They were unaware in 2000 that there even was a mistake. This is called “hindsight”.

Hindsight, perhaps, but it was made during the Clinton years. They knew they had made a mistake and refused to put controls in place.

From your own quote (except where you conveniently stripped out the DATE):

In 2000 [...] Consumer advocates warned that lenders were trapping borrowers with low “teaser” interest rates and ignoring borrowers’ qualifications.

You are suffering from some kind of schizophrenic episode if you can’t see that.

From your post in #27,

My reply in #32 was the very same link you used. The very first three paragraphs were

Clinton did NOT cause the housing crises. All the evidence points to his successor, Bush.

I am not blaming Clinton’s administration alone. Bush’s had a mighty hand in it, too.

Re: personal attacks

Kids like you and your smart mouth are the type who used to get the crap kicked out of them in the locker room. Is that what your problem is? Are you trying to beat me up from the safety of your keyboard, hundreds of miles away from any possible reprisal? That’s got to be it. I’ve never met anyone in real life who would talk like that to someone face to face.

… Clinton Administration officials admitted they made a mistake and would have done it differently.

They were unaware in 2000 that there even was a mistake. This is called “hindsight”.

Bush was only in office for three months when he got word of the problems with the defaults.

So Bush was made aware of the problem when they became apparent. Remember, HUD was not recognizing these loans as public interest loans for the FMs.

There is no way in hell he could have caused the loans to default in that short of time.

So, knowing that some of the loans were problematic, the Bush Administration told the FMs to buy them. Clinton didn’t. It was Bush.

From your post in #27,

HUD [under Clinton] expected that Freddie and Fannie would impose their high lending standards on subprime lenders.

My reply in #32 was the very same link you used. The very first three paragraphs were

In 2004, as regulators warned that subprime lenders were saddling borrowers with mortgages they could not afford, the U.S. Department of Housing and Urban Development helped fuel more of that risky lending.

Eager to put more low-income and minority families into their own homes, the agency required that two government-chartered mortgage finance firms purchase far more “affordable” loans made to these borrowers. HUD stuck with an outdated policy that allowed Freddie Mac and Fannie Mae to count billions of dollars they invested in subprime loans as a public good that would foster affordable housing.

Housing experts and some congressional leaders now view those decisions as mistakes that contributed to an escalation of subprime lending that is roiling the U.S. economy.

Clinton did NOT cause the housing crises. All the evidence points to his successor, Bush.

You are in some identity crises that is causing you to pretend you are a successful businessman. Your replies show an appalling lack of business world knowledge. The only explanation is you are a poser living in some theoretical, dream world, fantasy land. Your research is equivalent to a freshman or sophomore High School student. All indications are you have never held a job in your life. AND, since I have been a manager for many years, are a supervisor’s nightmare; you think you know it all even before the orientation.

Now since we have been through this once already here, I’m done.

Note that in previous posts, Clinton Administration officials admitted they made a mistake and would have done it differently.

Bush was only in office for three months when he got word of the problems with the defaults. There is no way in hell he could have caused the loans to default in that short of time.

Now there you go again, posting incorrect shit. The problem was traced back to 2000. That does not mean there was a visible problem seen at any time in 2000.

Any successful businessman understands the difference between noise and trends. Oopps, I said “successful businessman”. That though is the difference between the real world and a pretend scenario.

Personally, I think they realized they screwed up and since there wasn’t anything they could do about it, just let is slide.

It wasn’t bad until 2000. They could have stopped it then but didn’t, just like Bush’s group could have stopped it in 2001 when they saw all the defaults coming in from the loans made in the 90s.

BTW . . . Bonfire, not campfire.

Do I blame Bush’s admin? Yes. Do I blame Clinton’s admin? Yes. Between Clinton’s liberal HUD policies on subprime mortgages and Bush’s neocon polices on “homes for everyone,” they performed a great alley oop.

To paraphrase what Bobbo in #59 wrote,

It went from a small campfire to a forest fire.

Now a campfire is very useful. Certain defensive measures are required though. Such as if you see sparks floating into the dry brush beside the camp you might want to do something. But blaming the idea of the campfire is silly. Blame the person who allowed the whole mess to get out of control. Dumping more wood on the fire is only asking for trouble.

Leveraged debt instruments in the unregulated exchange banks has caused upwards of 12-13 TRILLION dollars of damage.

The leveraging would have occurred without subprime stupidity.

A bonfire to a forest fire? – - Ok.

Hey, from 370AD until 460AD any massive shift could have toppled Western Rome. They kept delaying the inevitable…

I agree with that to a certain extent. My link does, just not in detail. It does point out some salient facts, however.

Clinton started a bonfire without anyway to put it out. Bush let it turn into a forest fire.

In 2000, as HUD revisited its affordable-housing goals, the housing market had shifted. With escalating home prices, subprime loans were more popular. Consumer advocates warned that lenders were trapping borrowers with low “teaser” interest rates and ignoring borrowers’ qualifications.

This was before Bush was in office. Lenders were already getting greedy by 2000.

HUD restricted Freddie and Fannie, saying it would not credit them for loans they purchased that had abusively high costs or that were granted without regard to the borrower’s ability to repay. Freddie and Fannie adopted policies not to buy some high-cost loans.

That year, Freddie bought $18.6 billion in subprime loans; Fannie did not disclose its number.

Then, the first year Bush was in office is when we saw the policies of Clinton’s admin start to take effect:

In 2001, HUD researchers warned of high foreclosure rates among subprime loans.

“Given the very high concentration of these loans in low-income and African American neighborhoods, the growth in subprime lending and resulting very high levels of foreclosure is a real cause for concern,” an agency report said.

By 2000, people could see the writing on the walls. If the market continued down the path it was going, things were going to get much worse.

Bush could have stopped it, but he didn’t. The Dot Com bust was putting the US into a minor recession and home prices were continuing to rise in spite of the recession. I am not sure what he was thinking except perhaps “you don’t kill home sales during a recession.” Shrug.

Do I blame Bush’s admin? Yes. Do I blame Clinton’s admin? Yes. Between Clinton’s liberal HUD policies on subprime mortgages and Bush’s neocon polices on “homes for everyone,” they performed a great alley oop.

Now, we have a bunch of houses worth 1/2 of what their paper says they should be worth and Obama’s admin is trying to keep those prices inflated because . . . ? Irregardless of whose fault it was originally, Obama is heading down the same path. He is trying to maintain the price bubble.

Read the article. I disagree with nothing in it. However, it is incomplete. It failed to discuss the issues before Bush took the reins as my article link did.

The suggestion that the FMs willingly made bad investments is wrong. Your WP article along with the NYT article point out the political interference that put them in their precarious position.

That neither article spends much time discussing things before Bush is because there wasn’t a problem during Clinton’s Administration. When the effects of the bad paper came to light, the Bush Administration should then have corrected the problem. They didn’t. Instead they forced the FMs to take the paper so the financial institutions could write even more.

Not really. The US can easily default on its debt. Its been done in history countless times and always to the amazing benefit of the defaulter. The REAL question is will the government still try to recoup the debts of the citizens while defaulting on the debts of the nation?

Hell, many people personally go bankrupt because it’s the only way out. And, well, as the loaner that’s the risk you take.

Deficit spending: the crack cocaine of USA politicians. Never ends well.

Well put, and scary as hell.