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CNN admits “Trump's right: The economy is doing well and he deserves some credit”

Discussion in 'North American Politics' started by Shaul, Sep 9, 2018.

  1. suncowiam

    suncowiam Well-Known Member

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    Let me just simplify this a bit. The ultimate lender is the US government. :)

    The point that they control interest rates should satisfy what else they can control to regulate the value of cash.

    Anyhows... I have a very busy day. Appreciate the conversation. Have a good one.

    [Edited]
    Also, this is why I pointed to flippers...
    House flippers triggered the US housing market crash, not poor subprime borrowers
     
  2. Revoltingest

    Revoltingest Greased up & ready for action!
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    No, for non-governmental lenders, ie, not Fannie Mae & Freddie Mac.
    Example:
    All my current loans are with a local bank which doesn't sell the loans.
    This bank got no bailouts or other government assistance.
    I'll have to read this later.
    But the opening paragraph....
    "The grim tale of America’s “subprime mortgage crisis” delivers one of those stinging
    moral slaps that Americans seem to favor in their histories. Poor people were reckless
    and stupid, banks got greedy. Layer in some Wall Street dark arts, and there you have
    it: a global financial crisis."
    ....argues against a straw man. In the public discussion I've seen, the "poor" weren't
    blamed as the cause. Moreover, the largest lender was the federal government (Fannie
    Mae & Freddie Mac), which behaved similarly to other lenders.

    Edit......
    From the article....
    This is problematic....."single mortgage borrowers" applies to those with only first mortgage loans. To imply that having more than one mortgage makes one an investor is wrong because many homeowners (non-investors) have 2nd & even 3rd mortgages on their homes.
    Moreover, lenders impose different requirements upon investors (non-owner occupant borrowers), eg, higher equity & interest rate.

    This claim of "mounting evidence" actually presents none. Moreover, the supposedly
    debunked claims don't relate to mine, which aren't about people who are poor or have
    shoddy credit. I see a system created by the fed which created the bubble with
    dysfunctional incentives. I don't blame the borrowers, who were just doing what was
    in their reasonable self interest in their experience.

    When I'm dictator, here are my policies.....
    - End institutionalized inflation, ie, let prices fluctuate due to market forces rather than
    over-expanding the money supply. (This mitigates prices rising due to perception of
    an inflation hedge.)
    - End personal tax deductions, eg, home mortgage interest, home property taxes.
    (This is fairer to renters. And it makes home ownership about utility rather than
    investment.)
    - Put all lenders on notice: No bail-outs if your loan portfolio fails.
    (This will change their perception of risk, inducing safer lending practices.)
    - End lending regulation which opposes working with troubled borrowers.
    (Government should not be intentionally causing financial loss.)
    - In the event of economic disaster, assist only borrowers.
    (This will indirectly help lenders survive.)
    - Stop attacking & meddling in the affairs of other countries.
    With fewer enemies, we'll suffer fewer terrorist attacks.
    - Privatize all governmental lenders, eg, Fannie Mae.
    (Taxpayers shouldn't be on the hook for them.)
     
    #162 Revoltingest, Sep 15, 2018
    Last edited: Sep 15, 2018
  3. Sha'irullah

    Sha'irullah رسول الآلهة

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    I am directly stating my opinions are because of the poor and the tax cuts overwhelming help the poor. Allowed me to become a legal LLC off of nothing and grow me and my sisters business from 0$. Granted I still have issues with the tax cuts but not helping the poor is nonsensical.

    You seriously lack insight when you write, you keep restating my circumstances and ask why I am not acting on them everytime I do.
     
  4. suncowiam

    suncowiam Well-Known Member

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    I'm not that keen on the loan/mortgage companies, but according to this:

    Fannie Mae - Wikipedia

    Fannie Mae and similar banks played a critical role in the collapse of the economy requiring the government to "take over."

    All I can say is that the government fixed just no to the expectations of yours and others. There's probably not more I can add to this.

    I have to go pray at a temple for about 2-3 hours today because its part of family/cultural traditions. I am so not looking forward to it.
     
  5. Revoltingest

    Revoltingest Greased up & ready for action!
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    Guess who created & exercises regulatory control over Fannie Mae & Freddie Mac?
    Who bought the most Countrywide loans?
    The fed had a ginormous role in creating risk factors for the bubble & crash.

    I'm off to "temple" too....
    [​IMG]
     
  6. metis

    metis aged ecumenical anthropologist

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    The Great Recession didn't happen because of too many regulations but too few, especially allowing banks to hold so little in reserve. Some economists basically called what we did as acting like a casino. Countries that weren't so loosey-goosey didn't see this directly happening with their banking system, however since banking systems internationally affect each other, they were affected by what happened here. ​

    It was mostly caused by over-speculation within the shadow-banking industry that by its nature has few regulations. After the collapse, the one thing that so many Republicans did was to try and blame it mostly of Fanny Mae and Freddie Mac, but that simply was just a fabrication. If in doubt, check out the Wikipedia article on "Fanny Mae" and scroll down to 1.3.
     
  7. Revoltingest

    Revoltingest Greased up & ready for action!
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    Experts are very useful people, but sometimes things don't comport with one's experience.
    Then tis best to cast a jaundiced eye towards them. It's possible....just possible...that their
    analysis is imperfect.
    Remember back a few years when all the polls were predicting a guaranteed Hillary
    victory over Trump? Experts wielding advanced laser calculus statistics said it with
    numbers, so it must be true, eh. But the odd thing I saw traveling around the country
    was that the yard sign metric told a different story. Trump signs vastly outnumbered
    Hillary's.

    Now, on to the housing bubble crash....
    You & other experts say speculators were the problem.
    I was & still am in the real estate business....development, home owning, property
    management, investment (residential & commercial). Of all those I associate with, no
    one buys property for speculation, ie, to buy & briefly hold for later resale at a higher price.
    Why don't they speculate?
    Unless one has inside knowledge of a zoning change, appreciation typically isn't fast
    enuf to justify the carrying costs (taxes, insurance, interest, maintenance, opportunity)
    & sale costs (transfer taxes, income taxes, legal & commissions run around 10% of price).
    This is a lot of overhead. Those I know who actually make money in real estate buy
    investments to hold onto. If the value increases, refinancing is the better way to turn
    increased equity into cash than a sale.

    I saw many homeowners (who weren't speculators) discover that reduced wage income
    made their homes unaffordable. And with reduced property values resulting from the
    crash, they owed more than their homes were worth. They couldn't sell because that
    would mean coming up with cash to cover the principal shortfall & closing costs.
    So they get foreclosed upon....often by Fannie Mae & Freddie Mac, who don't renegotiate
    with troubled borrowers. Essentially, the federal government tells them "Screw you!".


    Just last nite, I heard another expert on NPR discuss the crash & causes. The guy
    made sense to me...no real disagreement between us. But the interesting things was
    what he did not address, ie, federal policy which incentivizes housing bubbles.

    Let's consider value.....
    What should the price of housing be?
    One might expect it to be priced based upon the utility of having a home. Essentially,
    you'd pay an amount every month which reflects the value of living there. Renters
    view things from this perspective.
    But for homeowners, it's a different picture for several reasons.....
    - Monetary inflation (government created) means that your home's value increases
    in dollars, while your loan balance is unaffected by inflation. One gets to make a
    profit in dollars even when there's no increase in economic value. This makes
    one's home an investment which is a hedge against inflation. This return increases
    with greater spending & borrowing, thereby encouraging borrowing more money to
    buy more house than one actually needs.
    - The cost of home ownership is reduced by income taxes avoided due to deductions
    for property taxes & mortgage interest paid. The savings are greatest the more money
    one borrowers, & the spendier a house one buys.
    - When one later sells one's primary residence, the IRS doesn't tax this gain (some
    limitations apply to high value homes).

    These heavy subsidies cause housing market inflation to prices above the value
    of a home's actual utility, thus creating bubbles. So the problem isn't due to
    villains....it's the system itself which creates instability. This is something the
    "experts" don't notice.
     
    #167 Revoltingest, Sep 17, 2018
    Last edited: Sep 17, 2018
  8. 1robin

    1robin Christian/Baptist

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    I like charts, data, statistics as well but they take time to provide and to investigate so I like to hover around the edge of a debate and try to determine if the extra time necessary to spend producing and evaluating the data is really worth it. That is why I kept asking you to provide your exact position. I don't spend tone of time on debates I don't think are important, challenging, and where the two participants disagree significantly.

    You keep forgetting that it was Carter that created the housing mess and Clinton who doubled down on it. I think Bush just happened to be the president when it imploded. It's like blaming the existence of the Vietnam war on LBJ.

     
  9. metis

    metis aged ecumenical anthropologist

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    One key for understanding what happened to cause the Great Recession is what are called "credit-default swaps" and how that also encouraged over-speculation. One might google "AIG" in order to see the role they played in the shadow-banking system that went berserk.

    It essentially created a house-of-cards that could take minor hits but not the big one that we saw starting in 2007. The two women who devised the system abandoned it and sent warnings out prior to that date because they realized it was too unstable, but too many people were making too much money, so their warnings got ignored.

    BTW, my pension was tied to AIG, but fortunately the state guaranteed it security. However, had the economy gone "south" significantly enough, even the state might not have been in a position to protect our pensions. It's unbelievable how close our entire economy came to "the edge of the table" in 2008.
     
  10. Anthem

    Anthem Active Member

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    I insist there already is war.
     
  11. Revoltingest

    Revoltingest Greased up & ready for action!
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    Could be much worse than it is.
     
  12. Anthem

    Anthem Active Member

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    Not much of a supporter then, are you?
     
  13. Anthem

    Anthem Active Member

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    Yes. But to say it could result in war is just wrong.
     
  14. Anthem

    Anthem Active Member

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    Can you make that more specific if you can?
     
  15. Anthem

    Anthem Active Member

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    I would love to know too, but I bet he isn't a citizen and never took part in the voting.
     
  16. Anthem

    Anthem Active Member

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    Fox hates arabs
     
  17. Anthem

    Anthem Active Member

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    I'm sorry, but that doesn't answer the question - at all.
     
  18. Revoltingest

    Revoltingest Greased up & ready for action!
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    So you say.
    We each have our opinions about whether the risk of war has increased.
     
  19. Anthem

    Anthem Active Member

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    Risk of war. Ok ok. Over and out.
     
  20. metis

    metis aged ecumenical anthropologist

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    Apparently Trump's sabre-rattling doesn't count with some.
     
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