CNBC Editor blames Obama's Stimulus for recent stock woes

rhadamanthus · Mar 5, 2009

You keep trying to turn this into something political (my party vs your party) but I don't see it that way Stan. Frankly, that's too trite for someone as intelligent as you appear to be.

teehee omg

EDIT: thanks pgabs - I was waiting for you to step in. I recall you posting about this at length in previous threads.

SamFisher · Mar 5, 2009

wakkoman said:

Way to pick one stupid company he cited in the Article to prove his point Sam.
Click to expand...

I didn't pick the company bro, he did - and he explicitly discussed it as if it were a valid hypothesis, including to ticker symbol and price movement (which had a little green arrow going UP when he posted this garbage).

I can do the same for any of these stocks - he mentioned CAT -do you know what would happened to CAT stock if Obama repealed the stimulus package and many hundreds of billions of dollars of infrastructure spending? LOL...

Conversely look at the big winners under Obama's plan - are alternative energy stocks killing it these days? Nope. Despite the fact that they're getting hundreds of billions of federal funds.

This tells me that things like, say CATACLYSMIC DROPS IN GDP, RECORD LOSSES, AND A HORRIFIC ECONOMIC FORECAST just might be predominant.

It also tells me that judging the success of the plan by market reaction is heinously stupid - remember the Market is always highest before the fall, and lowest before the rise. So by virtue of this form of analysis - economic conditions in October of 2007 were never better and nothing could derail the train!

The depth of this kind of analysis endorsed by you and this article is that of a two-year old. A very slow witted two-year old who has not yet mastered the difference between correlation and causation.

But then again, that's all you really know how to do. Avoid the bigger picture and nitpick on something smaller to drive your point. It really shows what kind of ability you lack to have rational discussions.
Click to expand...

Yeah wakkoman: focusing on a small aspect of a larger trend, confusing correlation with causation, and sticking your head in the sand against the backdrop of the big picture - why does that sound familiar?

Oh yeah - because the same half-witted, poorly made argument that you are making in this thread.

okierock · Mar 5, 2009

stanleykurtz said:

By the time that deregulation occurred in 2004, Fannie Mae and Freddie Mac were already in trouble. McCain attempted to intervene in 2003, but Barney Frank and company squashed his efforts after Congressional leadership changed.

You are correct in saying that this is very complicated, but this mess started when HUD mandated that lenders give loans to people that didn't deserve those loans. That was the start of a terrible snowball effect of greed that created "B-loans" and a secondary market for high yield, high risk, and poor credit mortgage backed securities.

I am surprised that you would actually point to deregulation that occurred in 2004, when McCain gave the following warning statement a year earlier-

Mr. President, this week Fannie Mae's regulator reported that the company's quarterly reports of profit growth over the past few years were "illusions deliberately and systematically created" by the company's senior management, which resulted in a $10.6 billion accounting scandal. The Office of Federal Housing Enterprise Oversight's report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae's former chief executive officer, OFHEO's report shows that over half of Mr. Raines' compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac. The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator's examination of the company's accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform. For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac--known as Government-sponsored entities or GSEs--and the sheer magnitude of these companies and the role they play in the housing market. OFHEO's report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO's report solidifies my view that the GSEs need to be reformed without delay. I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 1 90, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole. I urge my colleagues to support swift action on this GSE reform legislation."

Sen. Obama voted no, and we later elected him President. Wow.
Click to expand...

This is exactly what needed to happen and the Democratic congress voted it down with Obama's help.

okierock · Mar 5, 2009

pgabriel said:

The problem isn't the mortgages as much as the derivatives created from them. This article is from March 08
Click to expand...

The problem started with the bad loans, without the bad loans there are no derivatives created from them. True the bad loans themselves didn't collapse the credit market but they started the ball rolling.

If you are a banker and you loan money to people that can't pay it back bad things WILL happen, and they did.

stanleykurtz · Mar 5, 2009

rhadamanthus said:

You keep trying to turn this into something political (my party vs your party) but I don't see it that way Stan. Frankly, that's too trite for someone as intelligent as you appear to be.

teehee omg

EDIT: thanks pgabs - I was waiting for you to step in. I recall you posting about this at length in previous threads.
Click to expand...

I agree- there is plenty of blame to go around, and this shouldn't be a partisan issue.

I am just still flabbergasted how the press allowed Obama to paint McCain as one of the bad guys in the subprime mess.

pgabriel · Mar 5, 2009

okierock said:

The problem started with the bad loans, without the bad loans there are no derivatives created from them.
Click to expand...

this doesn't make any sense. without the bad loans there are no derivatives? and read the article, its not just mortgages.

SamFisher · Mar 5, 2009

okierock said:

The problem started with the bad loans, without the bad loans there are no derivatives created from them. True the bad loans themselves didn't collapse the credit market but they started the ball rolling.

If you are a banker and you loan money to people that can't pay it back bad things WILL happen, and they did.
Click to expand...

Credit derivatives & other synthetic instruments were invented decades before this.

This is really stupid. yeah, some guy left a burning cigarrette in your driveway, but since you decided to coat your house in gasoline - who bears the blame?

rhadamanthus · Mar 5, 2009

okierock said:

This is exactly what needed to happen and the Democratic congress voted it down with Obama's help.
Click to expand...

That bill (from 2005, not 2003 btw - wait - is that shorthand also reserved for schoolgirls?) was never voted on.

It mysteriously died in the republican-controlled Banking, Housing, and Urban Affairs Committee. Moreover, the bill seemed to deregulate fannie more than provide oversight, IIRC.

It appears that it was reintroduced in 2007 and then died in a democrat-controlled committee. Both sides stink.

okierock · Mar 5, 2009

pgabriel said:

this doesn't make any sense. without the bad loans there are no derivatives? and read the article, its not just mortgages.
Click to expand...

No derivatives CREATED FROM BAD LOANS IN AN ATTEMPT TO HIDE THEM AND PROFIT FROM THEM.

Come on guys you just don't want it to make sense.

Major · Mar 5, 2009

stanleykurtz said:

I am sorry, I guess you missed my last post. I lived through the changes in the residential and commercial mortgage business. I don't need websites to share my personal story.

The markets kept the mortgage business stable, because banks were responsible for their bad loans- just like in Canada.[/quoe]

The problem is that mortgages aren't the reason for the problem - they certainly exacerbated it, but banks can handle mortgage losses. It's what the banks did with the mortgages that caused the problems. There's a reason why the smaller regional banks - the ones that did the most CRA business - are the most stable of the bunch.

stanleykurtz said:

Please make an argument, but these personal attacks are tiresome.
Click to expand...

It's not a personal attack - you admitted it a few posts later when you linked to this blog:

http://www.verumserum.com/?p=2649

A Christian blog run by a guy with a liberal arts degree and another guy with an applied communications degree should not be your primary source for financial information. It goes back to blaming the CRA, which ignores the actual facts of the situation:

1. The mortgage crisis didn't start with CRA loans. It started on the coasts, where there was a wave of speculative loans. Even now, the vast majority of failing loans are in FL and CA. The CRA loans only started defaulting when the economy went to hell - well after this crisis started.

2. The primary lenders focused on CRA loans (community and regional banks) are doing better than the overall banking industry.

3. Europe and Asia did not have CRA - but did have deregulation - and are suffering the same problems as we are. Canada did not have deregulation and did not suffer.

I'm also impressed how they blame Barney Frank - despite having a GOP-controlled House and Senate, and no filibuster power in the House. Barney Frank couldn't have stopped anything in 2003 without the support of Republicans.

I especially liked this little nugget from your blog:

In 2004, the pattern of Republicans offering initiatives aimed at reform but failing to get them passed along largely party line votes continued:

In 2004, Republicans controlled the House. If these guys don't even know that, they are totally clueless. Instead of relying on inaccurate, biased blog posts, why don't *you* make an argument based on facts?
Click to expand...

rimrocker · Mar 5, 2009

Stewart was en fuego last night... one of his best shows ever...

<style type='text/css'>.cc_box a:hover .cc_home{background:url('http://www.comedycentral.com/comedycentral/video/assets/syndicated-logo-over.png') !important;}.cc_links a{color:#b9b9b9;text-decoration:none;}.cc_show a{color:#707070;text-decoration:none;}.cc_title a{color:#868686;text-decoration:none;}.cc_links a:hover{color:#67bee2;text-decoration:underline;}</style><div class='cc_box' style='position:relative'><a href='http://www.comedycentral.com' target='_blank' style='display:inline; float:left; width:60px; height:31px;'><div class='cc_home' style='float:left; border:solid 1px #cfcfcf; border-width:1px 0px 0px 1px; width:60px; height:31px; background:url("http://www.comedycentral.com/comedycentral/video/assets/syndicated-logo-out.png");'></div></a><div style='font:bold 10px Arial,Helvetica,Verdana,sans-serif; float:left; width:299px; height:31px; border:solid 1px #cfcfcf; border-width:1px 1px 0px 0px; overflow:hidden; color:#707070;'><div class='cc_show' style='position:relative; background-color:#e5e5e5;padding-left:3px; height:14px; padding-top:2px; overflow:hidden;'><a href='http://www.thedailyshow.com/' target='_blank'>The Daily Show With Jon Stewart</a><span style='position:absolute; top:2px; right:3px;'>M - Th 11p / 10c</span></div><div class='cc_title' style='font-size:11px; color:#868686; background-color:#f5f5f5; padding:3px; padding-top:1px; line-height:14px; height:21px; overflow:hidden;'><a href='http://www.thedailyshow.com/video/index.jhtml?videoId=220252&title=cnbc-gives-financial-advice' target='_blank'>CNBC Gives Financial Advice</a></div></div><embed style='float:left; clear:left;' src='http://media.mtvnservices.com/mgid:cms:item:comedycentral.com:220252' width='360' height='301' type='application/x-shockwave-flash' wmode='window' allowFullscreen='true' allowscriptaccess='always' allownetworking='all' flashvars='autoPlay=false' bgcolor='#000000'></embed><div class='cc_links' style='float:left; clear:left; width:358px; border:solid 1px #cfcfcf; border-top:0px; font:10px Arial,Helvetica,Verdana,sans-serif; color:#b9b9b9; background-color:#f5f5f5;'><div style='width:177px; float:left; padding-left:3px;'><a target='_blank' href='http://www.thedailyshow.com/full-episodes/index.jhtml'>Daily Show Full Episodes</a><br /><a target='_blank' href='http://www.comedycentral.com/shows/important_things/index.jhtml'>Important Things With Demetri Martin</a></div><div style='width:177px; float:left;'><a target='_blank' href='http://www.indecisionforever.com'>Political Humor</a><br /><a target='_blank' href='http://www.jokes.com'>Joke of the Day</a></div><div style='clear:both'></div></div><div style='clear:both'></div></div>

<style type='text/css'>.cc_box a:hover .cc_home{background:url('http://www.comedycentral.com/comedycentral/video/assets/syndicated-logo-over.png') !important;}.cc_links a{color:#b9b9b9;text-decoration:none;}.cc_show a{color:#707070;text-decoration:none;}.cc_title a{color:#868686;text-decoration:none;}.cc_links a:hover{color:#67bee2;text-decoration:underline;}</style><div class='cc_box' style='position:relative'><a href='http://www.comedycentral.com' target='_blank' style='display:inline; float:left; width:60px; height:31px;'><div class='cc_home' style='float:left; border:solid 1px #cfcfcf; border-width:1px 0px 0px 1px; width:60px; height:31px; background:url("http://www.comedycentral.com/comedycentral/video/assets/syndicated-logo-out.png");'></div></a><div style='font:bold 10px Arial,Helvetica,Verdana,sans-serif; float:left; width:299px; height:31px; border:solid 1px #cfcfcf; border-width:1px 1px 0px 0px; overflow:hidden; color:#707070;'><div class='cc_show' style='position:relative; background-color:#e5e5e5;padding-left:3px; height:14px; padding-top:2px; overflow:hidden;'><a href='http://www.thedailyshow.com/' target='_blank'>The Daily Show With Jon Stewart</a><span style='position:absolute; top:2px; right:3px;'>M - Th 11p / 10c</span></div><div class='cc_title' style='font-size:11px; color:#868686; background-color:#f5f5f5; padding:3px; padding-top:1px; line-height:14px; height:21px; overflow:hidden;'><a href='http://www.thedailyshow.com/video/index.jhtml?videoId=220253&title=the-dow-knows-all' target='_blank'>The Dow Knows All</a></div></div><embed style='float:left; clear:left;' src='http://media.mtvnservices.com/mgid:cms:item:comedycentral.com:220253' width='360' height='301' type='application/x-shockwave-flash' wmode='window' allowFullscreen='true' allowscriptaccess='always' allownetworking='all' flashvars='autoPlay=false' bgcolor='#000000'></embed><div class='cc_links' style='float:left; clear:left; width:358px; border:solid 1px #cfcfcf; border-top:0px; font:10px Arial,Helvetica,Verdana,sans-serif; color:#b9b9b9; background-color:#f5f5f5;'><div style='width:177px; float:left; padding-left:3px;'><a target='_blank' href='http://www.thedailyshow.com/full-episodes/index.jhtml'>Daily Show Full Episodes</a><br /><a target='_blank' href='http://www.comedycentral.com/shows/important_things/index.jhtml'>Important Things With Demetri Martin</a></div><div style='width:177px; float:left;'><a target='_blank' href='http://www.indecisionforever.com'>Political Humor</a><br /><a target='_blank' href='http://www.jokes.com'>Joke of the Day</a></div><div style='clear:both'></div></div><div style='clear:both'></div></div>

<style type='text/css'>.cc_box a:hover .cc_home{background:url('http://www.comedycentral.com/comedycentral/video/assets/syndicated-logo-over.png') !important;}.cc_links a{color:#b9b9b9;text-decoration:none;}.cc_show a{color:#707070;text-decoration:none;}.cc_title a{color:#868686;text-decoration:none;}.cc_links a:hover{color:#67bee2;text-decoration:underline;}</style><div class='cc_box' style='position:relative'><a href='http://www.comedycentral.com' target='_blank' style='display:inline; float:left; width:60px; height:31px;'><div class='cc_home' style='float:left; border:solid 1px #cfcfcf; border-width:1px 0px 0px 1px; width:60px; height:31px; background:url("http://www.comedycentral.com/comedycentral/video/assets/syndicated-logo-out.png");'></div></a><div style='font:bold 10px Arial,Helvetica,Verdana,sans-serif; float:left; width:299px; height:31px; border:solid 1px #cfcfcf; border-width:1px 1px 0px 0px; overflow:hidden; color:#707070;'><div class='cc_show' style='position:relative; background-color:#e5e5e5;padding-left:3px; height:14px; padding-top:2px; overflow:hidden;'><a href='http://www.thedailyshow.com/' target='_blank'>The Daily Show With Jon Stewart</a><span style='position:absolute; top:2px; right:3px;'>M - Th 11p / 10c</span></div><div class='cc_title' style='font-size:11px; color:#868686; background-color:#f5f5f5; padding:3px; padding-top:1px; line-height:14px; height:21px; overflow:hidden;'><a href='http://www.thedailyshow.com/video/index.jhtml?videoId=220254&title=joe-nocera' target='_blank'>Joe Nocera</a></div></div><embed style='float:left; clear:left;' src='http://media.mtvnservices.com/mgid:cms:item:comedycentral.com:220254' width='360' height='301' type='application/x-shockwave-flash' wmode='window' allowFullscreen='true' allowscriptaccess='always' allownetworking='all' flashvars='autoPlay=false' bgcolor='#000000'></embed><div class='cc_links' style='float:left; clear:left; width:358px; border:solid 1px #cfcfcf; border-top:0px; font:10px Arial,Helvetica,Verdana,sans-serif; color:#b9b9b9; background-color:#f5f5f5;'><div style='width:177px; float:left; padding-left:3px;'><a target='_blank' href='http://www.thedailyshow.com/full-episodes/index.jhtml'>Daily Show Full Episodes</a><br /><a target='_blank' href='http://www.comedycentral.com/shows/important_things/index.jhtml'>Important Things With Demetri Martin</a></div><div style='width:177px; float:left;'><a target='_blank' href='http://www.indecisionforever.com'>Political Humor</a><br /><a target='_blank' href='http://www.jokes.com'>Joke of the Day</a></div><div style='clear:both'></div></div><div style='clear:both'></div></div>

stanleykurtz · Mar 5, 2009

rhadamanthus said:

That bill (from 2005, not 2003 btw - wait - is that shorthand also reserved for schoolgirls?) was never voted on.

It mysteriously died in the republican-controlled Banking, Housing, and Urban Affairs Committee. Moreover, the bill seemed to deregulate fannie more than provide oversight, IIRC.
Click to expand...

McCain's statement is from 2003. The bill is a 2005 bill, but the bill died when the Senate adjourned.

The bill really died when Dodd, the largest recipient of money from Freddie and Fannie, took control of the committee.

Also, the bill was about oversight, not deregulation-
(1) in lieu of the Office of Federal Housing Enterprise Oversight of the Department of Housing and Urban Development (HUD), an independent Federal Housing Enterprise Regulatory Agency which shall have authority over the Federal Home Loan Bank Finance Corporation, the Federal Home Loan Banks, the Federal National Mortgage Association (Fannie Mae), and the Federal Home Loan Mortgage Corporation (Freddie Mac); and (2) the Federal Housing Enterprise Board.

Sets forth operating, administrative, and regulatory provisions of the Agency, including provisions respecting: (1) assessment authority; (2) authority to limit nonmission-related assets; (3) minimum and critical capital levels; (4) risk-based capital test; (5) capital classifications and undercapitalized enterprises; (6) enforcement actions and penalties; (7) golden parachutes; and (8) reporting.

pgabriel · Mar 5, 2009

okierock said:

No derivatives CREATED FROM BAD LOANS IN AN ATTEMPT TO HIDE THEM AND PROFIT FROM THEM.
Click to expand...

no, the derivatives were used to create equity to make more loans. read the article, when these became popular in the nineties, banks were expecting to be repaid in full.

stanleykurtz · Mar 5, 2009

pgabriel said:

this doesn't make any sense. without the bad loans there are no derivatives? and read the article, its not just mortgages.
Click to expand...

That was a good article you posted. I am not sure, however, that the problem is there is more criminal than negligence.

Here is a simple concept on which we might all agree. If a firm on Wall Street claims to offer some type of "insurance", and that firm is shown to not have funds available to pay off claims, then the members of that firm are hit with criminal fraud charges.

The article correctly states this all started with bad loans and a housing bubble though.

pgabriel · Mar 5, 2009

Major said:

The problem is that mortgages aren't the reason for the problem - they certainly exacerbated it, but banks can handle mortgage losses. It's what the banks did with the mortgages that caused the problems. There's a reason why the smaller regional banks - the ones that did the most CRA business - are the most stable of the bunch.
Click to expand...

if anyone does any real research on this topic, they will realize that when clinton and the republican congress deregulated the financial industry, they actually took what little teeth CRA had out.

SamFisher · Mar 5, 2009

stanleykurtz said:

McCain's statement is from 2003. The bill is a 2005 bill, but the bill died when the Senate adjourned.
Click to expand...

Sorry bro it was from 2006. We've been through this before.

http://bbs.clutchfans.net/showpost.php?p=3902921&postcount=21

okierock · Mar 5, 2009

pgabriel said:

no, the derivatives were used to create equity to make more loans. read the article, when these became popular in the nineties, banks were expecting to be repaid in full.
Click to expand...

Yes, I think we keep talking about the same thing and I keep assuming you understand me. The problem still goes back to the bad loans. They used derivatives to create equity that was backed by bad loans... if they are backed by good loans there are no problems.

pgabriel · Mar 5, 2009

okierock said:

Yes, I think we keep talking about the same thing and I keep assuming you understand me. The problem still goes back to the bad loans. They used derivatives to create equity that was backed by bad loans... if they are backed by good loans there are no problems.
Click to expand...

if they weren't created to create artificial equity, we wouldn't have this problem. Case in point, the snl crisis cost the government $124BB. no where near the problem we have now.

Sweet Lou 4 2 · Mar 5, 2009

bigtexxx said:

<object width="425" height="344"><param name="movie" value="http://www.youtube.com/v/RDVUPqoowf8&hl=en&fs=1"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/RDVUPqoowf8&hl=en&fs=1" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="425" height="344"></embed></object>
Click to expand...

ummmm. ok.

Newsfash! Election is over, your guy lost.

okierock · Mar 5, 2009

pgabriel said:

if they weren't created to create artificial equity, we wouldn't have this problem. Case in point, the snl crisis cost the government $124BB. no where near the problem we have now.
Click to expand...

I'm beginning to lose track of where we are going with this. If bad loans weren't the problem would we call it the sub-prime lending crisis?

Forums

CNBC Editor blames Obama's Stimulus for recent stock woes

rhadamanthus Contributing Member

SamFisher Contributing Member

okierock Contributing Member

okierock Contributing Member

stanleykurtz Member

pgabriel Educated Negro

SamFisher Contributing Member

rhadamanthus Contributing Member

okierock Contributing Member

Major Member

rimrocker Contributing Member

stanleykurtz Member

pgabriel Educated Negro

stanleykurtz Member

pgabriel Educated Negro

SamFisher Contributing Member

okierock Contributing Member

pgabriel Educated Negro

Sweet Lou 4 2 Contributing Member
Supporting Member

okierock Contributing Member

Share This Page

About ClutchFans

Rockets Content

Support ClutchFans!

CNBC Editor blames Obama's Stimulus for recent stock woes

rhadamanthus Contributing Member

SamFisher Contributing Member

okierock Contributing Member

okierock Contributing Member

stanleykurtz Member

pgabriel Educated Negro

SamFisher Contributing Member

rhadamanthus Contributing Member

okierock Contributing Member

Major Member

rimrocker Contributing Member

stanleykurtz Member

pgabriel Educated Negro

stanleykurtz Member

pgabriel Educated Negro

SamFisher Contributing Member

okierock Contributing Member

pgabriel Educated Negro

Sweet Lou 4 2 Contributing Member Supporting Member

okierock Contributing Member

Share This Page

Sweet Lou 4 2 Contributing Member
Supporting Member