Tuesday Highlights

Good morning.

7 responses to “Tuesday Highlights

  1. Well, here’s why Mr Obama went on the offensive regarding the banking crisis, to deflect. Or is this the reason? Or is this it?

    Yes yes this meme has been pushed around in GOP circles for a bit now written up in varying forms of sophistication. Essentially it can be summed up as “Blame Poor Black Folks”. Pressure to make loans to low income and minority applicants caused banks to make risky sub-prime loans that are now coming back to bite us all.

    FACT: We are talking trillions of dollars here. Sorry we just don’t have enough poor black folks to soak up all that money! Every poor person would have to be living in a $500K+ mansion for that to be the problem.

    The deregulation arguement is more valid. It’s not deregulation er sea that was the problem but allowing financial institutions to take on huge amounts of risk without proper disclosure. Many of these institutions are holding big question marks on their balance sheets and they are falling because no one can really be sure what they hold. Normal banking, like you and I use when we hit the ATM exists in a different type of positive deregulation. Yes we can, say, use our ATM in any state whereas 30 years ago we might be limited to only the state that our bank was in (if ATM cards were available back then). They are deregulated but transparant. They must disclose how much they owe to depositors and the loans they issue must be backed up by reserves…the riskier the loan the more reserve they must back up.

  2. Boonton,
    In the 80s the SNL debacle resulted because deregulation didn’t accompany a removal of guarantees.

    If the AIG and other banks are too big to be guaranteed, then perhaps there might be a regulatory need to insure that corporations (and banks) shouldn’t be allowed to get so big that they are “too big to fail”.

    Blacks are about (less than?) 10% of the population. The “poor” make up more than that, I’d say, so you’re identification of the poor as Black is not apt, and likely racist.

    Ms McArdle points to this. The “AIG” bailout isn’t trillions. She also thinks disclosure isn’t the cure, but in fact part of the problem.

  3. A partisan hack suggests “no one is attacking the Palin family”? are private family emails being published not an attack?

    No, an internet prankster essentially guessed her password (actually it seems they used the ‘forgot password’ feature on Yahoo and since her security questions were from public information or guessable info (like where did you meet your spouse) it was possible to do so).

    1. Is this an ‘attack on her family’? No.

    2. Should this be considered a partisan attack? No all available evidence is that it was done by the hacker underground (and I don’t like the word hacker here since it implies some type of programming genius who somehow got into Yahoo in some type of Mission Impossible action sequence) due to her celebrity status. Essentially this is no more an attack on her family than Paris Hilton’s blackberry being hacked was an attack on her family and friends.

    3. Why don’t you read the page you link too and address the actual point he is making!

    So, what do we have here? A Dem I’ve never heard of who said something dumb and apologized; a blog post from a writer who voted for Bush; and a Kos diary. This is evidence of “Obama-Biden Democrats” “attacking” Palin and her family.

    Do you have the slightest evidence that the prankster who got into Palin’s email account was an “Obama-Biden Democrat”? As the list of established Palin lies grows and grows it is a good time to be on the lookout for Republicans embracing the ideology of victimization.

    Also, the article has an excellent point about balance:

    Even by McCain campaign standards, this is just cheap and fpolish. If the Obama campaign wanted to play by similar rules, I wonder what Democrats would find if they looked for questionable attacks from prominent conservative blogs and user threads at the Free Republic, attributing all of it to “McCain/Palin Republicans”?

    Speaking of questionable attacks, let’s keep in mind there’s still blood on your hands (ok that’s kind of a hysterical metaphor) for pushing that “Ayers ghostwrote Obama’s book” story not too long ago.

  4. Mark

    Blacks are about (less than?) 10% of the population. The “poor” make up more than that, I’d say, so you’re identification of the poor as Black is not apt, and likely racist.

    Errr this is my point. The meme on the right is that the subprime problem was caused by activists pushing banks to make loans to the poor and minorities. Sorry, minorities is code word here for blacks….not the Amish, Scientologists, Wicca adherents, etc. (OK, Hispanics too). There are simply not enough blacks (let alone poor blacks) to have received all those loans unless everyone of them was given a mansion to live in….even though there’s been some improvement in some of our public housing population in the last 20 years there’s been…unfortunately….no such dramatic improvement.

    The poor is a larger portion of the population than just blacks or minorities but the same problem still exists. Unless every poor person got a mansion during the credit boom there’s not enough of them to go around. Sorry while there’s plenty of examples of shady stuff happening on the poor end of the market (esp. near the end of the boom), this isn’t the cause and people who advocate(d) better access to mortgages for the poor and minorities don’t need to feel guilty. There is not a banker in the US who wrote tens of millions of dollars of low income mortgages simply because Al Sharpton gave him a guilt trip. He did it because every week he wrote ten million in mortgages Wall Street gave him another $10M to write and Wall Street was doing it for the year end bonus, not to score points with Sharpton.

    Ms McArdle points to this. The “AIG” bailout isn’t trillions. She also thinks disclosure isn’t the cure, but in fact part of the problem.

    No AIG is a under $100M….I’m talking about the Bush plan for $700B. At this point we might as well round up to $1T for the proposed and actual gov’t bailouts to date. Needless to say, there’s been losses already incurred that aren’t going to be made good on by gov’t bailout (Lehyman Bros. for example) so trillions is in the neighborhood of what we are talking about.

    As for Ms McArdle, I’m not seeing where she addresses disclosue in the post you link too.

  5. http://www.washingtonpost.com/wp-dyn/content/article/2008/09/22/AR2008092202691.html?hpid=moreheadlines

    Half the houses for sale in Fairfax county VA are bank owned property. Per our friend wikipedia this county has the 2nd highest median household income & was the first county in the US to reach a 6 figure median income.

    Did this too happen because of ‘affirmative action lending’?

  6. Boonton,
    I could imagine that packages/rates (so called sub-prime lending) or other lending schemes which are targeted to the not-so-safe poor borrower also are attractive (and legally in a non-discriminatory world) attractive to the middle class/upper middle class borrower who also takes on risky loans for his dream second summer cottage.

    When housing prices plummet, its that second house owners who are more likely to skip out when because of a housing value price bubble burst and now he holds debt far in excess of the (street) value of that property. So he voluntarily defaults. And puts a lot of pressure on a lot of banks. Which when you track it back was cause by lending practices set in place to enable home ownership for the poor.

  7. No packing mortgages together to be sold as bonds and other more exotic instruments was seen as a financial revolution that enabled banks to make riskier loans than they used too. This credit expansion was celebrated as a way to enable homeownership for the poor but was not caused by ‘fair lending activists’. The credit expansion was throughout the economy and in dollar terms it is almost certainly more centered on the higher incomes. The really exotic loans….the no money down, the negative equity, the negative amortization (where your payments don’t even cover interest) and the ‘choose your own monthly payment’ mortgages….while I’m sure they were used in some low income cases went heavily for upper class houses where you could use such exotic animals to play speculation games. Keep in mind a single well off person with a $800K loan offsets 8 poor people playing with $100K loans.

    Like I said, the meme that this should be blamed on the poor or blacks (or activists for them) doesn’t fly.

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