How Obama Helped Cause the 2008 Crisis and Is Helping Reenact It
Obama didn’t just prevent a meaningful recovery from the 2008 financial crisis. He helped cause the crisis in the first place, by participating in the Democrat effort to force banks to make bad loans based on race:
President Barack Obama was a pioneering contributor to the national subprime real estate bubble, and roughly half of the 186 African-American clients in his landmark 1995 mortgage discrimination lawsuit against Citibank have since gone bankrupt or received foreclosure notices.
As few as 19 of those 186 clients still own homes with clean credit ratings, following a decade in which Obama and other progressives pushed banks to provide mortgages to poor African Americans.
Never mind the economic devastation; as always, the authoritarian do-gooders meant well.
Obama’s lawsuit was one element of a national “anti-redlining” campaign led by Chicago’s progressive groups, who argued that banks unfairly refused to lend money to people living within so-called “redlines” around African-American communities. The campaign was powered by progressives’ moral claim that their expertise could boost home ownership among the United States’ most disadvantaged minority, African-Americans.
Progressive activists’ ambition instead contributed greatly to a housing bubble that burst in 2007, crashed the nation’s economy in 2008, wiped out at least $4 trillion in equity, kept unemployment above 8 percent for four years, and damaged the intended beneficiaries of looser mortgage lending standards.
What’s worse, Obama has learned nothing whatsoever from the catastrophe he helped bring about; he is actually doubling down on the insane moonbat ideology that caused the housing bubble.
In the White House, Obama has continued to intensify regulatory pressure on banks to provide more risky loans to African-Americans and Latinos. He has used lawsuits to fund his allies. And taxpayers are now unwittingly contributing to a re-inflation of housing prices.
I don’t have to tell you how this movie ends. We’ve all seen it before.
On tips from J, JustTheTip, and Bob Roberts.
Let’s not forget these two videos either:
http://www.youtube.com/watch?v=Lr1M1T2Y314
http://www.youtube.com/watch?v=blcC_kCnf8U
Anybody in Illinois with a pulse and the right skin color was in on that suit
I take it from the tone of this post that you either don’t know – or choose not to know – that it was not in fact the loans themselves that caused the crash, it was the packaging of said loans into exotic structures, and betting against those exotic structures. The company that directly ‘invented’ it was called Magnataur – a hedge fund that was actually super clever, and at the time was completely legal, as well. Dude made an insane pile of cash for himself.
A problem caused by deregulation… under W. And certainly something R&R will immediately try to do again if they were to win. After all, if it caused a gigantic disaster once, we should do it some more, right?
Look, hating on poor people seems to be the flavor of the day for the right, but in this case it is not about the individual mortgages. Just isn’t. It is about the way in which those mortgages were treated. A nuance, perhaps, and certainly too complicated a thought for many of the denizens hereabouts, but the truth nonetheless.
“They shouldn’t have given blacks money?” Is that really what you are saying here?
They shouldn’t have given loans to people “they knew” couldn’t repay them. I’m quite sure you can turn that into a racist comment, but remember, a fact cannot be racist.
In order to gut America’s international power you first have to destroy its economy.
Without the money you can’t fund a world class military. Even if you have a fairly good military you cannot then afford to transport them in mass nor can you afford to post them overseas in any numbers that would do any good.
The rest of the world fears America. For a good metaphor along those lines go view Doctor Who’s adventures with the Pandorica, and the Demons Run episode.
In Obysmal’s case, he was brought up by an ignorant African who cast the US as just another empire that stole all its riches from the third world, and then he was fathered by a full blown communist who hated the success of capitalism and its icon – America. His mission is to lay us low so the rise of Utopia will be allowed to flower from the oh so wonderful people of the third world who have been suppressed by us. A total load of bull, but that’s what he believes.
Drudge reports today that 0bama’s speech will be moved indoors (to a much smaller venue) instead of being in a stadium. This is supposed due to worries about lightning.
Oh YEAH. There has to be a major worry about lightning bolts striking when the liar in chief gets up to speak.
(Not to mention that a half-empty stadium would be very embarrassing, lightning or not!)
“What’s worse, Obama has learned nothing whatsoever from the catastrophe he helped bring about…”
I strongly disagree. He’s learned that he can tell all the lies he wants, and get away with it because the American people are basically weak, gullible, and brain-dead.
realitysliberalbias
Wade Rathke – whose militancy caused him and his violent compatriot Bill Ayers to form a more violent version of the Students for a Democratic Society called the Weathermen – founded a group in 1970 called ACORN.
During the 70′s Rathke and Ayers went on a 40-target bombing spree as part of the Weathermen in their declared war against the United States, while both were intimately involved with ACORN.
In 1991 an ACORN offshoot – Project Vote – was created by Rathke, and one of their top guns became Barack Obama.
Four years later Obama became an ACORN attorney involved in a legal battle against Citibank, who was reluctant to lend housing money to the lowest income levels in “red-lined” areas of Chicago – sub-prime candidates – many of whom had no visible form of income.
The people at this site are very familiar with the bundling that took place and can speak of it with great length and depth, and you would be wise to stop berating those who know more about it than you do.
As far as regulations go, here is a video of the republicans trying to get regulations while the liberals were saying nothing was wrong.
Who pray tell, tried to stop the insanity?
http://www.bing.com/videos/search?q=congressional+hearing+to+regulate+freddie+mac%2ffannie+mae&view=detail&mid=8445035A7C8E9325F3EB8445035A7C8E9325F3EB&first=0
It would help to stop being so arrogant.
realitysliberalbias you have half the story and that’s not entirely correct as well.
Forcing lenders to give mortgages to incompetent borrowers is the foundation made of sand upon which the rest of the stupidity was built. As well, it was Fannie and Freddie packaging these and guaranteeing them as well as rating them A+ or better that set up this farce for the fall. Investment banks bought these derivitives based on the Fannie and Freddie ratings.
As the economy slowed the borrowers stopped paying. The holders of the notes lost their cash flows. Much like 1929 this caused an asset run to keep the ball in the air. Literally tons of gold was sold in the market in a few months, among other cash-outs to cover margin calls and to monitize the losses in the derivitives.
Then these loans went into foreclosure causing an implosion of house prices, devaluing the underlying assets of the loans and thus the derivitives that were based on them. Pretty soon the entire house of cards came down similar, once again, to 1929.
The CRA with addendums created by Congress set up the scenario. The various Presidents and their knee breakers at DoJ forced lenders to sign up incompetent borrowers. Finally, the Freddie and Fannie folks committed felony fraud in flogging packages of these loans as other than B or C (for “crap”) rated. When the investments went south so did the banks that bought them.
It’s official. We are now 16,000,000,000,000.00 $16 trillion in debt
chuck in st paul says:
“The various Presidents and their knee breakers at DoJ forced lenders to sign up incompetent borrowers.”
Sorry but it was all loans to afro americans and Obama’s fault as stated above. As was the tech bubble crash of the 90s.
The case mentioned above,Buycks-Roberson v. Citibank Fed. Sav. Bank Fair Housing/Lending/Insurance, showed Citibank rejected loan applications of minority applicants while approving loan applications filed by white applicants with similar financial characteristics and credit histories. Whats wrong with that.
Its not like bankers and mortgage brokers were pushing loans to make a buck.
Here are the wild “successes” resulting from that lawsuit
http://dailycaller.com/2012/09/03/with-landmark-lawsuit-barack-obama-pushed-banks-to-give-subprime-loans-to-chicagos-african-americans/
President Barack Obama was a pioneering contributor to the national subprime real estate bubble, and roughly half of the 186 African-American clients in his landmark 1995 mortgage discrimination lawsuit against Citibank have since gone bankrupt or received foreclosure notices.
As few as 19 of those 186 clients still own homes with clean credit ratings, following a decade in which Obama and other progressives pushed banks to provide mortgages to poor African Americans.
realitysliberalbias, can you take a look at the two videos I posted at the top of this thread, then elaborate on your statement with regards to deregulation under W?
So what he’s essentially saying is that the banks should have knuckled down and ate the loss in the name of political correctness.
Giving away free money is not how banks stay in business. If the losses from these bad loans were small enough that the banks could have shouldered them, then the ludicrous game of hot-potato that they set up to shelter themselves would not have failed so catastrophically. Would the damage have been more contained if a handful of banks had committed seppuku instead of sending the toxic loans circulating through the market with fraudulent ratings? Maybe, but how comfortable would you be running a bank if you knew that the federal government could force you to commit financial suicide for a nebulous “greater good”?
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J why do you bother? These bots emanate from a DNC boiler room? They can’t be bothered with facts.
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Entertainment. My own.
Would the damage have been more contained if a handful of banks had committed seppuku instead of sending the toxic loans circulating through the market with fraudulent ratings?
If only it were that easy.
The problem is that the banks in question would then be visited by Federal regulators with handcarts and a locksmith
Of course the banks bundled the loans and sold them as derivatives. They knew they were poison and wanted them on somebody else’s books, can you blame them? It didn’t hurt (the banks) that the word “mortgage” still meant something of value to the subsequent investors, but the banks had been bent over and hollowed out by stupid .gov requirements. It was the inevitable collapse of the mortgages themselves, not the bundling, that caused the crisis. The banks were just doing what they could to save themselves in the face of it.
It’s amazing how silly liberals can attempt to rewrite history and keep a straight face. They think they’re such good liars, when in actuality all sane people see them for the delusional idiots they are.
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I remember the noisy rhetoric against so-called “redlining” with Fat Al and ACORN in the middle of it all.
I lived in NYC at the time and was thinking how can private businesses be forced to give loans to unqualified borrowers? That’s akin to a mugging. And: What happens when these people fail to pay back their loans?
Sounds logical, right?
Well, I wasn’t a lib, even back then.
Now that the chickens have come home to roost: BOOOSH!!!!
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Economist’s View (sarc) September 5, 2012 at 8:54 am
“Sorry but it was all loans to afro americans and Obama’s fault as stated above. As was the tech bubble crash of the 90s.”
The CRA (Community Reinvestment Act) started in Carter’s administration, not Obysmal’s. Later Dodd/Frank made it considerably worse. The banks were forced to give those loans or be audited and taken to federal court on Civil Rights/redlining charges. It took decades to build up that huge amount of bad debt, not just a few years. Admitedly, Obysmal didn’t do anything to make it better, and is in the process of recreating the very same bad debt bomb.
Well, whatever…
Making dodgy loans is one thing. And is perhaps a bad idea. If, however, gigantic dodgy bets based on exotic packaging of said loans result in a few $trillion evaporating from the economy… that is worse.
See the difference? If someone cannot repay a home loan, that is a small problem. Very small, in fact – the physical capital remains, and only the underwater mortgagee is hurt. A single entity. Bank gets the house, tries again tomorrow. If, on the other hand, a gigantic bet goes bad on a complex derivative… entire companies are gone. And the entire economy tailspins.
Which one of those seems like a more ‘real’ problem? Should we worry more about regulating the bets our financial institutions place, or about individual homeowners who cant pay loans? Is it really Obama singlehandedly making loans that caused the problem? Of course not. (Unless you are a partisan hack incapable of thinking rationally. In that case, anything goes.)
First off, to the Bush-blamers; it was Clintoon who repealed the Glass-Steagall Act and allowed ‘banks’ to bundle and sell these bad loans to an unsuspecting public- Thank you.
Secondly; Compare the Stock Market in 2008 to days with primary returns, particularly Super-Tuesday. Notice anything? Like how every time the Zero took a state the stock market took a nosedive, and each time the Shrillary took a state there was a small but noticible rebound?
The Markets knew what was coming…
Um, yeah. Making dodgy loans is a real dumb idea, and that’s why the banks were redlining in the first place. Once they were forced to make the bad loans, they wanted to offload the poisoned assets, and they did so in a creative way.
It was still the failure of the mortgages, made to people who were in no way qualified for them, that destroyed the derivatives. No, there’s no difference. The value of the capital did not remain; it was destroyed in the collapse. This has had implications all the way into property tax collection, as assessed values have plummeted.
Banks were forced to do something stupid by the leftards in the .gov, and yes, they played hot potato with them. Would you expect them not to? They knew it was a ticking bomb and they weren’t about to be holding it when it stopped ticking. It was a suck thing to do, but the survival instinct kicks in. Just because the .gov tells you to do something doesn’t mean it isn’t damned stupid to do it. “We’re going to make you do this thing that will ruin you financially, and if you don’t, we’ll ruin you financially.” See the problem?
And yes, indeedy, there were Bawny Fwanks, etc etc, and yes, Barky hisown seff right at the heart of it all, between the “updates” to the CRA, and the ACORN lawsuits and whatnot, driving this insanity. And I reckon you want to stick it on W, who was in there saying we needed to stop doing stupid shit but got ignored?
Credibility. You’ve missed out.
True Blue
It wasn’t the Clinton repeal of Glass Steagall that caused the collapse
http://news.investors.com/ibd-editorials/042712-609562-citigroup-forgets-cra-history-in-subprime-woes.htm
Rather, it was Clinton’s choice for HUD chief
http://directorblue.blogspot.com/2010/07/andrew-cuomo-architect-of-ruin.html
So basically he repeats himself and confirms what I diagnosed in the first place: he wanted the banks to fall on their own swords in the name of affirmative action.
Ummah Gummah says:September 5, 2012 at 10:30 am
AND
J says:September 5, 2012 at 10:32 am
Durring WWI, an American trench line was so close to the German line that the “dougboys” would sometimes crap on a shovel and throw it at the Greman trench. They never hit anyone, but they had fun trying!
Yes but realitysliberalbias, could you please review the videos that I posted at the top of this thread and then elaborate on the deregulation under W in the context of those videos?
“A problem caused by deregulation… under W.”
I invite to make use of your superior googling skills and acquaint yourself with The Sarbanes–Oxley Act of 2002 (Pub.L. 107-204, 116 Stat. 745, enacted July 29, 2002).
I gave realitysliberalbias a fair shot.
Everyone here opened up with well-reasoned, thoughtful, non-aggressive, erudite and definitive answers.
His response: “Well, whatever.”
You people are amazing and make me proud to be a conservative and post on this site.
Thank you and God bless you all.
Reality’s mentality is the meth-laced brain-void we face in America today.
It’s scary so many prople live Baba Ram Dass’s “Be Here Now” mentality from the 60′s which excludes history and eliminates planning, and vomits, “Live in the moment – if it feels good, do it.”
Reality with a liberal bias is not reality.
It is hell on earth…it is void of values…it is an ongoing Godless lie without beauty, graciousness, or thanksgiving.”
Who can live in such darkness?
A. Levy
I agree 100%, but the wording in the post is rather weird sounding: “by participating in the Democrat effort to force banks to make bad loans based on race” and the first paragraph of the second grey quotation box.