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Duffy is God’s answer to a prayer.. I miss the old days of blogging when we were debating principals instead of people… Duffy has stuck to the old line of debating principals with facts, and that is what makes him special in the eyes of bloggers everywhere…
Since the passing of Steve Newton, he has been the only one to challenge me in any argument, and usually some pretty good stuff comes out of both sides during the exchange… I have respected that.. Cause once again, opinions mean dick. Facts are what we steer by.. It is my hope that in responding to his challenge that an answer may make itself apparent.. Who knows? It may not come from me… But if I’m the catalyst for bringing it out in the open, then… none of this was in vain..
Why I like to debate Duffy is simple.. Neither side, he or I, is concretely set in their opinions… We accept it when the other side makes sense… I usually go into such debates having no idea where they’ll end up… I hope the rest of you enjoy the ride as welI….
That said..
kavips rebutt’s:Uh… Mr. President. That’s not entirely accurate.
First off, the Community Reinvestment Act of 1977 was developed for, and locked in on, urban developmental areas and had no part of the subprime boom, which primarily occurred out in western desert regions where owning 4 to 5 investment homes was normal… Those homes were overwhelmingly funded by loan originators NOT SUBJECT to the act… We all know the crises was not because people couldn’t afford a payment on their house. It came about, because with no occupants, people could not afford the payments of 4 to 5 houses….. Instead of one loan per borrower turning up in default; four to five were.
Second off, The housing bubble reached its point of maximum inflation in 2005.
Courtesy of NYT
Third off, During those exact same years, Fannie and Freddie were sidelined by Congressional pressure, and saw a sharp drop in their share of loans secured by the Feds… Follow the dotted line on the very bottom of the graph…
Courtesy of NYT
Fourth off; During those exact same years, private secures, like Delaware’s own AIG, grabbed the lions share of the market.
Courtesy of NYT
Remember these graphs for later on when I discuss the results of deregulation, versus regulation… But like it or not, these graphs conclusively show that private insurers, who thanks to Marie Evans, we now know were deregulated by Phil Gramm in the 2000 Omnibus Bill, were the primary cause of the worlds financial collapse.. Probably put best by these words of AIG’s spokesperson, who when asked why they didn’t have sufficient funds to cover losses, said point blank, “We were deregulated. We were no laws requiring us to keep any funds, ..so we spent it…”
kavips rebutt’s:Uh… Mr. President. That’s not entirely accurate. I agree that the hedge funds did survive better than the banks. Not because of bailouts, but because they sold short during the crises and made billions while firms closed and people got thrown out of work. There is nothing wrong with that; I did the same. In fact close readers may remember my warnings that the crises was impending almost a year earlier. Very close readers may remember my telling them exactly when to sell, and at what point the stock market would rebound… I must say: I called it rather well. 🙂
De regulated hedge funds are not the issue… De-regulated, excessively leveraged, mortgage securities, are a different story however… They, not the banks that held them, are the cause of the crises…Years from now, when academics search for causes of the stock market crash of 2008, they will focus on the pivotal role of mortgage-backed securities. These exotic financial instruments allowed a downturn in U.S. home prices to morph into a contagion that brought down Bear Stearns a year ago this month – and more recently have brought the global banking system to its knees.
Where you err is when you state that banks too big to fail, assumed they would be bailed out… By implication, you say imply they failed from squandering money, and wanted the bailouts.. But your tax dollars didn’t flow directly to the bottom line.
So in that sense, the bailout money represents an expense for banks. That’s one reason a number of banks have said they want to give the money back as soon as possible.
You say big banks were counting on a bailout, and they got them? That didn’t happen to these banks. New Mexico, Georgia, and Florida each lost a bank just last Friday. That brings to 8, the number of banks failed in June. Unfortunately if a bank is failing, it can’t bet on itself to fail, as can a hedge fund.
kavips rebutt’s:Uh… Mr. President. That’s not entirely accurate. The idea is that the banks made bad decisions knowing taxpayers would bail them out is the issue that is inaccurate. For the record, I have no qualms that it was the Clinton legacy who tore down the wall between banks and investment banking. Like you, I feel it was a good idea to do so… Again the problem was not primarily with banks making loans to people who could not pay.. Although, it was as late as October 2009, when I was made aware of one private Bank in Denver still exaggerating income to make loans look good enough on paper to get approval of securitization. What caused the collapse was the leveraging of those loans as securities, so that as the housing market became overextended, and the ARM jumped past the low cost opening years, the damage was 100 times worse because of leveraging. What made the collapse criminal, was that the insurance most financial institutions had bought from AIG, to cover such an improbable event, had already spent by that companies executives, out on bonuses to themselves. What made it doubly criminal, was that when they received government dollars through a taxpayer bailout, those same executives assumed it was to first go towards paying their bonuses again. However, very recent events may give some cover to the argument that some collusion was implicit in the bailing out of Goldman Sacs and AIG… Basically, once bailed out, AIG paid Goldman Sacs for shares twice as much as they were worth. The documents also indicate that regulators ignored recommendations from their own advisers to force the banks to accept losses on their A.I.G. deals and instead paid the banks in full for the contracts.
Perhaps the greatest tragedy coming out of Iraq, was the replacement of the pragmatic Ret. General Jay Garner, with the politically appointed Paul Brenner. Almost overnight, Iraq flip flopped from welcoming the United States, to blowing us up…….
If you can remember the boys around the cameras,……..”we love Bush….Bush is the Man”, then you understand how good things were looking in the first months after Baghdad fell and what a great job the pragmatic Jay Garner did.
The subsequent change after Garner left, shows one thing. Republican philosophy stinks, not just for Americans, but apparently everyone else too. (lol) (Sorry dudes….It just does!) The national blog Toms.Dispatch has this take on one date in 2004 when Mike Castles hero, George Bush, bestowed the Medals of Freedom on Tommy Franks, George Tenet, and Paul Bremmer. In case you missed it, I said Medals of FREEDOM.
Tommy Franks, the first recipient, has brought to the Afghans, the freedom “to grow just about the total opium crop needed to provide for the globe’s heroin addicts — 8,200 tons of opium in 2007, representing 93% of the global opiates market. This was a 34% jump from the previous year and represented opium production on what is undoubtedly a historic scale. Afghanistan’s peasants, surviving as best they can in a land of narco-warlords, narco-guerrillas, and deadly air attacks have, once again, set a record when it comes to this unique freedom.” Well deserving choice of the Medal of Freedom.
Secondly and one of my personal favorites, solely because he is a holdover from the glory days of the Clinton Administration, is George Tenet. I like this guy, and sympathize with being in his position of having to compromise defending the country, with working with the Cheney cabal…..Surely he is deserving of the Medal of Freedom. After all, ”
As CIA Director, Tenet then delivered to Agency operatives the freedom to target just about anyone on the planet who might qualify (however mistakenly) as a “terror suspect,” kidnap him, and “render” him in extraordinary fashion either to a foreign prison where torture was regularly practiced or to a CIA secret prison in Afghanistan, Eastern Europe, or who knows where else. He also freed the Agency to “disappear” human beings (a term normally used in our world only when Americans aren’t the ones doing it) and freed the Agency’s interrogators to use techniques like waterboarding, known in less civilized times as “the water torture” (and only recently banned by the Agency) as well as various other, more sophisticated forms of torture.” Another great choice by George Bush.
Now I have some qualms about the third one. Paul Bremmer has probably contributed the most to freedom than anyone in modern memory. He can be thanked for the unlimited freedom Blackwater Security now has throughout the entire region of iraq. They can thank Paul Bremmer.
“A day before he left, however, he established a unique kind of freedom in Iraq, not seen since the heyday of European and Japanese colonialism. By putting his signature on a single document, he managed to officially establish an “International Zone” that would be the fortified equivalent of the old European treaty ports on the China coast and, at the same time, essentially granted to all occupying forces and allied companies what, in those bad old colonial days, used to be called “extraterritoriality” — the freedom not to be in any way under Iraqi law or jurisdiction, ever.”
So today, again before the world at the United Nations General Assembly hall, the current United States president, George W. Bush, got up and proclaimed he was dedicated to working for freedom…..
After considering his track record and using that definition of freedom instead of the one Bush tried his best to enunciate,…. the world’s governments collectively yawned a big yawn, leaned back in their chairs, and politely said “no thanks.”
” F R E E D O M !!!” William Wallace: Braveheart