for my next trick….

[CA renter]

[quote=gandalf]Thanks, car.

Bizarre to say the GSE’s are somehow at fault for what happened more than say, private sector Goldman that securitized the paper and sold the bonds, or private sector AIG that backstopped them selling insurance to speculators, or private sector Countrywide that originated the ridiculous loans in the first place.

Oooooo! Big government. Watch out. (Boo!)

Ironically, it’s just the opposite. If federal/state government and agencies had retained their historic role in regulating the financial-related industries, it would have prevented much of the speculative excess. The Fed, with responsible leadership, perhaps would have even tightened credit when the bubble had so clearly presented itself.

* * *

Any thoughts on the whole Coke-Pepsi thing?

I go for Mountain Dew.[/quote]

Absolutely. As a matter of fact, the GSEs traditionally made very boring, traditional mortgage loans. It was only when the govt forced them to start buying the toxic stuff (people were able to refi their toxic loans out of the private market and into the GSE product) that the GSEs really became the monsters that needed to be “saved.” The GSEs were actually reducing their portfolios and increasing capital ratios after the 2003/2004 issues, but were told to reverse action when the PTB saw that the private market was getting into deep trouble. IMHO, the private market would have been hit even harder if not for these moves.
———————–

“The retained portfolios of mortgages and mortgage-backed securities (MBS) held by Fannie and Freddie grew strongly in the years preceding the OFHEO orders. For example, if we look at year-end figures for 2002 and 2003, we see that over the course of 2003 the two firms’ retained portfolios grew by a net of 12.3 percent and, at the end of 2003, they held 22 percent of outstanding mortgages on 1-to4-family properties. Net growth of their retained portfolios then stopped; over the course of both 2004 and 2005, their total portfolios of mortgages and MBS fell slightly. In 2006, their retained portfolios continued to decline and by the end of the third quarter their portfolios were below year-end 2005. Meanwhile, the total market continued to expand. The combined market share of Fannie and Freddie fell from 22 percent at the end of 2003 to 14 percent at the end of the third quarter of 2006.”

[I copied the above quote from pages 4-5 from the following link. All typos are mine. CAR]

http://fraser.stlouisfed.org/historicaldocs/1103/download/40924/20070117.pdf
———————

In other words, as the mortgages were becoming ever more toxic, the GSEs’ share was growing smaller and smaller **because the majority of “toxic” mortgages were originated and traded in the private (non-GSE) market.**

Anyone claiming the CRA or the GSEs were at fault (common talking points of the Republican propaganda machine) don’t know what they’re talking about. While the GSEs certainly posed some risks, it was the private market that came up with the continuous stream of ever more toxic mortgages that enabled the housing market to take off like it did, especially post-2003.

[SD Realtor]

Yes and the best way for the private market to learn the lessons of the past would have been to let the private market deal with the consequences of their stupid behavior rather then bail them out.

A private market will not operate efficiently if there are no consequences for the poor operating practices.

The govt had a chance to teach the private market a lesson and the govt blinked.

[SD Realtor]

Yes and the best way for the private market to learn the lessons of the past would have been to let the private market deal with the consequences of their stupid behavior rather then bail them out.

A private market will not operate efficiently if there are no consequences for the poor operating practices.

The govt had a chance to teach the private market a lesson and the govt blinked.

[SD Realtor]

Yes and the best way for the private market to learn the lessons of the past would have been to let the private market deal with the consequences of their stupid behavior rather then bail them out.

A private market will not operate efficiently if there are no consequences for the poor operating practices.

The govt had a chance to teach the private market a lesson and the govt blinked.

[SD Realtor]

Yes and the best way for the private market to learn the lessons of the past would have been to let the private market deal with the consequences of their stupid behavior rather then bail them out.

A private market will not operate efficiently if there are no consequences for the poor operating practices.

The govt had a chance to teach the private market a lesson and the govt blinked.

[SD Realtor]

Yes and the best way for the private market to learn the lessons of the past would have been to let the private market deal with the consequences of their stupid behavior rather then bail them out.

A private market will not operate efficiently if there are no consequences for the poor operating practices.

The govt had a chance to teach the private market a lesson and the govt blinked.

[MicroGravity]

The fundamental flaw in any reasoning that leads one to believe that a bigger stronger central government should be empowered to protect the poor, ignorant, powerless individual from the big evil corporation is the assumption that big evil corporation will be unwilling or unable to unduly influence that same (presumably) benevolent government.
To use the coke vs. pepsi analogy: Once the government has been empowered to choose which will be the national drink, coke and pepsi will abandon any effort to please the consumer or convince the consumer of its superiority and instead spend all its effort and capital trying to influence the legislature that gets to make that decision for the masses.
Congratulations! Rather than having two companies vying for your dollar, and likely doing everything in their power to convince you to buy their stuff–both in good ways, such as making a better, cheaper product, and in bad ways, trying trick you to make you think you’ll improve your life by buying their product–now some drink czar gets to tell you what to drink, using your tax dollars and the power of the law to compel you.

“If you love wealth more than liberty, the tranquility of servitude better than the animating contest of freedom, depart from us in peace. We ask not your counsel nor your arms. Crouch down and lick the hand that feeds you. May your chains rest lightly upon you and may posterity forget that you were our countrymen…and buy my beer”–Samuel Adams

[MicroGravity]

The fundamental flaw in any reasoning that leads one to believe that a bigger stronger central government should be empowered to protect the poor, ignorant, powerless individual from the big evil corporation is the assumption that big evil corporation will be unwilling or unable to unduly influence that same (presumably) benevolent government.
To use the coke vs. pepsi analogy: Once the government has been empowered to choose which will be the national drink, coke and pepsi will abandon any effort to please the consumer or convince the consumer of its superiority and instead spend all its effort and capital trying to influence the legislature that gets to make that decision for the masses.
Congratulations! Rather than having two companies vying for your dollar, and likely doing everything in their power to convince you to buy their stuff–both in good ways, such as making a better, cheaper product, and in bad ways, trying trick you to make you think you’ll improve your life by buying their product–now some drink czar gets to tell you what to drink, using your tax dollars and the power of the law to compel you.

“If you love wealth more than liberty, the tranquility of servitude better than the animating contest of freedom, depart from us in peace. We ask not your counsel nor your arms. Crouch down and lick the hand that feeds you. May your chains rest lightly upon you and may posterity forget that you were our countrymen…and buy my beer”–Samuel Adams

[MicroGravity]

The fundamental flaw in any reasoning that leads one to believe that a bigger stronger central government should be empowered to protect the poor, ignorant, powerless individual from the big evil corporation is the assumption that big evil corporation will be unwilling or unable to unduly influence that same (presumably) benevolent government.
To use the coke vs. pepsi analogy: Once the government has been empowered to choose which will be the national drink, coke and pepsi will abandon any effort to please the consumer or convince the consumer of its superiority and instead spend all its effort and capital trying to influence the legislature that gets to make that decision for the masses.
Congratulations! Rather than having two companies vying for your dollar, and likely doing everything in their power to convince you to buy their stuff–both in good ways, such as making a better, cheaper product, and in bad ways, trying trick you to make you think you’ll improve your life by buying their product–now some drink czar gets to tell you what to drink, using your tax dollars and the power of the law to compel you.

“If you love wealth more than liberty, the tranquility of servitude better than the animating contest of freedom, depart from us in peace. We ask not your counsel nor your arms. Crouch down and lick the hand that feeds you. May your chains rest lightly upon you and may posterity forget that you were our countrymen…and buy my beer”–Samuel Adams

[MicroGravity]

The fundamental flaw in any reasoning that leads one to believe that a bigger stronger central government should be empowered to protect the poor, ignorant, powerless individual from the big evil corporation is the assumption that big evil corporation will be unwilling or unable to unduly influence that same (presumably) benevolent government.
To use the coke vs. pepsi analogy: Once the government has been empowered to choose which will be the national drink, coke and pepsi will abandon any effort to please the consumer or convince the consumer of its superiority and instead spend all its effort and capital trying to influence the legislature that gets to make that decision for the masses.
Congratulations! Rather than having two companies vying for your dollar, and likely doing everything in their power to convince you to buy their stuff–both in good ways, such as making a better, cheaper product, and in bad ways, trying trick you to make you think you’ll improve your life by buying their product–now some drink czar gets to tell you what to drink, using your tax dollars and the power of the law to compel you.

“If you love wealth more than liberty, the tranquility of servitude better than the animating contest of freedom, depart from us in peace. We ask not your counsel nor your arms. Crouch down and lick the hand that feeds you. May your chains rest lightly upon you and may posterity forget that you were our countrymen…and buy my beer”–Samuel Adams

[MicroGravity]

The fundamental flaw in any reasoning that leads one to believe that a bigger stronger central government should be empowered to protect the poor, ignorant, powerless individual from the big evil corporation is the assumption that big evil corporation will be unwilling or unable to unduly influence that same (presumably) benevolent government.
To use the coke vs. pepsi analogy: Once the government has been empowered to choose which will be the national drink, coke and pepsi will abandon any effort to please the consumer or convince the consumer of its superiority and instead spend all its effort and capital trying to influence the legislature that gets to make that decision for the masses.
Congratulations! Rather than having two companies vying for your dollar, and likely doing everything in their power to convince you to buy their stuff–both in good ways, such as making a better, cheaper product, and in bad ways, trying trick you to make you think you’ll improve your life by buying their product–now some drink czar gets to tell you what to drink, using your tax dollars and the power of the law to compel you.

“If you love wealth more than liberty, the tranquility of servitude better than the animating contest of freedom, depart from us in peace. We ask not your counsel nor your arms. Crouch down and lick the hand that feeds you. May your chains rest lightly upon you and may posterity forget that you were our countrymen…and buy my beer”–Samuel Adams

[scaredyclassic]

which gives me an idea! maybe the government can make some cash by selling the rights to be the official ____ of the USA. so for instance, coke and pepsi can bid cash to be the Official Cola of the United States of America. Say that title goes for a billion dollars. cool. use the billion to buy a bitchin plane for some senators or pay down the deficit or whatnot. we could do that for every single product — cell phones, underwear, everything. that would bring in a lot of money, would it not. and it wouldn’t cost the government anything…

[scaredyclassic]

which gives me an idea! maybe the government can make some cash by selling the rights to be the official ____ of the USA. so for instance, coke and pepsi can bid cash to be the Official Cola of the United States of America. Say that title goes for a billion dollars. cool. use the billion to buy a bitchin plane for some senators or pay down the deficit or whatnot. we could do that for every single product — cell phones, underwear, everything. that would bring in a lot of money, would it not. and it wouldn’t cost the government anything…

[scaredyclassic]

which gives me an idea! maybe the government can make some cash by selling the rights to be the official ____ of the USA. so for instance, coke and pepsi can bid cash to be the Official Cola of the United States of America. Say that title goes for a billion dollars. cool. use the billion to buy a bitchin plane for some senators or pay down the deficit or whatnot. we could do that for every single product — cell phones, underwear, everything. that would bring in a lot of money, would it not. and it wouldn’t cost the government anything…

[scaredyclassic]

which gives me an idea! maybe the government can make some cash by selling the rights to be the official ____ of the USA. so for instance, coke and pepsi can bid cash to be the Official Cola of the United States of America. Say that title goes for a billion dollars. cool. use the billion to buy a bitchin plane for some senators or pay down the deficit or whatnot. we could do that for every single product — cell phones, underwear, everything. that would bring in a lot of money, would it not. and it wouldn’t cost the government anything…

[Author]

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