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Old 12-08-2011, 12:56 PM   #1
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(Sent from phone via capitalism)

IIm in break room. Obama on. Says we need a regulatory agency to protect consumers...specifices that people got tricked into loans they coulnnt afford and we need to protect them.

What I don't understand is isn't that what happens when its the policy of the hud to offer loans to people that cannot afford them?
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Old 12-08-2011, 01:03 PM   #2
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Victim voters. The King Governor obviously targeted these victims of HUD, only Hussein bin Obamakahn can save you and eliminate the obscenely rich $250k household millionaires. Now is not the time for profit, it's time time for social change. Now get on your bicycle, load it up with grain, and pedal to the voting booth.
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Old 12-08-2011, 01:29 PM   #3
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so what happens when we create the "consumer protection agency" and they see that fannie mae and freedie mac will gurantee loans up to over 700K? or that is was the HUDs own policies that was used in Obama's example as a reason for the agency to exist (ie, giving loans to people we knew couldn't afford them)?
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Old 12-08-2011, 01:49 PM   #4
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1) The Gov't writes legislation that incentivizes LENDERS to loan to "the poor" - e.g. create zero downpayment loans. Remember that the whole reason for 20% downpayment, is that the market has figured out that this balances risk of default vs. profits, by reducing the risk of the moral hazard of borrowers walking away.

2) The Federal Reserve, a quasi gov't agency, manipulates interest rates down, to quell a recession caused by an earlier bubble of their own making.

3) The monetary system, is such that lenders create money that didn't exist before, whenever they lend to new borrowers. Unlimited supply of low-interest money going into bidding houses. Prices bubble.

The above combo, all of which are NOT free market actions/entities, produces a frenzy of borrowing and money creation, which inflates the bubble, with borrowers that can't afford houses, buying houses whose prices are bidded up.

Read this:
http://www.fee.org/wp-content/upload...iltBooklet.pdf
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Old 12-08-2011, 01:51 PM   #5
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That's what I'm saying. It was gov't and gov't policies that caused the crisis/issue that Obama just spoke about in an effort to promote/justify his CFPB. But what happens when the CFPB determines this is the case? Will the agency protext us against the gov't?
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Old 12-08-2011, 02:08 PM   #6
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Quote:
Originally Posted by Braineack View Post
That's what I'm saying. It was gov't and gov't policies that caused the crisis/issue that Obama just spoke about in an effort to promote/justify his CFPB. But what happens when the CFPB determines this is the case? Will the agency protext us against the gov't?
Th agency is not for protecting consumers, it to punish the private sector as an instrument of "change". It will create a list of corporations and lenders for voters to hate, which will certainly exclude campaign contributors like VE who pay no taxes and relocate overseas.
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Old 12-08-2011, 03:22 PM   #7
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fascist!
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Old 12-08-2011, 03:25 PM   #8
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3) The monetary system, is such that lenders create money that didn't exist before, whenever they lend to new borrowers. Unlimited supply of low-interest money going into bidding houses.
I agree for the most part with your first points. However, when a bank makes a loan, the result nets to zero. There is no money creation. The bank has a deposit (liability) and a loan (corresponding asset). The borrower has a deposit (asset) and a loan (corresponding liability).

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That's what I'm saying. It was gov't and gov't policies that caused the crisis/issue that Obama just spoke about in an effort to promote/justify his CFPB.
It was government, corporations and consumers that caused the crisis.
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Old 12-08-2011, 04:46 PM   #9
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Originally Posted by Scrappy Jack View Post
I agree for the most part with your first points. However, when a bank makes a loan, the result nets to zero. There is no money creation. The bank has a deposit (liability) and a loan (corresponding asset). The borrower has a deposit (asset) and a loan (corresponding liability).



It was government, corporations and consumers that caused the crisis.
Not really. When a bank makes a loan, it gives person A money to pay person B for something. person B then takes the same money, puts it into a bank, and the bank loans the money out again. Teh cycle continues from there. That's how banks make money, and the unrestricted use of this type of scam is what caused the first Great Depression

To say that it was government, corporations, and consumers, without explanation is misleading. It was poor people electing a government that gave them Freddie and Fannie in exchange for votes, which in turn drove builders and developers to overbuild and consumers to overspend. That is what caused the first crisis, which was not properly dealt with, which gave us our current situation.

Braineack is right, this is just another example of the government creating an agency to deal with a problem it created. Screw those b*****ds. Vote for Ron Paul.

But don't listen to me. I'm just
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Old 12-08-2011, 04:56 PM   #10
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I'm also smart enough to know not to argue ecomonics and monetary type things with Scrappy. A man needs to know his limitations.
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Old 12-08-2011, 05:04 PM   #11
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Yachiru, it's an interesting claim that it was "poor people electing a government that created the crisis", but it's patently false.

Numerous banks and financial institutions were unaffected. ****, I bank with an institution that has been practically begging to loan me and several other people I know cash since about 2008. But why?

They only loaned financially sound loans. You have a clusterfuck of government "deregulation"*, corporate greed, and citizen greed combining into a Voltron-level of clusterfuckery to the most corrupt banks. The result of banks overextending like they did to the people they did, and mind you when they were not forced to loan in the first place, but were financially incentivized to loan due to government "deregulation" (See: Toxic assets and the resulting blowup), yeah. Predatory lending practices cannot be explained away by "Oh, it's POOR PEOPLE'S FAULT!". No one had a gun to the banks head to loan to the "poor people", the banks did it out of greed - and frankly, I believe they were well aware of what was going to happen when they did it. As I said, numerous financial institutions were unaffected by the crash/recession - but they didn't take advantage of the "deregulation".

Let me give another example. Did you know that our current credit card and loaning laws would fall under "usury" laws laid out by the founders and, frankly, would land the operators of the financial institutions in jail up untill the mid-1970s? You can claim "OH, BUT THAT'S THE CONSUMERS RESPONSIBILITY". The thing about predatory lending practices is that they use various tricks to make the consumer not realize what the terms actually are. See: The 79.9% credit card who made it nigh-impossible to find out the non-introductory APR.

While you can't say it's not people's responsibility, you also equally cannot say it's not the lender's responsibility. Sure, people signed the loan - but the lender approved it. And, frankly, with the **** the gov't pulled as other people pointed out, the gov't enabled it. If any of the 3 had said "**** no!", it wouldn't be an issue. See: Banks that were unaffected by the 2008+ events.

*: Psuedo-deregulation intended to benefit the **** out of certain corporations is what I refer to by this.
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Old 12-08-2011, 05:51 PM   #12
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Originally Posted by crimson_yachiru View Post
Not really. When a bank makes a loan, it gives person A money to pay person B for something. person B then takes the same money, puts it into a bank, and the bank loans the money out again. Teh cycle continues from there. That's how banks make money, and the unrestricted use of this type of scam is what caused the first Great Depression
1. We use a different monetary system from the one used during the Great Depression, so I am going to skip over that whole part.
2. Walk through it:
  • Yachiru walks in to Bank of America and wants to take out a loan for $500.
  • Bank of America determines that Yachiru is a good credit risk and extends the loan. Note: the loan officer does not check to see if there are enough deposits or reserves available to be loaned out first.
  • Bank of America now has a $500 asset (the deposit created via the loan) and a $500 liability (the outstanding loan balance).
  • Yachiru now has a $500 asset (the money from the loan) and a $500 liability (the outstanding loan balance).
  • When you sum the total assets and liabilities, they net to zero.

Quote:
Originally Posted by crimson_yachiru View Post
To say that it was government, corporations, and consumers, without explanation is misleading.
I would argue not misleading but extremely simplified. Arguing that it was just the government is misleading.

blaen covered the rest pretty well. I am almost always amazed that there is not close-to-consensus on this.

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I'm also smart enough to know not to argue ecomonics and monetary type things with Scrappy. A man needs to know his limitations.
Don't worry, there are plenty of people on this board capable of poking holes in anything I write.
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Old 12-08-2011, 06:24 PM   #13
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not me. im just a loud mouth cynic.
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Old 12-08-2011, 06:35 PM   #14
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Stupid people need protecting. I mean come on. How else would 90% of Florida raise thier children without the governement?? They would die brain! Dont you get that?!?!
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Old 12-08-2011, 06:52 PM   #15
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I hate arguing on the internet. Scrappy; I was agreeing with you, except I think you oversimplified your statements to the point where you lost some validity. You have since, to me at least, clarified those statements.

Blaen99: I completely fail to see how your argument does anything but support my viewpoint. I said that it was poor people (some would say 47%) who are citizens, gave votes in exchange for loans that they would not otherwise be able to get: "and citizen greed", and in exchange for these votes: "You have a clusterfuck of government "deregulation"".

After that, you have some banks jumping on what looks like easy cash: "combining into a Voltron-level of clusterfuckery to the most corrupt banks. "

Which gave you our current crisis. Everyone agree?

Oh, and this statement: "Predatory lending practices cannot be explained away by "Oh, it's POOR PEOPLE'S FAULT!"." Sure, not "poor" people. Short-sighted, ignorant people who don't listen to Ron Paul and realize that the housing market was a bubble waiting to burst.

Last edited by crimson_yachiru; 12-08-2011 at 07:02 PM. Reason: "is" to "was"
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Old 12-08-2011, 09:41 PM   #16
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Banks are out to make a profit, and not always in a honest way. I fully expect people to try to **** me over in life, however, many people (use to) trust banks b/c they think if the bank lied or misled, then there would be repercussions via the government. It looks like the higher-ups in many banks did some sketchy **** to make money and **** people over in the process.

Thread about 60 minutes uncovering sketchy **** and Braineack being a pessimist
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Old 12-09-2011, 09:53 AM   #17
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there's nothing wrong with questioning everything.
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Old 12-11-2011, 07:11 PM   #18
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Quote:
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(Sent from phone via capitalism)

IIm in break room. Obama on. Says we need a regulatory agency to protect consumers...specifices that people got tricked into loans they coulnnt afford and we need to protect them.

What I don't understand is isn't that what happens when its the policy of the hud to offer loans to people that cannot afford them?
we need an agency to protect idiots from themselves?
dont get me wrong the banks knew the loans were made to people who were higher risk

but it is our responsibility to learn about the loans we take

next thing you know there will be an agency to protect women from sitting on toilets while the seats are still up
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Old 12-12-2011, 03:22 PM   #19
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apparently it's good for the economy to hire 200,000 pencil pushers at the taxpayers expense, to protect the taxpayer against programs that ruin the econ established, implemented, and inforced for the gov't.

http://www.consumerfinance.gov/
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