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merrill

 2008 financial crisis was the proliferation of unregulated derivatives in the last decade. THANKS RECKLESS CONSERVATIVES. Role of Derivatives in Financial Crisis. Deriv owners could no longer afford payments between 2004 and 2006. WHAT COLLATERAL?

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INTERNATIONAL BUSINESS

Bush drive for home ownership fueled housing bubble

WASHINGTON — "We can put light where there's darkness, and hope where there's despondency in this country. And part of it is working together as a nation to encourage folks to own their own home."

- President George W. Bush, Oct. 15, 2002

The global financial system was teetering on the edge of collapse when Bush and his economics team huddled in the Roosevelt Room of the White House for a briefing that, in the words of one participant, "scared the hell out of everybody."

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46 minutes ago, dontlooknow said:

2004 we had a republican house and Senate they could of fixed it if they wanted too. Just like the wall. 

Im guessing you dont know how the senate works, time to refresh the civic course you missed in High school.

 

nothing gets fixed until both parties come together, the founders set it up that you  need 60 votes in congress , in 2004 Republicans had 53 seats , the Democrats had 45 and there was 2 independents that sides with the democrats.

 

Where do you think the 7 votes were going to come from to get the bill passed?

 

 

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51 minutes ago, dontlooknow said:

INTERNATIONAL BUSINESS

Bush drive for home ownership fueled housing bubble

WASHINGTON — "We can put light where there's darkness, and hope where there's despondency in this country. And part of it is working together as a nation to encourage folks to own their own home."

- President George W. Bush, Oct. 15, 2002

The global financial system was teetering on the edge of collapse when Bush and his economics team huddled in the Roosevelt Room of the White House for a briefing that, in the words of one participant, "scared the hell out of everybody."

That’s obviously false and plenty of documented evidence the Bush adminstration spent 7 years warning democrats about the impending housing crisis and they did nothing. 

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republicans know exactly what they're doing...they just hope the result and collaspe of America from their Failed Policies happens on a Democrats watch

 

 

bush wrote a paper in College against Americas social programs....the gop has always wanted to destroy them, all their deregulation and spending is accomplishing just that!

 

Iraq was another way to spend big 

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On 1/13/2019 at 5:55 PM, merrill said:

The real cause of the 2008 financial crisis was the proliferation of unregulated derivatives in the last decade. These are complicated financial products that derive their value by reference to an underlying asset or index. A good example of a derivative is a mortgage-backed security.

 

How Derivatives Work 

Most derivatives start with a real asset. Here's how they work, using a mortgage-backed security as an example

=== A bank lends money to a homebuyer.

 

=== The bank then sells the mortgage to Fannie Mae. This gives the bank more funds to make new loans.

 

=== Fannie Mae resells the mortgage in a package of other mortgages on the secondary market. This is a mortgage-backed security, which has a value that is derived by the value of the mortgages in the bundle.

 

=== Often the MBS is bought by a hedge fund, which then slices out a portion of the MBS, let's say the second and third years of the interest-only loans, which is riskier since it is farther out, but also provides a higher interest payment. It uses sophisticated computer programs to figure out all this complexity. It then combines it with similar risk levels of other MBS and resells just that portion, called a tranche, to other hedge funds.

 
=== All goes well until housing prices decline or interest rates reset and the mortgages start to default. 
 

Role of Derivatives in Financial Crisis 

That's what happened between 2004 and 2006 when the Federal Reserve started raising the fed funds rate. Many of the borrowers had interest-only loans, which are a type of adjustable-rate mortgage. Unlike a conventional loan, the interest rates rise along with the fed funds rate. When the Fed started raising rates, these mortgage-holders found they could no longer afford the payments. This happened at the same time that the interest rates reset, usually after three years. 

 

As interest rates rose, demand for housing fell, and so did home prices. These mortgage-holders found they couldn't make the payments or sell the house, so they defaulted. For more, see Subprime Mortgage Crisis Timeline.

 

Most important, some parts of the MBS were worthless, but no one could figure out which parts. Since no one really understood what was in the MBS, no one knew what the true value of the MBS actually was. This uncertainty led to a shut-down of the secondary market, which now meant that the banks and hedge funds had lots of derivatives that were both declining in value and that they couldn't sell. 

 

Soon, banks stopped lending to each other altogether, because they were afraid of receiving more defaulting derivatives as collateral. When this happened, they started hoarding cash to pay for their day-to-day operations. For more, see 2007 financial crisis timeline.

 

That is what prompted the bank bailout bill. It was originally designed to get these derivatives off of the books of banks so they can start making loans again.

 

It is not just mortgages that provide the underlying value for derivatives. Other types of loans and assets can, too. For example, if the underlying value is corporate debt, credit card debt or auto loans, then the derivative is called a collateralized debt obligations. A type of CDO is asset-backed commercial paper, which is debt that is due within a year. If it is insurance for debt, the derivative is called a credit default swap.

 

Not only is this market extremely complicated and difficult to value, it is unregulated by the Securities and Exchange Commission. That means that there are no rules or oversights to help instill trust in the market participants. When one went bankrupt, like Lehman Brothers did, it started a panic among hedge funds and banks that the world's governments are still trying to fully resolve.

 

 

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On 1/14/2019 at 5:29 AM, benson13 said:

republicans know exactly what they're doing...they just hope the result and collaspe of America from their Failed Policies happens on a Democrats watch

 

 

bush wrote a paper in College against Americas social programs....the gop has always wanted to destroy them, all their deregulation and spending is accomplishing just that!

 

Iraq was another way to spend big 

 

bump

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On 1/13/2019 at 4:44 PM, chairmanOFTB said:

Sorry OP, you don't know what youre talking about, you're just parroting left wing propaganda

 

Derivatives have been around for centuries, you can trace them to the middle ages.

Modern derivatives took over after the computer age and after Fischer Black and Myron Scholes published their paper " The Pricing of Options and Corporate Liabilities" in which go Myron Scholes a nobel prize in economics, Black died two years earlier and they dont award dead people the award, anyways my point is because of these two guys and Bob merton came up with the Black–Scholes–Merton model in which Derivatives trade by, its funny since the 70's Derivatives have been traded no regulations and all of a sudden in 2008 they caused major destruction?


can you libs explain that?

 

Or maybe the crash of 2008 was caused by numerous parties .

 

you cant just blame derivatives as they still exist today 


This guy is very ignorant.

 

He can't tell the difference between saying that having any derivatives at all always causes a crash like 2008, and having any ability to learn how the abuse of derivatives played a key role in that crash.

 

His argument is like denying the atomic bombs dropped on Japan killed anyone. "You're just parroting left wing propaganda. There have always been atoms and there were no big explosions destroying cities from atoms for thousands of years".


There are books explaining the causes of the crash and the role of derivatives. He has not read them and there's not much point for him to do so.

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On 1/13/2019 at 10:12 PM, chairmanOFTB said:

Im guessing you dont know how the senate works, time to refresh the civic course you missed in High school.

 

nothing gets fixed until both parties come together, the founders set it up that you  need 60 votes in congress , in 2004 Republicans had 53 seats , the Democrats had 45 and there was 2 independents that sides with the democrats.

 

Where do you think the 7 votes were going to come from to get the bill passed?

 

 

I k ow exactly how the senate works. 

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5 minutes ago, dontlooknow said:

I k ow exactly how the senate works. 

 

As I posted above, that poster is very ignorant. He made errors in his 'correction' of you as well, in his claim about the founding fathers requiring 60 votes in the Senate.

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6 hours ago, Craig234 said:


This guy is very ignorant.

 

He can't tell the difference between saying that having any derivatives at all always causes a crash like 2008, and having any ability to learn how the abuse of derivatives played a key role in that crash.

 

His argument is like denying the atomic bombs dropped on Japan killed anyone. "You're just parroting left wing propaganda. There have always been atoms and there were no big explosions destroying cities from atoms for thousands of years".


There are books explaining the causes of the crash and the role of derivatives. He has not read them and there's not much point for him to do so.

 

Sorry, you don’t win the Ginsu knives, the year’s supply of Turtle Wax or even a copy of our home game.  Your assessment of derivatives  is ridiculously disconnected from reality.  No one with even the most tenuous grasp of basic economics – we’re talking a week of high school level instruction – would make the ridiculous assertion that (????}

 

Arguing like denying the atomic bomb dropped on Japan killed anyone ROFL, what a stupid compassion 

seriously but thanks for the laugh Craig.

 

Take an econ 101 course first then lets talk.

 

dropping the atomic bomb on japan haaaaaaaaaa too funny.

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6 hours ago, Craig234 said:

 

As I posted above, that poster is very ignorant. He made errors in his 'correction' of you as well, in his claim about the founding fathers requiring 60 votes in the Senate.

 

Im pretty sure Ive never posted that, but Im sure you can check, I know the 60 vote rule was adopted by the senators in the 94th congress, (Democrat senators)

the founders insisted the senate in the majority had to have some votes from the minority party.

 

But thanks for playing Craig.

 

 

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19 minutes ago, chairmanOFTB said:

 

Im pretty sure Ive never posted that, but Im sure you can check, I know the 60 vote rule was adopted by the senators in the 94th congress, (Democrat senators)

the founders insisted the senate in the majority had to have some votes from the minority party.

 

But thanks for playing Craig.

 

Here's the ignorant 'chairman' posting to 'correct' dontlooknow:

"Im guessing you dont know how the senate works, time to refresh the civic course you missed in High school.

 

nothing gets fixed until both parties come together, the founders set it up that you  need 60 votes in congress ..."

 

I commented:

"As I posted above, that poster is very ignorant. He made errors in his 'correction' of you as well, in his claim about the founding fathers requiring 60 votes in the Senate."

 

Hours after making the statement, he responded above, denying he'd made the statement.

 

Instead of admitting his error, he doubled down and moved the goalposts, making another false statement about the founding fathers, this time claiming they required 'minority party' votes to pass any legislation. (He also can't spell "Democratic".) Not that he'll read, but here's an interesting article about the founding fathers on the issue.

 

https://prospect.org/article/did-founding-fathers-screw

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1 minute ago, Craig234 said:

 

Here's the ignorant 'chairman' posting to 'correct' dontlooknow:

"Im guessing you dont know how the senate works, time to refresh the civic course you missed in High school.

 

nothing gets fixed until both parties come together, the founders set it up that you  need 60 votes in congress ..."

 

I commented:

"As I posted above, that poster is very ignorant. He made errors in his 'correction' of you as well, in his claim about the founding fathers requiring 60 votes in the Senate."

 

Hours after making the statement, he responded above, denying he'd made the statement.

 

Instead of admitting his error, he doubled down and moved the goalposts, making another false statement about the founding fathers, this time claiming they required 'minority party' votes to pass any legislation. (He also can't spell "Democratic".) Not that he'll read, but here's an interesting article about the founding fathers on the issue.

 

https://prospect.org/article/did-founding-fathers-screw

and I misspoke on that part, and corrected myself 

 

next.

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On 1/13/2019 at 6:55 PM, merrill said:

2008 financial crisis was the proliferation of unregulated derivatives in the last decade. THANKS RECKLESS CONSERVATIVES. Role of Derivatives in Financial Crisis. Deriv owners could no longer afford payments between 2004 and 2006. WHAT COLLATERAL?

 

 

On 1/13/2019 at 7:07 PM, peter45 said:

You don't really expect "conservatives" to understand much of that, do you?

 

 

That's why I (typically) provide them the videos.

I think it's the written-word that usually confuses them, the most.

 

January 3, 2010

See: 4:45 thru 12:00

 

 

 

 

 

 

Quote

 

Money, Power And Wall $treet

April 24, 2012

 

 

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1 hour ago, chairmanOFTB said:

and I misspoke on that part, and corrected myself 

 

next.

 

So, he misstates that he corrected himself when I corrected him, he ignores the NEW error he made, and doesn't read the article supplied. Typical ignoramus.


Next.

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20 minutes ago, Craig234 said:

 

So, he misstates that he corrected himself when I corrected him, he ignores the NEW error he made, and doesn't read the article supplied. Typical ignoramus.


Next.

 

blah blah blah, Craig do you think you're low opinion of me offends me boy

 

you have not corrected me on a damn thing comrade, to borrow that classic line from that movie Top Gun, your ego is writing checks your body cant cash.

 

 

 

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1 hour ago, chairmanOFTB said:

and I misspoke on that part, and corrected myself 

 

next.

 

 

40 minutes ago, Craig234 said:

So, he misstates that he corrected himself when I corrected him, he ignores the NEW error he made, and doesn't read the article supplied. Typical ignoramus.


Next.

 

 

17 minutes ago, chairmanOFTB said:

blah blah blah, Craig do you think you're low opinion of me offends me boy

 

you have not corrected me on a damn thing comrade, to borrow that classic line from that movie Top Gun, your ego is writing checks your body cant cash.

 

 

housewife1950.jpg

"FIGHT, NICE, KIDS!!"

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bye bye craig

 

thanks for the ignore too, you're a waste of time and energy

 

since I dont put anyone on Ignore , I just physically ignore morons 

 

 

 

 

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