Quote Of The Year

42 Replies to “Quote Of The Year”

1. Yeah, it’s unlikely that this kind of reporting will go on in the MSM at all.  After all, it must all be the fault of the big bad Republicans, doncha know…
   Garth

2. Right you are Garth. Doncha know that Bush Sr. was actually telling Slick Willy what to do? And this article will never see the light of day,unless somebody emails to McCain/Sarah…hint..hint.

3. Amusing isn’t it watching Barney Franks in his best Elmer Fudd voice at the hearings today, he’s the slob that under Clinton lobbied from his Freddie/Fannie Mac oversight committee position that they accept high risk loans to give the poor housing. It started the whole sub-price mess. He and Shumer are complete snakes in the grass.
   Starting in ’91 Bush on public record warned about both agencies risk problems. Congress took it down the path to the fiasco we are in coupled with the slobs on WS peddling bad paper. Lefties are notorious for conventiently forgetting their history. Watching the Congressional slugs on C-span today was an exercise in hypocrisy.
   Instead of bulldozing the overhang of housing that would shore up property prices the Democrats won’t rest until they can turn the empty condos and McMansions into public housing. The middle class be da*ned.

4. Just to make sure, I’m assuming this is supposed to be relevant to the current housing crisis?
   Assuming that is Kates proposition, it makes absolutely zero sense. Somehow, almost two decades ago, Clinton tried to get rid of race discrimination (or if you disagree with that, he was simply trying to get black people who shouldn’t have loans more of a chance to obtain a mortgage).
   Now, after 8 years of republicans, these same poor people have crushed the entire financial system of the United States of America with 700 billion dollars worth of bad mortgages? Really? Are you really stretching it that far?

5. Even beter, McCain tried to rein them in in 2005

6. It started even earlier . . Jimmy Carter’s administration.
   Is this a case of “mortgage justice”, a subset of social justice ?
   Just wondering

7. It is not the rich defaulting on all those mortgages,

8. Sorta on topic. PowerLine says it has a advance copy of Bush’s speech.
   Get this doozie of a line:
   We must guarantee that no American suffers the soft bigotry of being forced to live with the consequences of his bad decisions.
   Can this be true? Will Bush deliver such a full and final repudiation of conservatism?

9. barf-jebus
   not only did clinton start the mess, butt his appointed fool, greenspan refused to raise interest rate, which would have “cooled” the market, but he babbled about it being (low int. rates) good for the economy. He was on the job from 94 to 06, so you do the math.
   and try comprehending that we have the same leftist BS in our civil service , time to clean the leftist garbage out
   FIRE THEM ALL

10. Here’s my take on the whole mess.
    Regulations in the American Merchant Banking industry are sadly needed. At the root of this latest mess is leverage and Merchant Banks think nothing of leveraging funds in their possession up to 30%, a recipe for disaster, as has been witnessed. Had there been limits in this area the current situation would not have occurred. The unfortunate problem with the government getting involved with regulating the industry is that they will do what governments everywhere do, over regulate. Merchant banks do have an important roll to play and regulation should be confined to one or two key areas, not a blanket cover everything approach that will continue to hinder and prolong the current banking situation.
    Short selling has a roll to play and a ban here is not a good idea. Short sellers are quite often the canary of a company with problems. The problem as I see it is when a company starts to fall, for whatever reason, the piling on effect of the shorts exacerbates the problem, weather real or imagined, and the downward spiral picks up steam and inhibits the companies ability to address it’s problems in the proper manner. My feeling here is simply rework the up-tic rule that will limit the piling on when someone is in trouble and help reduce the losses to the other shareholders.

11. bar_jebus – Clinton “tried to get rid of race discrimination”, like who hasn’t since the 60’s, you’re kidding aren’t you?, and, what has that to do with the reality of lowering mortgage standards in this sub-prime mess? Both blacks and whites participated in risky loans. We’ve had fair housing and lending laws here for 40 years on the books. If you had the money and the credit rating you got the house regardless of skin color until the game got rigged and credit standards were modified to open the door for lots of abuse.
    In your pinhead universe of default to the simplist racial paradigm, race isn’t an issue in this mess. Only you made it such.

12. Greenspan is largely responsible for the housing boom, I completely agree with you there. The fundamental problem here is not giving loans to people who can’t afford them. If banks did that in a rational situation, and then tried to package them up and sell them with the buyer knowing full well that the seller is a credit risk, then they’d go out of business because no one would buy their silly triple A rated securities.
    The problem of course is that these organizations lied…these people were not triple A rated. However, people kept buying these packaged securities, so the banks kept dishing them out in a feeding frenzy that was similar to a positive feedback loop. The market won’t bear losses just because the government told them to ruin their own businesses. Saying that “poor people” caused it due to social initiatives is ridiculous in the extreme.

13. Anne Coulter explains it as well.You can find her and a few other stories about this at Joel’s.
    http://www.proudtobecanadian.ca/blog/

14. Yeah, Garth and guys….
    Must be Clinton’s fault, or Carter’s fault (or Kennedy’s and FDR’s fault?) – or, as Kate wants to think, the ‘minorities’ fault…the typical SDA position (I mean what *isn’t* the ‘minorities’ fault for you guys?)
    Anyway: deregulation. Right-wing money grubbers deregulating everything in sight, going on a greedfest, then crawling back and demanding the little people pay up for their recklessness. Why, it’s almost as if it were planned, isn’t it?
    The American people know it – that’s why they overwhelmingly and rightly blame the Republicans forthe mess.
    John McCain knows it – that’s why he’s trying to get out of the debate Friday night and away from all those uncomfortable questions. Coward!
    You know it, too. And maybe even Bush Jr. knows it – can you see it in his eyes that he knows his legacy is 1) lying his country into a disastous war 2)instituting torture as American policy 3) losing an entire American city and now 4) the greatest economic crisis since 1929.
    Heckuva job, Rightards!

15. But Kate, the American economy is in great shape, right? This is after all, what you’ve been preaching for the last two years..perhaps longer. And does your beloved Bush bare no accountability? AHem…he has been the president for the last 8 years. You know..I might have been able to cut you some slack for suggesting it was failed leadership partially due to the Clinton’s that lead to 9/11, but there comes a time where you have to accept responsibility. Isn’t that a tenet of your ideology; owning up to your own mistakes when you screw up? So why play spin doctor? Kind of hypocritical really, don’t ya think?

16. So lets look at home ownership in the US…and lets look at it by race. The nice thing about the less politically correct US is that you get these kind of interesting stats.
    http://www.infoplease.com/ipa/A0883976.html
    For African Americans it has ranged between 44.1% in 1996 and 49.1% in 2004 and last year sat at 47.2%. Rough estimate is that there are 30,000,000 african americans in the US and that means households at say 2.1 (estimate) of about 14,500,000 households.
    So if the peak is 49.1% then that this means the number of mortgages in the US held by African Americans is about 7,200,000 mortgages.
    So lets now assume that ALL of the increase in African American home ownership is due to bad loans. So thats 49.1- 44.1 = 5%. That works out to being about 10% of the peak…..thats 720,000
    Now lets assume the average house price is 300,000 and that this was 100% financed and has now gone under. You get 216 Billion. Thats 500 Billion short of the 750 billion being asked for
    So even under these extreme circumstances of assuming all new black mortgages since 1996 are poor and unqualified and that they are the source of the problem you cannot get over 50%, not even over 33%.
    Easy credit being offered to ALL, including these people, caused a bubble, most likely taken advantage of by those a rung or so up from the poor. The structure of the mortgages had adjustable rates, the fed got worried about inflation and jacked up rates about 2 years ago for a bit along with there being back ends to these contracts that “exploded the rate”…cheap in expensive later.
    The loans were packaged up by freddie mac and fannie mae, under an impression that proper due diligence was done on any and all of those mortgages. The mortgages, buried deep in the financial instruments were sold off. And other financial instruments on the assumed risk of these instruments.
    When it becomes clear that the value of the underlying asset has fallen significantly or is alrernatively gone down an undetermined amount then all of the instruments were built upon it, including insurance on those instruments, goes to zero….it goes to zero because nobody knows the value or how to obtain a value, not because they are valueless.
    The lack of disclosure, and the lack of proper due diligence doen at the beginning is the cause….ultimately easy credit applies to all.
    Of course why a quasi government institution like Fannie and Freddie are the largest issuer of mortgage finanicng is beyond me, geez in canada we do it the old fashioned way, banks.
    Anyway, my point is dont blame the poor, and dont blame blacks. They arent the source of the problem. Fannie and Freddie got sloppy, there was no oversight and they allowed contaniminated risk into the system, that then got buried by in other instruments…..of course the fact that these other pillars, insurance, investmnet banks werent being supervised like commercial banks made it worse.
    Freddie and Fannie are the initial sources of this problem….they were left unsupervised….and I suspect there will be many democrats that will suffer from this because these Quango’s were dumping grounds and holding tanks for many a congressional appointment.
    It will get ugly.
    Personally. The government should just buy all the mortgage paper, cap the rates, rest the ams to 40 years. The holders of the paper will get take a haircut, it will be quantifiable though. Then you work out mortgage portfolio and slowly sell it off over time. Lets people stay in homes, make payments quantifies losses and gives the government the upside on the value of the good mortgages.
    This other bailout is a whole other problem that I am less inclined to do. I dont like the government taking positions in investmenbt firms etc etc.
    It is really bad. And the worry is the precedent it sets for the government to take positions in all sick industries….welcome to 1960’s and 70’s UK.
    Big freaking mess, but dont make it a racial issue, or a poor issue….they arent the cause of a trillion in losses.

17. Interesting how it goes. Just like they deny global warming, right-wing RepubliCons are desperate to blame anything except their own greed for this economic disaster.
    I have a friend who was a financial advisor at a bank. She left that job when “ordinary” people started pitching tantrums in her office because their portfolio did not wield those juicy profits that they read about in the Wall Street Journal, circa 2000.

18. People wonder why Usury was outlawed. At least in the OT testament even slaves where set free or any loans where cancelled every 50 years in the jubilee year. As an economic control.

19. This entire banking mess is a direct result of government getting involved the business of the private sector.
    According to the linked piece, down the line the loan officers were following orders.
    On the other side of the desk were the idiotic home buyers who couldn’t believe their good fortune. A big house with a rapidly rising value that they could use as an ATM machine through equity credit.
    George W Bush was busy for the most part of his terms fighting our mortal enemies. In this last term the democratic controlled senate and house prevented anything from going through that Bush may want anyway. He did try to save future citizens from that ponzy scheme called social security. He knows it will fail completely in about thirty more years and there will be no money left for future seniors.
    There is a lot of blame to go around and many to put it on. The question is, what did we learn from this and what will be done to prevent this from happening again.
    I will suggest that a good start would be if Whitey could get over the guilt and start treating blacks the same as we treat each other. That is what most try to do, but then it’s up to blacks to treat us the same as they treat each other too.
    What are the odds?

20. Western Canadian post.
    “Regulations in the American Merchant Banking industry are sadly needed. At the root of this latest mess is leverage and Merchant Banks think nothing of leveraging funds in their possession up to 30%, a recipe for disaster, as has been witnessed”.
    I agree except if you check you will find leverage in most cases was 30 times equity (not 30%) and in some cases up to 50 times equity so it’s not difficult to understand that when the market went against their positions banks became insolvent very quickly.
    Leverage is a wonderful thing when it works for but is a killer when it goes against.

21. Western Canadian post.
    “Regulations in the American Merchant Banking industry are sadly needed. At the root of this latest mess is leverage and Merchant Banks think nothing of leveraging funds in their possession up to 30%, a recipe for disaster, as has been witnessed”.
    I agree except if you check you will find leverage in most cases was 30 times equity (not 30%) and in some cases up to 50 times equity so it’s not difficult to understand that when the market went against their positions banks became insolvent very quickly.
    Leverage is a wonderful thing when it works for but is a killer when it goes against.

22. Odd how the left has no means of recognizing and therefore dealing with facts and truth. Deny, deflect, lie. A tantrum yes. But never a rational rebuttal.
    An affinity with the ideology that gave us taqiyya, it appears.

23. John V at September 24, 2008 9:39 PM
    That my good man is a excellent and fair assessment.
    What depresses me most about this whole mess is the seemingly universal consensus that it was a “market failure”. Here’s what I think of “market failure”: there’s no such thing. The phrase is as ridiculous as looking out your window at a winter storm and saying that it’s a “weather failure”. No such thing.
    What is so often perceived as “market failure” is always and everywhere and without exception, as John V. explains, the sorry result of government intervention in the free market.

24. me no dhimmi writes: “Get this doozie of a line:
    We must guarantee that no American suffers the soft bigotry of being forced to live with the consequences of his bad decisions.
    Can this be true?”
    You may have seen the link on PowerLine, but this was the work of Scott Ott, of Scrappleface. It may be a fair translation of the plan, but it’s not what the President said.

25. prospector
    you are correct, should have edited my own post but didn’t. Try 300%.
    Thanks

26. Roseberry, thanks.
    Geez, I can be dumb sometimes! Yes, I saw the link at PowerLine, didn’t recognize the name, didn’t go there: relied on the summary. Had they indicated scrappleface in the link I would have known. Actually, let’s not make excuses: I should have known Bush couldn’t possibly say that. BLUSH. (I’m a bit brittle at the moment, or maybe dumbstruck would be more apt.).
    Note to self: always click on links even when pressed for time.
    In my defence: in this bizzaro world, anything is believable.

27. When you think clearly about any crisis, financial or otherwise, it seems the roots always stretch back 10, 20, 30 years. In the intervening time, even though a few people can see the problem, nothing gets done; Clinton legislated bad loans, and Bush did not fix it. Then, when a confluence of circumstances come together in just the wrong way, bang, disaster.
    The thing is, there is nothing we can do to prevent it from happening again. Future generations are bound to believe themselves wiser and smarter than we are, just as we believe we are far more clever and morally evolved than our parents and grandparents. Thus history is fated to repeat itself.

28. Let us look at it objectively. Clinton started the ball rolling, and for more than a decade, in a bull market for real estate, it looked like he was right. Minority home ownership was up, and none of the predicted problems materialized. Only when the market turned was there a problem.
    This loans to people with poor credit strategy worked well, right up until the moment it stopped working. It is like momentum investing; it works great right up until there is a catastrophic failure, and only with the benefit of hindsight can you see that catastrophic failure is the only sure outcome, eventually.

29. Well it’s going to be interesting to see how the FBI investigation works out.
    Of some 1400 lenders PLUS FNM + FRE + AIG and some of the other would be beneficiaries the US Bailout plan in addition to current and past members of the US Congress …. A whack of Democrat politicians and high profile supporters.
    Funny too that the Names Clinton and Obama keep coming up!
    As the man said …. people will be going to jail.

30. This may be a bit OT but I read recently that ON AVERAGE a black person making between $65,000-$75,000 US/yr, on average, has a worse credit rating than a white person making less than $25,000 US/yr.

31. kelly
    This may be a bit OT but I read recently that ON AVERAGE a black person making between $65,000-$75,000 US/yr, on average, has a worse credit rating than a white person making less than $25,000 US/yr.
    Please provide a link for numbers

32. This political correctness has led us to disaster. It reminds me of the ban on identifying specific ethnic groups as more dangerous than others when it comes to airport security. And we all now where that led…

33. Yes, the unlikely support of a certain supremacist ideology, post 911, ironically led to the diversity in airport security.
    Ethnicity is secondary.

34. Tom Velk, Economics Professor at McGill was interviewed on CTV after the Bush bailout speech on Sept 24.
    http://watch.ctv.ca/news/latest/bailout-blues/#clip95767
    Velk….. 1:24
    There was a government program that really forced banks to lend money to people who weren’t going to pay it back, so the problem wasn’t so much wicket, greedy, Wall Street bankers but politicians who were trying to get votes from their constituents
    Interviewer…..3:52
    Given that this has happened under the Republican watch, do you think this is going to reflect poorly on John McCain ?
    Velk…………4:18
    In fact the real problem is with the Democrats in Congress who were making loans available, house loans, available to their constituents, many of whom are what we call NINJNA borrowers – no income, no job, no assets – they shouldn’t have had the loans in the first place. Mainstreet is alright, 95-97% of US mortgages are just fine, it’s those NINJNAs who by and large vote Democratic that caused, that tipped over, the first dominoes in the row. Unfortunately for McCain, he’s going to carry the can.

35. It’s a Liberal/Democrat trait of garnering votes by selling futures on a promised illusion of utopia. As a result, disaster happens.
    The ideological definition of progressivism.

36. The discrimination being “You can’t afford it mate”.
    Some discrimination. Some outcome!

37. Watched newt on H&C take apart the proposed plan and offer something different. He made a lot of sense to me and intimated that McCain is coming back to washington to propose similar significant changes. These next few days could be the stuff you will tell your grandkids about 25 years from now.
    http://www.foxnews.com/video/index.html

38. here’s a more precise link:
    http://www.foxnews.com/video/index.html?playerId=videolandingpage&streamingFormat=FLASH&referralObject=3110655&referralPlaylistId=949437d0db05ed5f5b9954dc049d70b0c12f2749
    well worth a look…

39. Gord Tulk
    Tks for the Fox links. Newts take on the “mess” is insightful. How this all unravels will be interesting.
    Newt calling the present proposal “socialism at its worst” and sugesting a “workout, not a bailout” as a solution leaves me to wonder how this bill can be rammed through before the weekend.
    Newt saying “Lets start by putting under oath some of the members of congress … ”
    I could only hope for that to happen before the election.
    It will be a shame if McCain falls on his sword by putting country first to mitigate this economic mess at the expense of his campaign. Nobama wont. ( I hope I’m wrong on that)
    Can O vote “present” by proxy while on the Letterman show regarding this bill?

40. We are going to elect an affirmative action president to fix affirmative action loan crisis.
    I don’t think the crappy loans was the whole problem. It was partial regulation. Partial regulation never works.

41. Go with the bailout and you end up with .50 cents on the dollar,dont take the bailout and you end up with .30cents on the dollar.
    lose lose
    damned if you do or dont
    between a rock and…

42. As I’ve stated on the Worthwhile Canadian Initiative blog, there’s few situations that can’t be made worse by the application of unbounded hyperbole, yet people (such as “real” above) insist on calling this “the greatest economic crisis since 1929.”
    Yeah, that’s what they’ve called all the other economic dislocations we’ve had in the last 80 years, too.  Makes good copy, and as an added bonus, scares the sh!t out of the general public, making them nice and pliant for the next round of political meddling.
    A simple point: assuming the “bailout” goes through, the entire 700 billion dollar package represents around 5.3% of U.S. GDP for a single year (estimated U.S. GDP for 2006 was $13.13 trillion [PPP basis]).  I’m against the bailout because it teaches the wrong lesson — that is, that if you f*ck up royally enough, Mommy and Daddy will bail out your silly little irresponsible butt and save you from learning the vital life lesson of “actions have consequences.”  The technical term is that such an action creates “moral hazard.”
    Yet the bailout will probably go through (at least in some form), and those without historical memory will ignore the fact that, on a percentage-of-GDP basis, we’ve faced comparable problems since the early 1970s and come through them, appropriately humbled (albeit for only a short time).
    Meddling almost always leads to one thing: a death spiral of more meddling.
    Garth