rickyp wrote:r\A small program in 1998, "forced" companies....most who weren't in the mortgage business in 1998, to begin selling sub prime and garbage mortgages ? And they didn't really start doing that till after all the deregulation that occurred that allowed into the business.

Yes because they small program as you said was just 2 Billion in Texas alone. Multiple that over 50 states and it become much large. and again, it was the change in regulations this caused that allowed others to take advantage of it. So while those companies that caused the problems in 2008 may not have been in the mortgage business in 1998, if you take away the 1998 threat of legal action, then the companies that caused the problem wouldn't have been able to take advantage of to get into the trouble.

This is the point you seem to not be willing to accept. Government action in 1998 set up circumstance that in 2004 companies started taking advantage of in ways the government never intended. If you take away the initial government actions, the housing bubble doesn't happen.

Many retail businesses will be open Thanksgiving day offering door buster deals to entice people. This is a change I find rather appalling and terribly unfair to their workers.

I suppose the workers have free will to weigh the consequences on not working that shift. They are not forced to work on Thanksgiving doorbuster times. I am all for a person having the choice to make based on what is the best for them and taking into account the repurcussions.

That being said... I find the expanding door buster times sad. Thanksgiving is becoming the forgotten holiday. Halloween to Christmas with no break in between. Quite sad...

steve

I am saying those who believe their side is as pure as the driven snow are kidding themselves.

Since I think repeal of Glass Steagall under Clinton was the intial step ...I don't get why you think I'm saying this is a democrat/Republican issue.
It is a complete and utter failure for the idea of limited governance. And perhaps that does point to a lot of republicans. But Clinton was part of the tour towards deregulation that created the disaster.

archduke

Yes because they small program as you said was just 2 Billion in Texas alone. Multiple that over 50 states and it become much large. and again, it was the change in regulations this caused that allowed others to take advantage of it. So while those companies that caused the problems in 2008 may not have been in the mortgage business in 1998, if you take away the 1998 threat of legal action, then the companies that caused the problem wouldn't have been able to take advantage of to get into the trouble.

This is the point you seem to not be willing to accept. Government action in 1998 set up circumstance that in 2004 companies started taking advantage of in ways the government never intended. If you take away the initial government actions, the housing bubble doesn't happen

I don't accept it because its bs.
Sub prime mortgages represented 8 to 10% of teh mortgage market from 1990 through 2004. Thats SIX years of so-called force that had no affect on the use of sub prime (2billion $ in mortgagaes in Texas is pretty small in the scope of mortgage money Archduke)
The 1998 affirmative action program caused nothing. If it had a causitive effect something would have happened to the use of sub primes when it was brought itnto affect.
The list of things that impacted the financial markets and the mortgage markets is vast, starting with the repeal of Glass Steagall and piling up under Bush II. But this so-called Force nver had any affect. If it had affect you could point to a substantive change in the use of Sub primes in the year or perhaps 2 years after the program
Never happened.

It's not though Ricky. Because if you look at the timeline of the subprime crisis on Wikipedia, CDS's were first created in 1994 but they didn't start getting traded heavily until after the 1998/99 regulation changes (GLB and Fannie easing credit requirements). And as we have established the 1998 regulation changes happened as part of a deal to allow banks to do more loans to low income borrowers. Something banks wouldn't have done without the threat of discrimination lawsuits.

As for it taking a while, I have no idea what you are talking about. Subprime loans were $160 Billion in 2000 (year after regs changes), which was up $40B from 6 years before, to $332Billion in 2003 which is a 48% increase within 3-4 years of the regs changes. The increased lending to higher risk borrowers started around 2002. That seems to be within your desire to see substantive changes shortly after the changes.

http://en.wikipedia.org/wiki/Subprime_c ... t_timeline

Your figuires and comment suggest, Archduke, that the increases started in earnest 4 years after the 1998 reforms. The average annual rate of increase until 2000 is about 5%. After that it shoots up rapidly.

Looking at the timeline I wonder if slashing interest rates over 2000-2003 and the banning of oversight of CDS instruments in the 2000 Commodity Futures Modernization Act were not key factors. Both started under Clinton, but I suspect did more to overheat the housing and derivatives markets repectively.

Neal Anderth wrote:Many retail businesses will be open Thanksgiving day offering door buster deals to entice people. This is a change I find rather appalling and terribly unfair to their workers.

Perhaps. Certainly the news media is presenting that angle. However, there may be many workers who are happy to have the extra income during these tough times before the Dec. holidays. I believe that some states mandate time and a half in these cases, or companies pay it anyway.

Danivon

Ray Jay wrote:

How do you determine when you are in a position to pull the rug? In the US context, you are saying that 9% unemployment / 15% underemployment is too high relative to deficits of $1.5 trillion. How low should be the unemployment rate or how high do deficits have to go before you are comfortable tugging at the rug?

I'd use GDP and it's growth as a measure, along with the cost/benefits of taking back the support. GDP has just about recovered to what it was pre-crash, and recovery is still weak. As that's a measure of the overall economy, and I'm concerned more with the overall economy than with the government's account-book, that's what I'd go with.

This feeds into both of your measures. Economic growth will reduce unemployment (well, it should do), and it will also reduce deficits, which undoes the pressure on debt.

http://www.tradingeconomics.com/united- ... gdp-growth

Here's a table on US GDP. It shows that GDP exceeds pre-crash levels. How much higher does it have to go before we are willing to substantially reduce government spending?

Given that I acknowledge that GDP has reached pre-crash levels (I said 'only just' because it only exceeds by a tiny proportion in real terms, and only did so in recent months) I have to ask if you read my words before asking.

The US has therefore got to where it should be 3 years ago, and is not yet showing solid growth. I would say when the lag is down to a year and growth is at 'normal' levels, you can have eased off.

The Financial Crisis Inquiry Commission reported in January 2011 that "the CRA was not a significant factor in subprime lending or the crisis. Many subprime lenders were not subject to the CRA. Research indicates only 6% of high-cost loans—a proxy for subprime loans—had any connection to the law. Loans made by CRA-regulated lenders in the neighborhoods in which they were required to lend were half as likely to default as similar loans made in the same neighborhoods by independent mortgage originators not subject to the law.

CRA = 6% of sup prime. Archduke.

Its funny that the Fianncial Crisis Inquiry Commission never mentioned that all those lenders were being "forced" to make sub-prime loans. Maybe, because they had jumped into the market with two feet, beleiving that they could hedge all their risk in CSDs.

If you want to blame a specific law blame the Commodities Future Modernization Act of 2000. The eseential deregulation that took the chocks out from the wheels. As of 2008, there was no central clearing house to honor CDS in the event a party to a CDS proved unable to perform his obligations under the CDS contract.

Unfortunately, you are answering an argument I never made. I pretty much always said the CRA wasn't directly responsible in that CRA borrowers and lenders weren't the problem. The problem was the change of regulations the increased CRA enforcement required allowed other, non-CRA lenders, give inappropriate loans to non-CRA borrowers that caused the problems. In other words;

Gov't threatens to pursue discrimination lawsuits against banks for not doing enough minority lending

Fannie Mae eases credit restrictions to allow banks to achieve above stated increased minority lending; as well as,
Congress lessen regulations on the banking industry to achieve above stated increased minority lending

Non-CRA lenders use the above changes in credit restrictions and regulations to make questionable loans to non-CRA borrowers.

Take away the initial changes to CRA and you take away eased credit restrictions and lessened regulations. Take away the eased credit restrictions and lessened regulations, and you take away the non-CRA lenders ability to make such bad loans.

LOS ANGELES (AP) — A woman shot pepper spray to keep shoppers from merchandise she wanted during a Black Friday sale, and 20 people suffered minor injuries, authorities said.

The incident occurred shortly after 10:20 p.m. Thursday in a crowded Los Angeles-area Walmart as shoppers hungry for deals were let inside the store.

Police said the suspect shot the pepper spray when the coverings over the items she wanted were removed.
"Somehow she was trying to use it to gain an upper hand," police Lt. Abel Parga told The Associated Press early Friday.
He said she was apparently after some electronics and used the pepper spray to keep other shoppers at bay.
Officials said 20 people suffered minor injuries. Fire department spokesman Shawn Lenske said the injuries to least 10 of them were due to " rapid crowd movement."

Parga said police were still looking for the woman.

The store remained open and those not affected by the pepper spray continued shopping.

what does that have to do with OWS?

Ray Jay wrote:what does that have to do with OWS?

I think it's tangentially related to Steve's scare-piece about OWS being a threat to shoppers. Looks like it's the shoppers that are the problem sometimes...