The Worst President Ever?
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[quote=LSUAlum] [
This puts pressure on the entire market by lowering the spread between conforming and ‘sub-prime’ rates due to increased competition for marginal borrowers.
Rate compression coupled with low historical rates creates increased demand for the supply of homes. Increased demand increases price appreciation such that lenders take more risks because the risk profile was mitigated by the underlying collateral so the relative risk for the transaction could be raised on the debtor side.
The CRA started it all. Now, you ask did this work for a decade before (implying that since it took a while to surface it must have been a smaller portion of the problem). The easy answer is that the underlying collateral wasn’t increasing at the same rate as in the end because the demand hadn’t increased to the point of driving prices artificially higher. As demand increased and rates came down, it snowballed.
It’s like asking if the oil market was manipulated forcing 150 dollar a barrel oil, why did this just happen in 2007? It didn’t, it just reached the tipping point in 2007. Same with the CRA, it started the ball rolling but was exacerbated by other factors later to hit the tipping point in 2006.
As for the previous notion that no one saw this coming, that’s ridiculous. Everyone in the industry saw it coming but as long as there is that much demand, people will take on too much risk. Many will not, but some will.
I worked in Mortgage Banking from 1998 until 2007. It was quite a ride.[/quote]
well put.
The SEEDS of liberal ideals (increase homeownership) were at the ROOT of the problem.
“why did this just happen in 2007? It didn’t, it just reached the tipping point in 2007”
SUB PRIME has nothing to do with CRA. The CRA was established for banks to lend at Prime rates to a portion of the population that they served (affirmative action for lending). Sub-Prime loans have been around for years, it was the compression of the Prime v. Sub-Prime or Alt-A rates that caused a huge mess.
I don't think I disagree with anything here, so I'm not sure what we are debating.
[quote=gabe] [quote=LSUAlum] SUB PRIME has nothing to do with CRA. The CRA was established for banks to lend at Prime rates to a portion of the population that they served (affirmative action for lending). Sub-Prime loans have been around for years, it was the compression of the Prime v. Sub-Prime or Alt-A rates that caused a huge mess.
[/quote]I don't think I disagree with anything here, so I'm not sure what we are debating. [/quote] We are debating the intent of the CRA. The above was in reference to a quote stating the intent of the CRA was to lend Sub-Prime to people who could reasonably afford to pay off the loan. My assertion is that Sub-Prime has nothing to do with the CRA. Largest Sub-Prime lenders during the meltdown were not subject to the CRA. Sub-Prime was squeezed by the CRA which had it's intentions in lending PRIME to borrowers who would not otherwise qualify. Bottom line is that the Risk vs. Reward relationship was ARTIFICIALLY unbalanced due to government intervention. So, when the government had to bail out the system it should take on an appropriate amount of responsibility for causing the problem.
[quote=Conrad Dobler][quote=NYCTrader] [quote=Conrad Dobler][quote=NYCTrader]
By LIZ SIDOTI, AP National Political Writer
WASHINGTON – Budget deficits are in the stratosphere. Unemployment has hit 10 percent. The health care overhaul is incomplete.
Still, Americans appear to like President Barack Obama and the way he's doing his job.
The latest Associated Press-Gfk poll shows the president's popularity holding steady, with 56 percent of those polled approving of the way he's taking care of the country's business. His marks for handling the 8-year-old war in Afghanistan have jumped by double digits, with more than half now approving, since he capped a three-month strategy review by announcing a big troop increase.
[/quote] You found the one poll where Obama's in positive numbers. Here's the rest; http://www.realclearpolitics.com/epolls/other/president_obama_job_approval-1044.html [/quote]Actually, the only poll I see on Real Clear Politics that has a significant negative opinion on Obama is from Rasmussen, which normally skews right. So I'm not sure I see your point.
[/quote]
NBC News/Wall St. Jrnl 12/11 - 12/14 1008 A 47 46 +1 Associated Press/GfK 12/10 - 12/14 1001 A 56 42 +14 USA Today/Gallup 12/11 - 12/13 1025 A 49 46 +3 ABC News/Wash Post 12/10 - 12/13 1003 A 50 46 +4 Pew Research 12/9 - 12/13 1504 A 49 40 +9
The point is you selected the ONLY poll that has Obama with strong numbers. I'm not buying the "Obama's numbers look like Reagans" because it never seems to have a chart along with it and it hinges on inflated Obama numbers (like selecting the ONE poll showing Obama at 56%). Polls aren’t the end of the world and it’s early to call him the “worst president ever”.
You really think it "remains to be seen if Obama's polices will work out"? I don't. Obama is empowering government, Reagan empowered commerce.
[/quote]1. Regardless what your views on economic policy are, it's soon to determine whether or not Obama's policies will work. Just because you hate them doesn't mean they will be ineffective.
2. The polls you list above all have Obama with net positive approval ratings, so I'm not sure what your point is. As I said earlier, I know Obama is not wildly popular right now and I'm trying to be a cheerleader. All I'm doing is showing that the data doesn't support the view that he is "over".
3. Below is a link to a Gallup chart of Reagan's approval ratings:
http://www.presidency.ucsb.edu/data/popularity.php?pres=40&sort=time&direct=ASC&Submit=DISPLAY
Reagan peaks in May 1981 @ 68% after the assassination attempt. His numbers slide and bottom out in Jan 1983 @ 35%. His first term ends with an approval rating of 48% on 12/14/81
Below is a link to a Gallup chart on Obama's approval ratings:
http://www.presidency.ucsb.edu/data/popularity.php?pres=44&sort=time&direct=ASC&Submit=DISPLAY
Obama's approval ratings peak shortly after he took office at 69%. On 12/14/09 they hit a bottom of 48%.
So, 28 years to the day, Obama and Reagan have the same approval numbers. They also had virtually the same top on their first term approval numbers. 68% and 69% relatively speaking.
If you can't see the similarities between these polling numbers, I don't know what to tell you.
[quote=LSUAlum] [quote=gabe] [quote=LSUAlum] SUB PRIME has nothing to do with CRA. The CRA was established for banks to lend at Prime rates to a portion of the population that they served (affirmative action for lending). Sub-Prime loans have been around for years, it was the compression of the Prime v. Sub-Prime or Alt-A rates that caused a huge mess.
We are debating the intent of the CRA. The above was in reference to a quote stating the intent of the CRA was to lend Sub-Prime to people who could reasonably afford to pay off the loan.
My assertion is that Sub-Prime has nothing to do with the CRA.
Largest Sub-Prime lenders during the meltdown were not subject to the CRA. Sub-Prime was squeezed by the CRA which had it’s intentions in lending PRIME to borrowers who would not otherwise qualify.
Bottom line is that the Risk vs. Reward relationship was ARTIFICIALLY unbalanced due to government intervention. So, when the government had to bail out the system it should take on an appropriate amount of responsibility for causing the problem.[/quote]
I guess I’m tired but I can’t make heads or tails of what you are saying here.
I’m still hoping someone will address the points I’ve made on CRA as a cause for the current crisis.
That was my very original point, now since lost in all the back and forth. And it’s that the EMPIRICAL EVIDENCE is very strong that the economy and the stock market do better when a Democrat is in the White House. I’m not arguing cause and effect, just noting the fact. Given that, it’s surprising to me that people who depend so much on the market doing well bash Democrats so much.
As I see it you answered your own question. People who know and believe in markets understand that the "the economy and the stock market do better when a Democrat is in the White House" claim is based largely on the anomaly of the Clinton years (take them out of the equation and it's not even a close contest) and there's zero cause and effect there. Clinton was the beneficiary of systemic changes made during the Reagan years.
To address your points, the Credit Reform Act of 1994 was signed by Bill Clinton. Here is an exerpt written by Jim Campen, Entitled 'The Community Reinvestment Act: A Law that works' written in 1997
Please tell me you are joking. Once again, I get it you are a retail salesman but this topic has been analyzed to death in the financial press. Don’t you ever read anything beyond the sports pages?
To be clear, no, the CRA has basically NOTHING to do with the current crisis. A quick Goggle search will explain why.
Here’s just one:
Businessweek - Bloomberg
and another
http://bigpicture.typepad.com/comments/2008/10/misunderstandin.html
And what’s Clinton got to do with anything? The CRA was passed into law in 1977!!
"In fact, the CRA is one of the most remarkable success stories of the 1990s. Under strong pressure from a second wave of grassroots activism that began ten years ago, many banks have recognized the potential for profitable business in neighborhoods that they had written off without a second thought not so long ago. Mortgage loans to minority and low-income home buyers have soared. Hundreds of local partnerships among banks, community-based organizations and government agencies have resulted in tens of thousands of new units of affordable housing.
The CRA has acquired broad and deep support, due to the difference that it has made in hundreds of communities throughout the United States. This support paid off in 1996 when the CRA emerged intact from a determined attempt by congressional Republicans, following their 1994 electoral victory, to gut the law "
This 'Law that Worked' created demand for home loans and housing that had not been seen before and was one of the primary drivers to the boom in home prices and thus the lending bubble that ensued. Dems in office pushed this 'housing for everyone' agenda and as it eventually led to defaulting loans and helped create the foreclosure problems, the Dems took ZERO blame for their actions. So, to spell it out clearly for you since you are 'tired'. Your assertion that the CRA had nothing to do with the problem along with your poorly organized arguments and understanding of the back story of the crisis leads me to the conclusion you are a TERRIBLE ANALYST. The fact that you don't know what you are talking about, that you berate someone for being a 'salesman', that you are citing businessweek.com as one of your sources instead of actual understanding or analysis AND that you are avoiding actual discussions only adds to that conclusion.[quote=gabe] That was my very original point, now since lost in all the back and forth. And it’s that the EMPIRICAL EVIDENCE is very strong that the economy and the stock market do better when a Democrat is in the White House. I’m not arguing cause and effect, just noting the fact. Given that, it’s surprising to me that people who depend so much on the market doing well bash Democrats so much.
As I see it you answered your own question. People who know and believe in markets understand that the "the economy and the stock market do better when a Democrat is in the White House" claim is based largely on the anomaly of the Clinton years (take them out of the equation and it's not even a close contest) and there's zero cause and effect there. Clinton was the beneficiary of systemic changes made during the Reagan years.
[/quote] To be fair, much of what Clinton did was quite good for the markets. Balancing the budget is huge for the strength of the dollar. He was a beneficiary of some previous policies, but more importantly he was a beneficiary of being in office during the most revolutionary transformation of business technology in the last 50 years (Internet, PC computing power, Data Transmission rates)[quote=gabe] [quote=Conrad Dobler] [quote=gabe]Shania, there’s a reason you get paid to do retail sales and I get paid to do analyical work.[/quote]
Given how you seem to not understand Glass-Steagal (and how the repeal of it actually made it possible for Merrill, MS and GS to be saved) and have the details of TARP wrong, I doubt your "analyical work" has anything at all to do with finance or markets.[/quote]
Either I'm completely unclear or you can't read.
I'll go with the second!
I AGREE with you that, if anything, the repeal of Glass-Steagall helped deal with the crisis. But some here think that the repeal was one of the main causes of the crisis. So, if I was unclear let me be clear this time. I agree with you on this point.
As for the details of TARP I got wrong, which are those?
[/quote]
Glass-Steagall DID assist in getting out of the crisis as it allowed MS and GS to become bank holding companies and get to the Fed window. OTOH, when you said that G/S had nothing to do with the meltdown you betrayed the fact that you don't understand how banks like Citi and BofA got in trouble to begin with (G/S allowing them to be both investment AND commercial banks, thus the contagion of bad assets reached into commercial banks).
On the whole, I support the repeal of G/S, but your inability to see how it figured in the crisis says to me this isn’t your area of expertise.
Your error on TARP is just as egregious. MS and GS survived NOT because AIG was propped up to pay off on the short-side bets it had promised to cover, but because of the way Paulsen forced cash in to EVERY large institution’s hands, whether they “wanted it” or not, thus sparing MS and the GS in that order, from the short sellers who’d driven Bear and then Lehman off the cliff.
I don’t doubt you “analyze” something for a living, it just isn’t anything related to finance and markets.
[quote=Conrad Dobler][quote=gabe] That was my very original point, now since lost in all the back and forth. And it’s that the EMPIRICAL EVIDENCE is very strong that the economy and the stock market do better when a Democrat is in the White House. I’m not arguing cause and effect, just noting the fact. Given that, it’s surprising to me that people who depend so much on the market doing well bash Democrats so much.
As I see it you answered your own question. People who know and believe in markets understand that the "the economy and the stock market do better when a Democrat is in the White House" claim is based largely on the anomaly of the Clinton years (take them out of the equation and it's not even a close contest) and there's zero cause and effect there. Clinton was the beneficiary of systemic changes made during the Reagan years.
[/quote] To be fair, much of what Clinton did was quite good for the markets. Balancing the budget is huge for the strength of the dollar. He was a beneficiary of some previous policies, but more importantly he was a beneficiary of being in office during the most revolutionary transformation of business technology in the last 50 years (Internet, PC computing power, Data Transmission rates)[/quote]I agree with your point that Clinton was a beneficiary of a couple of things (Reagan's policies, the technology revolution) and I'm trying to be fair to Clinton. He signed the bill killing off Glass-Steagall, he championed welfare reform, he employed a good Sec of the Treasury. The "balanced budget" thing goes a tad far in my book since he had to be dragged kicking and screaming to that and since his first inclination was to hike taxes and expand government spending at the same time.
[quote=NYCTrader]
1. Regardless what your views on economic policy are, it's soon to determine whether or not Obama's policies will work. Just because you hate them doesn't mean they will be ineffective. [/quote]
It isn’t too early. We’ve seen this movie before, massively expanding government, higher taxes, weaker dollar, national debt exploding, slower growth from the real powerhouse of the economy, the private sector. This path leads to doom. Our only hope is that he changes (or is forced to change) the path.
[quote=NYCTrader]
2. The polls you list above all have Obama with net positive approval ratings, so I'm not sure what your point is.[/quote]
The point was every other single poll aside from the one you selected to quote had Obama at or below 50%. That was the point. I’ve already said that I felt the “worst president ever” label hasn’t been earned, yet. That doesn’t mean you selecting a poll at 56% when every other one is at 50% or well under is kosher.
[quote=NYCTrader]
So, 28 years to the day, Obama and Reagan have the same approval numbers. [/quote]
That theory means next to nothing. It uses a single polling agency (Gallup). It doesn’t appreciate the fact that Obama’s chart is almost completely declining from day one. It doesn’t note that Reagan’s chart showed him gaining support (even before the assassination attempt) before it decline.
More importantly, it doesn’t capture how, while Reagan faced a disapproving and down right universal hostile press corps, Obama benefits mightily from his support in that contingent. For example, while unemployment was lower under Reagan at the same point than under Obama, Reagan faced the gloom and doom reporting from the nightly news, to include endless reports on the homeless. When did you last see a “homeless report” much less one that blamed government policies for it? He’s got the wind at his back of the press corps and hearts and flowers of the usual players overseas and still his poll numbers are in the ditch. Reagan’s numbers improved when he was able to go over and around the press to the public. Obama can’t expect to benefit from that sort of thing, since the press is a major constituency in his case.
[quote=LSUAlum][quote=Conrad Dobler][quote=gabe] That was my very original point, now since lost in all the back and forth. And it’s that the EMPIRICAL EVIDENCE is very strong that the economy and the stock market do better when a Democrat is in the White House. I’m not arguing cause and effect, just noting the fact. Given that, it’s surprising to me that people who depend so much on the market doing well bash Democrats so much.
As I see it you answered your own question. People who know and believe in markets understand that the "the economy and the stock market do better when a Democrat is in the White House" claim is based largely on the anomaly of the Clinton years (take them out of the equation and it's not even a close contest) and there's zero cause and effect there. Clinton was the beneficiary of systemic changes made during the Reagan years.
[/quote] To be fair, much of what Clinton did was quite good for the markets. Balancing the budget is huge for the strength of the dollar. He was a beneficiary of some previous policies, but more importantly he was a beneficiary of being in office during the most revolutionary transformation of business technology in the last 50 years (Internet, PC computing power, Data Transmission rates)[/quote]I agree with your point that Clinton was a beneficiary of a couple of things (Reagan's policies, the technology revolution) and I'm trying to be fair to Clinton. He signed the bill killing off Glass-Steagall, he championed welfare reform, he employed a good Sec of the Treasury. The "balanced budget" thing goes a tad far in my book since he had to be dragged kicking and screaming to that and since his first inclination was to hike taxes and expand government spending at the same time.
[/quote] Full Disclosure: I'm about as much of a card carrying Republican Free-Market Advocate as I can be without being labeled as a Hannity wannabe. That being said, regardless of whether he did it kicking and screaming, he did it. The repeal of Glass-Steagall (as you mentioned to gabe) was a huge mistake but also was championed by the Robert Rubin who was Treasury Secretary under Clinton and Robert Graham a Republican from Texas (he co-wrote the Grahm-Leach-Billey Act). It was a republican push that blame should be given to all on.[quote=Conrad Dobler]
[quote=NYCTrader]
1. Regardless what your views on economic policy are, it's soon to determine whether or not Obama's policies will work. Just because you hate them doesn't mean they will be ineffective. [/quote]
It isn’t too early. We’ve seen this movie before, massively expanding government, higher taxes, weaker dollar, national debt exploding, slower growth from the real powerhouse of the economy, the private sector. This path leads to doom. Our only hope is that he changes (or is forced to change) the path.
[quote=NYCTrader]
2. The polls you list above all have Obama with net positive approval ratings, so I'm not sure what your point is.[/quote]
The point was every other single poll aside from the one you selected to quote had Obama at or below 50%. That was the point. I’ve already said that I felt the “worst president ever” label hasn’t been earned, yet. That doesn’t mean you selecting a poll at 56% when every other one is at 50% or well under is kosher.
[quote=NYCTrader]
So, 28 years to the day, Obama and Reagan have the same approval numbers. [/quote]
That theory means next to nothing. It uses a single polling agency (Gallup). It doesn’t appreciate the fact that Obama’s chart is almost completely declining from day one. It doesn’t note that Reagan’s chart showed him gaining support (even before the assassination attempt) before it decline.
More importantly, it doesn’t capture how, while Reagan faced a disapproving and down right universal hostile press corps, Obama benefits mightily from his support in that contingent. For example, while unemployment was lower under Reagan at the same point than under Obama, Reagan faced the gloom and doom reporting from the nightly news, to include endless reports on the homeless. When did you last see a “homeless report” much less one that blamed government policies for it? He’s got the wind at his back of the press corps and hearts and flowers of the usual players overseas and still his poll numbers are in the ditch. Reagan’s numbers improved when he was able to go over and around the press to the public. Obama can’t expect to benefit from that sort of thing, since the press is a major constituency in his case.
[/quote]Dude, you asked me for charts and graphs backing up my claims. I delivered them. You can rationalize it all you want, but you lost me at hostile press corps. The numbers are the numbers. They speak for themselves.
That you did. Thanks. You might think they speak for themselves, I don't and I explained why.
Dude, you asked me for charts and graphs backing up my claims. I delivered them. You can rationalize it all you want, but you lost me at hostile press corps. The numbers are the numbers. They speak for themselves.
People who know and believe in markets understand that the “the economy and the stock market do better when a Democrat is in the White House” claim is based largely on the anomaly of the Clinton years (take them out of the equation and it’s not even a close contest) and there’s zero cause and effect there. Clinton was the beneficiary of systemic changes made during the Reagan years.
Factually incorrect. You can take out the top perfomer on both sides and you still get the same results. Then again, if you are going to argue that the reason the economy did well under Clinton is due to what Reagan did, it's clear you are not interested in a real discussion, just in regurgitating GOP talking points.
In that case, let me revert to explaining that you're just a retail salesman, and it shows!
… but you lost me at hostile press corps.
Ahhh, let me explain. I don’t know if you were around at the time, but Reagan's numbers came in the headwind of a hostile press (and hostile Hollywood and hostile intelligencia). There were countless CBS evening news updates about how horrible the economy was, how there were millions of homeless in the streets and how it was Reagan's fault. Mitch Snyder became a national figure. Obama's numbers are just as bad and that's with the press carrying the water for him. When did you last see anything about the homeless?
Reagan's numbers soared when he got to the people around the press and lessened their impact. Obama has no equivalent upside. He’s in a completely different situation.
[quote=gabe] [quote=Conrad Dobler] People who know and believe in markets understand that the "the economy and the stock market do better when a Democrat is in the White House" claim is based largely on the anomaly of the Clinton years (take them out of the equation and it's not even a close contest) and there's zero cause and effect there. Clinton was the beneficiary of systemic changes made during the Reagan years.
[/quote]
Factually incorrect. You can take out the top perfomer on both sides and you still get the same results. [/quote]
Prove it. Every time I've heard an attempt at this line of logic (and it’s always from a partisan Democrat) it was clear Clinton pulled the Democrat's numbers up strongly, and that's if you're silly enough to believe there's usually any direct cause and effect between the party in the Whitehouse and the market.
[quote=gabe]
Then again, if you are going to argue that the reason the economy did well under Clinton is due to what Reagan did, it's clear you are not interested in a real discussion, just in regurgitating GOP talking points. [/quote]
Nonsense. Reagan remade the landscape, he transformed the tax code, energized commerce, sang the virtues of capitalism. His policy changes brought about the biggest bull market in American history. Clinton inherited the fruits of that tree and he happened to be in office when technology took a great leap forward. He’s not without his own (minor) achievements, but the fact remains he stood on Reagan’s shoulders.
[quote=gabe]
you're just a retail salesman, and it shows![/quote]
One with a background in economics, who has a grasp of the markets and market history and knows a pretender when he sees one claiming to be an equity analyst.
Conrad,
You can’t even read my friend, where did I ever say I was an equity analyst?
Listen, it’s clear you rely on Fox News talking points and are unwilling to look at numbers. Someone just posted a graph proving their point and you responded with that lame “blame the press” nonsense Republicans always bring up.
I’m always game to have a good analytical debate, as with Moraen. But you don’t know what you are talking about and clearly rely on myths about your heros.
It’s OK, your job is to sell, not to think. Every time some newbie with experience in finance shows up here the first thing he’s told is his MBA and his in-depth knowledge of capital markets are irrelevant. This is a sales job.
Who knows, maybe you studied economics back when you were taking classes in a community college. Obviously you don’t need what little you learned for your current job.
Fact is, I couldn’t last one week doing retal sales like you do. And you could never get an analytical job. To each their own.
Have fun selling!