Merv's Politically Incorrect Audio Blog

He loves kids!

I wish we could implement a guest / migrant worker program. Seems like it would solve a lot of problems. Such would be too technocratic for the USA though.

Good.

Shumer: don't feed the demon.

 

Would love to see a "birther" deal: he's Canadian. That would be ROFL.

 

Way too simplistic of a view. Technically there are many reasons - multiple safeguards against stupidity failed at all levels.

Ultimately, the reason is that many people wanted to "own" their own home, including people who were not qualified and never should have been qualified. The politicians, on both sides of the isle, from Maxine Waters to GWB, were all too willing to oblige. The crisis was a full bipartisan effort with some major politicians even on the take: https://en.wikipedia.org/wiki/Countrywide_Financial_political_loan_scandal

2020-04-27 THE MORTGAGE CRISIS

Banks do a lot of good. We wouldn't have those hole-in-wall places if banks did not exist. Banks through the SBA can lift disadvantaged minorities up from despair, give them huge opportunities. Companies like Schiit, Topping, Pi2Design, iFi, etc. need banks so they can get to our doorsteps what we want. Whether they should exist at all is a question of more cosmic proportions.

 

Deregulation wasn't a major part. A concerted effort to look the other way was the root cause.

I was banker at that time. Both working for a bank and then later being a bank auditor who produced results for Federal regulators. Banking regulations only increased at this time - from 2002 to 2008, and even more from 2009+. They were not removed or made easier via deregulation. In theory, the mortgage crisis should have never happened.

I really really wanted to buy a house. There's a reason why I sat out until late 2010.

 

Politicians playing up the notion that every American family should own its home allowed for the conditions that led to the crisis. It's what the people wanted, and in turn the politicians gave the people got what they deserved.

Mortgages are still bundled as securities today. Fannie Mae and Freddie Mac, quasi-governmental agencies, still guarantee most mortgages. (There's been debate for a while whether to cut them loose, but nothing as happened).

Nothing much has really changed. The major changes are higher capital requirements which have squeezed out smaller banks, the ineffectual or corrupt OTS regulator (who oversaw the S&Ls) being folded into the most strict regulatory agency (OCC), and if that there is even an "i" not dotted correctly on a mortgage application, it gets rejected.

You also need to be more specific with respect to "deregulation". If it's sloppy audit work or wink-wink on the part of the OTS, then I would agree with you.

 

Yes, there is still no fencing around banks so that they only perform certain kinds of activities. Today, we have mega behemoth worldwide investment and retail banks such as Chase. All hail Jamie Dimon.

Add Bank of America and Citi.

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I dislike the narrative that the repeal of sections of GS which fenced in retail banks from doing certain things as a major contributor. That's like blaming the boogeyman. At every any level, had people been good, the mortgage crisis would not not occurred.

This starts from people being honest with themselves, with what they make, how much they can afford and understanding the responsibilities and risks of homeownership, from people offering the loans to be honest with the lendees, to people signing off on the loans to do their due diligence, to people auditoring the banks to ensure regulations and processes are being followed, to people running the regulatory agencies not to take bribes from the people running the banks, to people who wanted high yield securities without thinking about the default risks, to people who passed laws to encourage responsibility instead of touting unrealistic scenarios just so they can secure votes.

The mortgage crisis was a moral failing at all levels, from the common man all the way to up to the top. As such, we should endeavor to realize that it's up to each and every one of us not to be dumb. Had any layer had the courage to say no, that this home loan with zero down and a balloon payment in three years is too risky, then the crisis would have never happened.

People do have power.

 

The invasion and take-over of our Capital (with severe National Security consequences) were motivated and fueled by Trump.

The motivation behind the invasion was the unsubstantiated claim by Trump about the election being unlawfully stolen from him.

The unsubstantiated claim has been continuously expressed through social media outlets. As a measure to curve further violence, which is escalating to National Security levels, social media outlets have responded by banning further distribution of these claims.

There would not be a need for forceful repudiation, if the social media outlets did not allowed Trump to continue jeopardizing the stability of his own country through them.