Economist Caution: Prepare For 'Massive Wealth Destruction'

[head of joaquin]

What is your favorite rational solution to AGW?

I don't have one, and it hardly matters. First step is to acknowledge the problem, second step is to evaluate rational solutions to it, and third step is to educate the public and have them decide, since we as a nation must bear the burden.

Of course conservatives have obstructed all these steps with complete demagoguery. It's what conservatives do.

 

[head of joaquin]

Democrat quotes about the health of Fannie Mae and Freddie Mac | From the Right

His first ignorant comment was in 03 when Bush attempted to regulate Fred and Fannie, and he again lauded Bush for the same effort as chair of the Fin committee in 07.

Leftist love to ignore a frank, Dodd, and RINO Graham kept the Bush admin from trying to head off the housing fiasco at least 3x in 8 years repeatedly saying "there is no crisis" just like those who think $85 billion a month in money creation for oblunders spending spree won't hurt us in the future either.

Bogus, unsourced, undated.

Typical rightwing noise machine dreck.

 

[ttwtt78640]

I don't have one, and it hardly matters. First step is to acknowledge the problem, second step is to evaluate rational solutions to it, and third step is to educate the public and have them decide, since we as a nation must bear the burden.

Of course conservatives have obstructed all these steps with complete demagoguery. It's what conservatives do.

:lol: :doh Indeed, that is a classic liberal reply - I don't know or have any clue but if you republicants won't approve funding for my favorite research institution to formulate a solution then you are obstructionist, racist and bigotted and also surely want to throw granny off the cliff, beat baby seals with clubs and starve the poor little children in New Guinea. :roll:

 

[Dittohead not!]

I guess that my real point is of the stated two problems, the state of the U.S. economy and the state of global climate change which is more likely to be solved by making U.S. policy changes?

There could be some effects on the economy, for better or for worse, depending on what those policy changes might be.

 

[Somerville]

Actually they nailed it six years ago. They were spot on. Of course they continuously say the very same thing daily so eventually they had to nail it.

Sadly they will once again be right someday, just not today.

WHO "nailed it six years ago" Peter Schiff? The "economist" who was calling for hyper-inflation if the the stimulus and QE were undertaken?

Marc Faber? The man who advocates for two opposing views simultaneously?

...here's the secret to forecasting success -- maintain an extreme, polarizing long-term view. Then adopt the exact opposite view, as a short-term trading idea, and blame governments for making it happen.

Read more: Marc Faber's Genius Is That He Can Never Be Wrong - Business Insider

You can't lose - because no matter what happens, it's always the government's fault.

Seriously, quoting Donald Trump as an economics expert? The man is a salesman, a prime exemplar of the stereotypical used car salesman meme.

The lawyer asks him, have you ever lied in public statements about your properties? Trump says he tries to be truthful, but then he adds this, "I'm no different from a politician running for office. You don't want to say negative things."

Then the lawyer asks him, have you ever exaggerated in statements about your properties? His response, "I think everyone does."

Read more: Donald Trump Admits Under Oath That He's Exaggerated How Much Money He's Made - Business Insider

 

[cpwill]

i do believe you are mistaken in that argument. but show us exactly what barney frank said and when he said it

WSJ has a beginners compilation

House Financial Services Committee hearing, Sept. 10, 2003:

Rep. Barney Frank (D., Mass.): I worry, frankly, that there's a tension here. The more people, in my judgment, exaggerate a threat of safety and soundness, the more people conjure up the possibility of serious financial losses to the Treasury, which I do not see. I think we see entities that are fundamentally sound financially and withstand some of the disaster scenarios. . . .

House Financial Services Committee hearing, Sept. 25, 2003:

Rep. Frank: I do think I do not want the same kind of focus on safety and soundness that we have in OCC [Office of the Comptroller of the Currency] and OTS [Office of Thrift Supervision]. I want to roll the dice a little bit more in this situation towards subsidized housing. . . .

House Financial Services Committee hearing, Sept. 25, 2003:

Rep. Frank: Let me ask [George] Gould and [Franklin] Raines on behalf of Freddie Mac and Fannie Mae, do you feel that over the past years you have been substantially under-regulated?

Mr. Raines?

Mr. Raines: No, sir.

Mr. Frank: Mr. Gould?

Mr. Gould: No, sir. . . .

Mr. Frank: OK. Then I am not entirely sure why we are here. . . .

Rep. Frank: I believe there has been more alarm raised about potential unsafety and unsoundness than, in fact, exists....

June 27 2005, Barney Frank insists there is no housing bubble:

hopefully, you do accurately remember mccain insisting the 'the fundamentals of the economy are sound' as the meltdown was beginning

I certainly do. Just as I remember Obama promising that the Stimulus would save us from 8% unemployment, and Nancy Pelosi telling us that Obamacare would create hundreds of thousands of jobs almost immediately.

....Wait.... you don't think our political leadership actually doesn't know the slightest thing about economics, and is just making this up as they go along... do you?

 

[Dittohead not!]

June 27 2005, Barney Frank insists there is no housing bubble:







I certainly do. Just as I remember Obama promising that the Stimulus would save us from 8% unemployment, and Nancy Pelosi telling us that Obamacare would create hundreds of thousands of jobs almost immediately.

....Wait.... you don't think our political leadership actually doesn't know the slightest thing about economics, and is just making this up as they go along... do you?

Perish the thought.
The people of this great nation wouldn't select leaders who know nothing about economics, would we?:roll:

 

[cpwill]

Perish the thought.
The people of this great nation wouldn't select leaders who know nothing about economics, would we?:roll:

Of course we wouldn't. That's why we insist that our leadership has proven track records involving years and preferably a decade or more of experience in executive positions making demonstrably economically wise decisions. Sure, some politicians will try to distract us from their complete lack of that kind of experience with petty baubles, or simplistic chants that the other guy is a meanie, but we are smart enough to see right through them, yes sir, yes we are...

...“Above this race of men stands an immense and tutelary power, which takes upon itself alone to secure their gratifications and to watch over their fate. That power is absolute, minute, regular, provident, and mild. It would be like the authority of a parent if, like that authority, its object was to prepare men for manhood; but it seeks, on the contrary, to keep them in perpetual childhood: it is well content that the people should rejoice, provided they think of nothing but rejoicing. For their happiness such a government willingly labors, but it chooses to be the sole agent and the only arbiter of that happiness; it provides for their security, foresees and supplies their necessities, facilitates their pleasures, manages their principal concerns, directs their industry, regulates the descent of property, and subdivides their inheritances: what remains, but to spare them all the care of thinking and all the trouble of living?


Thus it every day renders the exercise of the free agency of man less useful and less frequent; it circumscribes the will within a narrower range and gradually robs a man of all the uses of himself. The principle of equality has prepared men for these things;it has predisposed men to endure them and often to look on them as benefits.


After having thus successively taken each member of the community in its powerful grasp and fashioned him at will, the supreme power then extends its arm over the whole community. It covers the surface of society with a network of small complicated rules, minute and uniform, through which the most original minds and the most energetic characters cannot penetrate, to rise above the crowd. The will of man is not shattered, but softened, bent, and guided; men are seldom forced by it to act, but they are constantly restrained from acting. Such a power does not destroy, but it prevents existence; it does not tyrannize, but it compresses, enervates, extinguishes, and stupefies a people, till each nation is reduced to nothing better than a flock of timid and industrious animals, of which the government is the shepherd.” ...

 

[justabubba]

Democrat quotes about the health of Fannie Mae and Freddie Mac | From the Right

His first ignorant comment was in 03 when Bush attempted to regulate Fred and Fannie, and he again lauded Bush for the same effort as chair of the Fin committee in 07.

Leftist love to ignore a frank, Dodd, and RINO Graham kept the Bush admin from trying to head off the housing fiasco at least 3x in 8 years repeatedly saying "there is no crisis" just like those who think $85 billion a month in money creation for oblunders spending spree won't hurt us in the future either.

let's see if you are willing to allow factual information to intrude on your delusions:
Barney Frank didn

 

[Dittohead not!]

let's see if you are willing to allow factual information to intrude on your delusions:
Barney Frank didn

Was the argument that Barney Frank caused the housing bubble, or simply denied that it was happening?

 

[cpwill]

let's see if you are willing to allow factual information to intrude on your delusions:
Barney Frank didn

I couldn't help but notice that you completely failed to answer his point, apparently having just simply googled "Barney Frank didn't cause the housing crises" and then cited the top article that pops up. And the article doesn't...really... do a terribly good job of making the point, inasmuch as it papers over much of Fannie and Freddie's effect on the markets, and ignores such critical components as their grading schemes.

They are far and away not the only players in this debacle. But they are major players.

 

[justabubba]

I couldn't help but notice that you completely failed to answer his point, apparently having just simply googled "Barney Frank didn't cause the housing crises" and then cited the top article that pops up. And the article doesn't...really... do a terribly good job of making the point, inasmuch as it papers over much of Fannie and Freddie's effect on the markets, and ignores such critical components as their grading schemes.

They are far and away not the only players in this debacle. But they are major players.

these GSEs were at most minor players in the financial meltdown
"conforming loan" meant a loan which could be sold to fannie mae/freddie mac. non-conforming loans, what facilitated the financial malaise, were those loans which fannie mae could not buy for its secondary market portfolio, per its regulations. as can be seen from one of the graphs on my prior cite, during the run up to the great recession, the GSE share of mortgages fell, substantially. and the no longer government owned - but government backed - GSEs were on the sidelines while collateralized debt obligations - packaged mortgages - were being sold on the street. since the regs prevented the GSEs from buying the loans for their secondary portfolio, they used their substantial cash holdings to instead "invest" in the high risk high interest mortgages, again those were the risky mortgages the regs prohibited the GSEs from buying for their secondary market portfolios
in hind sight, we can recognize that this was a foolish practice. one engaged in by the private sector managers. however, the GSE shareholders were not content to have their investment funds parked while high flying high yield mortgages were available to be held as a GSE investment. being unable to acquire these risky loans for their secondary market holdings, they sought a back door method to participate in the high earnings that existed before the crash, and bought positions in the sub-prime/non-conforming loans that were available. that was the extent of the GSE participation in the meltdown
now, let's see who was in the white house when the fannie mae manipulation of its financial statements occurred:

... In 2001, Raines had written an op-ed in the Wall Street Journal lauding Bush's faith-based initiative. He had also reached out to Bush allies in the faith-based community, including Kirbyjon Caldwell, the Houston pastor who gave the benediction at Bush's first inaugural. In October 2002, at the White House Conference on Minority Home Ownership, Raines and Caldwell were both on hand to be praised warmly by Bush for their work.

It hasn't even been three years since that sunny day in Atlanta, but oh, how the world has changed. Both Brendsel and Raines have been deposed in the wake of multibillion-dollar accounting scandals. Brendsel fell in 2003, after government regulators accused Freddie Mac of understating billions in profits in an effort to smooth earnings. More recently the Securities and Exchange Commission ruled that Fannie Mae--the larger and more important of the two companies--had violated accounting rules, overstating profits by an estimated $9 billion since 2001, which represents almost 40% of its total earnings during that period. Raines, who was paid more than $90 million during his six years as CEO--much of it linked to meeting profit targets--made a last-ditch effort to save his job, but to no avail. CFO Tim Howard was also forced out. Fannie's accounting firm of 36 years, KPMG, was fired. Once one of the most politically powerful companies in America--with staunch allies in Congress who did its bidding, a notoriously weak regulator, and a willingness to steamroller its critics--Fannie today is more vulnerable, in both a business and political sense, than it has ever been before. However it emerges from this scandal, it will almost surely never again be the unstoppable force it once was. ...

The Fall of Fannie Mae - January 24, 2005

yoas a secondary market lender. you want to blame barney frank. why not the republicans who eroded our regulatory system to such a degree that they enabled that meltdown. the same party which opposed the regulatory changes after the meltdown

 

[greyhat]

Every broken clock is right twice a day...

 

[Fisher]

Every broken clock is right twice a day...

Unless it is digital.......

 

[cpwill]

Yeah..... so.....

Was the argument that Barney Frank caused the housing bubble, or simply denied that it was happening?

 

[greyhat]

Unless it is digital.......

Broken is still broken .

Guys like Faber and Roubini have an image to sell you: Doom & Gloom. I remember how in 2009 Faber (and the like) was all about: more doom, more gloom. Instead the markets have been rising since March 2009 ...

They appeal to people's emotions and always have a bearish stand. You have to take what they say with a bucket of salt.

 

[Fisher]

Broken is still broken .

Guys like Faber and Roubini have an image to sell you: Doom & Gloom. I remember how in 2009 Faber (and the like) was all about: more doom, more gloom. Instead the markets have been rising since March 2009 ...

They appeal to people's emotions and always have a bearish stand. You have to take what they say with a bucket of salt.

I take it all as an infomercial for "Damn, Ron has cornered the kitchen crap market....Shoot......Let's see.....It is never a better time to buy gold!!!"

 

[Dittohead not!]

Yeah..... so.....

So, blaming Barney Frank for the housing meltdown would be like blaming Shaun Hannity for global warming, when all he is really doing is denying that it is happening.

 

[csbrown28]

What is your favorite rational solution to AGW?

The first step in any solution is to admit there is a problem.

 

[cpwill]

So, blaming Barney Frank for the housing meltdown would be like blaming Shaun Hannity for global warming, when all he is really doing is denying that it is happening.

Well.... no. If Shawn (Sean?) Hannity were on the Congressional Panel overseeing the EPA and had kept the EPA from effectively countering AGW, then he would share about the same level of culpability as Barney Frank. Bubba is trying to attack the strawman of "was the major factor responsible for", when all anyone is saying is "denied it was happening, but was in a position where that denial enabled it".

 

[Ahlevah]

Is it going to be that gloomy. Your thoughts?

World GDP is about $80 trillion and total world-wide credit market debt is about three times that. In the developed countries the figure is 376% of GDP. So what's to worry about?

Seriously, I can see a multitude of things that can go wrong, but as an investor I can't afford to sit around waiting for a bubble to burst or the next financial crisis that causes the world to end. All a person can reasonably do is spread his bets and look for value as a way to (hopefully) minimize losses when the markets hit the inevitable speed bump. I'm still heavily invested in stocks, but I've also been taking some profits of late and adding to my position in longer-term Treasuries as a hedge because 1) the U.S. economy ain't that hot and I feel interest rates are likely to trend down again; 2) that's where money will flow to if there is another crisis.

Number of the Week: Total World Debt Load at 313% of GDP - Real Time Economics - WSJ

 

[Dittohead not!]

Well.... no. If Shawn (Sean?) Hannity were on the Congressional Panel overseeing the EPA and had kept the EPA from effectively countering AGW, then he would share about the same level of culpability as Barney Frank. Bubba is trying to attack the strawman of "was the major factor responsible for", when all anyone is saying is "denied it was happening, but was in a position where that denial enabled it".

OK, that makes sense.
Of course, he didn't singlehandedly bring on the housing crash, but was in a position to perhaps convince people to do something about it, and didn't.

It seems to me a lot of our leaders were wrong about the "creative" mortgages and selling houses to people who couldn't afford them, as well as about the lack of regulation.

Isn't it usually the Republicans who are against regulation, and the Democrats for it? Isn't Frank a Democrat? That seems to me to stand party platforms on their head.

 

[cpwill]

OK, that makes sense.
Of course, he didn't singlehandedly bring on the housing crash, but was in a position to perhaps convince people to do something about it, and didn't.

It seems to me a lot of our leaders were wrong about the "creative" mortgages and selling houses to people who couldn't afford them, as well as about the lack of regulation.

Isn't it usually the Republicans who are against regulation, and the Democrats for it? Isn't Frank a Democrat? That seems to me to stand party platforms on their head.

Sort of. To keep it in the "usually" category, remember that republicans are usually in favor of restricting government and freeing business, while Democrats are usually in favor of restricting business and freeing government.

 

[head of joaquin]

So, blaming Barney Frank for the housing meltdown would be like blaming Shaun Hannity for global warming, when all he is really doing is denying that it is happening.

Fannie and Freddie didn't cause the housing crisis, so your premise is false.

CDSs and the deregulation of table top brokers did, fueled by tax cuts for the rich, which sent huge amounts of cash into CDSs and REITS. Housing bubbles aren't caused by refis. That's simply impossible.

 

[head of joaquin]

Well.... no. If Shawn (Sean?) Hannity were on the Congressional Panel overseeing the EPA and had kept the EPA from effectively countering AGW, then he would share about the same level of culpability as Barney Frank. Bubba is trying to attack the strawman of "was the major factor responsible for", when all anyone is saying is "denied it was happening, but was in a position where that denial enabled it".

False premise. Fannie and Freddie had nothing to do with the housing bubble. Explain in detail how refis caused a bubble. You got your facts backward. The bubble caused the refis and the bubble was caused by too much idle cash in the hands of the very rich, as always.