, Fannie and Freddie went from holding a high of 48 percent of the subprime loans that were sold into the secondary market to holding about 24 percent, according to data from Inside Mortgage Finance, a specialty publication. One reason is that Fannie and Freddie were subject to tougher standards than many of the unregulated players in the private sector who weakened lending standards, most of whom have gone bankrupt or are now in deep trouble."

[Edited on November 11, 2011 at 1:25 PM. Reason : :]

11/11/2011 1:10:36 PM

Quote :

"I'll just go ahead and round my position to "F&F and CRA were trivial factors in the crisis.""

F&F were the only ones that caused taxpayers to lose their shirts. Hence this thread. As such, they cannot be trivial factors in the crisis.

As with all these discussions, the counter factual cannot be run. So we will never have evidence whether or not the housing bubble would have still occurred without all this government subsidization of housing. I give it an 80% chance. What is undeniable, I believe, is that these government programs have privatized profits and socialized losses upon taxpayers.

How about we meet in the middle? In exchange for restoring G-S, would you support doing away with F&F and the CRA? While I believe G-S was a waste of legislation and had almost nothing to do with this fiasco, it is insignificant compared to a policy of uncle sam insuring 98% of all the mortgages in America. If you think the banks made bad loans before when uncle sam was on the hook for half of them, just wait until the current crop reach fruition with uncle sam on the hook for 98% of them.

11/11/2011 1:54:55 PM

The losses continue:

Quote :

"WASHINGTON (AP) — Mortgage giant Fannie Mae is asking the federal government for $7.8 billion in aid to cover its losses in the July-September quarter. The government-controlled company said Tuesday that it lost $7.6 billion in the third quarter. Low mortgage rates reduced profits and declining home prices caused more defaults on loans it had guaranteed. The government rescued Fannie Mae and sibling company Freddie Mac in September 2008 to cover their losses on soured mortgage loans. Since then, a federal regulator has controlled their financial decisions. Taxpayers have spent about $169 billion to rescue Fannie and Freddie, the most expensive bailout of the 2008 financial crisis. The government estimates that figure could reach up $220 billion to support the companies through 2014 after subtracting dividend payments."

http://news.yahoo.com/fannie-mae-loss-widens-asks-taxpayers-7-8b-221752510.html

11/13/2011 5:59:23 PM

Pretty clear Shrike has been owned about as hard as one can possibly be owned.

11/13/2011 7:09:01 PM

Quote :

"F&F were the only ones that caused taxpayers to lose their shirts. Hence this thread. As such, they cannot be trivial factors in the crisis. "

*States a conclusion*

*Works backwards*

*Works forward*

Hence *conclusion, restated*

Checkmate, liberals >:]

11/14/2011 11:05:48 AM

^^Chance's valuable contributions so far,

Quote :

"For fucks sake shrike, stop making an ass out of yourself."

Quote :

"Shrike, the shit you've posted is so god damn fucking stupid that it just has to be trolling."

Quote :

"Are you asking us to produce numerous examples looking backwards where estimates were...to put it nicely...so fucking off that people should have been arrested for them?"

Quote :

"Pretty clear Shrike has been owned about as hard as one can possibly be owned."

Useless poster is useless.

11/14/2011 11:56:38 AM

You've already admitted your mistake. Why bother attacking the messenger now?

11/14/2011 12:23:27 PM

Bahaha Shrike makes a mistake with respect to a term and you guys want to run him out of town and discredit everything he says. Never mind the fact that you post volumes of counterfactuals (masquerading as facts) and a bunch of bullshit reasoning that's eviscerated over and over again, never once acknowledging any of it.

11/14/2011 12:30:33 PM

Is this what you people are talking about

http://www.detnews.com/article/20111114/AUTO01/111140434/1361/U.S.-boosts-estimate-of-auto-bailout-losses-to-$23.6B

Quote :

"The Treasury Department dramatically boosted its estimate of losses from its $85 billion auto industry bailout by more than $9 billion in the face of General Motors Co.'s steep stock decline. In its monthly report to Congress, the Treasury Department now says it expects to lose $23.6 billion, up from its previous estimate of $14.33 billion. The Treasury now pegs the cost of the bailout of GM, Chrysler Group LLC and the auto finance companies at $79.6 billion. It no longer includes $5 billion it set aside to guarantee payments to auto suppliers in 2009. "

11/17/2011 8:34:42 AM

Ill go ahead and put this here....

http://www.bloomberg.com/news/2011-11-28/secret-fed-loans-undisclosed-to-congress-gave-banks-13-billion-in-income.html

11/28/2011 11:03:59 AM

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11/28/2011 9:00:20 PM