Gary Johnson

[marshallnoise]

No, subprime lending was not mandated. You're wholly unqualified to speak about this issue because you continually prove that you have no clue what you are talking about.

Community Reinvestment Act. Eat your words asshat.

Edit: Since I know you will deny it. https://en.wikipedia.org/wiki/Commun...investment_Act

[flyboyx]

we are getting out of hand here guys. no problem disagreeing but stop with the name calling.

my impression of the candidate in this thread is that he is a dope smoking loony.

that said, he is probably better than the other two choices.


and yes.....sub prime lending came from the clinton administration. it was designed so poor minorities could afford their own home. they just forgot to consider that generally, most people that come from that background are there because they are stupid. unfortunately, it was bush jr that caught the flack for it because it started going to hell during his tenure.

[mrsleeve]

we are getting out of hand here guys. no problem disagreeing but stop with the name calling.

my impression of the candidate in this thread is that he is a dope smoking loony.

that said, he is probably better than the other two choices.


and yes.....sub prime lending came from the clinton administration. it was designed so poor minorities could afford their own home. they just forgot to consider that generally, most people that come from that background are there because they are stupid. unfortunately, it was bush jr that caught the flack for it because it started going to hell during his tenure.

I am quoting this because this what I was going to say.... Other than the fact I like gary, though some of his more recent positions are tempering that some

[Vincent Brick]

I liked Gary until I looked deeper into him and his agenda of privatization. And sorry, but if you are running for president right now you better be up on your knowledge of the current state of middle east conflicts. I used to regularly vote for Libertarian candidates until Tea Party rednecks came about and steered the party in a more socially conservative direction than it formerly held.

The bipartisan duopoly needs to have their control of televised debates removed so that both the Libertarian and Green Parties, and anyone else, can get their candidates out there. That shit is fucked up and Johnson and Stein are both getting hosed just like they did last election cycle, except this time they are both polling even higher.

I'd take Johnson over Trump any day, but then again I would prefer a ham sandwich as president over Trump.

[BraveUlysses]

we are getting out of hand here guys. no problem disagreeing but stop with the name calling.

my impression of the candidate in this thread is that he is a dope smoking loony.

that said, he is probably better than the other two choices.

and yes.....sub prime lending came from the clinton administration. it was designed so poor minorities could afford their own home. they just forgot to consider that generally, most people that come from that background are there because they are stupid. unfortunately, it was bush jr that caught the flack for it because it started going to hell during his tenure.

Subprime lending wasn't being done because of the CRA.

The banks wanted to continue selling high numbers of loans and mortgage securities, but at some point you will run out of applicants with excellent credit. Instead of slowing their sales of mortgages, the banks continued to sell loans qualified persons (in lower and lower quantities) and more loans to less qualified applicants, package them up as a mortgage security and used the credit agencies to put false credit ratings on the securities and continue to sell them as excellent investments but a higher and higher percentage of those securities contained toxic loans than in years past.

As foreclosures began to continue to greatly increase, this led to the eventual collapse of several large financial institutions because they were over-leveraged.

from the Financial Crisis Inquiry Commission conclusions:

In this report, we detail the events of the crisis. But a simple summary, as we see it, is useful at the outset. While the vulnerabilities that created the potential for crisis were years in the making, it was the collapse of the housing bubble—fueled by low interest rates, easy and available credit, scant regulation, and toxic mortgages—that was the spark that ignited a string of events, which led to a full-blown crisis in the fall of 2008. Trillions of dollars in risky mortgages had become embedded throughout the financial system, as mortgage-related securities were packaged, repackaged, and sold to investors around the world. When the bubble burst, hundreds of billions of dollars in losses in mortgages and mortgage-related securities shook markets as well as financial institutions that had significant exposures to those mortgages and had borrowed heavily against them. This happened not just in the United States but around the world. The losses were magnified by derivatives such as synthetic securities.

We conclude this financial crisis was avoidable. The crisis was the result of human action and inaction, not of Mother Nature or computer models gone haywire. The captains of finance and the public stewards of our financial system ignored warnings and failed to question, understand, and manage evolving risks within a system essential to the well-being of the American public. Theirs was a big miss, not a stumble.

While the business cycle cannot be repealed, a crisis of this magnitude need not have occurred. To paraphrase Shakespeare, the fault lies not in the stars, but in us.

The prime example is the Federal Reserve’s pivotal failure to stem the flow of toxic mortgages, which it could have done by setting prudent mortgage-lending standards. The Federal Reserve was the one entity empowered to do so and it did not. The record of our examination is replete with evidence of other failures: financial institutions made, bought, and sold mortgage securities they never examined, did not care to examine, or knew to be defective; firms depended on tens of billions of dollars of borrowing that had to be renewed each and every night, secured by subprime mortgage securities; and major firms and investors blindly relied on credit rating agencies as their arbiters of risk. What else could one expect on a highway where there were neither speed limits nor neatly painted lines?

We conclude widespread failures in financial regulation and supervision proved devastating to the stability of the nation’s financial markets. The sentries were not at their posts, in no small part due to the widely accepted faith in the self-correcting nature of the markets and the ability of financial institutions to effectively police themselves. More than 30 years of deregulation and reliance on self-regulation by financial institutions, championed by former Federal Reserve chairman Alan Greenspan and others, supported by successive administrations and Congresses, and actively pushed by the powerful financial industry at every turn, had stripped away key safeguards, which could have helped avoid catastrophe. This approach had opened up gaps in oversight of critical areas with trillions of dollars at risk, such as the shadow banking system and over-the-counter derivatives markets. In addition, the government permitted financial firms to pick their preferred regulators in what became a race to the weakest supervisor.

Yet we do not accept the view that regulators lacked the power to protect the financial system. They had ample power in many arenas and they chose not to use it. To give just three examples: the Securities and Exchange Commission could have required more capital and halted risky practices at the big investment banks. It did not. The Federal Reserve Bank of New York and other regulators could have clamped down on Citigroup’s excesses in the run-up to the crisis. They did not. Policy makers and regulators could have stopped the runaway mortgage securitization train. They did not. In case after case after case, regulators continued to rate the institutions they oversaw as safe and sound even in the face of mounting troubles, often downgrading them just before their collapse. And where regulators lacked authority, they could have sought it. Too often, they lacked the political will—in a political and ideological environment that constrained it—as well as the fortitude to critically challenge the institutions and the entire system they were entrusted to oversee. Changes in the regulatory system occurred in many instances as financial markets evolved. But as the report will show, the financial industry itself played a key role in weakening regulatory constraints on institutions, markets, and products. It did not surprise the Commission that an industry of such wealth and power would exert pressure on policy makers and regulators. From 1999 to 2008, the financial sector expended $2.7 billion in reported federal lobbying expenses; individuals and political action committees in the sector made more than $1 billion in campaign contributions. What troubled us was the extent to which the nation was deprived of the necessary strength and independence of the oversight necessary to safeguard financial stability.

We conclude a combination of excessive borrowing, risky investments, and lack of transparency put the financial system on a collision course with crisis. Clearly, this vulnerability was related to failures of corporate governance and regulation, but it is significant enough by itself to warrant our attention here.

In the years leading up to the crisis, too many financial institutions, as well as too many households, borrowed to the hilt, leaving them vulnerable to financial distress or ruin if the value of their investments declined even modestly. For example, as of 2007, the five major investment banks—Bear Stearns, Goldman Sachs, Lehman Brothers, Merrill Lynch, and Morgan Stanley—were operating with extraordinarily thin capital. By one measure, their leverage ratios were as high as 40 to 1, meaning for every $40 in assets, there was only $1 in capital to cover losses. Less than a 3% drop in asset values could wipe out a firm. To make matters worse, much of their borrowing was short-term, in the overnight market—meaning the borrowing had to be renewed each and every day. For example, at the end of 2007, Bear Stearns had $11.8 billion in equity and $383.6 billion in liabilities and was borrowing as much as $70 billion in the overnight market. It was the equivalent of a small business with $50,000 in equity borrowing $1.6 million, with $296,750 of that due each and every day. One can’t really ask "What were they thinking?" when it seems that too many of them were thinking alike.

And the leverage was often hidden—in derivatives positions, in off-balance-sheet entities, and through "window dressing" of financial reports available to the investing public.

The heavy debt taken on by some financial institutions was exacerbated by the risky assets they were acquiring with that debt. As the mortgage and real estate markets churned out riskier and riskier loans and securities, many financial institutions loaded up on them. By the end of 2007, Lehman had amassed $111 billion in commercial and residential real estate holdings and securities, which was almost twice what it held just two years before, and more than four times its total equity. And again, the risk wasn’t being taken on just by the big financial firms, but by families, too. Nearly one in 10 mortgage borrowers in 2005 and 2006 took out "option ARM" loans, which meant they could choose to make payments so low that their mortgage balances rose every month.

We conclude the government was ill prepared for the crisis, and its inconsistent response added to the uncertainty and panic in the financial markets. As part of our charge, it was appropriate to review government actions taken in response to the developing crisis, not just those policies or actions that preceded it, to determine if any of those responses contributed to or exacerbated the crisis. As our report shows, key policy makers—the Treasury Department, the Federal Reserve Board, and the Federal Reserve Bank of New York—who were best positioned to watch over our markets were ill prepared for the events of 2007 and 2008. Other agencies were also behind the curve. They were hampered because they did not have a clear grasp of the financial system they were charged with overseeing, particularly as it had evolved in the years leading up to the crisis. This was in no small measure due to the lack of transparency in key markets. They thought risk had been diversified when, in fact, it had been concentrated.

In conducting our inquiry, we took a careful look at HUD’s affordable housing goals, as noted above, and the Community Reinvestment Act (CRA). The CRA was enacted in 1977 to combat "redlining" by banks—the practice of denying credit to individuals and businesses in certain neighborhoods without regard to their creditworthiness. The CRA requires banks and savings and loans to lend, invest, and provide services to the communities from which they take deposits, consistent with bank safety and soundness. The Commission concludes the CRA was not a significant factor in subprime lending or the crisis. Many subprime lenders were not subject to the CRA. Research indicates only 6% of high-cost loans—a proxy for subprime loans—had any connection to the law. Loans made by CRA-regulated lenders in the neighborhoods in which they were required to lend were half as likely to default as similar loans made in the same neighborhoods by independent mortgage originators not subject to the law.

[Schnitzer318is]

I also would like to see Johnson in the debates (and other candidates) as well. Us being sold 2 candidates has gotten out of hand.

On the issue above (housing crisis), Ulysses is right. It was not government regulation that caused the issue but government deregulation. It started with Reagan but continued all the way through Bush Jr with Rep and Dem POTUS' alike. Some industries NEED regulation to reign in the greed factor associated with it. It's unfortunate, but true.

[mrsleeve]

^

Yes federals backing huge percentages of home loans with tax dollars, subprime and prime loans was such a great plan. What did we think was going to happen

[Schnitzer318is]

^

Yes federals backing huge percentages of home loans with tax dollars, subprime and prime loans was such a great plan. What did we think was going to happen

I am not saying the feds aren't partially to blame, they did deregulate and incentivize the practices going on. EVERYONE was making money. But it sounds like you are absolving the role of the banking institutions, ratings agencies, insurance companies, and investment brokers. Remember, many of the regulating agencies in the government were run by individuals incestuously tied to the banking. Also, no one in the government, or in the banking upper echelons were left holding the bag... it was the tax payers, investors, and regular employees of those institutions.

It was one big cluster fuck, and at the end of the day, the banking industry took advantage of a system they could control. It's easy to bet with other people's money, especially when you are making money just by placing that bet, and then again by reselling it. Greed needs to be regulated. It has been proven over and over again that 99% of people in this world will do whatever it takes (if legal) to get more money, even if it screws over others. People are sheep who live for more shit, prestige, and clout... all of which is purchased by money.

[mrsleeve]

not absolving at all, just saying when you insensitivise (sp) by and large high risk taking, by taking the risk (both personal and institutional) out of the equation by insuring that risk with other peoples money whom have little to no say in the arrangement from a seemingly bottomless well of money. It does not take Nostradamus to foresee where that path leads, and all those smart people we elect to represent all of that have little to no say in the arrangement, should have known better as well. But this is what happens when they are lining their own pockets as well from that same well.

[Schnitzer318is]

not absolving at all, just saying when you insensitivise (sp) by and large high risk taking, by taking the risk (both personal and institutional) out of the equation by insuring that risk with other peoples money whom have little to no say in the arrangement from a seemingly bottomless well of money. It does not take Nostradamus to foresee where that path leads, and all those smart people we elect to represent all of that have little to no say in the arrangement, should have known better as well. But this is what happens when they are lining their own pockets as well from that same well.

Couldn't agree more. Especially the highlighted. I just wish the banks, and more importantly, the BoD's, were held more accountable. They played their Russian roulette and when the gun went off, they put someone else in front of the bullet. Same goes for the regulators at the Fed, SEC, and Treasury.

[ajhostetter]

So I watched the town hall last night. I really do want to support Johnson, but he was pretty embarrassing on his lack of world knowledge.

[Schnitzer318is]

So I watched the town hall last night. I really do want to support Johnson, but he was pretty embarrassing on his lack of world knowledge.

I'd take that over the other two major candidates... but that's my opinion. Others feel differently I'm sure. You can always surround yourself with a good cabinet that knows world affairs. You can't fix what's wrong with Hillary or the Donald.

[ajhostetter]

I'd take that over the other two major candidates... but that's my opinion. Others feel differently I'm sure. You can always surround yourself with a good cabinet that knows world affairs. You can't fix what's wrong with Hillary or the Donald.

True story...

[BraveUlysses]

So I watched the town hall last night. I really do want to support Johnson, but he was pretty embarrassing on his lack of world knowledge.

It's pretty bad, between this and the Aleppo question. Trump would get a pass on this but this is the second time GJ has ran for president and he really should have his shit together by now.

[CorvallisBMW]

Johnson isn't doing himself any favors...