<p>I live in Boston and people went crazy on the streets. I heard screaming all night long. And everyone looked like a zombie this morning when they went to class. We have a lot of happy students here.</p>
<p>Dunno if my dorm exploded- I wasn’t in it. But Grant Park certainly went nuts.</p>
<p>Wow, I would have loved to be in Grant Park for that.</p>
<p>As it is, I’m very sick so I didn’t celebrate, but I was of course deliriously happy (through the deliriousness of the medicine). My friends and I are having an Obama party on friday; I’ll be better by then (wether I actually am or not) and having a huge blowout :)</p>
<p>Damn, this is why I hate community college. No dorm, and thus I spend the evening alone at home with no one to celebrate with. =[</p>
<p>Being in Chicago was absolutely incredible. Friends at other schools kept texting me saying they could see the crowd I was in on CNN. I didn’t get back to my dorm until around 2:30 and there were still some people celebrating. Voting in Hyde Park was also very cool.</p>
<p>McCain/Palin 08!!!</p>
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<p>I think you mean McCain/Palin 2012! lol… course by then it may be XXX/Palin… I mean, you think McCain’ll really last 'til 2012?!</p>
<p>Half of my class definitely wasn’t there for my 8:30 class today</p>
<p>[YouTube</a> - SUNY Plattsburgh Celebrates Obama’s Win!](<a href=“http://www.youtube.com/watch?v=A7f4cdOPtCY]YouTube”>http://www.youtube.com/watch?v=A7f4cdOPtCY)</p>
<p>I know we’re not supposed to post you tube links but maybe CC will allow this one because it’s not meant to promote a certain school. It’s meant to show a moment in history. S said that it was a pretty amazing experience.</p>
<p>haha…the my 8:30 lecture was pretty empty too…i def. had an exam last night and missed the official announcement…but it was pretty exciting to come out to…unfortunately the election was all i could think about during the exam…</p>
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<p>Who ate the loans when they went bad? hint: they got a big government bailout, and hint 2: it wasn’t normal banks.</p>
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<p>Who owned over 50% of the mortgage market? Fannie + Freddie. What collapsed? The housing market. What do you need to buy a house? A mortgage.</p>
<p>and thanks, but I don’t watch fox news. I just support a hands off market economy, with winners and losers. Not an economy where if you do badly the losses get socialized.</p>
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<p>So… when Obama raises the minimum wage, you are saying that will just send more jobs overseas? Because the companies can cut costs by doing so? I agree. That is why I am against raising the minimum wage, as raising it only leads to inflation.</p>
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<p>ummm… they could? Freddie/Fannie bought loans. That’s what they did. They are in the secondary mortgage market. When they buy the loan from the bank, the bank has more money, and can use that new money to make another loan.</p>
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<p>if you got an adjustable rate mortgage… it is just that, ADJUSTABLE!!! People act so surprised when their rate goes up, it’s amazing. No mention of minorities, just people trying to buy $500,000 houses (that are way overpriced) when their family income can’t support it. Why would you borrow money you can’t pay back? WHY??</p>
<p>if banks knew they wouldn’t be paid back on the loans, then they wouldn’t have made the loans… except… there are these things that just exist that we can sell our loan to, so it doesn’t matter if it’s a good loan or not, b/c it won’t hurt us! brilliant!</p>
<p>ohhhh, you mean when CLINTON started pressuring them to make loans to people who shouldn’t be getting them? gotcha.</p>
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I can even toss our your liberal NYT as the source: [Fannie</a> Mae Eases Credit To Aid Mortgage Lending - New York Times](<a href=“http://query.nytimes.com/gst/fullpage.html?res=9C0DE7DB153EF933A0575AC0A96F958260]Fannie”>http://query.nytimes.com/gst/fullpage.html?res=9C0DE7DB153EF933A0575AC0A96F958260)</p>
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<p>I agree here. At some point though people will decide to stop trying to earn more money, when it’s no longer worth it to them because they feel like they don’t get to keep enough of it. I don’t know what that point is, and I certainly am not anywhere near it. If it makes you feel better about me, I just graduated from school and I’m spending the next year volunteering with Americorps, and I put somewhere in the neighborhood of 500 hours of community service (mostly tutoring) into the community near my school during my 4 years, and a spring break doing Katrina relief in Biloxi, MS. I can’t really help anyone out with money now. But I can help with my time.</p>
<p>I wish Obama the best of luck. He will have a chance to win my vote in 2012.</p>
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<p>that’s messed up. seriously. messed up. She can move to… somewhere else.</p>
<p>soccerguy, I don’t know if you’re just confused about the subprime crisis and the economy, or are trying to backpedal from what you’ve written. Lets me refresh your memory about what you wrote
See where he writes “the government would help them out if things went bad (read: fannie/freddie would buy the dangerous loans)”? This clearly means that if things don’t go bad the banks would hold onto their loans and make money, but if the loans went bad they could turn them around and sell them to Fannie/Freddie. This is not how the mortgage market works; when a bank makes a loan they may turn around and sell it Fannie/Freddie and (good or bad) it is gone and the bank has money to make another loan. The distinction is important because Soccerguy wants you to believe Fannie/Freddie were just waiting to take bad loans like an insurance company, and its that bad policy that tempted banks to make subprime loans. As you see above, he plainly claims that without this guarantee the subprime crisis wouldn’t not have occured. The right-wing explanation Soccerguy gives counts on you not understanding the mortgage market. Not only does he misrepresent Fannie/Freddie as insurance, most subprime loans were not even eligible to be sold to Fannie/Freddie! Many mortgages originated by banks such as Countrywide were packaged into securities which in turn were sold to banks, investors, hedge funds, and investment banks. Freddie/Fannie does not buy these securities back, they only purchase home loans from the originating bank. In fact 75% of subprime loans were turned into securities. Soccerguy’s right-wing claim that banks were “pushed and pushed” to make bad loans because Fannie/Freddie would buy them if they went bad is inherently false because 75% were not eligible to be bought!</p>
<p>I’ll go on, but let me comment for other readers of the thread that I realize this is a bit technical and not fun to slog thru. And that’s what those that push the right-wing stories count on. They figure you don’t want to dig into messy details, so they give you sound-bites like "the gov’t pushed banks to make bad loans and promised a bailout if things went bad " and count on enough people falling for it.</p>
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Soccerguy knows he has been caught out so he’s trying a bit of sleigh-of-hand here to make you believe his account of why banks made bad loans in the first place. In explanation #1 banks were happy to make bad loans because they know they’ll be bailed out by Fannie/Freddie. We already have seen that is false, banks either sell them right away to Fannie/Freddie or they don’t, but Soccerguy still wants you to believe that banks were promised they could sell bad loans to Fannie/Freddie and that’s just what happened. Congress passed a bailout bill and the Fed acted after the crisis began; it’s the Fed and Treasury that are behind the bailout. Soccerguy is hoping you won’t notice he’s substituted “government” for “Fannie/Freddie” so that you’ll think his original account is correct. The right-wing account of the origins of the subprime debacle is obviously wrong once you catch the trick of replacing “Fannie/Freddie” with “goverment”.</p>
<p>In an earlier reply I had pointed out that Former Fed Chairman Alan Greenspan, a godlike figure to the free-market believers, did not mention a word about the gov’t pushing banks to make bad loans or Fannie/Freddie being at the root. Surely if these had been at the heart of the problem he would have mentioned it; the pristine free-market didn’t work because of these corrupting forces. In fact he said that a securitization system that stimulated appetite for loans made to borrowers with spotty credit histories, was at the heart of the breakdown of credit markets. I posted “Nothing there about Freddie/Fannie being at the heart of the problem.” To which Soccerguy tries to confuse you by mixing apples and oranges. He writes
Do you see the trick here? Ignoring the fact that Soccerguy is able to identify Fannie + Freddie at the heart of the problem even though Fed Charimain was not, what matters is where the subprime loans came from, not the overall quantity of loans. The “50% of mortgages” are the apples; what Soccerguy doesn’t tell you is that most of those loans are so-called conforming loans, made to to borrowers that can document their income, put a down-payment, meet loan ratios to show they can repay, etc. These loans are doing just fine. The subprime loans are the oranges; and while Fannie + Freddie hold some of them the vast majority were made via investment banks packaging them into securities. Tha is what Greenspan identified as the heart of the problem.</p>
<p>As a side note, why did the subprime crisis cause such problems to so many large institutions? Many mortgages originated by banks such as Countrywide were packaged into securities which in turn were sold to banks, investors, hedge funds, and investment banks. The latter 2 bought them with borrowed money so they were leveraged; If you put up $100 million of your own money and borrowed $900 million, you can buy $1 billion worth of securities. If the return is 1% on your deal, since you only put up 1/10 of the money you are earning 10%! During the boom years investment banks were earning 15-20% on their equity, and they did this by leveraging themselves 20-30x!!! The problem is that when you’re highly leveraged, a slight dip in overall value of your investment is magnified in effect on the money you put up. If the bonds you bought drop in value 1% and you’re leveraged 30x, you just lost about 30% of your investment. In a nutshell this is how so much money was lost, bankrupting firms and causing a need for a bailout.</p>
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<p>Maybe you “clearly interpreted” what I wrote, but I didn’t write about what happens if things went well.</p>
<p>It’s kinda like if I sold broken toys though. As long as someone buys the broken toys (or bad loans), what incentive do I have to fix them?</p>
<p>Fannie/Freddie might not be government in name, but in practice, they were and are. And with the $700 (/$850) billion, the Ibanks got treatment like they were government owned enterprises. And as we have seen recently, they are using that money on expensive vacations etc (and AIG is still paying Manchester United… maybe they can change the logo on the front of their uniform to say “American Taxpayers”)</p>
<p>Without a guaranteed market for an inferior product, the inferior product dies out of the business model, replaced with a superior product. Here, the I-banks should have been left to die, in the market. They have a bad product, they lose. But that’s not what happened. They got saved. Have a bad product? Don’t worry, the government will fix it for you.</p>
<p>Just to recap where we ended up on the issue, because all the right-wing people are going to be telling the fable in the years to come that it was the gov’t that pushed the financial industry into this mess. Rush Limbaugh and the other right-wing fanatics are screaming that it was the community reinvestment act (CRA) that caused the whole problem. In fact to the right the lesson of the crisis is NOT the need for reasonable oversight so there are no more trillion dollar bailouts. What you see happening to the banks is clear repudiation of their worldview, and yet to the amazement of most people they find in the unfolding crisis “proof” the government caused the crisis!! </p>
<p>Soccerguy quotes from the standard story they use, explaining its genesis thusly
That “pushing and pushing” he’s talking about is the CRA act. Now you can never convince someone on the right they’re wrong about this; you notice that soccerguy has not yet admitted he is wrong. But for everyone else, who may encounter people like soccerguy on campus earnestly peddling this story and wonder if maybe there’s something to it, you deserve to know what really happened and recognize the right-wing rants for the fantasy that they are. </p>
<p>Here is a Federal Reserve speech yesterday by one of its Governors (12/3/08) that addresses the very claim made by soccerguy and others on the right
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<p>Note, too, the obstinate insistence by those on the right to blame the willingness to make bad loans on Freddie and Fannie, along with the standard subterfuge soccerguy still insists on of writing Freddie and Fannie at first and then quickly switching to “government” as if they were the same thing. </p>
<p>I’ve already shown you that Freddie & Fannie did not originate most of the sub-prime loans. Furthermore I’ve explained that they could NOT buy the loans once they were packaged and sold off by the banks to investors. So how can Freddie and Fannie be even remotely accused
That’s not even remotely possible, and in fact it didn’t happen. Even with the bailouts it isn’t Freddie/Fannie that are helping out the banks, its the Fed and Treasury. Doesn’t seem to bother soccerguy, though… Tells you more about those making these kind of arguments than the world around us, don’t you think?</p>