Whose Fault?

[Libsmasher]

- Whose fault is it people took out home loans they couldn't pay, didn't understand but signed anyway, or rolled the dice that home prices would continue to rise forever?

- Whose fault is it that food was converted into fuel, greatly raising food prices?

- Whose fault is it that world demand for oil pushed oil prices up, at the sametime the US had lots of rules about where oil companies can't drill?

 

[lipmonkey]

- Whose fault is it people took out home loans they couldn't pay, didn't understand but signed anyway, or rolled the dice that home prices would continue to rise forever?

I'd say it was predatory lending practices and people living beyond their means.

- Whose fault is it that food was converted into fuel, greatly raising food prices?

I'd say it was whoever convinced Americans that ethanol was a good method to reduce our dependence on foreign oil.

- Whose fault is it that world demand for oil pushed oil prices up, at the same time the US had lots of rules about where oil companies can't drill ?

I take it you are referring to the ANWR reserves and off-shore drilling. Take a look at the barrels per day both reserves will offer and the timeline both will come online. You'll find those reserves aren't as great as you are making them out to be, in terms of barrels per day, especially in the short term.

Even if the rules you are referring to weren't in place we would still be seeing a high price for oil. The only thing bringing it down is conservation and less demand, not a lack of oil.

 

[PLC1]

- Whose fault is it people took out home loans they couldn't pay, didn't understand but signed anyway, or rolled the dice that home prices would continue to rise forever?

Lipmonkey is correct. Both the buyers, who speculated and lost, and the lenders, who were incautious about who they loaned money to, are to blame.

- Whose fault is it that food was converted into fuel, greatly raising food prices?

That one is a little more complicated. According to this:
http://www.politico.com/news/stories/0807/5447.html

at least five politicians are to blame. I'm sure that there are more.

Three Republican presidential candidates, former Massachusetts Gov. Mitt Romney, former New York Mayor Rudy Giuliani and former Arkansas Gov. Mike Huckabee, all visited the Iowa Falls refinery, where they pledged further investment in alternative energy.

Over the past year, two other candidates, Sen. Hillary Rodham Clinton (D-N.Y.) and Sen. John McCain (R-Ariz.), went from strongly opposing the expansion of ethanol to endorsing it.

- Whose fault is it that world demand for oil pushed oil prices up, at the sametime the US had lots of rules about where oil companies can't drill?

Mostly the US drivers who insisted on living 50 miles from work and driving the least fuel efficient vehicles available. Partly the Chinese and Indians for developing their respective economies, but we can hardly blame them for that.

Partly it's the fault of American consumers who forgot the lessons of the early '70s and didn't pursue clean alternative energy back then.

Finally, it's the fault of the forces against drilling: The oil industry that makes more money when the price is high, the speculators who drive up the price, and the environmental movement whenever it opposed drilling.


Or, going back over your past posts, it may be all the fault of the liberals.

Yes, that's it. It's all liberals, liberals, and more liberals! Smash those liberals, everything is their fault!

 

[Libsmasher]

Quote:
Originally Posted by Libsmasher
- Whose fault is it people took out home loans they couldn't pay, didn't understand but signed anyway, or rolled the dice that home prices would continue to rise forever?

I'd say it was predatory lending practices and people living beyond their means.

That phrase "predatory lending" is confusing to me - what does it mean? Pointing a gun at people's heads, and making them sign a bad loan? Do YOU read what you sign? Do YOU wait till you understand what you're signing before you sign it? Are adults to be treated like children by the government? When people take out a loan with an impossible balloon payment, but gamble that the equity will grow enough by the time it comes due that they can refinance - is that "predatory lending"? Or is it better described as "made a stupid bet and lost"?

Quote:
- Whose fault is it that food was converted into fuel, greatly raising food prices?

I'd say it was whoever convinced Americans that ethanol was a good method to reduce our dependence on foreign oil.

And that "whoever" was exactly - who? Hint: it's a political group that starts with "L" and isn't libertarians.

Quote:
- Whose fault is it that world demand for oil pushed oil prices up, at the same time the US had lots of rules about where oil companies can't drill ?

I take it you are referring to the ANWR reserves and off-shore drilling. Take a look at the barrels per day both reserves will offer and the timeline both will come online. You'll find those reserves aren't as great as you are making them out to be, in terms of barrels per day, especially in the short term.

Even if the rules you are referring to weren't in place we would still be seeing a high price for oil. The only thing bringing it down is conservation and less demand, not a lack of oil.

Well, gosh, lessee - if the offshore drilling hadn't been banned in 1981, we'd be running at full production now, wouldn't we? The thrust of my question is HOW WE GOT TO WHERE WE ARE NOW. BUT if we don't start drilling NOW, how much worse off will we be later?

Your claim of a high price for oil is simplistic. Because of the huge US trade defict, caused in large part by imported oil, the dollar is weaker and the dollar-denominated cost of oil correspondingly goes up. By pumping much of our OWN oil, the dollar would strengthen and the world price of oil would go down.

 

[PLC1]

And that "whoever" was exactly - who? Hint: it's a political group that starts with "L" and isn't libertarians.

I gave you a list of five specific individuals. Are they all those evil L word people who aren't Libertarians?

 

[Libsmasher]

I gave you a list of five specific individuals. Are they all those evil L word people who aren't Libertarians?

Thanks for your list of five, but the overall thrust has come from the entire lib establishment.

 

[pocketfullofshells]

Bob Crane...it was all Bob Crane.
( yes of Hogans Heros Fame)

I would say its many people fault.

People for taking loans they cant pay back
Banks for making loans that they should know are to much for them, but wanting the quick buck
Our Culture for breading a mindset of spend spend spend spend spend, you have to have it all or your not cool.
Lending practices that where at best unethical, at worse illegal
Politicians who took the eyes off those making the loans who where suppose to be oversight, but for some pay offs or because they where just wrong, said lets not watch them close anymore...

 

[GenSeneca]

Barney Frank:

In 2003, Frank rejected Bush administration and Congressional Republican efforts for the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis. [25] Under the plan a new agency would have been created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.[26] "These two entities, Fannie Mae and Freddie Mac, are not facing any kind of financial crisis," Frank said. He added, "The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."[27]

McCain, 2005:

Sen. John McCain [R-AZ]: Mr. President, this week Fannie Mae's regulator reported that the company's quarterly reports of profit growth over the past few years were "illusions deliberately and systematically created" by the company's senior management, which resulted in a $10.6 billion accounting scandal.

The Office of Federal Housing Enterprise Oversight's report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae's former chief executive officer, OFHEO's report shows that over half of Mr. Raines' compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.

The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator's examination of the company's accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform.

For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac--known as Government-sponsored entities or GSEs--and the sheer magnitude of these companies and the role they play in the housing market. OFHEO's report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO's report solidifies my view that the GSEs need to be reformed without delay.

I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.

I urge my colleagues to support swift action on this GSE reform legislation.

Enron execs were put on trial, the Freddie and Fanny execs have been granted golden parachutes at taxpayer expense - Thanks to their political contributions.

Enron - 81 Billion dollars
Freddie and Fanny - 631 Billion dollars

All of them cooked the books, all of them deserved to fail miserably, but only one was investigated for crimes while the other two were bailed out... Oddly enough, Enron people went on to work for Bush and did a wonderful job... And now some of the Freddie and Fanny people, up to their eyes in fraud, are now working for Obama...

I'm sure they will do a wonderful job too.

 

[Libsmasher]

Banks for making loans that they should know are to much for them, but wanting the quick buck

Riiiiiiiight - banks make a "quick buck" when the borrower defaults. They've made so many quick bucks - that's why they're collapsing.

Lending practices that where at best unethical, at worse illegal

Nonsense - the collapse was caused by people borrowing money they couldn't repay.

Politicians who took the eyes off those making the loans who where suppose to be oversight, but for some pay offs or because they where just wrong, said lets not watch them close anymore...

This is pure defamation - you are making things up from thin air, and have no proof.

 

[BigRob]

I just want to throw this out there in regards to ethanol expansion. Unless they openly said expand "corn ethanol" then do not think you can say they want to expand turning food into fuel. There are many different types of ethanol, sugar cane, switch grass, etc....

So when someone says they want to expand ethanol. you have to them ask what kind.

 

[Dawkinsrocks]

Of course it isn't the banks fault if they lend to people with bad credit is it?

The banks couldn't possibly be responsible.

There is no onus on them to be responsible considering what happens when they **** it up.

Grow up.

 

[PLC1]

Thanks for your list of five, but the overall thrust has come from the entire lib establishment.

I suppose that if you lump Mitt Romney, Rudy Giuliani . Mike Huckabee, Hillary Clinton and John McCain together as "the lib establishment", then you have a point.

Just what is your definition of "lib" anyway? It seems to cover politicians from a variety of philosophical backgrounds.

 

[foggedinn]

Of course, the whole thing is my fault, but since we're playing the blame others game, we left out the credit reporting agencies.

These bad sub-prime loans were bundled in with AAA rated security instruments. As soon as they were bundled, what should have been junk rated securities suddenly became AAA rated credit instuments. They were then sold on the open market as if they were actually AAA rated securities.

Just remember, although there seems to be plenty of blame to go around, it's really all my fault.

 

[BigRob]

Of course, the whole thing is my fault, but since we're playing the blame others game, we left out the credit reporting agencies.

These bad sub-prime loans were bundled in with AAA rated security instruments. As soon as they were bundled, what should have been junk rated securities suddenly became AAA rated credit instuments. They were then sold on the open market as if they were actually AAA rated securities.

Just remember, although there seems to be plenty of blame to go around, it's really all my fault.

haha

 

[XCALIDEM]

Being in the mortgage industry myself, it's hard to put a finger on someone.

I know that at one point I was surprised at the types of crazy financing that was available and the way some people were being taken advantange.

I know that a lotof this crazyness now is being caused by idiots who don't want to keep making payments because their houses are not worth what they paid for. They bought their house with very minimum investment, or no investment.

You'd be surprise how many people come up to me asking me to encourage them to walk awy from their homes because it's not worth it anymore....

I tell them, Did you pay the bank extra when your house was worth 100 to 200k more? It's ridiculous! the bank who agreed to be the nice guy and let these people borrow thousands of dollars in good faith are getting shafted by all these people.

It's the borrowers fault!!!!