Chief Spreading Bull

Discussion in 'The Dungeon' started by lrrs517, Nov 28, 2017.

  1. 2blueYam

    2blueYam Track Day Addict

    So, what that graph doesn't show is how much the Fed spent to purchase those securities vs. the present day value or how much they may have sold back to the market at how much of a loss vs. a gain. That makes it pretty pointless in determining how much the Fed is in the hole on those. If I read that graph correctly, the Fed is holding Mortgage backed securities currently worth nearly 1.8T dollars.
     
  2. G 97

    G 97 What's my name

    IIRC the Fed ended up in the black with the GM bail out.
     
  3. GRH

    GRH Well-Known Member

    That is correct but until they start lowering their balance sheet and selling them back on the market neither you nor I can answer whether they do it at a profit or loss. My point is that money had to come from somewhere to save the banks and it's still outstanding.
     
  4. GRH

    GRH Well-Known Member

  5. G 97

    G 97 What's my name

  6. GRH

    GRH Well-Known Member

    Actually you did hear it, GM did a commercial on it

    It just wasn't accurate
     
    G 97 likes this.
  7. In Your Corner

    In Your Corner Dungeonesque Crab

    The individual taxpayer lost.
    You lost.
     
  8. lrrs517

    lrrs517 Internet Investigative Officer

    I have never donated to any campaign. But when the Republicans finally determine who her opponent will be it will be my first donation. I don't care about his or her positions on anything. I hate her that much.
     
  9. TXFZ1

    TXFZ1 Well-Known Member

    I agree with the morons part, the issue I have is the banks fraudulently claiming the loans were sound while knowing they were about to fail. Obama let them walk and we bailed both the banks and the ins companies out.
     
    jrsamples and crashman like this.
  10. crashman

    crashman Grumpy old man

    For me it goes a bit further back than that though. Clinton and the Community Reinvestment Act pressured banks to allow stupid people with little to no credit to get mortgages. That is what I believe started the whole mess. Clinton also pushed alot of financial deregulation that made it easier for the banks to fuck people over. Bush did not help matters any because when the bubble popped his administration came up with TARP to bail them out and Obama let them walk. We were fucked in a very bipartisan fashion with this one...
     
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  11. In Your Corner

    In Your Corner Dungeonesque Crab

    This is exactly what happened. The whole house of cards wouldn't have fallen in if the government hadn't created those cards in the first place.
    Banks were forced to write loans they would have and had never made using their standard business practices.
    They knew that a certain number were bound to fail, but they had to write them anyway.
    That is exactly where the problem originated.
    The rest was a game of hot potato which the taxpayers lost.
     
  12. Banditracer

    Banditracer Dogs - because people suck

    The tax payers always lose...
     
  13. jrsamples

    jrsamples Banned

    When I was in banking, that wasn't really the case. CRA type loans seemed to be pursued as a cost of doing business -- a cost to keep the regulators from blocking your expansion when you wanted to buy or merge with another bank. You know, "....by merging into a larger entity, we will be able to bring you a wider range of banking services at lower cost." What a crock of shit. Big bank is just a license to steam roll your customers because you have a billion more of them in line to kiss your ass.

    I remember getting pissed on more than a few occasions when asked if any of my recent loan extensions had included any minority applicants because, "....we can get credit with that on our CRA report." I didn't give a shit what someone looked like, just be able to pay the loan and then do so.

    IMO, making those bad loans was just greed on many different levels. I remember some underwriters at UG (PMI insurers) who were complaining to management that their standards only went down as time went by. When the loan insurer (UG) started accepting appraisals that were performed lock stock and barrel by the originating loan officer, I knew that shit would eventually hit the fan. But that was just on the insurance level. Imagine everyone doing that sort of bull shit industry wide. Now we have bigger banks who have basically been given a free ride for the last 8 years with zero interest rates. That's like telling Monger that he can schedule races at any track during the year without a fee. How could he not make money. I hate the f'n banks and the government that enables them.
     
  14. In Your Corner

    In Your Corner Dungeonesque Crab

    You just used a lot of words to say what I put in a sentence, but you say it yourself.

    CRA type loans seemed to be pursued as a cost of doing business -- a cost to keep the regulators from blocking your expansion when you wanted to buy or merge with another bank.

    That right there was the government forcing the bank to make bad loans.
    That's where the root of the problem was.
    You have the causality backward.
    It was the government's insistence that the banks make bad loans, not the banks wanting to make bad loans.
    They could make the loans or be put out of business defending themselves against charges of redlining, their choice.
    The problem originated with a few Congress creatures who put the blame everywhere else when the shit hit the fan.
     
  15. jrsamples

    jrsamples Banned

    No that's not really the case IMO. I think that you are using "forcing" too liberally. Look at BB&T among others. They experienced very little impact when the shit blew up. Why? It is because they CHOSE to not wade into the pool of higher risk. Goberment didn't make them do that, and they were still playing the CRA game to a level that satisfied the regulators. Their eventual loans losses (albeit small) were the result of the downward direction of the economy, which hit their business loan portfolio. But, oddly enough, it was still within a loss ratio that they could foresee and hold reserves for.

    Yeah, I believe many places wanted to make "bad" loans (loans with low analysis of repayment ability, low analysis of collateral, and high LTV ratios). They wanted to make them because THERE HAD NEVER BEEN A MORTGAGE BLOW UP (did you even watch the movie) and they viewed not doing these types of loans as leaving a pile of money on the table. But, the collapse would have been avoidable if one of the players along the way would have been able to call a turd a turd.
     
  16. In Your Corner

    In Your Corner Dungeonesque Crab

    Sorry, I did the reading, I didn't watch any movie.
    Those loans would have never been made without the government pressure to do so.
    It most certainly was not voluntary.
     
  17. crashman

    crashman Grumpy old man

    But was it not the repeals and rule changes enacted by the government that allowed this whole mess to start? Give a large corporation the tools to make more profit and they will be all over it. Do you blame your dog for eating too much or do you blame yourself for putting too much food in his bowl?
     
  18. jrsamples

    jrsamples Banned

    I blame him for lying about still being hungry.:D
     
  19. Mongo

    Mongo Administrator

    The banks lying about all that is an issue for sure. Making it easy to bundle and sell crap loans is an issue. But the morons still did it to themselves. They can't blame the banks for their own stupid.
     
  20. Motofun352

    Motofun352 Well-Known Member

    Stupid? Yes. But it is a special kind of stupid, fueled by greed. Don't worry that you can't afford the balloon rate. In 3 or 5 years the real estate will appreciate so much you will just sell it and buy another...instant wealth! Whenever you feel the greed emotion kicking in tell yourself to stop and reflect for a while....either that or go buy some tulips.:p
     

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