Lucky... 0 #26 October 23, 2009 QuoteQuotewhy hasn't Obama and the dems done anything? My feeling is that they have received to much money from the people involved. What laws were broken? The Gramm-Leach-Bliley Act (along with the Commodity Futures Modernization Act of 2000) ensured there would be insufficient regulation to prevent the banking crisis. One senator even predicted the bailouts as the legislation was in Congress. The true and ultimate catylist were the low int rates; w/o those there would be no mortgage mess. Quote Share this post Link to post Share on other sites
TomAiello 25 #27 October 23, 2009 QuoteThe true and ultimate catylist were the low int rates; w/o those there would be no mortgage mess. What factors led to the low interest rates?-- Tom Aiello [email protected] SnakeRiverBASE.com Quote Share this post Link to post Share on other sites
kelpdiver 2 #28 October 23, 2009 QuoteQuoteQuoteThe government is the lender, and the company is the borrower. Mind you, nobody forced the bailed-out companies to borrow this money; they requested it when they couldn't get that level of financing elsewhere. There is actually some debate about that. I've seen several bank CEO's on the news saying that they felt pressured (by the treasury department) into taking the bailout (and also pressured to absorb the banks that were failing). If a guy can't deal with a bit of pressure, he shouldn't be CEO of a major financial institution. That is totally UNconvincing, Tom. Well, I posted the documents that prove otherwise. You guys have had overnight to reply to that. For the big 9, Paulson said take the money, or your regulator will force you to. He needed all on board to make it look like a magic bullet that would solve the problem. Quote Share this post Link to post Share on other sites
Lucky... 0 #29 October 23, 2009 QuoteQuoteThe true and ultimate catylist were the low int rates; w/o those there would be no mortgage mess. What factors led to the low interest rates? Tax cuts, my friends. Bush and co cut taxes, so the economy stagnated, it was sputtering anyway, and the tax cuts killed it. So then Greenspan felt the need to keep lowering it ot kickstart it, but it never happened. Int rates fell low, prinicpal replaced interest when people were qualifying for loans, house prices doubled with allowed anyone to buy a house, so sub-primers got in. House prices were accellerating so fast that no one stopped to look at the quality of teh paper. And the economic boom from 2004-2006 was just the circulation of all the inflated house money. Evan at that, tax revenues were still low in spite of what people are saying, so it was a lose/lose. Quote Share this post Link to post Share on other sites
TomAiello 25 #30 October 23, 2009 Oooh, this will be fun. What caused the Great Depression? The Civil War? The Bubonic Plague? I bet it was those evil tax cuts that did those things, too. -- Tom Aiello [email protected] SnakeRiverBASE.com Quote Share this post Link to post Share on other sites
jcd11235 0 #31 October 23, 2009 QuoteThe true and ultimate catalyst were the low int rates; w/o those there would be no mortgage mess. That may well be the most concise and most accurate post you've ever made, Lucky. The low interest rates were indeed the catalyst, but the deregulation of financial institutions and the lack of regulation of financial derivatives, particularly credit default swaps, were the primary causes. Once catalyzed with low interest rates, a perfect storm began to form.Math tutoring available. Only $6! per hour! First lesson: Factorials! Quote Share this post Link to post Share on other sites
kallend 1,672 #32 October 23, 2009 QuoteQuoteQuoteQuoteThe government is the lender, and the company is the borrower. Mind you, nobody forced the bailed-out companies to borrow this money; they requested it when they couldn't get that level of financing elsewhere. There is actually some debate about that. I've seen several bank CEO's on the news saying that they felt pressured (by the treasury department) into taking the bailout (and also pressured to absorb the banks that were failing). If a guy can't deal with a bit of pressure, he shouldn't be CEO of a major financial institution. That is totally UNconvincing, Tom. Well, I posted the documents that prove otherwise. You guys have had overnight to reply to that. For the big 9, Paulson said take the money, or your regulator will force you to. He needed all on board to make it look like a magic bullet that would solve the problem. They don't PROVE anything. If a guy can't deal with a bit of pressure, he shouldn't be CEO of a major financial institution.... The only sure way to survive a canopy collision is not to have one. Quote Share this post Link to post Share on other sites
Lucky... 0 #33 October 23, 2009 Quote Oooh, this will be fun. What caused the Great Depression? The Civil War? The Bubonic Plague? I bet it was those evil tax cuts that did those things, too. I guess that avoids you having to address the issues. Quote Share this post Link to post Share on other sites
Lucky... 0 #34 October 23, 2009 Quote Quote The true and ultimate catalyst were the low int rates; w/o those there would be no mortgage mess. That may well be the most concise and most accurate post you've ever made, Lucky. The low interest rates were indeed the catalyst, but the deregulation of financial institutions and the lack of regulation of financial derivatives, particularly credit default swaps, were the primary causes. Once catalyzed with low interest rates, a perfect storm began to form. And they're usually not? I need your approval. I appreciate the spelling correction, it also adds to the issueThe mess was caused by many elements, but w/o the low int rates it could not have happened. I think it still could have happened with the low int rates and w/o the deregulation. The low rates created the ponzi schemes, everything else was supplemental and probably accellerated the mess, but was not primary. Quote Share this post Link to post Share on other sites
jcd11235 0 #35 October 23, 2009 QuoteAnd they're usually not? I don't think many people would ever accuse you of typically being concise. QuoteI appreciate the spelling correction, it also adds to the issue I just didn't want to boldface a misspelled word. Your choice to use catalyst was ideal, and that's why I emphasized it, not because you misspelled it. QuoteThe mess was caused by many elements, but w/o the low int rates it could not have happened. It could have and would have, just not to the extent that it did with the low interest rates, hence catalyst. QuoteI think it still could have happened with the low int rates and w/o the deregulation. I disagree. The deregulation of the financial institutions and the lack of regulation of credit default swaps (i.e. no reserve requirements by the seller and no insurable interest requirements of the buyer) allowed investors to hedge bad investments and speculate on (and profit from) the failure of banks and other companies, setting the financial sector up for systemic failure.Math tutoring available. Only $6! per hour! First lesson: Factorials! Quote Share this post Link to post Share on other sites
kelpdiver 2 #36 October 23, 2009 Quote They don't PROVE anything. If a guy can't deal with a bit of pressure, he shouldn't be CEO of a major financial institution. How delusional do you want to be about this? It was the GOP's guy, even. This wasn't pressure, this was an order. And anyone that has dealt with the family of regulatory agencies (I get most of the love from the OCC) knows not to fuck with them. It's as smart as pissing into the wind of a Cat 5 hurricane. Quote Share this post Link to post Share on other sites
billvon 2,465 #37 October 23, 2009 >What caused the Great Depression? >The Civil War? >The Bubonic Plague? >I bet it was those evil tax cuts that did those things, too. Are you sure? I was just listening to Beck and he explained that most of them were Obama's fault. Quote Share this post Link to post Share on other sites
kallend 1,672 #38 October 23, 2009 QuoteQuote They don't PROVE anything. If a guy can't deal with a bit of pressure, he shouldn't be CEO of a major financial institution. How delusional do you want to be about this? It was the GOP's LAME DUCK, even. Not buying it.... The only sure way to survive a canopy collision is not to have one. Quote Share this post Link to post Share on other sites
Lucky... 0 #39 October 23, 2009 QuoteI don't think many people would ever accuse you of typically being concise. For sure, but that's what it takes to make a point sometimes. I even wrote that brevity is not what I would be accused of. But just because I'm not always concise doesn't mean I'm not precise. QuoteI just didn't want to boldface a misspelled word. Your choice to use catalyst was ideal, and that's why I emphasized it, not because you misspelled it. Then don't boldface it. You appear to be one of those over-meticulous, anal-retentive, OCD types, so perfect grammar is more important than substance. That's not an insult, a lot of people are like that, I used to be like that with internet discussion until I realized it distracted from the point. I enjoy talking the point too much. I can see people's tank runnin glow when they defer to grammar, syantax, etc. OTOH, I write legal docs sometimes and I'm insanely anal-retentive. You can't even use contractions with legal docs, it's bizzare. And concission is very important too or you'll lose the judge. I just think that posting boards are not teh place for nit-pickiness with spelling, that is, if you have a point to make. QuoteIt could have and would have, just not to the extent that it did with the low interest rates, hence catalyst. I don't think that with Gramm-Leach-Bliley it would have occurred at all. All Gramm did was to allow, "opening up the market among banking companies, securities companies and insurance companies." http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act The Gramm-Leach-Bliley Act allowed commercial banks, investment banks, securities firms and insurance companies to consolidate. So it allowed them to become big and to work outside their normal areas, in a lay sense. Nothing happened until the interest rates dropped; NOTHING. So the int rates, to me, are the primary cause for the mess, Gramm allowed them to get deeper faster, but w/o the ponzi scheme of house values artificially inflating weekly lenders would not have sucked themselves into that. QuoteI disagree. The deregulation of the financial institutions and the lack of regulation of credit default swaps (i.e. no reserve requirements by the seller and no insurable interest requirements of the buyer) allowed investors to hedge bad investments and speculate on (and profit from) the failure of banks and other companies, setting the financial sector up for systemic failure. But even if the mess did start w/o low int rates, it would have been shallow and short-lived, since the low int rates are what caused the ponzi spiralling of values. Again, Gramm was signed in Nov 99 and yet nothing happened until 2003-04 or so, so why not earlier? The int rate was too high to fasciliate a runaway mess. Quote Share this post Link to post Share on other sites
jcd11235 0 #40 October 23, 2009 QuoteSo the int rates, to me, are the primary cause for the mess, … You had it right the first time when you called them the catalyst. QuoteBut even if the mess did start w/o low int rates, it would have been shallow and short-lived, … That's what I said.Math tutoring available. Only $6! per hour! First lesson: Factorials! Quote Share this post Link to post Share on other sites
kelpdiver 2 #41 October 23, 2009 Quote You appear to be one of those over-meticulous, anal-retentive, OCD types, so perfect grammar is more important than substance. That's not an insult, a lot of people are like that OMFG - what an hilarious end to this work week! And your history shows that you're quite that type, much more than jcd is. Quote Share this post Link to post Share on other sites
kelpdiver 2 #42 October 23, 2009 Quote Not buying it. You don't have to. But it looks like the ivory tower perspective. Quote Share this post Link to post Share on other sites
Lucky... 0 #43 October 24, 2009 QuoteYou had it right the first time when you called them the catalyst. Yea, they were a very universal catalyst tho, they would have catalyzed the mess with or w/o Gramm. That's why I believe they were primarily causal too. QuoteThat's what I said. Good, we're in agreement, the most compelling feature of this mess were the low int rates. I agree that Gramm was a bad idea, corporations need more regulation, but even with Gramm, w/o low int rates, the mess would be either non-existent or minimal. Quote Share this post Link to post Share on other sites
Lucky... 0 #44 October 24, 2009 QuoteQuote You appear to be one of those over-meticulous, anal-retentive, OCD types, so perfect grammar is more important than substance. That's not an insult, a lot of people are like that OMFG - what an hilarious end to this work week! And your history shows that you're quite that type, much more than jcd is. I'm maticulous with data and supporting evidence, at least as much as I can be. We're all learning here, some are just rejecting the obvious - YOU. Notice how you pipe in to deny, reject, etc but you rarely to never provide any substance? Quote Share this post Link to post Share on other sites
likearock 1 #45 October 24, 2009 QuoteQuoteQuoteQuoteIf I was a board or CEO of any of those companies I would tell the czar to kiss my ass. You do not have the power or the legal right to tell me what I can be paid or what I can ask the board to pay my employees. The government is the lender, and the company is the borrower. Mind you, nobody forced the bailed-out companies to borrow this money; they requested it when they couldn't get that level of financing elsewhere. Well, there's considerable contention over the notion that no one forced them to take TARP money. The ones that haven't paid it back - almost certainly they needed to - but the others didn't feel they have much choice at all. Nonetheless, the terms of the deal included this sort of wage control...or did Congress pass that afterwards? It was passed afterwards - Bush & Co were perfectly happy to give taxpayer money to the fat cats, they just wanted to keep it from the poor and needy. And that's the key. Regardless of any anger you might have towards the financial institutions, it is universally recognized as unfair to impose conditions after a loan is made. Quote Share this post Link to post Share on other sites
kelpdiver 2 #46 October 24, 2009 Quote Notice how you pipe in to deny, reject, etc but you rarely to never provide any substance? It's all about the quality of the discussion - low quality merits low effort response. Someone like Marg - much higher response. You mistake quantity for quality, also. Quote Share this post Link to post Share on other sites
jcd11235 0 #47 October 24, 2009 QuoteYea, they were a very universal catalyst tho, they would have catalyzed the mess with or w/o Gramm. That's why I believe they were primarily causal too. Do you understand what catalyst means? If they were a catalyst (and they were), they weren't causal; they increased the rate of a reaction that was already occurring or was imminent. QuoteQuoteThat's what I said. Good, we're in agreement, the most compelling feature of this mess were the low int rates. No, that's not what I said, nor was it what you said in the text that I quoted. QuoteI agree that Gramm was a bad idea, corporations need more regulation, but even with Gramm, w/o low int rates, the mess would be either non-existent or minimal. Right, in the absence of a catalyst, the problem would have been occurring at a slow enough rate that there would not have been a significant threat of systemic failure in the financial system. The root cause was insufficient regulation. The low interest rates were the catalyst. It didn't matter how or why the interest rates reached such low levels. Had Greenspan played his hand differently and not kept the rates so low for so long, the low rates (or some other catalyst) would have eventually happened anyway, for some other reason, artificially or via market pressure. Without sufficient regulation, we would have the crisis at that time instead of the past year. With sufficient regulation, the low interest rates wouldn't have been such a problem.Math tutoring available. Only $6! per hour! First lesson: Factorials! Quote Share this post Link to post Share on other sites
Lucky... 0 #48 October 24, 2009 QuoteQuote Notice how you pipe in to deny, reject, etc but you rarely to never provide any substance? It's all about the quality of the discussion - low quality merits low effort response. Someone like Marg - much higher response. You mistake quantity for quality, also. What I don't mistake are people like you running from data, as you can run the rhetoric about your diddy and your diddy's diddy and how they did things. But we all have that, data, in large numbers and crossing it for added support when available, tells all. You get stuck with not being able to answer data so you skate and then become derrogatory. No secret. If you want to disprove me then ask and I will yet again post the mountain of data I have before.....I won't stay up waiting. Quote Share this post Link to post Share on other sites
Lucky... 0 #49 October 24, 2009 QuoteDo you understand what catalyst means? http://www.thefreedictionary.com/catalyst 2. One that precipitates (causes to happen) a process or event, especially without being involved in or changed by the consequences Sure, so the low rates were a catalyst, we agre, I think they were also causal in that I don't believe the mortgage wess would have happened at all or very slightly and shortly absent the low rates; that makes them causal. I have never waivered from my assertion that the mess was caused by and catalyzed by the low rates, Gramm may have accellerated the mess, but didn't cause it. You may have a different opinion, but I haven't waiverd on mine. QuoteIf they were a catalyst (and they were), they weren't causal; they increased the rate of a reaction that was already occurring or was imminent. I don't think the mess would have happened w/o low rates, so I believe the mess was primarily caused by and catalyzed by low int rates. If you want to drag out 4 pages on the difference between causation and catalyzation, enjoy, it's basically semantic. Or we can discuss whether an element can be the cause and the catalyst, that'll be fun. QuoteNo, that's not what I said, nor was it what you said in the text that I quoted. Whatever language you want to use, I believe that this mess wouldn't have occurred without low int rates. Reason being, the whole mess spiralled around increasing house values, which couldn't happen unless they were artificially inflated by the false principla replacing the dissappearing int cost of a mortgage. QuoteRight, in the absence of a catalyst, the problem was occurring at a slow enough rate that there was not a significant threat of systemic failure in the financial system. Right and it's possible and IMO probable that there would be nothing derrogatory realized by the deregulation absent the low rates. I noticed you didn't reply to my assertion that nothing happend from Nov 99 until late 2003, as that's when int rates started falling, give or take. I feel the entirety of the mess centered around low int rates and the int rate was dropped due to a stagnate economy, the economy was stagnate due to tax cuts, my friends. QuoteThe root cause was insufficient regulation. I think it was duel causation, Gramm and low rates. The rates were catalyzing and w/o them no measureable harm would be noticed. QuoteThe low interest rates were the catalyst. And the cause. Quote It wouldn't have mattered how or why the interest rates reached such low levels. Agree. QuoteHad Greenspan played his hand differently and not kept the rates so low for so long, it would have eventually happened anyway, for some other reason, artificially or via market pressure. Disagree and if it did, it would be negligible, as the banks would stop the foreclosure bleeding before it got too far. QuoteWithout sufficient regulation, we would have the crisis at that time instead of the past year. We would still have had the mess w/o Gramm and with low rates. If Gramm alone was enough, why did it take until the low rates 4 years later for it to implode? QuoteWith sufficient regulation, the low interest rates wouldn't have been such a problem. No, because, as I posted all Gramm did was to: - Allow banks and other fin inst to merge - Allow institutions that didn't dabble in mortgage to do so Even if we had the old system before Gramm, low rates would create artificial prinicipal value in real estate, so this still would have happened. Quote Share this post Link to post Share on other sites
jcd11235 0 #50 October 24, 2009 Congratulations, Lucky. You started from a post that was so accurate and concise that you were complimented for it and argued your way to a longwinded and incorrect diatribe. That's an impressive accomplishment. It would appear that you just got lucky, so to speak, with your choice of words in the post for which you were complimented and don't really understand the crisis as well as the post would otherwise indicate. * * * Quotehttp://www.thefreedictionary.com/catalyst 2. One that precipitates (causes to happen) a process or event, especially without being involved in or changed by the consequences It seems you were intellectually dishonest with your quoted definition of catalyst. You had to cherry pick one definition from several, most of which don't support your assertion. Why, for example, did you not choose the first one that fit the context of our discussion? Here it is: cat·a·lyst (ktl-st) n. 2. One that precipitates a process or event, especially without being involved in or changed by the consequences: "A free press ... has remained ... a vital catalyst to an informed and responsible electorate" (Robert O'Neal). The American Heritage® Dictionary of the English Language, Fourth Edition copyright ©2000 by Houghton Mifflin Company. Updated in 2009. Published by Houghton Mifflin Company. All rights reserved. Think of a nightclub. People go to nightclubs all the time in order to increase the probability to get laid on the night that they go. The nightclub is a catalyst. It doesn't cause people to get laid. The people get laid because horny men and horny women meet (and often consume alcohol to lower inhibitions). Yet, without the nightclub many of those singles (and wannabe singles) wouldn't meet and spend the night together. Still, we don't consider the nightclub to cause the sex, do we? Of course not. It only serves as a catalyst. The low interest rates were to the financial crisis as nightclubs are to sex. The low rates weren't causal, they were catalytic. QuoteNo, because, as I posted all Gramm did was to: - Allow banks and other fin inst to merge - Allow institutions that didn't dabble in mortgage to do so Those are pretty significant changes. At least one Senator foresaw the GLB Act leading to government bailouts. I also noticed that you failed to comment on the Commodity Futures Modernization Act of 2000. Was that more intellectual dishonesty, or do you not understand its relevance either? Do you understand why it would be a bad idea to let anyone who wanted to buy an insurance policy on John Doe's house do so? Do you understand why it would be a bad idea to let insurance companies sell insurance policies for which they are unable to pay the benefits if contractually required? Do you understand why the government allowed Lehman Brothers to fail while bailing out companies like AIG and Bear Stearns? After all, Lehman Brothers played in the market while the interest rates were just as low as when AIG were playing.Math tutoring available. Only $6! per hour! First lesson: Factorials! Quote Share this post Link to post Share on other sites
