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October 18, 2013 at 1:00 am #7110
You still checking in from time to time. Just finished All The Devils Are Here, it is as you say a very interesting book.October 18, 2013 at 6:04 pm #7157
Yup, I drop in every few days, mostly to keep up with the MN. Members. I’m sure I’ll be active in the MN. Forum as our whitetail rifle, and our late season wolf hunts get going.
I thought you’d like the book, there’s a hell of a lot of info in it concerning the crash. When we were discussing your anger at the bankers I wasn’t trying to change your mind, because we both know they bare their share of the blame. What I was trying to express was the fact that it ran a lot deeper than that. RT4 helped with that, he having first hand experience in the banking industry. No doubt “All the Devil’s” explained it much better than I ever could.
Since you liked that book, I’m going to suggest again that you read Thomas Sowell’s “The Housing Boom and Bust”. It’s a great addition to the info from McLean/Nocera. Sowell digs into some different areas, such as the role the press played, the role’s that state, and local governments played, the demographics, and he digs more into the role of the Clinton admin, just to name a few things. IMHO, it’s worth reading.
Like I said, McLean/Nocera do a good job of keeping their politics out of their book, but based on the book, as well as hearing a couple of hour long interviews with McLean, if I were to guess I’d say that she at least leans to the liberal side. Sowell will not leave you doubting that he took a conservative approach to his book. Politics aside, both books do a good job of listing their sources.October 18, 2013 at 9:31 pm #7161
I didn’t detect a lot of politics in McLean’s book, a little but not much. I didn’t feel you were trying to change my mind, just enlighten me a little, which the book did. I don’t feel so hard about the main street Bankers, but it reinforces my feelings about the Bigger Bankers. I feel stronger about some heads should have rolled and much less sympathy than I had for many. The Government had much less to do with the crash than I had thought, other than looking the other way. As the greedy SOBs took advantage of the ignorance of the borrows. And the borrowers, Who bear their own blame in that many loans were second loans. It is like all things the Greedy on all sides will take advantage of something that should have been a good thing, helping people buy their first home, which only 9% of the loans were for first time home buyers. Which was the idea, first time buyers, and thus have a vested interest in City, Local, State, and Federal Governments and America as a whole. Paying Property Taxes will give you a different out look on the things that money is spent on. Some of it could have been headed off but for the greed, those who had hedged their bets, taking the short side thus making them rich if the loans did fail.
Sowells book is next on my list, your advise on the books has been very good so far, so I look forward to reading it.October 19, 2013 at 12:07 am #7163
I might add I trust what You and RT say about the Some of the Bankers being forced to do things they didn’t like or feel was right, by the Government. But I didn’t see that evidence or take that away from or in McLeans book. She pointed out the Government looking the other way more than anything else. She concentrated, more on the Banking Industry and their own heavy handedness on non-conforming Banks or those that spoke out against them. There where those that did warn about what it could and did happen. But for the most part many said noting. So I see the main street bankers more as cowards than the villains I thought they were. They stood to loose money if they spoke out, so greed was still a part of their psyche just a different kind. Now that could be her political way of totally blaming the Rich Banking Industry, while blaming the Government for it’s lack of control, thus pushing her own feelings of more Government control. Perhaps Sowells book will give more insight into how and what the Government did than she did.
I feel less sympathy for many of those who borrowed money for homes they knew they could not afford. Or who took out second mortgages or second homes they knew they could not afford. But I knew there were those, just not to the extent that it was, some 80-90% of those bad loans being refi’s and such. But my Sympathy goes out to those, honest hard working people with a little troubled credit history, who got caught up in it. Those who were actually trying to buy a home and have a vested interest in not just in it but America its self. Those who where mislead and taken advantage of. There was Trillions of dollars, maybe just a few Trillion but still that is a bunch of dollars made off of risky loans.
People taking home 10,20 or 30 million dollar bonuses off of those loans. None or few of them actually lost any, any of that money, but people are still loosening their homes. So I still believe there should be a bunch of Bankers heads on sticks, just a few less Home Town Main Street Bankers. Many of them where just cowards who failed to do what they knew was right when they had a chance. That is a Coward, Cowards are no better than the bums in that 80-90% of barrowers. Coward or Bum both are low life’s. I respect You and RT, and understand you had experience in the Banking Business and have more insight than I. But it is just like the crash and what lead up to it, likes and dislikes, loyalty of and to groups and people, blinded many to the truth, fear paralyzed others. The fact remains innocent people The one’s who are forgotten in the blame game, where and still are hurting while many who could have helped or stopped it, still live well. But because it could cost them few Dollars said or did nothing. Rich or Poor a Chicken Shitt is still a Chicken Shitt. Villain or Coward is still a Chicken shitt. I Believe, the Cowards could still help but remain Chicken shitt enough not to. And the villains should still be hung. It would have been nice if as Paulson told Bush when they finally had to do some thing and take over. “ they want know anything til their heads hit the floor” if they had actually chopped off their heads.October 19, 2013 at 2:08 pm #7182
Yup… Sowell’s book will give you more insight as too government involvement, and as I mentioned, all level’s of government. Here’s a clue… Every time I hear about Dodd/Franks in the news I get angry, IMHO for those two to have their names on a banking reform bill is a crime in and of itself. However weak the bill may actually be.
As to government involvement, remember that deals with action, as much as inaction. I refer you back too the chapter “The Committee To Save The World”. Remember the gal Brooksly Born? She merely suggested looking into derivatives to see if they should possibly be regulated, and she was literally torched in a congressional hearing in 1998. After the LTCM debacle later that same year that congressional committee apologized to her in 1999… Yet nothing was done… In fact things went in the opposite direction… As a result of Born’s recommendations, “The Commodities Futures Modernization Act of 2000″(CFMA) was signed into law (The last bill that Clinton signed as president) That law explicitly stated that Derivatives were not futures, therefore they could not be regulated by the CFTC, or any other government agency. IMO, the CFMA was the law that blew the lid off of the derivatives market. Tho derivatives were not regulated before the CFMA, there was always talk of it in the wind so the Wall Street crew kept them in check knowing that someday they may have to open their books to the government. After the CFMA all bets were off… Those in Wall Street were free to trade unchecked in the derivatives market.
You also mentioned Bush/Paulson… After reading Sowell’s book you may come to the conclusion that the president that is taking the most heat for the crash by the public eye today, may in fact be the president that bares the least blame for the crash. You’ll have to draw your own conclusions about that.
As to the greedy Wall Street bankers… Yup we agree on that, but here’s some food for thought. While the big banks were supplying warehouse lines of credit, for the most part it was the mortgage brokers who were duping the public into taking bad loans. I won’t deal with the Quants here, but another thing to consider is that the overwhelming number of the traders for the big banks really had no clue about the potentially volatile nature of the products they were trading… What they mainly understood about those products was that they were making a lot of money off of them.
Which brings us to the end of the line… The investors… The investors were buying up the mortgage backed securities (CDO’s) as fast as Wall Street could churn them out, in fact they had become the preferred product for investors.
We both agree that it was greed, and power that led to the housing bubble, and subsequent crash. At this point I don’t feel qualified to determine that just because the $ amounts got bigger as the deals went up the line that the investors at the end of the line were any more or less greedy than the person on main street that was taking the refi’s, and were using their houses as piggy banks… I guess that determination can only be made by each individual… I’m not including you in this bunch, but it does bother me to see so many uniformed individuals on main street pointing their fingers around placing blame based on what they heard in the press, or what someone else just as uninformed told them, tho for the most part they are usually at least partially right. Tho I have to admit that at times I have a blast picking those individuals apart when they start spewing their ignorance… Last year (2012) their was a guy at work that would barely talk to me all Summer after I shredded him one morning before work when he was babbling his ignorance to the crew. Mind you that I was very polite, I just buried him with the truth… This past Summer he and I got along great, heck, he even quizzed me about the crash a few times.
I guess in the end we’ll all draw our own conclusions about who’s to blame for the crash… At this point whether I agree with someones conclusion or not isn’t the issue for me… I’ll just say that I have a hell of a lot more respect for someone who has taken the time to learn about what really happened, rather than just spouting their uninformed, rehashed rhetoric, whether I agree with them or not.
I’m sure you’ll enjoy Sowell’s book. I’m leaving the subject for a while, but if you run across any other good books about the crash let me know because I intend to return the subject in the future. I’m going to re-read Jared Diamonds “Guns, Germs, and Steel (The Fates of Human Societies)” Then will be reading his book “The West and the Rest”. After that who knows? Maybe I’ll go back to fiction for awhile.October 19, 2013 at 9:47 pm #7204
I will read Sowell’s Book. And thanks for not reaming me LD, I don’t know how appalled, and furious you where after reading McLean’s book. But I had to blow off a little steam myself, I never fully realized the depths lenders and borrowers had gone. 9% or some 2.4 Million of the 100s of millions of loans where first time borrowers, those the whole thing started out to help in the first place. And I was appalled at how those who did try to point out the problems, where treated. The betrayal by those they believed would help them, and didn’t because of fear, or greed. I am horrible with names, But He believed She had spoken out of turn and stepped on His toes figuratively speaking, but it was a childish act by one man. A man who if He said what he believed and put His pride aside, stood behind her, may not have stopped it, but sure could have curved it. And then those who knew what was about to happen and bet the balloon was going the burst, and just trashed and thrashed those who where warning about it, because they would have lost their money, never mind somebody had to pay, and that somebody was the Government. And no one really ever faced any charges.
This latest thing on the EBT card and Wal-Mart, shows just how bad the people of this country have gotten. Just shows or proves as bad as the Mortgage Co where, the borrowers where just as much to blame and just as bad, they all thought they could get something for free and did not care who they hurt to get it, the Government has deep pockets and I am going to get mine and then some before someone else does. WE the people are the Government that money comes out of our pockets and we continue to shoot our selves in the foot and cut off our noises to spite our faces. It is human nature though.October 21, 2013 at 12:39 pm #7292
CK, like you, I was already angry before I read All the Devils. Not only was I angrier after reading it, I had a lot more targets for that anger. As a fair warning, your going to feel more of that anger by the time your done with Sowells book. Between the two you get a good look at the very foolish, and somewhat ugly side of human nature.
As to Born… Robert Rubin is the name I believe your looking for… The worst part of that whole incident is that he was the one guy in that meeting that actually had first hand experience, as well as a healthy fear of the potential volatility of derivatives in the markets.
One area you haven’t mentioned is the compliance of the ratings agencies all in the name of market share. Once Moody’s started the other two fell right in line, pretty much so they wouldn’t fall behind on their bottom line. Another target for that anger.
As to charges, the recent JP Morgan decision is directly relative to the crash, and a pretty interesting decision at that. Like the charges everyone else has faced in the past the JP Morgan case is a Civil case. In the past, all the guilty parties ended up paying fines while admitting no guilt, and the case was closed. In the JP Morgan case, they’ve been fined, and a pretty hefty fine at that… But… In the JP Morgan case, the prosecution has not taken the possibility of criminal charges off of the table in the future.
One thing I’ve heard that may be true is that the reason the government has dragged it’s feet in the prosecutions is because the banks were so weak after the crash. Now that the banks have recovered they can handle the fines.
What I haven’t researched yet is what happens with those fines… Is it a boon for the government??? I’m pretty damn sure that the fines aren’t going to those who were hurt the most during the crash.October 21, 2013 at 3:09 pm #7304
Yep it was Born and Rubin I was talking about. I guess I was giving more blame to the Bankers than anyone else, and it has soaked in that as bad as they were, there were many more. Moody’s, S&P and their Ratings of the loan Packages (CDOs, Derivatives and the manipulating that went on) triple As that where no more than junk, the Appraisers and their manipulated, inflated appraisals of the homes.The manipulation of incomes, from $16,000 a year to $160,000 so borrowers could afford the manipulated over priced homes. Then Redleaf, Paulson and others more or less betting the market would implode,and hopeing they would while rakeing Born, Bair over the coals for thier warningsOctober 21, 2013 at 4:43 pm #7308
I guess I was giving more blame to the Bankers than anyone else, and it has soaked in that as bad as they were, there were many more
Ahhh yes… My work here is done… That really was my main point all along.
Hopefully some others are getting something out of our conversation… There really was a 30 year path with many players involved that led to the melt down… I suppose it’s up to anyone to decide for themselves who if anyone bares a greater share of the blame, I’ve done so myself… I’m just trying to point out that there is plenty of blame to go around.October 21, 2013 at 7:01 pm #7323
CK, if the link works, here’s a little more info on the JP Morgan case I mentioned.
Oh well… I couldn’t get any links to work… Just Google JP Morgan and you’ll find plenty of info about the caseOctober 21, 2013 at 11:34 pm #7334
I addressed this post to LD, because he recomended a book to me, a very interesting one at that. But any one is very welcome to join in.
I think it is an instinctive human feeling to distrust, dislike people who have a great deal of power over us. We all remember our first loan, and all the feelings that go with it. Most Bankers live well, or appear to any way. Bankers are no different than any one else as far as desensitization to things they see or must do often. Say like someone who works in a slaughterhouse becomes accustom to a smell that turns the rest of our stomachs. Foreclosing on bad loans is part of a banker’s job, something that must be done. But some of us on the out side just see a person who is living very well, seemingly heartlessly taking someone’s home, that someone rightly or wrongly becomes the underdog if you will. So it is a bully and an underdog, it is my nature to jump the bully and defend the underdog. The banker may not be the Bully and the underdog may not be the underdog you think he is. But the Bankers usually don’t need any help, they usually come out on top, their standard of living may be lowered a little, but they do ok. Or at least they seem to, and that is what most people see, and it is hard to feel for them. It is easier to feel for the person who has two or three kids, has a car that runs maybe half the time, just making ends meet, paying a high rent to a slum lord.
Now I must say I was one of those slum lords, even though I changed not even half of what most did in rent, Just enough to pay the taxes, and for the larger maintenance items. But many people just don’t care about anything and do not take care of any thing, after all it isn’t theirs. I had one person 6 months behind on rent, several bad checks I still have, never pushed it. I sold the place after they finally moved out. I never really wanted to rent the place, It was paid for and a place to have if hard times came, I preferred it be vacant. But those who knew I had it would tell people about it, and would ask, begged at one time, so they could have a place to live. A place with no one living in seems to go down hill faster than one with people in it. But then some go down hill very fast with some people. I sold it just for what is was worth, Never want to rent anything to anyone again, or be talked into it. Just like the Bankers if you have a place to rent, people see you as rich and mean.October 22, 2013 at 12:06 pm #7383
CK, that’s a great take on how many probably view bankers, whether they realize it or not.
That’s also probably why so many just accept the view that it was the big bankers that were responsible for the crash, and the mainstream press doesn’t help to change that view, in fact in most cases it fuels it. That then leads to the uniformed gossip on main street which most are willing to embrace.
I’ve never tried to let the bankers off of the hook because as I’ve said, they do bare their share of the blame. But when it comes to pointing fingers, between the two of us we don’t have enough fingers to point at all those that are responsible for the crash… Not even close… I hope at least some will stop to consider that, whether they research it any further or not. When I hear someone blaming one source for the crash, it’s my first indication that they probably don’t have a clue what really happened.October 22, 2013 at 5:49 pm #7420
I am about half way through Sowell’s book Houseing Boom and Bust. I must agree there are not enough fingers and toes combinded to point at all those Responsible. I also picked up a copy of Jon Meacham’s Amierican Lion Andrew Jackson in the White House, guess that is my next read. Also picked up a tip on another of Sowell’s Books, Conquest of Cultures. The manager of the book store saw at a distance the Cover of the Sowell’s book I was getting and came over asking if I liked Sowell’s books. I told him I was just given a tip on this one, he went on to suggest others of Sowell’s if I like this one. He laughed as I pulled out my notes of book names and added it to the list. Has anyone read O’Reilly’s book Killing Jesus, or the other books Killing Kennedy and killing Lincoln, I see the Killing Jesus in every book store up front and in mass?October 22, 2013 at 6:40 pm #7426
CK, I’ll have to go back to the guy who gave me the initial tip on Sowells book, he had recommended a couple others from Sowell as well. That was awhile ago. If the manager of the book store is paying attention to Sowell, that certainly gets my attention.
Let me know what you think about Meacham’s book about Jackson, it’s definitely one I’ve been considering.
As to the others you mentioned, I’ve got nothing.October 23, 2013 at 12:24 pm #7471
I finished Sowell’s book, LD you had said McLean was less political than Sowell. I am not sure, he may have been more open in his political views, and she more subtle, but I believe She was actually more political and followed the rhetoric Sowell talks about in his Book. McLean pointed the finger more at the Banking industry and their evil villainous ways, and touched very little on the Governments role to the point of saying the Government exercised very little control and practically did nothing to control or change much of anything. McLean hardly mentioned Congress and the others pushing for a quota of minorities getting loans, thus lowering of standards which caused the subprime loans push, that where pushed on Freddie and Fannie by the Government, that were then pushed on other lenders. She really mentioned little or nothing about how if the lenders did not comply, their controlling agencies would and could prevent them from doing business until they did. I believe she was pushing the villainous ways of the Bankers, ginning up the rhetoric for more Government control over the Banking Industry, while ignoring the Government push for quotas. And She was actually Subtlety pushing for more Government control. After reading Her book I was actually madder at the Bankers than I had been before. You, RT and others had pointed out how the Bankers had been forced into making loans they did not like, and to some degree it was in the news as well, but all that was played down. After reading McLean’s book and the playing down of the actual Government role. I was distracted by her rhetoric and madder than before, I believe that was what McLean may have been trying to do. Sowell did more than mention the Government meddling much more than McLean did, He named more names of those in Government and their roles, blamed Bankers and Wall Street as well as Government Meddling and spread the blame more equally, even on/to the barrowers, Who McLean so subtlety painted more as the victim’s of the evil Bankers and Wall Street Who need more control by the Government.
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