I still see alot of misconceptions about the Bush Mortgage Bubble and the Bush policies that encouraged, funde and protected it so I thought I would start an FAQ section. Since the resulting destruction of the housing and financial sector are still a drag on the economy today, it seems relevent
Q When did the Bush Mortgage Bubble start?
A The general timeframe is it started late 2004.
From Bush’s President’s Working Group on Financial Markets October 2008
“The Presidents Working Group’s March policy statement acknowledged that turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007.”
http://www.treasury.gov/resource-center/fin-mkts/Documents/q4progress update.pdf
"Since 1995 there has been essentially no change in the basic CRA rules or enforcement process that can be reasonably linked to the subprime lending activity. This fact weakens the link between the CRA and the current crisis since the crisis is rooted in poor performance of mortgage loans made between 2004 and 2007. "
http://www.federalreserve.gov/newsevents/speech/20081203_analysis.pdf
Those of us on the ground (selling real estate) see the bubble quite differently. It quite easily began in 2000, if not a year or so before then. Most Realtors would put the cause squarely on the backs of lenders for developing smoke- and-mirror mortgage products specifically for low-income bums who couldn't buy lunch, much less pay a mortgage...on the backs of FNMA and FHA for issuing and guaranteeing these products...on the backs of the rating agencies like Standard & Poors, Moody's and Fitch for rating junk as Triple A.
Q My conservative friends blame policies from 1864, 1977, 1992, 1995, 1999 and 2000. Why aren’t those policies responsible for the Bush Mortgage Bubble?
A Those policies had nothing to do with banks lowering their lending standards in late 2004 and they had nothing to do with Bush’s regulators not their jobs and had nothing to do with Bush’s regulators blocking state regulators from doing their jobs.
Q I have a friend who's a realtor and she insists the Bubble started in 2000, if not a year or so before then. What about that?
A Well I cant answer for anecdotal statements that are simply not supported by any data. I can only post clear straightforward points and back them up with solid factual links. Bush's working group told you it started late 2004. The fed told you it started in the same timeframe. Subprime loans increased 300 % a little before that timeframe and No Doc loans ROCKETED UP 1000% in that exact timeframe laid out by Bush's Working Group.
How can anybody argue with that?
A no, I ask the questions.
Q sorry
Those of us on the ground (selling real estate) see the bubble quite differently. It quite easily began in 2000, if not a year or so before then. Most Realtors would put the cause squarely on the backs of lenders for developing smoke- and-mirror mortgage products specifically for low-income bums who couldn't buy lunch, much less pay a mortgage...on the backs of FNMA and FHA for issuing and guaranteeing these products...on the backs of the rating agencies like Standard & Poors, Moody's and Fitch for rating junk as Triple A.
The bubbles, not just housing but other things as well, began in the late 80s and early 90s. By the late 90s, those of us who were watching were already seeing the first signs that the bubbles were going to burst. There was a dramatic downturn in many markets in 99 and 2000... before Bush even took office.
The fact is there is a LOT of blame to spread around for the economic disasters we've experienced over the past decade-plus... including at least three presidents, innumerable Senators and Reps, and a lot of Wall Street types.
Laying it all at Dubya's feet is just hyper-partisanship.
Question: Why would anyone bother to read your pontifications?
Answer: Most of them wouldn't.
Don't interrupt him with reality while he's trying to make a point.
Question: Why would anyone bother to read your pontifications?
Answer: Most of them wouldn't.
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