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Thread: How we got into this financial mess...

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    Regular Member Sonora Rebel's Avatar
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    This is from the NY Times 1999. Please read it and draw your own conclusions. (Kind'a obvious... but...) This affects ALL of us.






    September 30, 1999
    Fannie Mae Eases Credit To Aid Mortgage Lending
    By STEVEN A. HOLMES
    In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.
    The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.
    Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.
    In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans.
    ''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.''
    Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market.
    In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.
    ''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.''
    Under Fannie Mae's pilot program, consumers who qualify can secure a mortgage with an interest rate one percentage point above that of a conventional, 30-year fixed rate mortgage of less than $240,000 -- a rate that currently averages about 7.76 per cent. If the borrower makes his or her monthly payments on time for two years, the one percentage point premium is dropped.
    Fannie Mae, the nation's biggest underwriter of home mortgages, does not lend money directly to consumers. Instead, it purchases loans that banks make on what is called the secondary market. By expanding the type of loans that it will buy, Fannie Mae is hoping to spur banks to make more loans to people with less-than-stellar credit ratings.
    Fannie Mae officials stress that the new mortgages will be extended to all potential borrowers who can qualify for a mortgage. But they add that the move is intended in part to increase the number of minority and low income home owners who tend to have worse credit ratings than non-Hispanic whites.
    Home ownership has, in fact, exploded among minorities during the economic boom of the 1990's. The number of mortgages extended to Hispanic applicants jumped by 87.2 per cent from 1993 to 1998, according to Harvard University's Joint Center for Housing Studies. During that same period the number of African Americans who got mortgages to buy a home increased by 71.9 per cent and the number of Asian Americans by 46.3 per cent.
    In contrast, the number of non-Hispanic whites who received loans for homes increased by 31.2 per cent.
    Despite these gains, home ownership rates for minorities continue to lag behind non-Hispanic whites, in part because blacks and Hispanics in particular tend to have on average worse credit ratings.
    In July, the Department of Housing and Urban Development proposed that by the year 2001, 50 percent of Fannie Mae's and Freddie Mac's portfolio be made up of loans to low and moderate-income borrowers. Last year, 44 percent of the loans Fannie Mae purchased were from these groups.
    The change in policy also comes at the same time that HUD is investigating allegations of racial discrimination in the automated underwriting systems used by Fannie Mae and Freddie Mac to determine the credit-worthiness of credit applicants.

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    How is this related to OC?

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    Regular Member Sonora Rebel's Avatar
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    General Forum. An attempt to showcase what's just happened and why. Right now you may be able to afford a gun. There may come a time in the near future when you may not... or even cannot. This is a situation akin to losing a war. You may not realize it... but the effects will be long term... VERY long term. You and your children... maybe even grandchildren will be affected by this situation.

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    From the forum rules:

    2) Since we are a site dedicated to open carry, firearms and gun rights, all posts should relate substantially to one of these topics, even if your comments pertain mainly to freedom and liberty.
    This is not in any way a firearms related issue - this is about political economy. If OCDO had a subforum related to politics or economics, this might be relevant.

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    I can relate it in some way, look the bailout bill is going to add at LEAST 800B to the national debt.

    For all you non-economists, here's what that means:

    Prices for EVERYTHING will be rising and our currency will be dropping.

    Metals (read: ammo and rifle prices) will rise.

    Gas (read: shipping costs) will rise.

    Meat prices will rise, since corn is a primary feed ingredient and fertilizer and corn prices will likely rise. (read: Time to go hunting)

    Oh, here's the punchline: Nobody has a plan to pay this off.

    Now might be a really good time to load up on ammo, especially the long gun type.

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    Regular Member Thundar's Avatar
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    We got into this mess by allowing the Congress and the Chief Executive to exceed their constitutional authority.We now vote for the SOB that delivers the most goods.
    He wore his gun outside his pants for all the honest world to see. Pancho & Lefty

    The millions of people, armed in the holy cause of liberty, and in such a country as that which we possess, are invincible by any force which our enemy can send against us....There is no retreat but in submission and slavery! ...The war is inevitable–and let it come! I repeat it, Sir, let it come …………. PATRICK HENRY speech 1776

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    I don't think anyone ever questioned the sub-prime mortgage crisis as thekick off forthe economic disaster. That's far from the only reason though. Welcome to 6 months ago. The causes are settled, thedebate now is how to fix it and prevent it from happening again.

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    Regular Member Sonora Rebel's Avatar
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    I posted this because of the extraordinary circumstance of the threat. This forum is all about self defense... Sometimes...like now... it's just informational to understand where the threat came from. We'll all have to deal with it. There may be extraordinary consequences none of us can forsee... but should prepare for. Ammo... firearms... all of that may suddenly dry up. Maybe there will be much civil unrest... who knows? These are shaky times... No more same old , same old. The recent events happening to our economy have been called America's financial Pear Harbor. There will prob'ly be rampant inflation... and when times are tuff... crime skyrockets. We all are pretty much aware of that as well. 'Don't matter if yer Democrat or Republican... We're all gonna be in the same boat. That boat's been torpedoed.

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    Sonora Rebel wrote:
    I posted this because of the extraordinary circumstance of the threat. This forum is all about self defense... Sometimes...like now... it's just informational to understand where the threat came from. We'll all have to deal with it. There may be extraordinary consequences none of us can forsee... but should prepare for. Ammo... firearms... all of that may suddenly dry up. Maybe there will be much civil unrest... who knows? These are shaky times... No more same old , same old. The recent events happening to our economy have been called America's financial Pear Harbor. There will prob'ly be rampant inflation... and when times are tuff... crime skyrockets. We all are pretty much aware of that as well. 'Don't matter if yer Democrat or Republican... We're all gonna be in the same boat. That boat's been torpedoed.


    While I think that's a bit excessive, you might like this article:

    http://news.bbc.co.uk/2/hi/business/7645743.stm

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    This actually relates to guns because if the economy crashes as hard as some say it's going to...guns and open carry might become a LOT more important than even most folks here ever imagined.

    The possibilities range from a possible increase in the crime rate due to increased poverty, to civil unrest and martial law.

    In any case, it's best to hope for the best but prepare for the worst.


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    Please do not post stories that are CLEARLY not gun related.


    Thread LOCKED!

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    LEO 229 wrote:
    Thread LOCKED!
    OT, yes, but not locked yet! Lose your key?

    Schadenfreude!

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    Doug Huffman wrote:
    LEO 229 wrote:
    Thread LOCKED!
    OT, yes, but not locked yet! Lose your key?

    Schadenfreude!
    HA HA!!! Sorry Doug.. it was wishful thinking!!

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    I feel the topic could definitly have a corelation to self defense, You fellas are right, the punks and scum will come out of the wood work, and the first to be preyed upon will be the elders and women and children of communities with less than charitable neighborhoods.. It's not a bad idea to check up and look in on some of the elders of your aquaintences, and let em know your just a phone call away, because when seconds count, the cops are just minutes away. I've told Mom and Dad, and my wife, the day may come to you needing firearm protection just to keep the loaf of bread thats your own..

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    There is a correlation between rough economic times and increases in crime as well .

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    Regular Member Sonora Rebel's Avatar
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    Doug Huffman wrote:
    Schadenfreude!
    "Your pain is my pleasure!"'Only German word I know ofthat don't translate word for word to English. Danke!

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    Regular Member Alexcabbie's Avatar
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    like_the_roman wrote:
    How is this related to OC?
    This thread is related to Open Carry exactly like this: The current financial mess is a product of the policies of the gun-graqbbing DemonRat liberals (Not all Democrats are DemonRatz and I style them "ratz" instead of "rats" lest I get sued by the International Union of Disease Vectors). Barack Ubama and his ilk are in a quest for power and they think Mao Tse-Tung (or "zedong" which I actually prefer because it sounds like French for "The Dick") is a shining example of a brilliant leader.

    The DemonRatz passed laws which MANDATED financiers to issue sub-prime loans, which could then be sold to FNMA. Having that "guarantee" the banks went nuts and started signing folks up for houses they never would be able to afford. There's lots more to it, but one thing led to another and now; as should have ben obvious then; lots of people cannot afford their houses and are having them put up for sale on foreclosure. And of course this lowers the value of houses bought by folks who did everything right and now THEY have mortgages that exceed the purchase price of their houses, and are ditto facing foreclosure.

    Now when the Ratz cooked this deal up, it was with their usual intent of making everyone as totally dependent on them as possible. And for a season it worked until recently when it started to blow up in their faces. Now the Ratz are scrambling not so much as to fix blame on the Republican party (although they would dearly love to) but to escape possible political oblivion or even imprisonment should folks become widely aware of their role in this. Ubama has several people, notably Fred Raines, who are ass-deep in this on his staff, and the money trail leads straight to the DemonRatz's clubhouse. This "bailout" crapola is nothing but a ruse by DemonRatz who know that if they do not do something to distract the people they will need a bailout themselves -- FROM A BAIL BONDSMAN!!!

    And finally here is the OC connection. Mao The Dick was a fi8lthy louse but he said one thing that is true. In his "Red Book" he said:

    "POWER GROWS FROM THE BARREL OF A GUN"

    The Ratz know this is true. So did Our Founders and so do we.

    Case closed.




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    Actually, if you want to get to the REAL cause of this, you need to go back to Carter in '77. Look up something called the Community Reinvestment Act.

    That's what got this mess started. Clinton just gave the CRA another push.
    Why open carry? Because 1911 > 911.

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    Alexcabbie wrote:
    The current financial mess is a product of the policies of the gun-graqbbing DemonRat liberals
    The DemonRatz passed laws which MANDATED financiers to issue sub-prime loans, which could then be sold to FNMA.

    Yea, don't bother to factor in thederegulation put forth by the Republicans that led to the lack of discloser on the true value of the sub-prime mortgage backed securities. Hell, everyone STILL doesn't know what those assets are actually worth. Don't bother to factor in the "war on terruh" and it's effect on the US dollar and markets. And why would you even waste time considering the cyclical real estate values that just happened to drop at the worst possible time? How about Gee Dubya's record spending and budget deficit?Don't bother mentioning that either. Don't bother to recognize the fact that Gee Dubya pushed forward the corpratistic bailout bill that essentially socializes the responsibility to the tax payers, while keeping the profits in the hands of the private market. Maybe you need to look up the definition of Fascism. That bill was Gee Dub's baby and McCain voted for it as well. Cut the partisan crap and open your eyes.

    From wiki:
    Fascists opposed what they believed to be laissez-faire or quasi-laissez-faire economic policies dominant in the era prior to the Great Depression.[60][/suP] People of many different political stripes blamed laissez-faire capitalism for the Great Depression, and fascists promoted their ideology as a "third way" between capitalism and Marxian socialism.[61][/suP] Their policies manifested as a radical extension of government control over the economy without wholesale expropriation of the means of production. Fascist governments nationalized some key industries, managed their currencies and made some massive state investments. They also introduced price controls, wage controls and other types of economic planning measures.[27][/suP] Fascist governments instituted state-regulated allocation of resources, especially in the financial and raw materials sectors.

    Other than nationalization of certain industries, private property was allowed, but property rights and private initiative were contingent upon service to the state.[62][/suP] For example, "an owner of agricultural land may be compelled to raise wheat instead of sheep and employ more labor than he would find profitable."[63][/suP][63][/suP] According to historian Tibor Ivan Berend, dirigisme was an inherent aspect of fascist economies.[64][/suP] The Labour Charter of 1927, promulgated by the Grand Council of Fascism, stated in article 7:


    "The corporative State considers private initiative, in the field of production, as the most efficient and useful instrument of the Nation," then goes on to say in article 9 that: "State intervention in economic production may take place only where private initiative is lacking or is insufficient, or when are at stakes the political interest of the State. This intervention may take the form of control, encouragement or direct management."
    Fascism also operated from a Social Darwinist view of human relations. Their aim was to promote "superior" individuals and weed out the weak.[65][/suP] In terms of economic practice, this meant promoting the interests of successful businessmen while destroying trade unions and other organizations of the working class.[66][/suP] Historian Gaetano Salvemini argued in 1936 that fascism makes taxpayers responsible to private enterprise, because "the State pays for the blunders of private enterprise... Profit is private and individual. Loss is public and social."[67][/suP]
    We're there, folks. We have been for awhile.



    This mess has been called what it really is by more than a few people, the perfect storm. It was a load of f*ck ups on all sides, as well as natural economic trends that all came together in the worst possible way. Turning it into a partisan issue just showshow ignorant of it you really are.

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    Break down on the bailout bill MCCAIN AND OBAMAVOTED FOR:

    http://sayanythingblog.com/entry/ear..._bail_out_bill

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    Regular Member Alexcabbie's Avatar
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    You sound just like an Ubamanista mole to me.

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    Regular Member Sonora Rebel's Avatar
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    +1

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    sounds like there are numerous factors leading to this economic failure. I guess I'll throw in that as a society we try and live way beyond our means. check out one of those charts showing the average square footage of a house 50 years ago compared to today. people want more and more which requires a lot of money. Money that most of us don't have. And lets not forget that our money is fiat currency, produced by the independent bank called the federal reserve. Our money will inevitably become devalued the longer we live on this system. Even more now thanks to this fiasco.

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    Alexcabbie wrote:
    You sound just like an Ubamanista mole to me.


    You sound like you haven't even take an intro. level economics class to me, let alone know anything about what the country is going through right now. Hence the lack of a response with any useful content.

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    Regular Member Alexcabbie's Avatar
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    What the country is going through right now is called DemonRat corruption. I shall see your elitist ass at the voting booth, mole.

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