# In-Between Tuesday Primaries, March 8 **URL:** \ **Category:** Politics & Elections\ **Created:** [March 6, 2016, 3:42pm UTC](https://boards.straightdope.com/t/in-between-tuesday-primaries-march-8/748121 "2016-03-06T15:42:42Z")\ **Posts on this page:** 12\ **Page:** 8
**Author:** ![RTFirefly](https://avatars.discourse-cdn.com/v4/letter/r/c77e96/32.png) [@RTFirefly](https://boards.straightdope.com/u/RTFirefly)\ **Post date:** [March 9, 2016, 8:48pm UTC](https://boards.straightdope.com/t/in-between-tuesday-primaries-march-8/748121/141 "2016-03-09T20:48:51Z")
> [@SenorBeef](#): > > No, I get it. You view the auto bailout as primarily helping workers, so you oppose it. You view the bank bailout as primarily helping the super rich financial class, so you support it. > [@SenorBeef](#): > > So would you support reducing the power of those big banks to have the ability to wreck the world economy next time they get themselves into trouble so that we aren’t forced into making the terrible choice of bailing them out or collapsing the world economy next time? > [@Evil\_Captor](#): > > yeah, I know, conservative economics all the way, because the crash of 2007 was a result of Big Socialism at play. You got no cred with me there, I’m afraid. What IS this shit?? What I’m reading in this part of the thread is **Martin Hyde** doing a creditable job of setting his partisan leanings aside and doing some very smart and cogent analysis about Michigan and the Dem primary season. And the response from you guys is basically ‘U R a pawn of the rich.’ Lordy. ---
**Author:** ![RTFirefly](https://avatars.discourse-cdn.com/v4/letter/r/c77e96/32.png) [@RTFirefly](https://boards.straightdope.com/u/RTFirefly)\ **Post date:** [March 9, 2016, 8:52pm UTC](https://boards.straightdope.com/t/in-between-tuesday-primaries-march-8/748121/142 "2016-03-09T20:52:40Z")
Oh, and WTF does [McCain-Feingold](https://en.wikipedia.org/wiki/Bipartisan_Campaign_Reform_Act) have to do with credit default swaps? It’s a _campaign finance reform_ law. (And largely gutted by _Citizens United_.) Maybe you mean [Dodd-Frank](https://en.wikipedia.org/wiki/Dodd%E2%80%93Frank_Wall_Street_Reform_and_Consumer_Protection_Act)? ---
**Author:** ![SlackerInc](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/slackerinc/32/275_2.png) [@SlackerInc](https://boards.straightdope.com/u/SlackerInc)\ **Post date:** [March 9, 2016, 9:54pm UTC](https://boards.straightdope.com/t/in-between-tuesday-primaries-march-8/748121/143 "2016-03-09T21:54:37Z")
> [@Johnny\_Ace](#): > > In the short history of superdelegates (this will be the ninth presidential election since their final ratification and inclusion), I can think of none. Exactly. It would cause gnashing of teeth and rending of garments. Hopefully it won’t come to that. > [@ElvisL1ves](#): > > Got it! People in Michigan thought they were voting for \*Barry \*Sanders. 😉 You’re joking, but now that you mention it, I wonder if the similarity in names does engender a certain amount of, not confusion, but a vague feeling of familiarity and affection. > [@SenorBeef](#): > > So would you support reducing the power of those big banks to have the ability to wreck the world economy next time they get themselves into trouble so that we aren’t forced into making the terrible choice of bailing them out or collapsing the world economy next time? This has already happened. A good friend emailed me the following today (slightly redacted for his privacy) > [@](#): > > You know I would desperately like to make every single, last Sanders supporter who thinks banks walked away from 2008 with a slap on the wrist and no meaningful regulations take the regulatory trainings I’m currently having to take now that I work for [big, well known bank]. > > And I have very little actual decision making power, mostly all I do is audit the documents to make sure they meet a very limited set of predetermined criteria for a valid, acceptable deal. Our Legal and Credit depts make nearly all the serious banking decisions. And then in a followup: > [@](#): > > I even kind agree with folks that there should have probably been individual prosecutions for the worst offenders during that time but I can honestly say that after having worked for GE’s lending arm and now one of the world’s single largest banks that they seem to be taking the notion of complying with federal regulations very seriously. I currently have 19 different training courses I have to complete in the next 90 days as a new employee of [redacted] and I was required to take regular ongoing training of the same sort while with GE. And to date I have not heard a single person say (or even give a kind of wink and a nod towards) anything in private that contradicts the stated policies given to us in writing. ---
**Author:** ![Johnny\_Ace](https://avatars.discourse-cdn.com/v4/letter/j/6bbea6/32.png) [@Johnny\_Ace](https://boards.straightdope.com/u/Johnny_Ace)\ **Post date:** [March 9, 2016, 10:14pm UTC](https://boards.straightdope.com/t/in-between-tuesday-primaries-march-8/748121/144 "2016-03-09T22:14:27Z")
> [@Martin\_Hyde](#): > > Sure, in intelligent ways. It’s worth noting tons of new regulations and capital requirements apply to banks now, they are far less likely to get into the trouble they’ve gotten into in the past. I’d also favor reimposing Glass-Steagall requirements that prohibited the sort of structural conflicts of interest endemic in large investment banks after the 1999 repeal that persist to today. > > But I don’t actually blame the big banks for the financial crisis. They were part of it, but they weren’t the engine of it. The engine for the financial crisis was government policy. Companies respond in predictable ways, much like a rat will predictably run toward cheese you put out for it in a lab experiment. > > The United States government established Ginnie Mae and Fannie Mae and they are largely responsible for irresponsible behavior in the mortgage market. Ginnia Mae fully insures with the full faith and credit of the United States its Agency MBS, Fannie Mae does not, but it had an “implicit” guarantee as a “government sponsored enterprise.” This implicit guarantee was treated as explicit (and in fact, it was explicit.) Fannie Mae is the entity that actually securitized mortgages into MBS. Without these government intrusions in the economy the MBS market as we know it, the credit default swaps associated with it (which in itself was probably the single biggest death dealer because the true number of MBS collapses was low, most people–myself included who held onto their MBS throughout the crisis ultimately made money, but the credit default obligations lead to a lot of destruction of corporate wealth) simply would not be possible. The existence of the Maes is entirely due to New Deal era policies designed to promote homeownership, which every President has embraced fully. I’m against government encouraged homeownership (and also against the mortgage interest tax deduction, something that costs $400bn/year.) > > I’m fine with a society in which only around 20% of people own homes and the rest rent. But most Americans are not–and our government reflects that, and is thus to blame for the crisis in the mortgage industry, not the companies that behaved as they were incentivized by government to behave. As someone who worked for a mortgage broker before and during the crisis, I can tell you your facts are wrong, at least as far as Fannie Mae is concerned. I didn’t work with GNMA loans, so I couldn’t talk about those, but Fannie Mae had the highest requirements for loan approval in the industry. You didn’t just automatically get a Fannie Mae mortgage (which, btw, are 30-year fixed loans, one of the most stable of all loan types). It was the loan industry coming up with all these questionable financial instruments and then bundling them for sale to investors that caused the crisis. If anything, it was a lack of regulation on the part of the government that, if not caused, abetted the situation. Those government programs were in no way to blame for institutionalized greed on the part of banks and Wall Street. ---
**Author:** ![SlackerInc](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/slackerinc/32/275_2.png) [@SlackerInc](https://boards.straightdope.com/u/SlackerInc)\ **Post date:** [March 9, 2016, 10:19pm UTC](https://boards.straightdope.com/t/in-between-tuesday-primaries-march-8/748121/145 "2016-03-09T22:19:58Z")
What ever happened to caveat emptor? If you start saying financial instruments can never turn out to be worth far less than people think they are at a given point, you are going the way that got China into trouble recently. I think bitcoin, for instance, is utterly ridiculous, but I’m not keen to tell people they can’t sell one for $1,000 because that price is obviously overvalued and is going to crash. ---
**Author:** ![Evil\_Captor](https://avatars.discourse-cdn.com/v4/letter/e/f17d59/32.png) [@Evil\_Captor](https://boards.straightdope.com/u/Evil_Captor)\ **Post date:** [March 9, 2016, 10:31pm UTC](https://boards.straightdope.com/t/in-between-tuesday-primaries-march-8/748121/146 "2016-03-09T22:31:57Z")
> [@RTFirefly](#): > > Oh, and WTF does [McCain-Feingold](https://en.wikipedia.org/wiki/Bipartisan_Campaign_Reform_Act) have to do with credit default swaps? > > It’s a _campaign finance reform_ law. (And largely gutted by _Citizens United_.) > > Maybe you mean [Dodd-Frank](https://en.wikipedia.org/wiki/Dodd%E2%80%93Frank_Wall_Street_Reform_and_Consumer_Protection_Act)? Right, I meant Dodd-Frank. ---
**Author:** ![Martin\_Hyde](https://avatars.discourse-cdn.com/v4/letter/m/47e85d/32.png) [@Martin\_Hyde](https://boards.straightdope.com/u/Martin_Hyde)\ **Post date:** [March 9, 2016, 10:38pm UTC](https://boards.straightdope.com/t/in-between-tuesday-primaries-march-8/748121/147 "2016-03-09T22:38:28Z")
> [@Johnny\_Ace](#): > > As someone who worked for a mortgage broker before and during the crisis, I can tell you your facts are wrong, at least as far as Fannie Mae is concerned. I didn’t work with GNMA loans, so I couldn’t talk about those, but Fannie Mae had the highest requirements for loan approval in the industry. You didn’t just automatically get a Fannie Mae mortgage (which, btw, are 30-year fixed loans, one of the most stable of all loan types). I did not make any claims about the requirements . But a 30-year fixed rate loan is actually incredibly risky, and before the government of the Western world decided to create subsidized home ownership they largely did not exist. This is because a 30-year term subjects the lender to incredible risks. A hundred years ago a lot of loans were very short in duration and had very high downpayment requirements. It’s Federal intervention and creation of an artificial mortgage economy that has allowed people to buy homes with 5% down and pay it off over 30 years time. A truly free market would not offer such products to the majority of consumers. > [@](#): > > It was the loan industry coming up with all these questionable financial instruments and then bundling them for sale to investors that caused the crisis. If anything, it was a lack of regulation on the part of the government that, if not caused, abetted the situation. Those government programs were in no way to blame for institutionalized greed on the part of banks and Wall Street. Well mortgage backed securities from Fannie and GNMA were both implicitly and explicitly (respectively) guaranteed by the government, their MBSes represented a huge share of the market, and caused perverse pricing/risk assessments of the MBS market at large. ---
**Author:** ![steronz](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/steronz/32/11765_2.png) [@steronz](https://boards.straightdope.com/u/steronz)\ **Post date:** [March 9, 2016, 10:43pm UTC](https://boards.straightdope.com/t/in-between-tuesday-primaries-march-8/748121/148 "2016-03-09T22:43:52Z")
> [@Martin\_Hyde](#): > > I was referring to the demographic scorecard–in a “50/50 national race” she was supposed to lose Michigan to “be on track” to win the nomination. Bernie was supposed to win. I’m thinking you’re putting more weight into the word “supposed” than I am intending. The FiveThirtyEight scorecard is just a benchmark, showing us “is Clinton doing well in states where demographics say she is? Is Bernie?” Based on the benchmark Clinton didn’t need to win Michigan. But it’s _not_ a “50/50 national race”. While the RCP average was about 5 points a couple weeks ago, it’s been drifting since super Tuesday and is now at +11 for Clinton. In no reality was Clinton “supposed” to lose Michigan, only this hypothetical reality that nobody thought we lived in… until maybe yesterday. ---
**Author:** ![Martin\_Hyde](https://avatars.discourse-cdn.com/v4/letter/m/47e85d/32.png) [@Martin\_Hyde](https://boards.straightdope.com/u/Martin_Hyde)\ **Post date:** [March 9, 2016, 11:04pm UTC](https://boards.straightdope.com/t/in-between-tuesday-primaries-march-8/748121/149 "2016-03-09T23:04:03Z")
> [@steronz](#): > > But it’s _not_ a “50/50 national race”. While the RCP average was about 5 points a couple weeks ago, it’s been drifting since super Tuesday and is now at +11 for Clinton. In no reality was Clinton “supposed” to lose Michigan, only this hypothetical reality that nobody thought we lived in… until maybe yesterday. So let me restart–Michigan was an upset. When I said “Sanders was supposed to win Michigan” (or whatever it was I said), I mean that according to the FiveThirtyEight 50/50 scorecard, Clinton was assumed to lose there by 4 delegates. That scorecard is just a demographically weighted path for both candidates to get 2025.5 delegates. So what I’m saying here is “if Sanders is running a competitive campaign with Clinton he’s supposed to walk away with net 4 delegates here, based on the demographic projections.” I think people are for some weird reason reading too much into what I said–that scorecard isn’t represented by me as “predictive”, it’s benchmark of the candidates versus one hypothetical “path to the nomination.” It’s just one of many possible paths to the nomination, but one that is based on demographic estimates (as opposed to say, randomly selecting delegate numbers from the 56 races to come up with 2025.5 for each candidate.) I’m not 100% sure what you’re arguing against. ---
**Author:** ![Johnny\_Ace](https://avatars.discourse-cdn.com/v4/letter/j/6bbea6/32.png) [@Johnny\_Ace](https://boards.straightdope.com/u/Johnny_Ace)\ **Post date:** [March 9, 2016, 11:12pm UTC](https://boards.straightdope.com/t/in-between-tuesday-primaries-march-8/748121/150 "2016-03-09T23:12:10Z")
> [@Martin\_Hyde](#): > > I did not make any claims about the requirements . But a 30-year fixed rate loan is actually incredibly risky, and before the government of the Western world decided to create subsidized home ownership they largely did not exist. This is because a 30-year term subjects the lender to incredible risks. A hundred years ago a lot of loans were very short in duration and had very high downpayment requirements. It’s Federal intervention and creation of an artificial mortgage economy that has allowed people to buy homes with 5% down and pay it off over 30 years time. A truly free market would not offer such products to the majority of consumers. Exactly what risks are those? For the first half of the life of the loan the lender is getting mostly interest up front. If the borrower defaults on the loan, the lender gets the property. (Yes, I realize that banks don’t want to deal with the costs of selling that property and maintaining it in the interim, but in general they’re extremely low compared to the size of the loan.) And the longer the borrower goes before he/she defaults on the loan, the more money the lender makes. In short, if it didn’t make good financial sense to make those loans, banks would not make them, regardless of the backing of the government. Period. 30-year fixed loans made the American dream of home ownership possible for generations of people. In no way were they a bad thing. You could argue otherwise now, since it’s getting more and more difficult for the average person to buy a home, but overall its benefits have far outweighed its shortcomings. It was the variations that lenders came up with to make even more money that caused the real trouble. ARMs and reverse mortgages were the culprits, not 30-year fixed. For some people these types of loans make sense, but mostly they were damaging to the borrower and simply sold to them by money-hungry banks and brokers. ---
**Author:** ![Johnny\_Ace](https://avatars.discourse-cdn.com/v4/letter/j/6bbea6/32.png) [@Johnny\_Ace](https://boards.straightdope.com/u/Johnny_Ace)\ **Post date:** [March 10, 2016, 5:37am UTC](https://boards.straightdope.com/t/in-between-tuesday-primaries-march-8/748121/151 "2016-03-10T05:37:56Z")
I’m also curious where you got the idea that it was the government guaranteeing MBS’s. It was insurance companies in the main, primarily (and famously) AIG. The trigger for the entire domino effect was when they stopped offering credit default swaps after Lehman Brothers failed. You can criticize the government for a lot of things, but in this case the only thing it was guilty of was lack of oversight. ---
**Author:** ![Martin\_Hyde](https://avatars.discourse-cdn.com/v4/letter/m/47e85d/32.png) [@Martin\_Hyde](https://boards.straightdope.com/u/Martin_Hyde)\ **Post date:** [March 10, 2016, 1:35pm UTC](https://boards.straightdope.com/t/in-between-tuesday-primaries-march-8/748121/152 "2016-03-10T13:35:14Z")
> [@Johnny\_Ace](#): > > I’m also curious where you got the idea that it was the government guaranteeing MBS’s. It was insurance companies in the main, primarily (and famously) AIG. The trigger for the entire domino effect was when they stopped offering credit default swaps after Lehman Brothers failed. > > You can criticize the government for a lot of things, but in this case the only thing it was guilty of was lack of oversight. What are you talking about? Ginnie Maes have full faith and credit of the United States, Fannie Mae MBS had an “implicit” government backing. The “idea” is based on reality. From GNMA’s website: > [@](#): > > Ginnie Mae securities are the only MBS to carry the full faith and credit guaranty of the United States government, which means that even in difficult times, an investment in Ginnie Mae MBS is one of the safest an investor can make. [Previous page](https://boards.straightdope.com/t/in-between-tuesday-primaries-march-8/748121.md?page=7)