Audio: Mark Levin on the subprime crisis
posted at 3:15 pm on September 21, 2008 by Allahpundit
Via Ace. It’s long, but we’ve had lots of requests for it and you’ve got time on a slow Sunday afternoon. What happens when a policy with good intentions is built on a foundation of bad financial sense? Ask the New York Times, which saw this coming almost 10 years ago. September 30, 1999:
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.”
And now here we are. Click to listen.
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You are, of course, correct.
I originally wrote it as: “Socialism creates more poor people!”, but deleted the “more” because I thought it would be more snappy without it.
I should have stuck to my first instinct. :D
Tuning Spork on September 21, 2008 at 9:08 PM
It’s not Bush’s fault, or specifically the Republicans – although political correctness can probably claim them as a victim, for not put up much opposition to the creation of these stupid “people who are too poor to afford to pay for their mortgage” mortgages.
Remember the “red lining” scares of the ’70s? Cries of prejudice and discrimination in the sales of homes? this was part of what eventually led into the creation of sub-prime mortgage products because – after all – it would be discriminatory to deny someone the opportunity to purchase their own home, for such silly reasons as: Ain’t got no money, and ain’t got no ability to pay.
seanrobins on September 21, 2008 at 9:09 PM
I disagree.
Socialism (tries) rear its ugly head when enough wool is pulled over the eyes of enough targeted Democrat constituents who are foolish enough to buy into the class envy and class warfare game that the Dems are selling.
seanrobins on September 21, 2008 at 9:12 PM
When I had my real estate license I used to try and talk young people into buying less expensive homes they could afford. I would even try to explain the whole concept of building equity to them.
But as a general rule they wanted the most expensive house they could get. They would come to me preapproved with a loan they had gotten through some mortgage broker who might or might not have been honest with them. Often times they did not understand the loans they had gotten. And since many of them were putting no money down and had no equity in the property they were more inclined to bail out when things got tough. They had nothing to lose. They would just walk away.
So it was not all the politicians, individuals played a part in this too. And people just thought it would keep going on.
Not even people like the SEC or the Fed really seemed to realize how bad it was.
Terrye on September 21, 2008 at 9:15 PM
I don’t know IF it was the bankers OR who setups up the loans(i’m not in that business) whoever did those or approves of “Ninja Loans”(No Income, No Job, (and) no Assets)
Come on! What bank would agree to but that risk?(And why LAW would MAKE a bank HAVE to buy that? Any who are the people suckering people into signing these Ninja Loans?)
It’s an Irresponsible thing.
Chakra Hammer on September 21, 2008 at 9:16 PM
seanrobins:
Poor people have been around a lot longer than socialism. I am not a socialist by any means, but it is not the blame for all poverty. Look at history.
Terrye on September 21, 2008 at 9:17 PM
Tuning Spork:
I dealt with a lot of those lenders and no one was making them loan to people. They were advertising cheap money everywhere. They were looking for people to borrow money.
Terrye on September 21, 2008 at 9:18 PM
I don’t know IF it was the bankers OR who setups up the loans(i’m not in that business) whoever did those or approves of “Ninja Loans”(No Income, No Job, (and) no Assets)
Come on! What bank would agree to buy that risk?(And why LAW would MAKE a bank HAVE to buy that? And who are the people suckering these people into signing these Ninja Loans anyhow? They people sucking the people into purchasing Ninja Loans are working off of Commission I bet!)
It’s an Irresponsible thing.
Chakra Hammer on September 21, 2008 at 9:21 PM
Were the lenders working off of commission selling Ninja Loans?
Chakra Hammer on September 21, 2008 at 9:23 PM
I was thinking back to the 18th and 19th centuries, but this past week’s events make riots over wealth seem more than just hypothetical.
In the end voters will vote their pocket books if the economic situation is at all tight. The Obama voters may be foolish from a macro-economic standpoint but may be rational if they perceive that they’ll benefit in the short term directly from one of his socialist policies.
dedalus on September 21, 2008 at 9:26 PM
If So, those lenders should have to GIVE that Commission back..
Thats BS, trying to see how many people they can get suckered into a deal(without any No Income, No Job, (and) no Assets to make a profit.. )
Thats wrong..
Chakra Hammer on September 21, 2008 at 9:26 PM
And the places like Fannie/Freddy picking up the debt/loans KNOWING that the stuff would backed by the government and the taxpayers.. (All of this a scheme of the Democrats)
Ohhhh.. wtf..
Chakra Hammer on September 21, 2008 at 9:33 PM
I stand corrected again, dag nab it.
I remember riding the bus and seeing the signs: “IF YOU HAVE 6 MONTHS OF RENT RECEIPTS, YOU CAN OWN A HOME!”.
I’m a bit touchy on this subject just because I bought an “efficiency condo” for $60,000 in 1987 — the height of the market then. I had to quit it after 8 years because my chosen trade –offset printing — didn’t lend itself well to the computer era. (I failed when CALDOR failed.)
Chakra,
What’s a “ninja loan”?
Tuning Spork on September 21, 2008 at 9:36 PM
Upon refreshing, I see what a “ninja loan” is.
Chakra, ye really gotta stop talking to yerself….
Tuning Spork on September 21, 2008 at 9:41 PM
He spelled it out in his post: No Income, No Job or Assets (NINJA).
rmgraha on September 21, 2008 at 9:41 PM
Democrats in cahoots with Al-Qaeda..
trying to destroy the economy.. :{
Jamie Gorelick has doe it again.
Jamie Gorelick
Even though she had no previous training nor experience in finance, Gorelick was appointed Vice Chairman of FNMA(Fannie Mae) from 1997 to 2003. She served alongside former Clinton Administration official Franklin Raines, and earned over $26,000,000($26 Million Dollars) during her six years there. During that period, FNMA(Fannie Mae) developed a $10 billion accounting scandal. One example of falsified financial transactions that helped the company meet earnings targets for 1998, a “manipulation” that triggered multimillion-dollar bonuses for top executives. Gorelick received $779,625. On March 25, 2002, Business Week interviewed Gorelick about the health of “Fanny Mae”. Gorelick is quoted as saying, “We believe we are managed safely. We are very pleased that Moody’s gave us an A-minus in the area of bank financial strength — without a reference to the government in any way. Fannie Mae is among the handful of top-quality institutions.” One year later, Government Regulators “accused Fannie Mae of improper accounting to the tune of $9 billion in unrecorded losses”. Not long after that, the American taxpayer was forced to foot the bill of a failing Fannie Mae.
——————
Is Jamie Gorelick going to get to Walk AGAIN?
She helped to cause 9-11 that killed lots of US Citizens and hurt our economy.
Now, she was part of the problem and was in a position that she had NO BUSINESS of being in, and is a corrupt as hell..
Where are the Grand Juries?
Chakra Hammer on September 21, 2008 at 9:42 PM
Chakra:
Yes, a lot of them were getting commissions.
Terrye on September 21, 2008 at 9:48 PM
Does anyone have access to a transcript of this Sept 19 show? This is some powerful stuff, if I weren’t in bed with the flu I might type it up myself.
cannonball on September 21, 2008 at 9:49 PM
Well then see… they were feeding the the beast!
They were supplying the crack addict!
Chakra Hammer on September 21, 2008 at 9:51 PM
Tuning:
My ex put himself through school doing offset printing part time. And he was a stripper. That is what they called it, but the real job title was lithographer. Yes, printing really change didn’t it?
Terrye on September 21, 2008 at 9:53 PM
Chakra:
It just fed on itself. I think that is why it is so hard to assign blame, there is so much of it to go around.
Terrye on September 21, 2008 at 9:54 PM
Was it because of commisions? If the company was eagerly pushing it’s reps to make more loans, then what could be the reason?
Perhaps it was to try to offset to risks of their existing loans. Perhaps the lenders figured that if they had enough good borrowers — at least enough to offset the occassional bad borrower, anyway — that they’d still have a chance of making a go of it.
This is like check kiting. Except that it’s done by people whose own money is safe, and on behalf of people whose money is in their clueless, seemingly fraughtless, scheming little hands.
I’ve run out of patience with these frauds. These “politicians”. These creeps who are so self-absorbed that they deign to run for office in the first place!
I’m gonna grab a beer. Back in a minute…
Tuning Spork on September 21, 2008 at 9:54 PM
Well.. who had oversight of the banks the last couple of years?
you had people, people willing and pushing crack on to crackheads, and willingly selling alcohol to alcoholics, you had people pushing poor people with gambling problems in a casino..
Seems like a shady business to me..
those NINJA loans may sound like a compassionate thing, but that is the most irresponsible thing ever, and I’M POOR..!
(I know, A Republican admitting to being poor.)
yep, there are some of us.
Chakra Hammer on September 21, 2008 at 10:08 PM
NINJA loans came with higher rates and the mortgage broker could earn a higher yield spread premium on them (basically YSP is the broker’s commission, but it is based on the interest rate the broker is able to sell the borrower.) A lot of brokers marketed NINJA loans in poorer communities and folks there often never even asked if they could qualify for a regular full-doc loan with a lower rate. If it was an adjustable rate loan the borrower could quickly get in over his head and default. But the broker makes the commisison at cllsing regardless of whether the borrower pays the loan at all. This was as huge breakdown in the system – you had a sales force being paid to sell higher rates and riskeir loans with no responsibility for the performance of the loan.
There was also a ton of fraud in the broker business; even on the full-doc loans a lot of those “docs” were faked by the brokers.
rockmom on September 21, 2008 at 10:09 PM
Flutejpl,
Can’t get you that exact quote because it didn’t come from a printed source either hardcopy or online. Came purely from a phonecall I was engaged in with my financial advisor…who is the Director of Investment Planning at a very large and well known financial advisory (but NOT an investment bank and NOT connected to ANY of the big players) whose boss, the founder of the firm, has sufficient connections to hear about what happened in that meeting.
So, the rest of you may take what I’ve written with a grain of salt. This advisor has never, ever steered me wrong, and I’m aware of his boss’ connections. I trust what he told me to be the straight dope.
And it scared the hell out of me.
Because he was quoting money market and commercial paper market data at specific times on Thursday.
If Levin’s arguing the bailout is now necessary…unfortunately so, but is railing against those who caused it, well, then I’m still a loyal listener.
Shirotayama on September 21, 2008 at 10:46 PM
Exactly what I posted 47 hours ago.
I’m making up audio CDs of his show and passing them out to as many as possible… we’ll never hear the truth via the leftist news media.
electric-rascal on September 21, 2008 at 10:51 PM
Rockmom,
Indeed. PLENTY of fraud in the financial biz to go around. The fault lay in several places:
-Clinton’s political push to make sure minorities got into home ownership…whether they were a good credit risk based on the numbers or not. Reference the Neil Boortz article I posted a link to earlier.
-Clinton signing Gramm’s push to repeal Glass-Steagall
-A totally broken, utterly siloed U.S. regulatory structure where needed communication didn’t take place between regulators and in fact, may have been prohibited. Reference the link I posted earlier to Paulson’s March 2008 proposals for financial industry regulatory reform. SIX MONTHS AGO.
-Business conduct STUNK: One of Paulson’s proposals is a business conduct regulator over the entire financial industry, recognizing that formerly split market sectors (banking, securities, futures, insurance, mortgage lending) have long since converged and are utterly interconnected now (again, due to Glass-Steagall going away…and due to needing to compete with Euro and Asian capital markets’ regulation structures to stay competitive).
There is PLENTY of blame to go around. But there were also people sounding the alarms for a number of years who got ignored, and they saw this coming.
All of us better pray the commercial paper and cash fund markets stay afloat. If they collapse, as almost happened last Thursday, we face severe national economic pain.
Shirotayama on September 21, 2008 at 10:56 PM
Rockmom,
I forgot to add another link. This book directly addresses some of the fraud issues that have gone on, and how to get around them.
http://www.amazon.com/exec/obidos/ASIN/1416543112/bookstorenow16-20
Shirotayama on September 21, 2008 at 10:57 PM
BTW, I totally agree with Levin:
Socialism DOES create poor people. And poor medical care. And thus unhealthy people who can’t get treatment.
Socialism creates nothing but utter mediocrity. So does the political correctness the Left has used to dumb down our schools, make it easier for incompetents to be employed based solely on their heritage (an extreme liberal dem manager at my job hired someone solely based on her wanting another of her own race to be hired…and although the guy’s a nice guy, by what I’ve heard from others who work with him directly apparently has no freakin’ clue what he’s doing), etc, etc. All to serve the ideal that everyTHING has to be 100% fair to everyBODY.
Except life’s not fair and never fully can be. Rather than push people to excel, socialism pushes people to total mediocrity.
Shirotayama on September 21, 2008 at 11:03 PM
Lending money to a “high risk” borrower at “higher rates” doesn’t even make sense.
The higher the rate, the more likely the chance of default.
Liberals are stupid.
Well-meaning but stupid.
god, I still hate politicians….
Tuning Spork on September 21, 2008 at 11:27 PM
Maxx on September 21, 2008 at 11:28 PM
No where else for me to vent this, but this is close enough.
I just read that McCain suggested Andrew Cuomo, as a replacement for Christopher Cox, for head of the Securities and Exchange Commission, in a major interview.
WHAT THE HELL IS WRONG WITH MCCAIN! Every time i start to feel good about him he pulls stupid stunts like this. Doesn’t he realize that Cuomo is the A$$CLOWN who caused the whole problem to start with? How freaking stupid do you have to be to put that guy forward to look into all this!!!!!
America1st on September 22, 2008 at 12:18 AM
Andrew Cuomo???
Yeah, that’s enough to give ME pause, too.
McCain BLEW IT the other day when he all too quickly demanded that Chris Cox be fired immediately.
It was a knee-jerk reaction that should have been thought out more carefully first before being said.
And Obama took the gift and walked all over McCain, to Obama’s poll result advantage.
McCain needs to think before he speaks, turn to his experts, and ask “I want to say this…what are the repercussions?” before opening his mouth.
Otherwise, get ready for America’s first Marxist administration.
Shirotayama on September 22, 2008 at 6:30 AM
My thanks to Hot Air for posting links to The Great One, Mark Levin. I first heard of him a year ago through Hot Air and I’ve listened to his show every night since then.
He is our modern day Patrick Henry. There is no one like him.
“He’s a true, genuine friend and a brilliant, brilliant conservative. He’s probably the smartest living, breathing conservative I know, other than me.” – Rush Limbaugh
Five star credible source.
rishika on September 22, 2008 at 9:01 AM
McCain has also come out in support of setting income limits on executives – just lost my vote – again.
Can.Utility on September 22, 2008 at 9:28 AM
So are you voting for Obama, or not voting at all? Both are the same: a vote for hurting America.
Rethink your position man, this isn’t a single issue election.
cannonball on September 22, 2008 at 12:11 PM
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