Why is it the Bush Mortgage Bubble? Because Bush created it.

L

LV426

Verified User
I see Conservatives are still blaming everything in the world except for themselves for the Bush Economic Collapse and Bush Mortgage Bubble.

The reason it's Bush's Mortgage Bubble and not Clinton's, is simply because Bush's regulators ceased the enforcement of lending standards on subprime loans, beginning in 2004, like Bush says himself via his Working Group on Financial Markets:

“The Presidents Working Group’s March policy statement acknowledged that turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007.”
https://www.treasury.gov/resource-center/fin-mkts/Documents/q4progress update.pdf

And before a Conservative posts a lying Op-Ed blaming the CRA, here's the Federal Reserve, telling those people to go back to stapling teabags to their faces:

"Since 1995 there has been essentially no change in the basic CRA rules or enforcement process that can be reasonably linked to the subprime lending activity. This fact weakens the link between the CRA and the current crisis since the crisis is rooted in poor performance of mortgage loans made between 2004 and 2007. "
https://www.federalreserve.gov/images/20081203_analysis.pdf
 
Now, there will be Conservatives who will post lying Op-Eds, or who will say "Bush tried to reform GSE's but Democrats wouldn't let him."

Except that isn't true at all, and it was Bush who opposed GSE reform:

"Strong opposition by the Bush administration forced a top Republican congressman to delay a vote on a bill that would create a new regulator for mortgage giants Fannie Mae and Freddie Mac."
https://www.marketwatch.com/story/oxley-pulls-fannie-freddie-bill-under-heat-from-bush

"Despite what appeared to be a broad consensus on GSE regulatory reform, efforts quickly stalled. A legislative markup scheduled for October 8, 2003, in the House of Representatives was halted because the Bush administration withdrew its support for the bill"
https://pdfs.semanticscholar.org/e31c/f28389f421cbc0a45ce0ade0f45af9c38cd2.pdf

And why did Bush oppose GSE reform? Well, according to his own Treasury Secretary, there was no reason to worry about GSE's in September 2003:

Testimony from W’s Treasury Secretary John Snow to the REPUBLICAN CONGRESS concerning the 'regulation’ of the GSE’s

Mr. Frank: ...Are we in a crisis now with these entities?

Secretary Snow: No, that is a fair characterization, Congressman Frank, of our position. We are not putting this proposal before you because of some concern over some imminent danger to the financial system for housing; far from it.“
https://www.govinfo.gov/content/pkg/CHRG-108hhrg92231/html/CHRG-108hhrg92231.htm
Click to expand...
 
So how did Bush create a housing bubble and why?

Well, the why is an easy answer; Bush created a housing bubble to help his re-election chances. Bush knew that housing starts are job multipliers, so he "started" as many new homes as he could to juice an economy that, from 2001-2003, wasn't delivering on the promises made of the tax cuts.

He went so far as to tie his tax cuts to the housing market as early as the spring of 2004, as he was campaigning:

Bush Ties Policy to Record Home Ownership
March 26, 2004
Touting his tax cuts as the economy's savior — and pointing to the strong housing market as proof — Bush said "more people own their own home now than ever." More than 50 percent of minorities owned their own homes in the last three months of 2003 for the first time ever, the president said.
https://www.foxnews.com/story/bush-ties-policy-to-record-home-ownership
 
So how did Bush actually create the bubble?

There were a few levers he pulled, but the biggest lever to pull was letting Wall Street self-regulate in 2004 in exchange (!) for easing leveraging restrictions: https://www.sec.gov/rules/final/34-49830.pdf. By doing this, Bush the Dumber let all those Wall Street banks over-leverage themselves to purchase all those garbage subprime mortgages that they then immediately packaged, insured, and then flipped onto unsuspecting investors while concealing the risk of these loans and securities.

As Bush's Working Group says, “The Presidents Working Group’s March policy statement acknowledged that turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007.”

The net result of the easing of lending restrictions caused a spike in subprime lending.

From 1993-2001, subprimes constituted about 8-10% of all new mortgages, and their default/delinquency rate was below the national average.

But beginning in 2004, subprimes constitued an increasing number of all new mortgages, rising to 40% of all new mortgages by 2006:

“Some 80 percent of outstanding U.S. mortgages are prime, while 14 percent are subprime and 6 percent fall into the near-prime category. These numbers, however, mask the explosive growth of nonprime mortgages. Subprime and near-prime loans shot up from 9 percent of newly originated securitized mortgages in 2001 to 40 percent in 2006.”

“In dollar terms, non-prime (subprime) mortgages represented 32 percent of all mortgage origination in 2005, more than triple their 10 percent share only two years earlier"
https://www.federalreserve.gov/pubs/feds/2008/200859/

So there goes the narrative that the Bush Mortgage Bubble was somehow Clinton's fault.
 
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Now will come the part when Conservatives will say that it was poor people and Fannie & Freddie that were responsible for the defaults.

Except that isn't the case at all.

As we see in this chart, the GSE-backed loans were the last to enter delinquency. The first? The shitty lowered-standard loans that started defaulting as early as 2006:

View attachment 14344

And then here, we see the corresponding spike in subprime lending:

View attachment 14345
 
AssHatZombie said:
obama bailed out the banks. true scientific fact.
Click to expand...

No, actually, Bush bailed them out with the TARP vote in November 2008.

Obama bailed out the auto industry, and they paid everything back with interest, while Trump handed rural trash $30B last year that they will never pay back because they're deadbeats.
 
LV426 said:
No, actually, Bush bailed them out with the TARP vote in November 2008.

Obama bailed out the auto industry, and they paid everything back with interest, while Trump handed rural trash $30B last year that they will never pay back because they're deadbeats.
Click to expand...

except many gm shareholders were screwed over with that auto bailout. heinous.

the government should never bail out corporations, or banks. it's fascism.
 
LV426 said:
I see Conservatives are still blaming everything in the world except for themselves for the Bush Economic Collapse and Bush Mortgage Bubble.

The reason it's Bush's Mortgage Bubble and not Clinton's, is simply because Bush's regulators ceased the enforcement of lending standards on subprime loans, beginning in 2004, like Bush says himself via his Working Group on Financial Markets:

“The Presidents Working Group’s March policy statement acknowledged that turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007.”
https://www.treasury.gov/resource-center/fin-mkts/Documents/q4progress update.pdf

And before a Conservative posts a lying Op-Ed blaming the CRA, here's the Federal Reserve, telling those people to go back to stapling teabags to their faces:

"Since 1995 there has been essentially no change in the basic CRA rules or enforcement process that can be reasonably linked to the subprime lending activity. This fact weakens the link between the CRA and the current crisis since the crisis is rooted in poor performance of mortgage loans made between 2004 and 2007. "
https://www.federalreserve.gov/images/20081203_analysis.pdf
Click to expand...

HORSE SHIT.

IT was CLINTON who signed the CRA, rescinded the long-standing executive order banning investment houses from dealing in mortgage-backed securities, right after he lifted the long-standing three year moratorium of exec.branch personnel going to work in the industries they regulated, causing a FLOOD of Clinton Adm. personnel to fill up Wall St. where they began trading in (then) profitable mortgage backed securities.

THEN THE DUNCE-O-CRATS PUT THE US TAXPAYER ON THE HOOK FOR ALL THE CRA-INDUCED SUB-PRIME MORTGAGES THAT WERE FAILING, AFTER TAKING OVER CONGRESS in 2006, BY USING THE GSEs (Fannie and Freddie) to BACK THEM, IMMEDIATELY BEFORE THE COLLAPSE.

WHEN THE SHIT HIT THE FAN, ALL THE FRAUDOCRATS IN THE BIG BANKS, ETC., MADE SURE THAT THEY WERE BAILED OUT BY THE TAXPAYERS.


IT WAS ENTIRELY THE ACTIONS OF DUMMYCRATS THAT CAUSED IT.


BUSH'S BIG MISTAKE WAS NOT CRACKING ON FANNIE AND FREDDIE< BECASUE HE DIDN'T WANT TO BE CALLED "RACIST".
 
Grokmaster said:
HORSE SHIT.

IT was CLINTON who signed the CRA, rescinded the long-standing executive order banning investment houses from dealing in mortgage-backed securities, right after he lifted the long-standing three year moratorium of exec.branch personnel going to work in the industries they regulated, causing a FLOOD of Clinton Adm. personnel to fill up Wall St. where they began trading in (then) profitable mortgage backed securities.

THEN THE DUNCE-O-CRATS PUT THE US TAXPAYER ON THE HOOK FOR ALL THE CRA-INDUCED SUB-PRIME MORTGAGES THAT WERE FAILING, AFTER TAKING OVER CONGRESS in 2006, BY USING THE GSEs (Fannie and Freddie) to BACK THEM, IMMEDIATELY BEFORE THE COLLAPSE.

WHEN THE SHIT HIT THE FAN, ALL THE FRAUDOCRATS IN THE BIG BANKS, ETC., MADE SURE THAT THEY WERE BAILED OUT BY THE TAXPAYERS.


IT WAS ENTIRELY THE ACTIONS OF DUMMYCRATS THAT CAUSED IT.


BUSH'S BIG MISTAKE WAS NOT CRACKING ON FANNIE AND FREDDIE< BECASUE HE DIDN'T WANT TO BE CALLED "RACIST".
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Don't lie again. The Senate bill was offered by Phil Gramm, a Repub. it was backed by Leach and Bliley, Republicans. It was supported by Greenspan, a republican. Gramm had tried to get such a bill passed many times and it was voted down by the Dems. This time he got it through. A few Dems fought for some concessions. But they did not have the votes to stop it. ALL the no votes were by Dems. After it was passed, I think it was about 3am. Durbin came out and said he hopes he is wrong, but the bill they passed was very dangerous to the economy. Clinton signed the bill the repubs passed, that is all he did. Gramms wife was working at Enron. She wanted a shot at making all that mortgage money and she got it. here's the vote. https://www.opensecrets.org/news/2008/09/money-and-votes-aligned-in-con/
 
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Nordberg said:
Don't lie again. The Senate bill was offered by Phil Gramm, a Repub. it was backed by Leach and Bliley, Republicans. It was supported by Greenspan, a republican. Gramm had tried to get such a bill passed many times and it was voted down by the Dems. This time he got it through. A few Dems fought for some concessions. But they did not have the votes to stop it. ALL the no votes were by Dems. After it was passed, I think it was about 3am. Durbin came out and said he hopes he is wrong, but the bill they passed was very dangerous to the economy. Clinton signed the bill the repubs passed, that is all he did. Gramms wife was working at Enron. She wanted a shot at making all that mortgage money and she got it. here's the vote. https://www.opensecrets.org/news/2008/09/money-and-votes-aligned-in-con/
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CLINTON REWROTE THE ORIGINAL CRA BY EXECUTIVE FIAT, GREATLY LOWERING THE STANDARDS= SUB PRIME LOANS.

GET A FUCKING CLUE FOR A CHANGE.



President Clinton's tenure was characterized by economic prosperity and financial deregulation, which in many ways set the stage for the excesses of recent years. Among his biggest strokes of free-wheeling capitalism was the Gramm-Leach-Bliley Act, which repealed the Glass-Steagall Act, a cornerstone of Depression-era regulation. He also signed the Commodity Futures Modernization Act, which exempted credit-default swaps from regulation. In 1995 Clinton loosened housing rules by rewriting the Community Reinvestment Act, which put added pressure on banks to lend in low-income neighborhoods. It is the subject of heated political and scholarly debate whether any of these moves are to blame for our troubles, but they certainly played a role in creating a permissive lending environment.


http://content.time.com/time/specials/packages/article/0,28804,1877351_1877350_1877322,00.html


THERE WAS NO "BILL" TO ALLOW TREADING HOUSES TO DEAL IN MORTGAGE BACKED SECURITIES, NOR TO PUT THE TAX PAYERS ON THE HOOk WHEN THE SHIT HIT THE FAN = ALL DEMCORATS.
 
LV426 said:
Why is it the Bush Mortgage Bubble? Because Bush created it.
Click to expand...

This moronic lie again? We got it the first time; you're mentally retarded.

Watch as Democrats attack the regulator and race hustle in the hearings in 2004 trying to get a handle on the impending crisis; yes the DEMOCRATS are the reason nothing was done folks:
Fannie Mae/Freddie Mac Hearings 2004
 
LV426 said:
Now, there will be Conservatives who will post lying Op-Eds, or who will say "Bush tried to reform GSE's but Democrats wouldn't let him."
Click to expand...

Watch as Democrats attack the regulator and race hustle in the hearings in 2004 trying to get a handle on the impending crisis; yes the DEMOCRATS are the reason nothing was done folks:
Fannie Mae/Freddie Mac Hearings 2004
 
Grokmaster said:
IT was CLINTON who signed the CRA,
Click to expand...

Per the Federal Reserve Board of Governors:

"Since 1995 there has been essentially no change in the basic CRA rules or enforcement process that can be reasonably linked to the subprime lending activity. This fact weakens the link between the CRA and the current crisis since the crisis is rooted in poor performance of mortgage loans made between 2004 and 2007. "
https://www.federalreserve.gov/images/20081203_analysis.pdf
 
Grokmaster said:
CLINTON REWROTE THE ORIGINAL CRA BY EXECUTIVE FIAT, GREATLY LOWERING THE STANDARDS= SUB PRIME LOANS.
Click to expand...


Wrong.

Per the Federal Reserve Board of Governors:

"Since 1995 there has been essentially no change in the basic CRA rules or enforcement process that can be reasonably linked to the subprime lending activity. This fact weakens the link between the CRA and the current crisis since the crisis is rooted in poor performance of mortgage loans made between 2004 and 2007. "
https://www.federalreserve.gov/images/20081203_analysis.pdf
 
PostmodernProphet said:
Bush's Mortgage Bubble?......Barney Frank says you're a fucking racist liar........
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No, it's the Bush Mortgage Bubble because it was Bush's regulators who ceased the enforcement of lending standards beginning in 2004 and extending into 2007, like Bush's own Working Group said:

“The Presidents Working Group’s March policy statement acknowledged that turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007.”
https://www.treasury.gov/resource-center/fin-mkts/Documents/q4progress update.pdf

It's also the Bush Mortgage Bubble because Bush was the one who pushed increased subprime lending, with new subprimes totaling as much as 40% of all new mortgages issued by 2006. In 2003, that share was just 10%:

“Some 80 percent of outstanding U.S. mortgages are prime, while 14 percent are subprime and 6 percent fall into the near-prime category. These numbers, however, mask the explosive growth of nonprime mortgages. Subprime and near-prime loans shot up from 9 percent of newly originated securitized mortgages in 2001 to 40 percent in 2006.”

and

“In dollar terms, non-prime (subprime) mortgages represented 32 percent of all mortgage origination in 2005, more than triple their 10 percent share only two years earlier"
https://www.federalreserve.gov/pubs/feds/2008/200859/

Ouch. How embarrassing for you to be so wrong about everything all the time.
 
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