Yuppie Welfare

http://www.cnbc.com/id/47865155/

Too bad I got $0.00 in SL debt or I'd be perking up for this...

On the advice of someone who probably queened-out, this signature has been deleted.

lstriar's picture

I know you are probably being glib, but equating college grads with student loans to yuppies is pretty far off.

HAZMAT's picture

Idea! Sponsor some to Norris square ... ;)

To be ones self and unafraid, right or wrong, is more admirable than the easy cowardice of surrender to conformaty. Irving Wallace.

Kenzo's picture

Well yeah, that liberal arts degree in Early Colonial Hispanic History probably won't elevate someone to yupsterdom, but let's just say I go to Wharton and rack up some series debt-ola and have an inkling to move to Kansas...

On the advice of someone who probably queened-out, this signature has been deleted.

Kenzo's picture

HAZMAT wrote:
Idea! Sponsor some to Norris square ... ;)

Pat would be OK with it as long as your degree wasn't in Ethics, Legal, and especially Architecture I'd imagine.

On the advice of someone who probably queened-out, this signature has been deleted.

Lauraska's picture

I'd like some yuppie welfare.

dan

The give degrees in "Legal"?

Godwin was basically a Nazi.

lstriar's picture

Or lets say you are 99% of the college grads in this country who have some level of college debt and didn't go to anything resembling Wharton and who majored in things that are not "Early Colonial Hispanic History". Most jobs that pay any kind of adequate wage and benefits require a college degree, which the majority of people need to take out loans to afford.

But keep up the one-liners.

stein's picture

Kenzo wrote:
Well yeah, that liberal arts degree in Early Colonial Hispanic History probably won't elevate someone to yupsterdom, but let's just say I go to Wharton and rack up some series debt-ola and have an inkling to move to Kansas...

291$/month isnt going to put much of a dent in your wharton payments. most likely you would still be better off living in a higher wage area.

Ken Milano (before he went and edited this comment out to avoid the consequences of having wrote it) wrote:
I don’t have much sympathy for renters, for me, they are non citizens

Kenzo's picture

You're right, Nebraska is better (Warren Buffett).

On the advice of someone who probably queened-out, this signature has been deleted.

Jayallday's picture

It's hardly welfare

Wherever you go, there you are

brooke's picture

Okay, I've been to the US side of Niagara Falls many a time growing up about an hour and a half away. 20 people ain't going to do anything to change the depressing dynamics of that city--if it's still a city. With that many applicants, I wonder if they shouldn't cut the aid in 1/3 and get 3 times the amount of people...which still will do nothing but at least it will keep Ann Taylor open.

Former attorney and current CITYSPACE real estate agent extraordinaire

stein's picture

Jayallday wrote:
It's hardly welfare

sure it is, its something that is unearned but makes peoples lives better.

Ken Milano (before he went and edited this comment out to avoid the consequences of having wrote it) wrote:
I don’t have much sympathy for renters, for me, they are non citizens

dan

It's only welfare when it goes to somebody else.

Godwin was basically a Nazi.

stbenjamin's picture

Soul Man wrote:
It's only welfare when it goes to somebody else.

Except when it goes to banks, then it is "restoring confidence in our economy"

Jayallday's picture

stein wrote:
Jayallday wrote:
It's hardly welfare

sure it is, its something that is unearned but makes peoples lives better.

It's more like a tax break and incentive to bring college graduates into the area. Welfare is paying people not to work

Wherever you go, there you are

Leo's picture

Jayallday wrote:
stein wrote:
Jayallday wrote:
It's hardly welfare

sure it is, its something that is unearned but makes peoples lives better.

It's more like a tax break and incentive to bring college graduates into the area. Welfare is paying people not to work

If that's how you define welfare, do you find unemployment compensation or SSD any different?

Mulvihill & Rushie LLC
The Fishtown Lawyers
Criminal Defense • Civil Trials
www.FishtownLaw.com
215.385.5291

Jayallday's picture

Leo wrote:
Jayallday wrote:
stein wrote:
Jayallday wrote:
It's hardly welfare

sure it is, its something that is unearned but makes peoples lives better.

It's more like a tax break and incentive to bring college graduates into the area. Welfare is paying people not to work

If that's how you define welfare, do you find unemployment compensation or SSD any different?

Yes

Wherever you go, there you are

Leo's picture

Please elaborate.

Mulvihill & Rushie LLC
The Fishtown Lawyers
Criminal Defense • Civil Trials
www.FishtownLaw.com
215.385.5291

stein's picture

Welfare isn't paying people not to work, its paying people who can't find work (for a variety of reasons). You have the causation backwards.

Ken Milano (before he went and edited this comment out to avoid the consequences of having wrote it) wrote:
I don’t have much sympathy for renters, for me, they are non citizens

Jayallday's picture

stein wrote:
Welfare isn't paying people not to work, its paying people who can't find work (for a variety of reasons). You have the causation backwards.

Think again. Go into the hood and see how many people are trying to look for work

Wherever you go, there you are

Jayallday's picture

Leo wrote:
Please elaborate.

People who are on unemployment and social security actually paid into it. Disabled people can't work

Wherever you go, there you are

Kotter's picture

Most of the people on welfare are bottom feeders. they could care less about working. Free food, free housing , free booze , free public transportation. What more can you ask for? Thats why everyone wants to come to America. LAND OF THE FREE.

Heavens to Betsy

Zaw's picture

Jayallday wrote:
stein wrote:
Welfare isn't paying people not to work, its paying people who can't find work (for a variety of reasons). You have the causation backwards.

Think again. Go into the hood and see how many people are trying to look for work

"Just looking for a check" " Obamaa Bucks"

You can take the fish out of the town but you can't take the town out of the fish.

Zaw's picture

Kotter wrote:
Most of the people on welfare are bottom feeders. they could care less about working. Free food, free housing , free booze , free public transportation. What more can you ask for? Thats why everyone wants to come to America. LAND OF THE FREE.

Come on Kotter dont you remember the lecture we got on black white relations?:

Soul Man wrote:

Evil white America has never done anything that might help the victim-class in this country

You can take the fish out of the town but you can't take the town out of the fish.

Zaw's picture

Jayallday wrote:
Leo wrote:
Please elaborate.

People who are on unemployment and social security actually paid into it. Disabled people can't work

did i ever mention on here about the 5th grader whose mother is trying to get him SSD? Because he has ADHD. 5th grade. oh and pushed to have her daughter put in special education class. i wonder why......

You can take the fish out of the town but you can't take the town out of the fish.

austen's picture

What's your point?

stein's picture

Jayallday wrote:
stein wrote:
Welfare isn't paying people not to work, its paying people who can't find work (for a variety of reasons). You have the causation backwards.

Think again. Go into the hood and see how many people are trying to look for work

well don't you have extensive first hand knowledge of the economic situations of people in 'the hood'

Ken Milano (before he went and edited this comment out to avoid the consequences of having wrote it) wrote:
I don’t have much sympathy for renters, for me, they are non citizens

Frank Jones's picture

Where are the 40,000 jobs that will employ the people of the hood?

Zaw, Kotter, Jayallday? Or are you saying that all those people refused to work and THEN the jobs moved to China. (all so the stock holders could make $.02 x 100,000)

And should we just let them starve to death or go into robbing people full time? Which one?

stein wrote:
It is nice to be so privileged that you can be oblivious to a pretty popular stereotype in the canon of racism.

th's picture

Zaw wrote:
i wonder why......

Something tells me you think you know why. You're just to afraid to say it.

You wanna dance? LET'S DANCE!

Frank Jones's picture

Throw them all in jail?

stein wrote:
It is nice to be so privileged that you can be oblivious to a pretty popular stereotype in the canon of racism.

Frank Jones's picture

That's how Christmas lights are made in China. With prison labor. Is that what we should do?

stein wrote:
It is nice to be so privileged that you can be oblivious to a pretty popular stereotype in the canon of racism.

th's picture

Frank Jones wrote:
Throw them all in jail?

Na, then we'd just have to pay for them all over again. And listen to Kotter complain that they are living a cushy life behind bars.

Best to just move to a fortified community and hope the barbarians eat each other instead of trying to scale our walls. Of course, anyone in our compound who loses their job will be immediately tossed over wall along with their family.

You wanna dance? LET'S DANCE!

Frank Jones's picture

What you have to understand is that if you have an economy where businesses can hire and fire at will, if they can move their factories where ever they want when ever they want, if you want a workforce that can read and write, if you want the people in your country to be able to speak their minds (not a dictatorship) someone is going to have to pay for it.

If you don't pay for it you'll get crime, riots and revolution. Look at history. Look at the rest of the world.

I'll bet you $10 you can't find:
really mobile workforce with no organized labor
democracy
educated people
no revolution
no welfare

Like anything else, if you want x y and z someone is going to have to pay for it.

stein wrote:
It is nice to be so privileged that you can be oblivious to a pretty popular stereotype in the canon of racism.

Frank Jones's picture

These tea party people want all that for free. Then they whine, complain and blame the black people when they don't get it.

stein wrote:
It is nice to be so privileged that you can be oblivious to a pretty popular stereotype in the canon of racism.

Kotter's picture

Theres work if you look..might have to work 2 jobs to make ends meet..Nah let the Govt take care of us. Of by the way Frank never did i say anything about Black people. you said it . could it be true?

Heavens to Betsy

FPDA's picture

There are definitely a lot of people who are suckling at the teat of the system. There are definitely a lot of people who are just hitting a rough patch and need a hand up. Can't we just focus our efforts on finding a way to eliminate the one type to the extent possible while helping the other type to a reasonable degree? Just admit that there is some truth to both sides of the argument and you might actually come to some sort of reasonable compromise, or you could just fling poo at each other like a bunch of chimps.

stein's picture

"suckling at the teat of the system" is still a poverty-stricken lifestyle. I'm not worried about masses of people choosing that over a materially better lifestyle through getting a job. I am worried about the situation where getting a job means no better a lifestyle and if that is the case then the problem is in the job market, not the safety net.

Ken Milano (before he went and edited this comment out to avoid the consequences of having wrote it) wrote:
I don’t have much sympathy for renters, for me, they are non citizens

stein's picture

Ken Milano (before he went and edited this comment out to avoid the consequences of having wrote it) wrote:
I don’t have much sympathy for renters, for me, they are non citizens

TLP's picture

Jayallday wrote:
Leo wrote:
Please elaborate.

People who are on unemployment and social security actually paid into it. Disabled people can't work

You don't "pay into" unemployment and social security. There's no bucket in DC where your dollars are kept waiting for you to hit hard times or get old. You pay unemployment taxes and social security taxes now to cover the people who need unemployment and social security now. When you lose your job or get old, those same benefits will be available to you, paid by the taxpayers at that time.

That's how the system is structured to work. We can discuss if that's the best way to provide benefits, or if that system is even sustainable given our aging population, but neither are some special breed of benefit that you "earn" by paying into a fund that is waiting for you down the road.

FPDA's picture

stein wrote:
"suckling at the teat of the system" is still a poverty-stricken lifestyle. I'm not worried about masses of people choosing that over a materially better lifestyle through getting a job. I am worried about the situation where getting a job means no better a lifestyle and if that is the case then the problem is in the job market, not the safety net.

Not necessarily. I knew a single mother in NJ who told me that it didn't make much sense for her to work at all. She was in AmeriCorps and was getting the whole run of benefits from the state and fed. She also only had a HS Diploma and not a ton of skills to speak of. She told me that she had added it up and getting a job would have actually resulted in a net of only a few dollars a month, but a loss of around 20 hours a week of time spent with her kid. In the short-term, it made no sense to get a full time job, but in the long term there's no chance for advancement in that kind of a situation, which she knew. These are the kinds of decisions that our benefits system and economy forces, and it kind of sucks. People like you are correct that we shouldn't just yank the rug out from under her, but people who disagree with you are right in that she needs to take a longer-term view and make a sacrifice now for a better future for her and her family.

Frank Jones's picture

Kotter wrote:
Theres work if you look..might have to work 2 jobs to make ends meet..Nah let the Govt take care of us. Of by the way Frank never did i say anything about Black people. you said it . could it be true?

So you're saying there are 2 jobs for everyone that's looking for work?! What planet are you on?

Find out how many people need jobs.
Find out how many available jobs there are.

There will never be as many jobs as there are people looking for them. That's a fact. Otherwise labor prices would go up. Better to move the jobs overseas.

What you don't understand is a good business environment requires unemployment.
It requires a mobile workforce and not all that generations living in the same place crap.
Why would you want to pay a guy enough to feed and house all those people? Hire him AND his wife for less.

In this economy it's a myth that if everyone works hard there will be no poverty.

stein wrote:
It is nice to be so privileged that you can be oblivious to a pretty popular stereotype in the canon of racism.

Frank Jones's picture

A good business environment with a good living environment costs money. You can't have both for free.

stein wrote:
It is nice to be so privileged that you can be oblivious to a pretty popular stereotype in the canon of racism.

th's picture

Some one has to work cheaply enough for me to enjoy the dollar menu.

You wanna dance? LET'S DANCE!

th's picture

FPDA wrote:
People like you are correct that we shouldn't just yank the rug out from under her, but people who disagree with you are right in that she needs to take a longer-term view and make a sacrifice now for a better future for her and her family.

Stop ... making ... sense.

You wanna dance? LET'S DANCE!

stein's picture

FPDA wrote:
She was in AmeriCorps and was getting the whole run of benefits from the state and fed.

oh cool, so she had a job at the time.

Quote:
She told me that she had added it up and getting a job would have actually resulted in a net of only a few dollars a month, but a loss of around 20 hours a week of time spent with her kid.

I, for one, long for an economic system that forces mothers to spend less time raising their children.

Quote:
but people who disagree with you are right in that she needs to take a longer-term view and make a sacrifice now for a better future for her and her family.

oddly enough, getting a second job most likely wouldn't have helped her long-term view (but would greatly diminish her child's long-term view). But what would make a difference is.... training! another worthwhile class of government programs that "people who disagree with me" don't believe is worth spending "their tax dollars" on.

Ken Milano (before he went and edited this comment out to avoid the consequences of having wrote it) wrote:
I don’t have much sympathy for renters, for me, they are non citizens

FPDA's picture

stein wrote:
oh cool, so she had a job at the time.

Yes, kind of. A job that wouldn't have existed had the government not been paying the full freight for it. And that didn't really have much in the way of responsibilities. She primarily stuffed envelopes.

Quote:
I, for one, long for an economic system that forces mothers to spend less time raising their children.

Sarcasm, despite what I can tell from your track record on this board, is not a substitute for a rational argument. If you are a single-parent you will either be in poverty (with or without government assistance), or you will need to put yourself into a better position so that you can not be in poverty. I'm sure the system you long for, the one where single mothers can be paid a middle-class wage to spend most of their time raising their children, is something that you can provide us with a lot more detail on in your next post.

Quote:
oddly enough, getting a second job most likely wouldn't have helped her long-term view (but would greatly diminish her child's long-term view). But what would make a difference is.... training! another worthwhile class of government programs that "people who disagree with me" don't believe is worth spending "their tax dollars" on.

I wasn't talking about a second job. I was talking about a full-time first job. The kind where the employer and employee enter into a mutually-beneficial relationship over a long period of time. The kind of job where your employers train you and where you seek knowledge on your own. Where you do a job for a few years, learn how to do it well, and get promoted or move on to bigger and better things. You know, what they call an "entry-level" job. They do still exist, you know.

In the workforce a government training program is nice, but the problem is that the government has, at best, a spotty record of targeting their investments in this area. Often the programs train for outdated skill-sets and jobs that won't be coming into existence. Experience and drive is necessary and can only come from the private sector. The argument, which has merit, is that the taxes taken from firms and individuals to use on government-organized and -funded training would actually have a greater positive impact if it was invested back into the private firms by the firms and their owners instead.

stein's picture

FPDA wrote:
And that didn't really have much in the way of responsibilities. She primarily stuffed envelopes.

so you were working with her?

Quote:
I'm sure the system you long for, the one where single mothers can be paid a middle-class wage to spend most of their time raising their children, is something that you can provide us with a lot more detail on in your next post.

What is wrong with the current system where the unlucky children don't have the double whammy of a poverty-stricken childhood AND a mother who isn't around to raise them like she would prefer because she has to work multiple jobs to maintain a lifestyle near the poverty line?

Quote:
I wasn't talking about a second job.

We already established that she in the AmeriCorps program.

Quote:
The kind of job where your employers train you.

hahahahahahahaha. the 1950s are calling, they would like their job market back.

Quote:
Where you do a job for a few years, learn how to do it well, and get promoted or move on to bigger and better things. You know, what they call an "entry-level" job. They do still exist, you know.

your middle class existence is showing.

Quote:
The argument, which has merit, is that the taxes taken from firms and individuals to use on government-organized and -funded training would actually have a greater positive impact if it was invested back into the private firms by the firms and their owners instead.

If this actually happened that might be an argument with merit. the private sector does effectively no training anymore. they'd rather the individual take on debt to finance their own training and then complain about the lack of skilled workers when the 'free market' doesn't work as efficiently as they pretend it does.

Ken Milano (before he went and edited this comment out to avoid the consequences of having wrote it) wrote:
I don’t have much sympathy for renters, for me, they are non citizens

ronchito's picture

stein wrote:
Quote:
The kind of job where your employers train you.

hahahahahahahaha. the 1950s are calling, they would like their job market back.

I have a job like this. They still exist.

FPDA's picture

stein wrote:
so you were working with her?

Yes, at the time I was. She essentially took up a job that would have been done by a volunteer (Americorps sends a lot of people through non-profits).

Quote:
What is wrong with the current system where the unlucky children don't have the double whammy of a poverty-stricken childhood AND a mother who isn't around to raise them like she would prefer because she has to work multiple jobs to maintain a lifestyle near the poverty line?

And your proposal is what, exactly? We're talking about motivations and opportunities here, not maintaining a poverty-level existence. Right now there is no "good" path from Point A to Point B because the benefits system makes you give up far too much in order to get yourself in a position to start reaching for Point B. You can say as much as you want that the economy isn't providing enough jobs in that pay range, but that's because jobs in that pay range don't have enough of a value-add to be worth more. When I spoke to this woman, she was getting around $27k in benefits combined. There's not going to be a $40k a year job waiting for her anywhere. There might be a $30k job somewhere. It used to be you ate dirt for 2-3 years in that $30k job and then got the $40k one. Now, you can't take the new job because it'll only net you a few dollars a week in exchange for 20 hours of extra work. Only a fool would take that trade.

Quote:
We already established that she in the AmeriCorps program.

Does this quote reflect the type of person you'd imagined you would be when you were a child? If not, please be reasonable.

Quote:
hahahahahahahaha. the 1950s are calling, they would like their job market back.

You're saying that there's no such thing as "on-the-job" training? You seriously go into work every day knowing exactly how to do every single thing that you need to? That sounds kind of sad. I've learned new skills at every single job I have ever had in my life. I'm constantly learning new things in order to do my job better, take on new responsibilities, and set myself up for the next step in my career. This does not need to happen in a structured program, but it does come from taking on new tasks and being trusted enough by your employer to do new things. Entry-level jobs exist and employers tend to provide help to new employees to get them the skills they need to succeed through training, mentoring, or direction.

Quote:
your middle class existence is showing.

Actually, more like what it took to get to that middle class existence. Don't make assumptions.

Quote:
If this actually happened that might be an argument with merit. the private sector does effectively no training anymore. they'd rather the individual take on debt to finance their own training and then complain about the lack of skilled workers when the 'free market' doesn't work as efficiently as they pretend it does.

Which free market are we talking about? Our schools or our institutions of higher learning? Do you really want to make an assertion that we have anything even resembling a free market in those areas?

th's picture

ronchito wrote:
stein wrote:
Quote:
The kind of job where your employers train you.

hahahahahahahaha. the 1950s are calling, they would like their job market back.

I have a job like this. They still exist.

Me too. Plus, my first job out of college gave me a lot of training - of course it was the mid 90s and the job market was so good that anyone with even a basic skill set was getting a big paycheck.

You wanna dance? LET'S DANCE!

Jayallday's picture

stein wrote:
Jayallday wrote:
stein wrote:
Welfare isn't paying people not to work, its paying people who can't find work (for a variety of reasons). You have the causation backwards.

Think again. Go into the hood and see how many people are trying to look for work

well don't you have extensive first hand knowledge of the economic situations of people in 'the hood'

Yes actually I do after working there for the last 15 years. The mentality is why work when I don't have to? If everybody had that mentality then society would fail and that's the problem

Wherever you go, there you are

Jayallday's picture

TLP wrote:
Jayallday wrote:
Leo wrote:
Please elaborate.

People who are on unemployment and social security actually paid into it. Disabled people can't work

You don't "pay into" unemployment and social security. There's no bucket in DC where your dollars are kept waiting for you to hit hard times or get old. You pay unemployment taxes and social security taxes now to cover the people who need unemployment and social security now. When you lose your job or get old, those same benefits will be available to you, paid by the taxpayers at that time.

That's how the system is structured to work. We can discuss if that's the best way to provide benefits, or if that system is even sustainable given our aging population, but neither are some special breed of benefit that you "earn" by paying into a fund that is waiting for you down the road.

I never said there was a "bucket" just that they pay into the system

Wherever you go, there you are

Jayallday's picture

Frank Jones wrote:
What you have to understand is that if you have an economy where businesses can hire and fire at will, if they can move their factories where ever they want when ever they want, if you want a workforce that can read and write, if you want the people in your country to be able to speak their minds (not a dictatorship) someone is going to have to pay for it.

If you don't pay for it you'll get crime, riots and revolution. Look at history. Look at the rest of the world.

I'll bet you $10 you can't find:
really mobile workforce with no organized labor
democracy
educated people
no revolution
no welfare

Like anything else, if you want x y and z someone is going to have to pay for it.

That doesn't mean you have to give up on reforming a culture of laziness

Wherever you go, there you are

Jayallday's picture

Frank Jones wrote:
Where are the 40,000 jobs that will employ the people of the hood?

Zaw, Kotter, Jayallday? Or are you saying that all those people refused to work and THEN the jobs moved to China. (all so the stock holders could make $.02 x 100,000)

And should we just let them starve to death or go into robbing people full time? Which one?

Neither. You are just being silly. How about community service to at least make them earn welfare money? Make them clean up litter and vacant lots

Wherever you go, there you are

Zaw's picture

FPDA wrote:
There are definitely a lot of people who are suckling at the teat of the system. There are definitely a lot of people who are just hitting a rough patch and need a hand up. Can't we just focus our efforts on finding a way to eliminate the one type to the extent possible while helping the other type to a reasonable degree? Just admit that there is some truth to both sides of the argument and you might actually come to some sort of reasonable compromise, or you could just fling poo at each other like a bunch of chimps.

I agree with just about everything you have said on this thread. Great stuff. Here comes the but....

But the problem is that as soon anyone mentions that people are sucking on the teat of the system or that the system is flawed they are accused of being heartless or racist or both. Most people that complain about all the abuse of the system do not want to pull the rug out from anyone. The people on liberal side of the argument always seem to want to make this an absolute argument, all or nothing. Most conservative type people want to give a hand up instead of constant, generational handouts. The people on my side of the arguement are concerned that when you give something to someone you cant take it away and they always want more. Somehow we need to start pulling back or doing things in a different way. The compromise always seems to only go one way.

You can take the fish out of the town but you can't take the town out of the fish.

Zaw's picture

Frank Jones wrote:
These tea party people want all that for free. Then they whine, complain and blame the black people when they don't get it.

see

You can take the fish out of the town but you can't take the town out of the fish.

Frank Jones's picture

Jayallday wrote:
Frank Jones wrote:
Where are the 40,000 jobs that will employ the people of the hood?

And should we just let them starve to death or go into robbing people full time? Which one?

Neither. You are just being silly. How about community service to at least make them earn welfare money? Make them clean up litter and vacant lots

That's not being silly. It's a real question that does not go away.

I'm all for community service jobs for people with no work. They did some great stuff with the WPA. Hoover Dam, all those national parks buildings. great though it is a government jobs program which you guys don't like.

-------------------

Anyway, yes there is laziness. and yes there are not enough jobs. From what I've read if a community sees they are unlikely to get a job people give up and go on govt. assistance. That's lame but also they are right. THey are unlikely to get a job. The same thing happens with income inequality. If it looks like the system is rigged for rich people the rest of us don't try as hard. Lame but it's part of human nature.

People need jobs. What I would do is have a 2 -year national service where all the 18 year olds are put to work doing something somewhere away from home. For that they could go to a trade school or college for two years.

stein wrote:
It is nice to be so privileged that you can be oblivious to a pretty popular stereotype in the canon of racism.

dmandy's picture

Zaw wrote:
FPDA wrote:
There are definitely a lot of people who are suckling at the teat of the system. There are definitely a lot of people who are just hitting a rough patch and need a hand up. Can't we just focus our efforts on finding a way to eliminate the one type to the extent possible while helping the other type to a reasonable degree? Just admit that there is some truth to both sides of the argument and you might actually come to some sort of reasonable compromise, or you could just fling poo at each other like a bunch of chimps.

I agree with just about everything you have said on this thread. Great stuff. Here comes the but....

But the problem is that as soon anyone mentions that people are sucking on the teat of the system or that the system is flawed they are accused of being heartless or racist or both. Most people that complain about all the abuse of the system do not want to pull the rug out from anyone. The people on liberal side of the argument always seem to want to make this an absolute argument, all or nothing. Most conservative type people want to give a hand up instead of constant, generational handouts. The people on my side of the arguement are concerned that when you give something to someone you cant take it away and they always want more. Somehow we need to start pulling back or doing things in a different way. The compromise always seems to only go one way.

Wow, never expected to say this but I agree with you on this point, despite being a liberal. I have never understood how some people can spend their whole life not working. I do understand that there is a big problem with the whole system. Goverment assistance of any kind should not be a lifelong thing for most people. It should be there for when it is needed. And it should be treated like a paycheck, not a handout, so people should have to do work for it. If that means doing dirty jobs, so be it. I grew up with the idea that all work is honest work. It may not be what you want to do but sometimes you have to do whatever you can to take care of yourself and your family. When my son was a baby, I needed help. If they had given me the option of working for the money, as long as my son was being taken care of, I would have jumped at the chance.Let me make this clear, I am talking about legal work. I know some dealers use this as a reason to deal. I also don't think that public housing should be a lifelong thing. Which means that something needs to done to create more affordable housing.

I don't believe that fixing any of this will be fast or easy. My belief is that we need to start with jobs. The jobs that people who are now on welfare would have had in the past are gone. We need to find a way to replace them at a living wage. remember the federal minimum wage is $7.25 an hour. Even if a person can find a job for $10.00 an hour and can get 40 hours, what are they taking home after taxes?

Zaw's picture

I dont know what the answer is either but to keep on throwing more and more good money after bad doesnt work anymore.
We already tried the afforable housing thing starting with the Community Reinvestment Act. And thats a good part of the reason where we have been economically the last 3 years.

You can take the fish out of the town but you can't take the town out of the fish.

dmandy's picture

Zaw wrote:
I dont know what the answer is either but to keep on throwing more and more good money after bad doesnt work anymore.
We already tried the afforable housing thing starting with the Community Reinvestment Act. And thats a good part of the reason where we have been economically the last 3 years.

Are you really saying that the Community Reinvestment Act is the reason the real estate market tanked and took the rest of the country with it? If that is what you are saying then you have no bloody idea what you are talking about and you have just moved to my Oh God Can I Block This Troll List. If that isn't what you meant, please explain futher.

Frank Jones's picture

Here's what you need to know about the community lreinvestment act. Only 15 percent of sub prime mortgages were subject to those regulations. The rest 85 percent, had nothing to do with that. It is just a handy excuse. The weird thing is you tell people that and they still pull the same canard out of their hat the next time. It's like they willfully ignore the facts just to keep an opinion.

The reason we had the bubble is because banks were able to bundle and sell their mortgages. No incentive to make an honest loan. They got the initiation fees from the loan but no longer had to back the mortgages with their own money. Of course they were going to write bad mortgages.

The reason they were able to bundle and sell off bad mortgages was because of rule changes. Specifically the graham leech act. Passes first in the house with a republican majority. If you listen to the republicans they are still fighting banking regulation except now they call it fighting for freedom.

stein wrote:
It is nice to be so privileged that you can be oblivious to a pretty popular stereotype in the canon of racism.

FPDA's picture

Again with the "No Shades of Grey" stuff. There is no "The Reason" for the real estate bubble and crash. Banks, Investors, Politicians, Buyers, Sellers, Agents, The Government, Community groups, and the General Public all had an important role to play. Trying to narrow it down to a single cause gets you nowhere.

Jayallday's picture

Frank Jones wrote:
Here's what you need to know about the community lreinvestment act. Only 15 percent of sub prime mortgages were subject to those regulations. The rest 85 percent, had nothing to do with that. It is just a handy excuse. The weird thing is you tell people that and they still pull the same canard out of their hat the next time. It's like they willfully ignore the facts just to keep an opinion.

The reason we had the bubble is because banks were able to bundle and sell their mortgages. No incentive to make an honest loan. They got the initiation fees from the loan but no longer had to back the mortgages with their own money. Of course they were going to write bad mortgages.

The reason they were able to bundle and sell off bad mortgages was because of rule changes. Specifically the graham leech act. Passes first in the house with a republican majority. If you listen to the republicans they are still fighting banking regulation except now they call it fighting for freedom.

I'm sure it had nothing to do with people taking mortgages they couldn't afford

Wherever you go, there you are

Zaw's picture

dmandy wrote:
Are you really saying that the Community Reinvestment Act is the reason the real estate market tanked and took the rest of the country with it?

FPDA wrote:
Again with the "No Shades of Grey" stuff. There is no "The Reason" for the real estate bubble and crash. Banks, Investors, Politicians, Buyers, Sellers, Agents, The Government, Community groups, and the General Public all had an important role to play. Trying to narrow it down to a single cause gets you nowhere.

I agree 100%. Just about everyone was to blame for what happened. I didn’t mean to lay everything at the feet of CRA, it did have a role to play but my bigger point was that affordable housing efforts were a major contributor. I said “ good part of the reason.”
As was greed from everyone involved.

You can take the fish out of the town but you can't take the town out of the fish.

dmandy's picture

[quote=ZawI agree 100%. Just about everyone was to blame for what happened. I didn’t mean to lay everything at the feet of CRA, it did have a role to play but my bigger point was that affordable housing efforts were a major contributor. I said “ good part of the reason.”
As was greed from everyone involved.

there was nothing affordable about the house sold during the so called real estate boom. If it was affordable there wouldn't be so many foreclosures.

Zaw's picture

Frank Jones wrote:
Here's what you need to know about the community lreinvestment act. Only 15 percent of sub prime mortgages were subject to those regulations. The rest 85 percent, had nothing to do with that. It is just a handy excuse. The weird thing is you tell people that and they still pull the same canard out of their hat the next time. It's like they willfully ignore the facts just to keep an opinion.

CRA was just a part of it. Half of all mortgages in 2007 were subprime and low quality.

Frank Jones wrote:
The reason we had the bubble is because banks were able to bundle and sell their mortgages. No incentive to make an honest loan. They got the initiation fees from the loan but no longer had to back the mortgages with their own money. Of course they were going to write bad mortgages.

It’s not just the fact that they bundled and sold mortgages it’s that half of them were bad mortgages. No incentive to make honest loans is right. Governemnt policies almost forced them to make bad loans.

Frank Jones wrote:
The reason they were able to bundle and sell off bad mortgages was because of rule changes. Specifically the graham leech act. Passes first in the house with a republican majority.

The banks that suffered losses because they held low quality mortgages or mortgage backed securities were engaged in activities always permitted by Glass-Steagall.

Any thoughts on Title XIII of the Housing and Community Development Act of 1992 ( the GSE Act)?
How about changes to CRA in 1995?
Or HUD’s Best Practices Initiative?

Oh I forgot you just want to talk about evil republicans and willfully ignore those facts just to keep an opinion.

You can take the fish out of the town but you can't take the town out of the fish.

Zaw's picture

dmandy wrote:
[quote=ZawI agree 100%. Just about everyone was to blame for what happened. I didn’t mean to lay everything at the feet of CRA, it did have a role to play but my bigger point was that affordable housing efforts were a major contributor. I said “ good part of the reason.”
As was greed from everyone involved.there was nothing affordable about the house sold during the so called real estate boom. If it was affordable there wouldn't be so many foreclosures.

It was affordable as long as there was a boom

You can take the fish out of the town but you can't take the town out of the fish.

Frank Jones's picture

People were going to banks for years before the bubble and asking for loans they could not afford. The difference was that in the bubble banks started to say yes to those loans and did not even ask for documentation.

I don't really blame the public that much. Everyone thought and was told that if they ever got in trouble they could flip their house for twice what they paid. In fact a lot of people thought it was foolish Not to get in on the game. That and if you wanted a house they all cost twice as much.

But back to the banks. and

Quote:
Any thoughts on Title XIII of the Housing and Community Development Act of 1992 ( the GSE Act)?
How about changes to CRA in 1995?
Or HUD’s Best Practices Initiative?

Those did not play a significant roll.
Reason 1. The bubble start 8 to 10 years after those acts were passed. I don't think you get causation there.
Reason 2. It was not loans for $100k that did in the banks. It was the more common higher dollar loans that really screwed them. And as I said, only 15% of sub prime loans fell under the purview of those acts. By far the most money lost was because of larger private loans.

Also in 2004 there was a sparsely attended meeting where they changed rules on leverage. Banks went from being able to leverage their own money by 12 times to 30 times! If you can bet $60 and you only have to spend $2 of your own money then BET BET BET!

Also mortgage rating agencies were being paid by the banks. Incentive to overvalue the bundles.

Also there were several federal agencies in competition to regulate the mortgage bundlings. Again, an incentive to go easy on the banks.

Alan Greenspan did not want to end the party.

I don't lay all the blame on the republicans. The Dems did not put a stop to it either. Freddie Mac was run by a bunch of guys trying to jump in to all that money and they took bad risks.

But it's mostly rules changes initiated by republicans and regulatory agencies ran by republicans that caused the crash. Obviously the low income stuff did not help .

That line that "we were all at fault" is not true. The people most at fault suffered the least of the consequences. The people least at fault felt the bust the most.

stein wrote:
It is nice to be so privileged that you can be oblivious to a pretty popular stereotype in the canon of racism.

Zaw's picture

Sorry this is going to be a long one. I don’t expect many people will have the attention span to take it in but I found some quotes that I hope tell a part of the story

Frank Jones wrote:
Those did not play a significant roll.
Reason 1. The bubble start 8 to 10 years after those acts were passed. I don't think you get causation there.
Reason 2. It was not loans for $100k that did in the banks. It was the more common higher dollar loans that really screwed them. And as I said, only 15% of sub prime loans fell under the purview of those acts. By far the most money lost was because of larger private loans.

No significant role??? HUD’s policy was to reduce underwriting standards that’s why they eroded.
RE: Reason 1. There were a number of things that “caused” the bubble but there was gradual increase in the affordable housing requirements set by HUD based on those Acts.
Housing prices began to spike in about 1997. Just 5 years after the GSE Act and 2 years after the CRA changes and 3 years after the HUD thing.
July 29, 1999, HUD issued press release:

Quote:
“Housing and Urban Development Secretary Andrew Cuomo today announced a policy to require the nation’s two largest housing finance companies to buy $2.4 trillion in mortgages over the next 10 years to provide affordable housing for about 28.1 million low-and moderate-income families.”… “under the higher goals, Fannie Mae and Freddie Mac will buy an additional $488.3 billion in mortgages that will be used to provide affordable housing for 7 million more low-and moderate-income families over the next 10 years. Those new mortgages and families are over and above the $1.9 trillion in mortgages for 21.1 million families that would have been generated if the current goals had been retained.”
“To fulfill the intent of [the GSE Act], the GSEs should lead the industry in ensuring that access to mortgage credit is made available for very low-, low- and moderate-income families and residents of underserved areas. HUD recognizes that, to lead the mortgage industry over time, the GSEs will have to stretch to reach certain goals and close the gap between the secondary mortgage market and the primary mortgage market. This approach is consistent with Congress’ recognition that ‘the enterprises will need to stretch their efforts to achieve’ the goals.”

Adolfo Marzol, Fannie’s Chief Credit Officer, noted to Fannie CEO Dan Mudd in a 2005 memorandum,

Quote:
“large 2004 private label [PMBS] volumes were necessary to achieve challenging minority lending goals and housing goals.”

Dan Mudd:

Quote:
“Fannie Mae’s mission regulator, HUD, imposed ever-higher housing goals that were very difficult to meet during my tenure as CEO [2005-2008]. The HUD goals greatly impacted Fannie Mae’s business, as a great deal of time, resources, energy, and personnel were dedicated to finding ways to meet these goals. HUD increased the goals aggressively over time to the point where they exceeded the 50% mark, requiring Fannie Mae to place greater emphasis on purchasing loans to underserved areas. Fannie Mae had to devote a great deal of resources to running its business to satisfy HUD’s goals and subgoals.”

Fannie 2006 report,

Quote:
“[W]e have made, and continue to make, significant adjustments to our mortgage loan sourcing and purchase strategies in an effort to meet HUD’s increased housing goals and new subgoals. These strategies include entering into some purchase and securitization transactions with lower expected economic returns than our typical transactions. We have also relaxed some of our underwriting criteria to obtain goals qualifying mortgage loans and increased our investments in higher-risk mortgage loan products that are more likely to serve the borrowers targeted by HUD’s goals and subgoals, which could increase our credit losses.”

RE: Reason 2. It was more than just 15% that “fell under the purview of those Acts”. See above quotes. Around 50% of all mortgages were considered Subprime or Alt A. So I think that probably had a HUGE effect those investments.
Admittedly I’m no expert on this subject but these are some facts as I know them:

Quote:
Immediately prior to the onset of the financial crisis, the GSEs held or had guaranteed 12 million subprime and Alt-A loans. This was 37 percent of their total mortgage exposure of 32 million loans, which in turn was approximately 58 percent of the 55 million mortgages outstanding in the U.S. Fannie and Freddie, accordingly, were by far the dominant players in the U.S. mortgage market before the financial crisis and their underwriting standards largely set the standards for the rest of the mortgage financing industry.

Is any of that wrong?
Because I have more.

You can take the fish out of the town but you can't take the town out of the fish.

FPDA's picture

Frank Jones wrote:
Reason 1. The bubble start 8 to 10 years after those acts were passed. I don't think you get causation there.

This is where most people get it wrong. The asset bubble behavior started in the 70's, not the late 90's. Prior to the late 70's, R.E. prices tracked inflation with very little variance. After society and the government decided that home ownership was a panacea for society's ills, both started to encourage it. When you mess with a market to create a result that diverges from what the market would determine otherwise, There will be consequences.

In this case, those consequences took the entirely predictable form of A) increased volatility, B) government interventions that increase A, leading to calls for further intervention, again increasing A, etc., then C) you see hairdressers on reality shows making huge financial bets in the market, and the bubble bursts (day traders in the dot-com boom, everybody turning into RE experts in the 2000's).

I feel bad for nobody, really. These last two "booms" took the exact shape that any college b-school freshman could see. And the lesson your parents should have told you is that if the money seems too easy, it probably is.

FPDA's picture

This is pretty much the killer graph. If you saw this graph and still took out a mortgage/equity loan after 2000, you've earned your losses.

Frank Jones's picture

Zaw: I did not say that 15% of loans were Sub prime/Alt A. It was more like 40% at the peak of the bubble.

15% of sub prime loans were subject to federal Community ReInvestment Act type regulations.

85% of Sub Prime/Alt A loans were made by private banks to non-low income individuals. These were made all on their own with no encouragement from the govt. Why do you keep saying the CRE was mainly responsible?

"Community Reinvestment Act had nothing to do with subprime crisis"
http://www.businessweek.com/investing/insights/blog/archives/2008/09/community_reinv.html

"It Wasn't the Community Reinvestment Act"
http://economistsview.typepad.com/economistsview/2008/09/it-wasnt-the-co.html

Non Partisan economists agree!

FPDA: How can you look at the graph you posted and say that the asset bubble started in the 1970s? It's plain to see it started in the aughts.

and I do blame federal regulators. It was obvious by 2005 that the whole thing was going to crash. People did not have the income to support the houses they were buying. They offered us a sub-prime loan and we were quite afraid and stuck with 30 year fixed.

stein wrote:
It is nice to be so privileged that you can be oblivious to a pretty popular stereotype in the canon of racism.

Frank Jones's picture

In case you did not notice. That "CRA was responsible" is a talking point put out by republicans. Also "Clinton signed the Gramham Leech act". You should look up the actual facts behind that as well.

They just have to throw something out there. It does not have to be true but as long as some people believe it, it works.

stein wrote:
It is nice to be so privileged that you can be oblivious to a pretty popular stereotype in the canon of racism.

th's picture

When we were looking to buy our first house, there were people willing to lend us ridiculous amounts of money. I couldn't figure it out. I kept going over the numbers and it just didn't add up. There was no way I would have been able to make the payments. I felt like I was stupid for not being able to figure it out.

So I bought a house with a mortgage that I knew I could afford. Then the bubble burst and I realized I wasn't the stupid one.

You wanna dance? LET'S DANCE!

FPDA's picture

Frank Jones wrote:
15% of sub prime loans were subject to federal Community ReInvestment Act type regulations.

So your argument is that 15% isn't an influential quantity? I don't think that's a supportable stance. There have been massive "bandwagon" and "moral hazard" issues with the CRA that contributed to the crisis. Essentially, because of the huge investment into the market by the government, and the implicit guarantees that come with that, the entire market gains the sheen of government protection whether it is spelled out or not. This did have an effect on the other loans. It isn't the primary cause of the collapse, but to say it had no contribution is pretty silly.

Quote:
FPDA: How can you look at the graph you posted and say that the asset bubble started in the 1970s? It's plain to see it started in the aughts.

I'm sorry, but how can you not? It's pretty clear that the asset prices became uncoupled from the underlying valuation (inflation) in the late 70's (hence the two peaks and troughs before the last inflation of the bubble in the aughts). That's when the bubble behavior began.

Here's an analogy for you. Imagine you get a nail in your car tire on Sunday. Monday you notice it's low, so you fill it with a bit of air. Tuesday it is low again, so you fill it with a little air again. Wednesday it's low again, so you overfill it to try to last a bit longer. Then it explodes on Thursday because you've stressed the system. The nail that caused the underlying issue was there on Sunday even though the critical step was overfilling the tire on Wednesday.

stein's picture

Ken Milano (before he went and edited this comment out to avoid the consequences of having wrote it) wrote:
I don’t have much sympathy for renters, for me, they are non citizens

Kenzo's picture

Subprime mortgage originations NEVER hit 50% even during the height of the boom and they were dead and buried in early 2007 because if any of you folks remember, they were exploding as early as Q3 2006. News of subprime mortgage defaults spreading across the USA was on the top of the radar in late 2006. I remember arguing about it on Phillyblog forever about it... there was a very infamous thread "How Sick is the Housing Market?" where the housing naysayers were battling it out with realtors/investors and doe-faced folks who wanted to get into the flipping business.

Source: Harvard University "State of the Nation's Housing" http://www.jchs.harvard.edu/publications/markets/son2008/son2008.pdf

If the housing crisis was JUST based on subprime mortgage loans, the disaster would have been contained. But that's not what happened. The subprime mortgages started defaulting because most of those subprime mortgages were ARMs with teaser rates followed by usurious interest rates that follow once the ARM hits the reset and the borrower is forced to pay 50% if not more.

The average subprime borrower "maximized" their loan. Which means at the start of the mortgage, they were paying the maximum sustainable payment that they could afford. In a period of outsourcing and jobs not being very tenuous, that is a very dramatic risk to take. Then you compound that risk by a short time window: if you do not convert your subprime mortgage into a fixed 30 year loan in time, keep your amount of revolving credit low and get your FICO score above 600 so you can qualify for that fixed-rate loan, you will be screwed.

Few people got over those hurdles in time for the defaults and the pullback in consumer credit. Worse: a lot of people use subprime to do "cash-out" refi: where you borrow against a grossly overinflated value of the property. People were doing this to consolidate credit card debt.

This segment of the mortgage market is small compared to the other segments. The biggest segment that failed and that was the most damaging to the housing market was the Option ARM and Alt-A type of mortgage. Those were the popular mortgages the middle class was getting. World Savings out of San Antonio, TX (then bought out by Wachova and what is now Wells Fargo) was the inventor of this type of mortgage contract.

If Bear Stearns was a heavy financier to subprime mortgage originators, Lehman Brothers was the pièce de résistance of the Option ARM mortgage. Option ARM gave you these options to pay your mortgage payment:

- The equivalent of a 15-year fixed payment (as if you were holding a fixed 15 year note)
- An equivalent 30-year fixed payment (as if you were holding a fixed 30 year note)
- Interest only - Your principal does not decrease, you are only paying the interest on the principal you borrowed
- Discount payment - You pay less than the interest owed, and what interest you did not pay was rolled back into the principal on your note. This option only exists until your mortgage undergoes a "recast", which is when your ARM mortgage resets its interest rate. But in a recasting, your mortgage re-amortizes to the shortened time window. Most often this was 27 or 25 years.

The killer with the Option ARM is if you didn't pay the amortized options on your bill and you reached for Interest Only or worse.. the temporary Discount payment... you would REALLY screw yourself. Even if interest rates drop to 1% when your ARM resets, the recasting will kill you because you didn't pay a cent on your principal and the recasting now forces you to pay down the principal on a shorter period of time.

This was a perfect storm because the subprime implosion began to pick up speed between 2006 and 2007 and banks were scrambling. Lehman Brothers had disastrous financial reports in '07 and many of the banks were in overdrive with their accounting tricks trying to cover up the mess and they were pulling the plug on originations. So banks had already started pulling back credit while the Option ARM people were about to fall on their own sword:

House price appreciation came to a sudden halt in early 2007 and what compounded it was that a lot of subprime borrowers were buying "premium" housing. i.e. They were buying new construction, exurbs, resort properties---everything but empty shells and lots on trailer parks. Subprime borrowers were living next door to Alt-A borrowers and Option ARM borrowers.

The teacher and the mechanic household of $60K/year were in the exact same kind of property next to the $240K HENRY couple; the teacher/mechanic household was in a move-up house while the HENRY couple were in (for them) a starter castle. When the subprime teacher/mechanic defaulted and the house went into foreclosure, the HENRYs next door became underwater---so they can't sell or finance. When the recast hit the HENRY couple, they walked away from their house---hence all the stories in '09 of people just walking away from their property.

To my knowledge, few of any of these folks were by any means considered "welfare". They're all strata of the blue and white collar working & middle classes, and all of them were dealing with ruthless unrelenting large expenses that were not fixed, which is a-typical of previous generations who always dealt with safer, fixed mortgages and lower mortgage payments that are not such a huge portion of household income.

In fact, Americans have just-about squeezed the costs out of everything else. What we spend on electronics per capita is not that much higher than in 1980, we spend less on clothing per capita than we did in the 70s and 80s, same for food. We even spend less on cars. [All this is inflation-adjusted]

Incomes haven't gone up, healthcare has gone up several thousand percent over what we used to spend on it, and to cover the loss of income, we rely on expensive credit products to tide us over.

Who's fault is that? Everyone's.

On the advice of someone who probably queened-out, this signature has been deleted.

stein's picture

Why HENRY? what was wrong with DINK?

Ken Milano (before he went and edited this comment out to avoid the consequences of having wrote it) wrote:
I don’t have much sympathy for renters, for me, they are non citizens

JedicusMaximus's picture

Because you can be a two income household with no kids and still not be a high earner?

10011101

stein's picture

yeah, but anyone who would actually be using the acronym DINK would be talking about 'high earners'. economists dont care about people who are living together just to make ends meet.

Ken Milano (before he went and edited this comment out to avoid the consequences of having wrote it) wrote:
I don’t have much sympathy for renters, for me, they are non citizens

Kenzo's picture

stein wrote:
Why HENRY? what was wrong with DINK?

We're not talking about childless couples moving into the City to live in rowhouses (DINKs)... HENRYs usually have at least one kid. (High Earner, but Not Rich Yet). I would consider any household > $200K/yr in gross household income and > $500K in fixed assets to be among that class [most of the assets are in the house, though].

Definition of a HENRY varies by where you are. A $100K/yr single person is practically poverty eating ramen every day if you're talking Manhattan, whereas in Philly that's a high earner.

And couples tend to have a REALLY bad habit of basing the mortgage payment into the family budget based on both incomes, instead of just the partner who has the most reliable income, which is a much safer bet. [One of the lessons you learn reading the Two Income Trap]

On the advice of someone who probably queened-out, this signature has been deleted.

stein's picture

500k in fixed assets? holy crap, i guess ill have to settle for being in a DINK household.

Ken Milano (before he went and edited this comment out to avoid the consequences of having wrote it) wrote:
I don’t have much sympathy for renters, for me, they are non citizens

Zaw's picture

Frank Jones wrote:
Zaw: I did not say that 15% of loans were Sub prime/Alt A. It was more like 40% at the peak of the bubble.

I never said you said that.

Frank Jones wrote:
15% of sub prime loans were subject to federal Community ReInvestment Act type regulations.

THAT is just 100% incorrect sir. Try actually reading some of the quotes I posted. Those other “CRA type” regulations involved GSE’s that had nothing to do with CRA loans. . So a HUGE amount if not most or all subprime loans were subject to those regulations.

And you keep throwing around that 15% number which I believe is incorrect but, ok, I’ll let you have it because if you think it’s complicated now we will really be in muddy water.

Frank Jones wrote:
85% of Sub Prime/Alt A loans were made by private banks to non-low income individuals. These were made all on their own with no encouragement from the govt. Why do you keep saying the CRE was mainly responsible?

Again, just plain wrong. No encouragement from the government?? I posted direct quotes from orgs that were directly affected by affordable housing quotas which shows how that affected mortgage standards. Which in turn increased the number of bad mortgages.

Frank Jones wrote:
"Community Reinvestment Act had nothing to do with subprime crisis"
http://www.businessweek.com/investing/insights/blog/archives/2008/09/community_reinv.html
"It Wasn't the Community Reinvestment Act"
http://economistsview.typepad.com/economistsview/2008/09/it-wasnt-the-co.html
Non Partisan economists agree!

But those links were from highly partisan people and of not much use or of any educational value. I’m not just dismissing them out of turn but the one blog failed to even mention the changes to CRA in the 90’s.
Maybe look into things a little more thoroughly and let me know what you find out.

You can take the fish out of the town but you can't take the town out of the fish.

Zaw's picture

Kenzo wrote:
Subprime mortgage originations NEVER hit 50% even during the height of the boom

Did someone here say they ever did? I don't think I did.

You can take the fish out of the town but you can't take the town out of the fish.

Zaw's picture

Dude! You didn't just pull a Krugman on me did you??

You can take the fish out of the town but you can't take the town out of the fish.

Frank Jones's picture

FDPA, looking at that graph again. There was a peak in 1980 and 1990 but the prices went down to the 1950s levels. But then did you see that huge thing at the end? What might have changed to cause that?

To put the blame primarily on the community reinvestment act is ridiculous, willful blindness. It must be necessary for you to keep your world view. Enjoy your billionaire overlords.

stein wrote:
It is nice to be so privileged that you can be oblivious to a pretty popular stereotype in the canon of racism.

stein's picture

Zaw wrote:

Dude! You didn't just pull a Krugman on me did you??

sure did.

Ken Milano (before he went and edited this comment out to avoid the consequences of having wrote it) wrote:
I don’t have much sympathy for renters, for me, they are non citizens

FPDA's picture

Frank Jones wrote:
FDPA, looking at that graph again. There was a peak in 1980 and 1990 but the prices went down to the 1950s levels. But then did you see that huge thing at the end? What might have changed to cause that?

To put the blame primarily on the community reinvestment act is ridiculous, willful blindness. It must be necessary for you to keep your world view. Enjoy your billionaire overlords.

I have repeatedly stated that there were many reasons for the crisis, of which government is one. To ignore those repeated statements is absurd, purposeful myopia.

Also, these are inflation-adjusted prices, so home prices didn't fall to 1950's level in terms of actual dollars. They regressed to the mean. This is an important difference.

Those peaks and valleys are referred to as "bear traps" where people with negative outlooks on a bubble market pull out too early when there's a slight dip in the market. Usually there's only one, but as we've had it drilled into our heads since we were children that "real estate is the best investment ever" it is actually surprising that there weren't more of them. Here's a graph that shows the "typical" asset bubble timeline:

Compare the two graphs if you would and tell me more about my billionaire overlords. This can be useful for looking at the future if you want to compare the typical bubble graph to, say, college tuition and gold prices. A good rule of thumb is once you start hearing about people with no expertise in an area "making a killing a X" then it is time to run away.

I like the old quote: "Success has many fathers, but failure is an orphan." This failure had plenty of parents, but people like you are allowing it to be orphaned by all but your preferred target. Kinda sad.

Kat's picture

Wow this thread has a record number of graphs.

FPDA's picture

Kat wrote:
Wow this thread has a record number of graphs.

Kenzo's picture

On the advice of someone who probably queened-out, this signature has been deleted.

FPDA's picture

Kenzo wrote:

That's not true at all. I only use crappy .gov sites because they'll host it for free. Duh.

Coder's picture

STOP IT...THAT HURTS MY EYEBALLS.

Kenzo's picture

On the advice of someone who probably queened-out, this signature has been deleted.

Coder's picture

You're evil.

Zaw's picture

Frank Jones wrote:
To put the blame primarily on the community reinvestment act is ridiculous, willful blindness. It must be necessary for you to keep your world view. Enjoy your billionaire overlords.

So basically you have absolutely nothing.
Do you keep repeating the same mantra again and again hoping that it will somehow become true or that you will actually believe it yourself?

You can take the fish out of the town but you can't take the town out of the fish.

austen's picture

I like manta rays. You can feed them at aquariums and they eat right out of your hand and stuff.

Zaw's picture

stein wrote:
Zaw wrote:

Dude! You didn't just pull a Krugman on me did you??

sure did.

The funny thing is that I already posted facts that directly contradict what Kruman said. Maybe you should actually read what I posted and attempt to understand what it means.

I thought it was pretty straightforward but I'll see your Krugman and raise you a Cato.
http://www.cato-at-liberty.org/krugmans-fannie-mae-fantasyland/

When I posted what I posted I was trying to show a factual basis from quotes of people at the time this was all going on and before the burst. not just opinion.

You can take the fish out of the town but you can't take the town out of the fish.

JedicusMaximus's picture

Zaw wrote:
So basically you have absolutely nothing.

Will the Federal Reserve work for you or are they part of the conspiracy too?

"Loans made by lenders regulated under the CRA were significantly less likely to go into foreclosure than those made by IMCs(independant mortgage companies)."

"Despite these caveats, we believe that this research should help to quell if not fully lay to rest the arguments that the CRA caused the current subprime lending boom."

http://www.frbsf.org/publications/community/cra/cra_lending_during_subprime_meltdown.pdf

10011101

Zaw's picture

austen wrote:
I like manta rays. You can feed them at aquariums and they eat right out of your hand and stuff.

thanks. i corrected the missing letter. i hope it did not cause too much confusion as to the meaning of my thoughts. Can I hire you as my proofreader?

You can take the fish out of the town but you can't take the town out of the fish.

HAZMAT's picture

Zaw wrote:
austen wrote:
I like manta rays. You can feed them at aquariums and they eat right out of your hand and stuff.

thanks. i corrected the missing letter. i hope it did not cause too much confusion as to the meaning of my thoughts. Can I hire you as my proofreader?

Your sarcastic thinking is as thought out as !

To be ones self and unafraid, right or wrong, is more admirable than the easy cowardice of surrender to conformaty. Irving Wallace.

th's picture

HAZMAT wrote:
Zaw wrote:
austen wrote:
I like manta rays. You can feed them at aquariums and they eat right out of your hand and stuff.

thanks. i corrected the missing letter. i hope it did not cause too much confusion as to the meaning of my thoughts. Can I hire you as my proofreader?

Your sarcastic thinking is as thought out as !

You drive me crazy with your incomplete !

You wanna dance? LET'S DANCE!

stein's picture

Zaw wrote:
stein wrote:
Zaw wrote:

Dude! You didn't just pull a Krugman on me did you??

sure did.

The funny thing is that I already posted facts that directly contradict what Kruman said. Maybe you should actually read what I posted and attempt to understand what it means.

I thought it was pretty straightforward but I'll see your Krugman and raise you a Cato.
http://www.cato-at-liberty.org/krugmans-fannie-mae-fantasyland/

When I posted what I posted I was trying to show a factual basis from quotes of people at the time this was all going on and before the burst. not just opinion.

http://krugman.blogs.nytimes.com/2010/09/21/fannie-freddie-further/

Ken Milano (before he went and edited this comment out to avoid the consequences of having wrote it) wrote:
I don’t have much sympathy for renters, for me, they are non citizens

HAZMAT's picture

Lol as it's meant to. !

To be ones self and unafraid, right or wrong, is more admirable than the easy cowardice of surrender to conformaty. Irving Wallace.

Zaw's picture

stein wrote:
Zaw wrote:
stein wrote:
Zaw wrote:

Dude! You didn't just pull a Krugman on me did you??

sure did.

The funny thing is that I already posted facts that directly contradict what Kruman said. Maybe you should actually read what I posted and attempt to understand what it means.

I thought it was pretty straightforward but I'll see your Krugman and raise you a Cato.
http://www.cato-at-liberty.org/krugmans-fannie-mae-fantasyland/

When I posted what I posted I was trying to show a factual basis from quotes of people at the time this was all going on and before the burst. not just opinion.

http://krugman.blogs.nytimes.com/2010/09/21/fannie-freddie-further/

http://www.freakonomics.com/2010/09/16/correcting-krugman/

You can take the fish out of the town but you can't take the town out of the fish.

FPDA's picture