WaPo: Obama pushes banks to make home loans to people with weaker credit

[JBond]

Or it might mean you're a perfectly respectable first time home buyer without extensive credit history.

You know, like it said in the article that none of you fucking read.

I read that and several other articles on the topic. I also understand the definition of insanity. Obama is doubling down on stupid. It's what he's best at.

 

[Dodger12]

Right now the banks are sitting on money and lending to noone. They've been fed money and liquidity by the federal government and refuse to pass that on to the electorate. As the article (which I'm sure noone read) stated, lending to people with credit scores between 680 and 620 (historically respectable) has dropped 90%. The article also stated they want to make it easier on people who are upside down on their mortgage to refinance at today's lower rates. If they want the economy moving they need to loosen up a bit.

People won't admit it but there's some truth to this. Banks have tightened up and I wonder if the interest rates were 7, 8 or 9 percent if they wouldn't give a loan to these same people that are getting rejected now. Truth is banks don't want to give loans at 3 or 3.5 percent, if not less. Banks used to make money on the interest but now they've found alternate revenue streams where they charge people for checking accounts, the use of debit cards, etc. It's the biggest scam going.....

And another thing on this bad credit debate. Some good, responsible folks have bad credit because they lost their jobs or their businesses took a hit during the down economy. I know some of these folks and it's tough because some have been in business many, many years and have had sterling credit until recently. As it stands now, without banks willing to give loans, most of these folks will have a hard time getting back on their feet. It's a vicious cycle.

 

[ScipioCowboy]

Sadly, the housing market is one of the most artificially manipulated markets in the entire economy. In 2002, while the economy was still recovering from the post-tech boom recession, economist and Leftist folk hero Paul Krugman -- the Keynesian-est Keynesian whoever Keynesian-ed -- wrote an article in which he suggested creating a bubble in the housing market to help the economy recover. That's exactly what the FED and the federal government did.

"To fight this recession the Fed needs…soaring household spending to offset moribund business investment. [So] Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble." -- Paul Krugman

After the bubble popped, leaving us in the malaise we are today, Krugman quickly distanced himself from his 2002 article.

 

[JBond]

Sadly, the housing market is one of the most artificially manipulated markets in the entire economy. In 2002, while the economy was still recovering from the post-tech boom recession, economist and Leftist folk hero Paul Krugman -- the Keynesian-est Keynesian whoever Keynesian-ed -- wrote an article in which he suggested creating a bubble in the housing market to help the economy recover. That's exactly what the FED and the federal government did.

"To fight this recession the Fed needs…soaring household spending to offset moribund business investment. [So] Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble." -- Paul Krugman

After the bubble popped, leaving us in the malaise we are today, Krugman quickly distanced himself from his 2002 article.

if it was not so pathetic.

 

[superpunk]

It would be worthy if it wasn't completely untrue quote-mining bullshit.

Did Krugman say that? Yes, in a NYT column in 2002. The quote is accurate. The following line was:

Judging by Mr. Greenspan's remarkably cheerful recent testimony, he still thinks he can pull that off.

http://www.nytimes.com/2002/08/02/opinion/dubya-s-double-dip.html?src=pm

The 2002 column was about the Fed's difficulties in fighting a recession caused by the NASDAQ bubble bursting, and that since the NASDAQ bubble was unsustainable, that the only way to return to the same level would be another bubble, and that perhaps Alan Greenspan was trying to do just that.

"Greenspan needs to..." was what Greenspan "needed to do" to make his rosy predictions come true, not what he needed to do for the good of the nation of the health of the economy.

The comment by Pimco's Paul MCulley to which Krugman was referring was:

"There is room for the Fed to create a bubble in housing prices, if necessary, to sustain American hedonism. And I think the Fed has the will to do so, even though political correctness would demand that Mr. Greenspan deny any such thing."

http://www.nytimes.com/2005/05/27/opinion/27krugman.html?_r=1

Does that sound like someone saying a housing bubble would be a good idea?

This was two guys (Krugman and McCulley) theorizing, in 2002, that Alan Greenspan intended to replace the internet bubble with a housing bubble to keep the numbers up.

I wish I had predicted in 2002 that Greenspan thought he could get away with creating a housing bubble to replace the NASDAQ bubble. That's an impressive prediction.

But the quote appears on dozens or hundreds of RW web-sites as proof that Paul Krugman called for the creation of a housing bubble in 2002.

And Jonathan Swift called for eating Irish children. He did. I've seen the quotes!

artards.

 

[ScipioCowboy]

Um, that's not even the same article. In your article, which is from 2005, Krugman is quoting McCulley.

In my article, which is from 2002, Krugman is giving a suggestion with a passing reference to McCulley.

Here's the article and the entire quote in context:

http://www.nytimes.com/2002/08/02/o....html?scp=4&sq=krugman mcculley bubble&st=cse

Dubya's Double Dip?
By PAUL KRUGMAN
Published: August 02, 2002

The basic point is that the recession of 2001 wasn't a typical postwar slump, brought on when an inflation-fighting Fed raises interest rates and easily ended by a snapback in housing and consumer spending when the Fed brings rates back down again. This was a prewar-style recession, a morning after brought on by irrational exuberance. To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.

In the 2002 article, Krugman quotes McCulley as stating what would be required to create a housing bubble. You'll notice there's no reference to "American hedonism" in the 2002 article.

I wonder why that is...

Not really. It's no wonder at all why Krugman changed his tune years later.

 

[superpunk]

No tune was changed. You're interpreting a prediction as a suggestion.

 

[jeebus]

Or it might mean you're a perfectly respectable first time home buyer without extensive credit history.

You know, like it said in the article that none of you fucking read.

Never been able to afford a credit card or a $3,000 car, no problem I am sure you can manage the payments on a $100,000 house and maintain it.

 

[superpunk]

Never been able to afford a credit card or a $3,000 car, no problem I am sure you can manage the payments on a $100,000 house and maintain it.

Can you come up with more overly simplistic bullshit examples that have no bearing on the thread topic?

 

[ScipioCowboy]

No tune was changed. You're interpreting a prediction as a suggestion.

A prediction would be, "I think the Fed will do such-and-such."

That's not what Krugman said...

"The basic point is that the recession of 2001 wasn't a typical postwar slump, brought on when an inflation-fighting Fed raises interest rates and easily ended by a snapback in housing and consumer spending when the Fed brings rates back down again. This was a prewar-style recession, a morning after brought on by irrational exuberance. To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble."

Saying what the FED "needs" to do in order to "fight this recession" isn't a prediction. They're his words, and he can't run from them.

 

[Midswat]

Never been able to afford a credit card or a $3,000 car, no problem I am sure you can manage the payments on a $100,000 house and maintain it.

Ridiculous

 

[superpunk]

A prediction would be, "I think the Fed will do such-and-such."

That's not what Krugman said...

"The basic point is that the recession of 2001 wasn't a typical postwar slump, brought on when an inflation-fighting Fed raises interest rates and easily ended by a snapback in housing and consumer spending when the Fed brings rates back down again. This was a prewar-style recession, a morning after brought on by irrational exuberance. To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble."

Saying what the FED "needs" to do in order to "fight this recession" isn't a prediction. They're his words, and he can't run from them.

you forgot how to english, son. Saying what might be needed to avoid something, or what Greenspan and the govt. might need to sell their idea, is not the same as making a recommendation. For instance I can say that in order to converse intelligently with me, most of our new renegade refugees need to take some courses on critical thinking and logical fallacies - but that is not the same thing as recommending they do it. In fact I'd prefer they don't, it would make it much less fun slapping them around.

You also in your quote mining, ignore the rest of the fucking article where Krugman went into further detail, with a little derision tossed Greenspan's way for good measure.

Judging by Mr. Greenspan's remarkably cheerful recent testimony, he still thinks he can pull that off. But the Fed chairman's crystal ball has been cloudy lately; remember how he urged Congress to cut taxes to head off the risk of excessive budget surpluses? And a sober look at recent data is not encouraging.

On the surface, the sharp drop in the economy's growth, from 5 percent in the first quarter to 1 percent in the second, is disheartening. Under the surface, it's quite a lot worse. Even in the first quarter, investment and consumer spending were sluggish; most of the growth came as businesses stopped running down their inventories. In the second quarter, inventories were the whole story: final demand actually fell. And lately straws in the wind that often give advance warning of changes in official statistics, like mall traffic, have been blowing the wrong way.

Despite the bad news, most commentators, like Mr. Greenspan, remain optimistic. Should you be reassured?

Bear in mind that business forecasters are under enormous pressure to be cheerleaders: ''I must confess to being amazed at the venom my double dip call still elicits,'' Mr. Roach wrote yesterday at cbsmarketwatch.com. We should never forget that Wall Street basically represents the sell side.

Bear in mind also that government officials have a stake in accentuating the positive. The administration needs a recovery because, with deficits exploding, the only way it can justify that tax cut is by pretending that it was just what the economy needed. Mr. Greenspan needs one to avoid awkward questions about his own role in creating the stock market bubble.

But wishful thinking aside, I just don't understand the grounds for optimism. Who, exactly, is about to start spending a lot more? At this point it's a lot easier to tell a story about how the recovery will stall than about how it will speed up.

Come on son. I don't even know why you introduced Krugman's thing in the first place but please just drop it so I don't have to keep doing this to you. You're one of the only ones I wish would stick around.

 

[ScipioCowboy]

you forgot how to english, son. Saying what might be needed to avoid something, or what Greenspan and the govt. might need to sell their idea, is not the same as making a recommendation. For instance I can say that in order to converse intelligently with me, most of our new renegade refugees need to take some courses on critical thinking and logical fallacies - but that is not the same thing as recommending they do it. In fact I'd prefer they don't, it would make it much less fun slapping them around.

Your example actually makes my point. Saying that "our new renegade refugees need to take a course on critical thinking etc." is not a prediction of any kind -- as you originally claimed Krugman's statements were. In fact, you're providing these hypothetical refugees a strategy--however ill-conceived it may be--to reach a certain desired outcome (i.e. conversing intelligently with you).

This is exactly what Krugman did. His preferred strategy was housing market manipulation, hence its pertinence to this thread and my claim about housing market manipulation.

You also in your quote mining, ignore the rest of the fucking article where Krugman went into further detail, with a little derision tossed Greenspan's way for good measure.

That's not quote mining, homie. I gave the quote in context. Once again, you can't run from his words, and you certainly can't hide behind revisions offered up three years after the fact.

Come on son. I don't even know why you introduced Krugman's thing in the first place but please just drop it so I don't have to keep doing this to you. You're one of the only ones I wish would stick around.

Riiiiiiight...

 

[superpunk]

He never phrased it as a recommendation. Ever. In fact, he mocked and questioned the viability of that course in THE EXACT SAME ARTICLE as I hi-lited. And he outlined the issues with the housing bubble continually over the next few years. Trying to shoehorn this quote-mined BS into your world view requires not only ignoring what he wrote in the same fucking article you've been quote-mining from all along, but also his body of work over the next few years.

It's a terrible idea, and you've been caught in it, so you can either drop it or continue looking silly, I guess. No objective person can read that article, particularly this paragraph

Bear in mind also that government officials have a stake in accentuating the positive. The administration needs a recovery because, with deficits exploding, the only way it can justify that tax cut is by pretending that it was just what the economy needed. Mr. Greenspan needs one to avoid awkward questions about his own role in creating the stock market bubble.

But wishful thinking aside, I just don't understand the grounds for optimism. Who, exactly, is about to start spending a lot more? At this point it's a lot easier to tell a story about how the recovery will stall than about how it will speed up.

And think he is describing a possible housing bubble with anything other than pessimism. it certainly isn't advocacy. Get real.

 

[ScipioCowboy]

You completely misread those last two paragraphs you quoted, homie.

You see, Krugman is a Keynesian. As such, he believes that most economic downturns can be reduced to a lack of aggregate demand, ie consumers aren't spending enough. Keynesians propose two primary remedies for this:

1) The government runs deficits in order to supplant consumer spending.

2) The FED lowers interest rates to encourage consumer lending and investment.

However, as Krugman notes in the last two paragraphs, the government was all ready running large deficits, and they weren't stimulating the economy. To make matters worse, interest rates were already low from a historic standpoint, and they weren't having a stimulative affect either, hence the reason Krugman criticizes Alan Greenspan in the article.

This is why Krugman is bearish. It has nothing to do with the housing bubble. It's because both Keynesian stimuli have failed and now he's explaining the need (<---his word) for a housing bubble. That's the point of those last two paragraphs--to further lay the Keynesian justification for a housing bubble.

An understanding of English is nice. But a rudimentary understanding of economics would've helped you as well, homie

 

[superpunk]

Lmao you literally cannot read what is right in front of you and had to resort to some keynesian bullshit to justify how wrong you are.

The last two paragraphs are about the governments NEED to create a boom to justify their tax cuts, otherwise it might seem like they weren't working. (they weren't and aren't). It is in no way a recommendation, as he makes abundantly clear by saying noone has money to spend so where would this boom come from?

Learn to read ffs.

 

[ScipioCowboy]

Actually, I mentioned that he was a disciple of Keynes when I first brought him up and it's consistently been part of the conversation.

But, sure, homie, you keep thinking everyone else has the reading comprehension problem.

 

[superpunk]

Not everyone else. its just you that refuses to read what's right in front of you.

 

[ScipioCowboy]

Riiiiiiiiiight......

 

[ThaBigP]

you forgot how to english, son. Saying what might be needed to avoid something, or what Greenspan and the govt. might need to sell their idea, is not the same as making a recommendation. For instance I can say that in order to converse intelligently with me, most of our new renegade refugees need to take some courses on critical thinking and logical fallacies - but that is not the same thing as recommending they do it. In fact I'd prefer they don't, it would make it much less fun slapping them around.

You also in your quote mining, ignore the rest of the fucking article where Krugman went into further detail, with a little derision tossed Greenspan's way for good measure.



Come on son. I don't even know why you introduced Krugman's thing in the first place but please just drop it so I don't have to keep doing this to you. You're one of the only ones I wish would stick around.

How you english?

recommend

Definition

to suggest that someone or something would be good or suitable for a particular job or purpose, or to suggest that a particular action should be done