The real reason behind the U.S. fed gov huge deficits, that main stream news isn't telling us.

Originally posted by americanbuffalo1
Its criminal behavior! I am of the belief the government is nothing more than a large criminal organization at this point and don't even get me started with Chase!

Hear, Hear! Yes, that is exactly what they are, criminals. Attorneys at law holding public office and writing legislation is a crime by proxy, the Original Thirteenth Article of Amendment states clearly that;
"If any citizen of the United States shall accept, claim, receive, or retain any title of nobility or honour, or shall without the consent of Congress, accept and retain any present, pension, office, or emolument of any kind whatever, from any emperor, king, prince, or foreign power, such person shall cease to be a citizen of the United States, and shall be incapable of holding any office of trust or profit under them, or either of them." [Journal of the Senate]

The Original 13th Amendment

This Article of Amendment, ratified in 1819 and which just "disappeared" in 1876, added an enforceable strict penalty, i.e., inability to hold office and loss of citizenship, for violations of the already existing constitutional prohibition in Article 1, Section 9, Clause 8 on titles of nobility and other conflicts of citizenship interest, such as accepting emoluments of any kind for services or favors rendered or to be rendered, and is particularly applicable today in the 21st Century as government is increasingly FOR SALE to the highest bidder, as foreign and multinational corporations and individuals compete to line the pockets of politicians and political parties to accommodate and purchase protection or privilege, i.e. honors, for their special interests.

Source Link

I think Washington Lobbies are unconstitutional also, as money is paid in return for votes and legislation, and other insider perks. Our leaders, whom we depend on, and interested only in lining their own bank accounts, and increasing their assets and power. Only Ron Paul speaks for the people. The rest speak for themselves.

reply to post by dolphinfan


How can you believe such nonsense?

This wide spread corruption on the part of mortgage lenders was nothing but a pure scam, where mortgage loans were bundled into bonds, and given credit ratings that were far above what they should have been rated at.

The only role government played was not regulating these business activities, which is what you free market people wanted, and got under Newt Gingrich's contract on America.

Government did not force these banks to lend money to people that couldn't afford to pay, government did not force these banks to falsely rate bad loans as solid investments.

And the Wall Street execs raked in the dough, yet you buy this about Carter did this, and Janet Reno did that, even though this whole mortgage fiasco didn't happen until after Gingrich's dereg of the banking industry, and GW got into office, so that banks knew they could get by with what ever crimes.

Home prices grew at reasonable rates throughout the nineties under Clinton, which proves it had nothing to do with what you claim.

By the way, these mortgage defaults occurred across the economic spectrum, except for the very rich. I have looked at those numbers, but if you have any proof to your claims, please provide it.

The people who pulled this con, conned the people who bought the homes. The people who bought the homes are victims, convinced that their home values would grow, always, ever up and up, and I remember plenty of free market preaching converts singing this song.

Our biggest political problem is too many people gobbling down the blue pills and guzzling the cool-aid, saying, "It has to be the governments fault, because if it really is the banks who are the crooks, than I have been completely suckered by that free market story line".

Blaming the government for the major scams pulled by the banking investment industry is like blaming the cops because some guy robbed a liquor store. Time to come to grips with the hard reality.

i am sick of the hate the banker threads.

banks arent stupid when it came to home mortgages and its manipulation that blame goes squarely on the federal government.

senators frank and dodd and their forcing banks to make loans to people they would not normaly lend to.

fanny and freddy guaranteed all those loans because the government owns them and they bailed themselves out.

the government created the situtation to create more control over the system nothing obama has done or the congress has fixed anything since bush left.

fanny and freddy still hold over 2 trillion is assets they created mers that allow mortgages to be bought and sold like a commodity and continue to manipulate them those same people who created fanny and freddy created mers.

stop blaming the banks blame the government anyone who does is just a blind ideolog.

Originally posted by dolphinfan
reply to post by sligtlyskeptical

 

That is simply innaccurate. Who do you suppose defaulted on their loans, the high end of the market? Of course not, it was the low end and when housing prices began to drop and the folks on the low end could no longer pull equity out of their homes to pay the loans, the loans went under. Once that happened, the middle tier of debt began to falter largely for the same reason, notably the upward pressure on home prices was no longer there because the clerk could not flip his house and buy up market again.

There are community reinvestment loans and there are loans that banks are required to make under federal law under the Community Reinvestment Act. Those, beginning in the Clinton years are over 50% of a bank's loan portfolio. To suggest that it was the top tier of the loans that defaulted, creating the problem is absurd. It was the gent making $40K buying a $400K house and betting that he could pull cash out of it each year to pay the loan and when the housing market stopped going up there was no dough to pull out and he defaulted. Who forced the banks to make those loans? The government. Did the banks make a lot of money making those loans? yes. Were the folks who got into homes they knew they could not afford greedy and foolish? absolutely.

If nobody wanted to get into homes they could not afford this problem never would have happened because there would have been no massive increase in debt to package, slice and dice and sell. If there was no demand for trash loans, the borrorowers and governent creating that demand on both ends of the curve, the banks would have no incentive to sell trash securities. basic supply and demand

That would play, except the vast majority of the 'bad' loans were NOT CRA loans. Over 80% of 'subprime' mortgates were not under any sort of direct government oversight (i.e. no CRA). Your so-called 'top tier' mortgages were very often just repackaged toxic waste or bottom middle stuff.

They'd start off by selling off the actual good stuff, then the actual middle stuff for a little bit less, and then lump all the toxic stuff together and then re-rate it, taking the 'top' of the toxic stuff and calling it AAA, the 'middle' a rating down, and so on simply to generate more AAA stuff out of thin air because that's where the big bucks was in mortgage securities and CDS stuff.

Furthermore, the CRA was actually WEAKENED towards the beginning of the Bush administration, right before a lot of that predatory subprime stuff started. Your entire argument is based on a fundamental misunderstanding of the chronology and the letter of the law in this case.

Quit blaming poor people for a wildly corrupt government that looks out only for the guys at Goldman Sachs.

This took me less than 10 seconds to find...what's your excuse?

Why poor people aren't to blame

reply to post by neo96


And you think the government also forced those Wall Street Execs to give themselves all those huge bonuses during that time when the fraudulent mortgage bubble was making them all filthy rich.

Basically, your post says "screw reality, I will believe what I want".

reply to post by poet1b


time to quit drinking the leftist coolaid and understand the facts. The government certainly did not tell a bank to give a loan to a poor person. It was far more subtle than that. What the government did do is disaggregate the areas in which the government made loans to ascertain that the bank was loaning in sufficient quanity in poor neighborhoods, that is the very basis of the community reinvestment act. If the feds found that the bank was not in compliance with the CRA they got (and still get) redlined, essentially putting them out of business.

No banker caused a person to lose their home. the implosion of the housing market did not cause a person to lose their home.

If a gent in 2005 bought a $200K house and was responsible, understood his income and took out a 30 year $100K loan he's in his house today to the extent that he can still make the payments. If everyone else in his neighborhood took out zero down, adjustable rate, interest only loans and the market turned, a ton of those are out of their homes. Who's fault is that?

Now if I can only afford a payment on a $100K loan and take one out with an adjustable mortgage and the banker tells me that based on trends, in three years when the interest rate adjusts, he should be able to refinance and pull cash out, use that cash to assist with payments or sell the house because the market was hot. If he gave him trends in the market and the gent took out the 3 year ARM, how is the banker to blame? When the gent bought the house knowing that he would need to use the increase in value that would occur within three years or he would not be able to make the payment, he is a speculator. Big risk in speculation, but that is exactly what that person is.

Now you'll get into the predatory loan rubbish. If someone signs up for several hundreds of thousands of debt without understanding the ramifications of taking on that obligation, when 6th grade math is sufficient to perform those calculations, is that the bankers fault? It is absolutely no different than sitting down at a black jack table and the dealer tells you that the last 5 gents who sat in that seat got dealt a black jack on their first hands and he's telling the truth. I bet it all on the first hand and get a 13. Do I have any right to blame or be angry at the dealer? Of course not. Are we to get into the business of giving folks IQ tests to sign up for large amounts of debt or do we need to write the loan agreements in 5th grade english?

The blame here is shared three ways, maybe 4 if you factor in the ratings agencys. The government who forced the banks to make risky loans, the bankers for masking the quality of debt instruments and making what amounted to a market of smoke and the person who bought a house under a loan agreement that going in he knew that absent favorable market movement he would not be able to pay.

As far as banks paying out huge bonuses, they are private concerns. If they broke the law they should be in jail and a bunch of them should currently be in jail, but how much Goldman Sachs pays out in bonuses is nobody's business but those who work at or own shares in Goldman. Again, the government gave these gents a ton of dough - in many cases, such as JP Morgan, dough they did not want to take but were forced to take. The government placed no constraints on what the banks could do with that money. Shame on both the government and the banks.

The blame is there to toss around, but somehow you folks refuse to assign any accountability to the person buying the house they could not afford because they wanted to cash in on the rise in housing prices. In other words, they were greedy.

Originally posted by neo96
i am sick of the hate the banker threads.

banks arent stupid when it came to home mortgages and its manipulation that blame goes squarely on the federal government.

Well you are such an ass kisser sheeple.

Bankers are not stupid, they are corrupt, like your mind.

reply to post by Janky Red


whatever

the us government is more corrupt than bankers and wall street ever will be

anyone who says otherwise is delusional

reply to post by dolphinfan


In this instance though there is what is called Duty of Care.
Regulation and credit markets determine the level of the Duty of Care

So in one instance the guy who is subject to higher risk within a volatile market in a lower income bracket takes out a low doc loan, it is also the legislative requirement to validate the risk. They guy is on skid row now because of the negligent legislation and also because he made a choice, took a risk and things went against him.

But ... and this is important.. The market hyped the ability to do low doc loans and, provided poor duty of care.

Sadly it really is a double edged sword.

Well the tent cities seem to be real enough.

What did the poor do to deserve this exactly?

A few cases I could understand.
But this is thousands and growing by 50 each week.
The words that spring to mind are "predatory banking."


David Grouchy

Starting in 2005 Banks were forced to start giving mortgages to illegal aliens.

HUD released a report awhile ago that 5 million illegals walked away from their mortgages.

The real number today is 15 million illegals walked away from their mortgages. The average mortgage was $350,000 time 15 million illegals =

5 TRILLION, 250 BILLION.....gone from the economy.

Much of it walked across the southern border as illegals bought and sold homes between themselves then FLED American with TRILLIONS.


That's not the worst of it. Starting in 2000 GMAC was giving new auto loans to illegals. Only a utility bill and a little money down and they were handed the keys to a shiny new GM SUV.....which they drove across the southern border and never paid for.

That wiped HUNDREDS of BILLIONS away from the US Economy...and Mexico, Central America, and South America was flooded with free American SUV's.


You been robbed fools.....and you're STILL getting robbed.

reply to post by guessing


Of course your are right. The absolute insanity of this entire business is that the vast majority of it could have easily been avoided by simple regulatory reform that the government failed to implement and has still failed to implement. In fact, the government has done next to nothing to put in place the proper regulatory protocols to ensure that this kind of thing won't happen again. As someone who worked for over 25 years in the asset management business I can absolutely tell you that there is a complete compartmentalization between sections of the investment bank, pretty much all the way down the stack. The folks on the bond desk have absolutely no idea what is going on on the money market desk, the cash desk, the derivitives desk, none of it. these are folks who have a very specific job to do and they do it. They execute transactions with the assumption that management is looking at the big picture. There are no enterprise risk management tools that effectively allow for reasonable risk management where you would have assurance of data quality and the timliness, which obviously needs to be real time. The government has done absolutely nothng to push banks to make those investments. If they did, IT firms would develop the tools, but right now there is no market. You are literally dealing with spreadsheets complied from the data from dozens of product specific risk management tools.

Back to the housing, relaxing the mark to market rules with respect to home loans would have solved this problem instantly. When you have a quick drop in housing prices the bank has to adjust the value of the debt Despite the fact that the debt holder is paying on a monthly basis with no missed payments, due to mark to market the bank has to now qualify that as a bad loan since the loan is for $500K but the house is now worth $400K, despite the fact that there is every reason to assume that the house at some point will be worth $500K again, or at least as much as the loan is for. With mark to market, if a home owner gets into trouble and perhaps temporarily has trouble making payments the bank has to foreclose on him because the state and federal rating agencies via the FDIC will classify the bank as under capitalized. Of course the loan is not bad. The bank has every reason to work out a solution with that home owner such as refinancing and tacking a few more years on to the loan, giving him a few months of no payments (tacked on to the end) etc since the gent is a quality customer and a good credit risk. Thats why in the beginning banks were working with folks to sort the problems out but when the number of underwater loans got too large such that they impacted the bank's entire loan portfolio they just immediately moved to foreclosure. Regulations forced their hands. When the feds are threatening to put your deposits into receivership based on your loan portfolio the bank has to get the loan off their books and thus foreclose on the house.

Talk to a community banker and they will tell you that had the government simply relaxed the market to market requirements (which most bankers think are foolish to begin with) and just let the housing market play out for a few years things would have come back and many many folks would still be in their houses.

The entire business underscores the problem and that is that the government is simply too big and there are too many things that are fundamentally integrated in practice yet totally disaggregated with respect to government policy and oversight.

Originally posted by neo96
reply to post by Janky Red

 

whatever

the us government is more corrupt than bankers and wall street ever will be

anyone who says otherwise is delusional

Please stop being stupid Neo

you do realize that wall street made a third of the economy disappear?

Arguing some arbitrary bench mark of corruption with you is like drooling for sport.

Can't you go somewhere else? AOL chat board maybe?

The wall of stupid you project is infectious and it really reduces discussion here, really, you make ATS
worse.

reply to post by Janky Red


What disappeared was never legitimately there to begin with. In case you don't watch the news, this week IBM came out with record profits, GE and Apple also massive profits for the 2nd quarter. The DOW closed above 12,700.

We're in the midst of a jobless recovery. You are going to see massive corporate profits and little if any hiring because firms have gotten lean and mean and are not going to bloat up again for years. The housing market, coupled with loose credit and poor regulation and oversight by the government had the economy awash with cash. Did the bankers have anything to do with that? Sure, but so did the person who bought and sold several houses in the run up of the housing boom, further driving up prices and dumping massive amounts of cash into the economy.

Wall Street did not destroy anything that was not really there to begin with.

reply to post by dolphinfan

Now if I can only afford a payment on a $100K loan and take one out with an adjustable mortgage and the banker tells me that based on trends, in three years when the interest rate adjusts, he should be able to refinance and pull cash out, use that cash to assist with payments or sell the house because the market was hot. If he gave him trends in the market and the gent took out the 3 year ARM, how is the banker to blame?

Because he drank too much of that right wing cool-aid, seems you are still suffering from the effects.

The guy taking out the loan relied in the information supplied by the banker, which he was told he should do, the banker supposedly being a professional, knowing what he is talking about and all.

The banker either chose to live in a fantasy world where home prices should continue to climb at unrealistic rates forever, of the banker lied to the guy, either way, the banker got his fat bonus.

It was insane for people to believe that the housing market could continue with prices rising at ridiculous rates forever. Yet, all these people ran around believing this nonsense, most of them also listening to talk show radio hosts far too much, and preaching free market economics.

Have you clued in yet to the reality that the mortgage market was bound to collapse. There were a large number of us people here on the web trying to warn people.

How much money did you make from the latest run of the real estate ponzi scheme down in Florida, home of the original land speculation ponzi scheme back in the twenties?

Yeah, it is the bankers fault for conning fools into believing this ponzi scheme. It is called fraud, and it is illegal for a reason. The bankers are the ones completely responsible for running this ponzi scheme, and no one else.

When the company is caught committing fraud, then it becomes everyone's business, all those bonuses should be taken back, and heavy fines should go along with them.

What really tweaks me is that all of us, mot of whom did not engage in this ponzi scheme, are paying for it. Even worse, our kids are going to have to pay for it.

reply to post by Pervius


The same GW, free market admin that refuse to enforce the laws against illegal immigration, shut down the large numbers of prosecution of companies hiring illegals started under the Clinton admin?

Wow, what a surprise.

reply to post by poet1b


I guess personal responsibility is simply not required of folks who are not bankers! How about this

Home shopper to Banker - "I want to buy that $300K house"
Banker - "OK how much do you have to put down"
Home shopper - "nothing, but I hear you have no money down loans"
Banker - "thats right we do. Hows your credit?"
Home shopper - "its not too bad"
Banker - "do you have a job?"
Home shopper - "yes, same job for the past years"
Banker - "here is a loan I can put you into. Its zero money down, a three year adjustable rate mortgage, meaning that the interest rate if fixed for three years and then will go up"
Home shopper - "whats the initial payment?
banker - "$1,500/month for the first three years"
Home shopper - "tell me again what happens in three years"
Banker - "the rate will adjust based on current interest rates using a standard called LIBOR. The rate might go up and it could go down"
Home shopper - "what if the rate goes up and I can't afford the payment?"
Banker - "well a couple of things. You could look to refinance the house. You could sell it. The housing market is really good right now and I have clients who are taking advantage of the increase in housing values to pull out equity and refinance into different loans. There are a number of things you can do"
Home buyer - "let me think about it"
Banker - "here take these documents home. They're about the loan and the services we offer"

A week later

Home shopper - "I'm going to buy that house"
banker - "fantastic, lets sign the papers"
Home shopper signs a hundred documents that are explained to him (which is a legal requirement) and buys the house, getting into a zero down, 3 year arm

Three years later

Home owner - "my interest rate went up and I can't make my payment"
banker - " lets see. Well housing prices have remained flat, so there is no money to pull out. You had a zero down loan so you have no equity in the home. I can refinance you, but that will cost $2K and can only put you into another ARM, which is really no different than what you have. You can sell the house"
Home owner - "I've tried, but nobody will buy it, even at a reduced rate. There is too much available on the market right now"
Banker - "sorry"


Now who is at fault there? The banker who made no promises and just gave the facts or the pinhead who speculated on real estate?

reply to post by davidgrouchy


That is pretty shocking. Basically the establishment of third world type shanty towns. As the reporter said this isn't going to get any better, it can only get worse. What do these people do if they get sick?, what happens when it gets cold? Who protects their stuff? who protects them? Who represents them?

reply to post by dolphinfan


Maybe you should go down to one of those tent cities and give them a lecture on personal responsibility. Tell them that they are the ones to blame for the financial crisis. Explain to them that Bankers are taking home Billions in bonuses and their homes.

reply to post by woodwardjnr


You can use emotion to assist in the explanation of what really happened or you can rely on the facts.

If a banker lied to someone they should be in jail

If a person speculated on real estate and the market moved in the wrong direction, he made a bad investment

If a person entered into a loan that there was a reasonable chance they would not be able to afford, they were irresponsible.

I am certainly sorry for the folks who lost their homes and jobs and are now in dire straits and think that steps should be taken to ensure that it does not happen again. The only way that will happen however is if they raise the credit standards and eliminate easy to enter loans. Doing that will disparately impact minorities and as such the government will not do that, as evidenced by the fact that the Justice Department is right now pushing banks to make more sub-prime loans.

I realize that it is quite easy to look at the conditions of folks and seek to assign blame and blame is easily assigned to those who are not in dire straits. That masks the reality of what really happened here. It is basic economics. With out demand there is no supply. Without the government pushing banks to loan money to poorly qualified people and those same folks speculating on real estate the bankers never would have had a market to create CDOs. Absent this massive amount of debt in the market place, there would have been no raw materials to make the CDOs in the first place