Bill Clinton caused housing crisis and 9/11 debate

The revelation that zantabak has an MBA has to go down as the greatest 'WTF?' moment in Clutchfans D&D history.

Though admittedly, that is a very commendable achievement for someone apparently incapable of stringing together a coherent sentence.

 

FACT TIME:

CRA didn't cover Investment Banks such as Bear Stearns/ Lehman Bros./ Goldman/ Merrill etc. These were the places where the greatest failure of risk management took place and they also originated subprime, cdo's and created much of the global demand for mbs.

Clinton's Special Affordability issues through HUD (Cisneros/Cuomo) pushed fannie/freddie into Sub-prime though. Those mandates continued until 50% of the outstanding mortgages of Fannie/Freddie were Sub-prime in 2005. So Clinton started it but Bush either ignored it or took the ball and ran down the field. Conclusion: Fannie/Freddie and their 5 trillion of mortgage portfolios seized by government.

Clinton is not blameless, but neither is Bush. This was an issue about the belief of asset backed securities and the percieved safety creating insatiable demand which loosened checks and balances in the system. Leverage and insurance on these products sealed the demise.

 

You win the "gold star of reason" today

 

It is neither Clinton or Bush's fault that 9/11 occured. The people that caused this were radical terrorists, with a radical ideology. To try to place blame on it is stupid.

The housing crisis was caused by poor lending habits, overambitious home builders, and countless poor choices by countless entities.

 

It's the Asians fault for saving too much.

http://www.nytimes.com/2009/03/02/opinion/02krugman.html?_r=1&em

Revenge of the Glut
By Paul Krugman

Remember the good old days, when we used to talk about the “subprime crisis” — and some even thought that this crisis could be “contained”? Oh, the nostalgia!

Today we know that subprime lending was only a small fraction of the problem. Even bad home loans in general were only part of what went wrong. We’re living in a world of troubled borrowers, ranging from shopping mall developers to European “miracle” economies. And new kinds of debt trouble just keep emerging.

How did this global debt crisis happen? Why is it so widespread? The answer, I’d suggest, can be found in a speech Ben Bernanke, the Federal Reserve chairman, gave four years ago. At the time, Mr. Bernanke was trying to be reassuring. But what he said then nonetheless foreshadowed the bust to come.

The speech, titled “The Global Saving Glut and the U.S. Current Account Deficit,” offered a novel explanation for the rapid rise of the U.S. trade deficit in the early 21st century. The causes, argued Mr. Bernanke, lay not in America but in Asia.

In the mid-1990s, he pointed out, the emerging economies of Asia had been major importers of capital, borrowing abroad to finance their development. But after the Asian financial crisis of 1997-98 (which seemed like a big deal at the time but looks trivial compared with what’s happening now), these countries began protecting themselves by amassing huge war chests of foreign assets, in effect exporting capital to the rest of the world.

The result was a world awash in cheap money, looking for somewhere to go.

Most of that money went to the United States — hence our giant trade deficit, because a trade deficit is the flip side of capital inflows. But as Mr. Bernanke correctly pointed out, money surged into other nations as well. In particular, a number of smaller European economies experienced capital inflows that, while much smaller in dollar terms than the flows into the United States, were much larger compared with the size of their economies.

Still, much of the global saving glut did end up in America. Why?

Mr. Bernanke cited “the depth and sophistication of the country’s financial markets (which, among other things, have allowed households easy access to housing wealth).” Depth, yes. But sophistication? Well, you could say that American bankers, empowered by a quarter-century of deregulatory zeal, led the world in finding sophisticated ways to enrich themselves by hiding risk and fooling investors.

And wide-open, loosely regulated financial systems characterized many of the other recipients of large capital inflows. This may explain the almost eerie correlation between conservative praise two or three years ago and economic disaster today. “Reforms have made Iceland a Nordic tiger,” declared a paper from the Cato Institute. “How Ireland Became the Celtic Tiger” was the title of one Heritage Foundation article; “The Estonian Economic Miracle” was the title of another. All three nations are in deep crisis now.

For a while, the inrush of capital created the illusion of wealth in these countries, just as it did for American homeowners: asset prices were rising, currencies were strong, and everything looked fine. But bubbles always burst sooner or later, and yesterday’s miracle economies have become today’s basket cases, nations whose assets have evaporated but whose debts remain all too real. And these debts are an especially heavy burden because most of the loans were denominated in other countries’ currencies.

Nor is the damage confined to the original borrowers. In America, the housing bubble mainly took place along the coasts, but when the bubble burst, demand for manufactured goods, especially cars, collapsed — and that has taken a terrible toll on the industrial heartland. Similarly, Europe’s bubbles were mainly around the continent’s periphery, yet industrial production in Germany — which never had a financial bubble but is Europe’s manufacturing core — is falling rapidly, thanks to a plunge in exports.

If you want to know where the global crisis came from, then, think of it this way: we’re looking at the revenge of the glut.

And the saving glut is still out there. In fact, it’s bigger than ever, now that suddenly impoverished consumers have rediscovered the virtues of thrift and the worldwide property boom, which provided an outlet for all those excess savings, has turned into a worldwide bust.

One way to look at the international situation right now is that we’re suffering from a global paradox of thrift: around the world, desired saving exceeds the amount businesses are willing to invest. And the result is a global slump that leaves everyone worse off.

So that’s how we got into this mess. And we’re still looking for the way out.

 

And they are both are ripping you off blind while raising the cost of living. Both parties are Collectivists who created this mess. It wont end until they are gone.

 

This thread is absurd. Proponents of the "Responsibility Party" apparently think that everything from 2000 until 2006 was Clinton's fault and everything after that is the fault of the Dem Congress and Obama. No recognition of the W administration's role in things, which makes sense, because for 8 years he was more infallible than the Pope and worshiped with more fervor than Koresh.

Furthermore, both of these wingnut zombie histories have been shot down repeatedly with facts and depositions and reports, yet here we are still talking about them. I swear, the Republican Party is becoming more cult-like everyday, even to the point of checking rationality at the door and only blaming others for their ills while refusing to honestly evaluate themselves.

 

You don't get it.

The people who made these loans new they would default at a high rate. They didn't care. Because the got the money now and passed the buck to someone who pooled all these loans together all the way to i-banks who knew as well. The guys who structured the securitization knew they were crappy loans, so did the rating agency.

Everyone knew. They did it anyway because they got nice bonuses for underwriting and moving bonds.

The people who made the decisions around these loans aren't the ones suffering buddy - they are living on Yachts and are spending money on cavier and laughing - all the way FROM the bank.

This was a scam....not a whole lot different than a pyramid scheme in some ways.

 

^^Sweet Lou, I think you are slowly rebuilding your rep with some solid posts. I don't agree with all of them, but they are quite different from your earlier persona and that is much appreciated.

 

See, I thought this was the fault of racist bankers (including the original FHA)who didn't lend to black communities for 20 - 30+ years after WWII, because blacks were inherently "poor credit risks," thereby creating the problem of underserved communities which Clinton actually acknowledged, and tried to do something about. In the same way that the Osama Bin Ladens and Ayatollah Khomeneis of the world were spawned by economically exploitive and undemocratic policies of the US and UK in the Middle East for at least half a century.

 

Yeah, but only if they were in Northern Ireland or Kashmir. Your team has to win every battle, at all costs: because you're always right, and they're always wrong, God says so.

 

Thanks...but truth be told, I am just being nice because this is my 9th and final life on CF. But truth be told, I reveled in my infamous persona and quite do miss riling a lot of folks up.

 

You just act like it.

 

Not really. It just speaks to the general decline in the value of an MBA. Anyone can get one.

It ain't hard to ignore the guy, BTW.

EDIT: lol just read that ol' tabak is from the PRC. This is hilarious.

 

I mentioned this in another thread but a big problem with the current Conservative movement is that it has bought into the politics of victimhood as much as it accused Liberals of. In the mind of many conservatives it seems like the movement has done no wrong but been the victims of machinations by seemingly all powerful foes like the Clintons. Ignoring the fact that the Clintons far from being all powerful have shot themselves in the foot many times, as long as Conservatives relish in victimhood they will never be able to return to being an affective political or intellectual movement.

 

I think MadMax shot you down before you even posted. And I don't think anyone including the "wingnuts" on the far, far right ever said W was more infallible than the Pope.