# \#OccupyWallStreet **URL:** \ **Category:** The BBQ Pit\ **Created:** [September 19, 2011, 6:27pm UTC](https://boards.straightdope.com/t/occupywallstreet/596851 "2011-09-19T18:27:54Z")\ **Posts on this page:** 20\ **Page:** 19
**Author:** ![elucidator](https://avatars.discourse-cdn.com/v4/letter/e/8edcca/32.png) [@elucidator](https://boards.straightdope.com/u/elucidator)\ **Post date:** [October 3, 2011, 7:30pm UTC](https://boards.straightdope.com/t/occupywallstreet/596851/361 "2011-10-03T19:30:12Z")
Oh, OK. So you didn’t say this: > [@](#): > > …When protestors call for tiny injustices in their favor, it is fatal to this necessary claim of moral superiority… Moral superiority is necessary. Even the tiniest infraction destroys that fragile perfection. I’m not that good, have to admit that. Not sure I know anybody who is. Maybe you are. But, for a saint, you are awfully quick with the nasty insult. “Despise justice”? Whatsamatta you? ---
**Author:** ![elucidator](https://avatars.discourse-cdn.com/v4/letter/e/8edcca/32.png) [@elucidator](https://boards.straightdope.com/u/elucidator)\ **Post date:** [October 3, 2011, 7:32pm UTC](https://boards.straightdope.com/t/occupywallstreet/596851/362 "2011-10-03T19:32:44Z")
> [@Left\_Hand\_of\_Dorkness](#): > > …But so far I’ve seen no signs that the protest is anything more than an angry sea anemone, lashing out blindly with tentacles but not able to move in any direction. Yeah. Kids these days, huh? ---
**Author:** ![Jackmannii](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jackmannii/32/311_2.png) [@Jackmannii](https://boards.straightdope.com/u/Jackmannii)\ **Post date:** [October 3, 2011, 7:41pm UTC](https://boards.straightdope.com/t/occupywallstreet/596851/363 "2011-10-03T19:41:10Z")
I think that sea anemones don’t lash out; typically they hope to ensnare something passing by. Maybe a related species might serve as a metaphor for the excesses of Wall Street. Imagine unwary investors, swimming in a placid sea of expected capital returns, when suddenly they are painfully stung by the excesses of predatory lenders and greedy traders, like so many toxic jellyfish. ---
**Author:** ![Left\_Hand\_of\_Dorkness](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/left_hand_of_dorkness/32/7156_2.png) [@Left\_Hand\_of\_Dorkness](https://boards.straightdope.com/u/Left_Hand_of_Dorkness)\ **Post date:** [October 3, 2011, 7:48pm UTC](https://boards.straightdope.com/t/occupywallstreet/596851/364 "2011-10-03T19:48:08Z")
> [@elucidator](#): > > Oh, OK. So you didn’t say this: Yes, I did say that. And while it does share some of the same letters with “perfect sainthood is a prerequisite for protest”, the words themselves are different. I’m perfectly capable of typing the words I mean to type; if I wanted to say something different, I’d say something different. I could ask you to show what the differences are, just to prove you can read, but that’s a lazy debate tactic, so I’ll make it clear. “Perfect sainthood” implies that in every aspect of life public and private the protestors must be perfect. That’s not what I’m saying. What I am saying is that, **in the context of the protest** , you can’t be asking for injustices in your favor if you’re calling for justice. Nobody will listen to you. You destroy your credibility. > [@](#): > > But, for a saint, you are awfully quick with the nasty insult. “Despise justice”? Whatsamatta you? Okay, look. That was a rhetorical flourish on my part in response to your snark about how the protestors needed to learn there was no such thing as justice for all. Of COURSE I don’t think you despise justice. IN THIS CASE, however, you’re arguing against justice, and so I was (via snark, of course) turning your complaint about justice on its ear. If you want to conduct this conversation without snark, I’m happy to do so going forward, mostly just to watch you tremble and bite through your lips in an effort to hold the snark back. But I think you’re taking a ridiculous amount of offense at those words. ---
**Author:** ![Left\_Hand\_of\_Dorkness](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/left_hand_of_dorkness/32/7156_2.png) [@Left\_Hand\_of\_Dorkness](https://boards.straightdope.com/u/Left_Hand_of_Dorkness)\ **Post date:** [October 3, 2011, 7:49pm UTC](https://boards.straightdope.com/t/occupywallstreet/596851/365 "2011-10-03T19:49:20Z")
> [@Jackmannii](#): > > I think that sea anemones don’t lash out; typically they hope to ensnare something passing by. They also don’t get angry. Poetic license. As for kids these days, 'luci, I had the same complaint when I was 22 about foolish protestors; I had my epiphany about requiring protestors to play chess as a part of an absurdly misguided environmental direct action I was involved in in 1995, in which a NIMBY jerk manipulated a bunch of us kids into risking our lives in a direct action to prevent a developer from developing a 10-acre piece of land. So no, it’s not kids these days. ---
**Author:** ![Left\_Hand\_of\_Dorkness](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/left_hand_of_dorkness/32/7156_2.png) [@Left\_Hand\_of\_Dorkness](https://boards.straightdope.com/u/Left_Hand_of_Dorkness)\ **Post date:** [October 3, 2011, 7:56pm UTC](https://boards.straightdope.com/t/occupywallstreet/596851/366 "2011-10-03T19:56:29Z")
On further thought, in case you need these words: You know what I said about you despising justice? I take it back. ---
**Author:** ![elucidator](https://avatars.discourse-cdn.com/v4/letter/e/8edcca/32.png) [@elucidator](https://boards.straightdope.com/u/elucidator)\ **Post date:** [October 3, 2011, 7:57pm UTC](https://boards.straightdope.com/t/occupywallstreet/596851/367 "2011-10-03T19:57:08Z")
Then it never happened. ---
**Author:** ![RedFury](https://avatars.discourse-cdn.com/v4/letter/r/ec9cab/32.png) [@RedFury](https://boards.straightdope.com/u/RedFury)\ **Post date:** [October 3, 2011, 8:05pm UTC](https://boards.straightdope.com/t/occupywallstreet/596851/368 "2011-10-03T20:05:32Z")
Gotta start _somewhere_… Many/most of the things said in this thread were said about the [**15-M Movement**](http://en.wikipedia.org/wiki/2011_Spanish_protests) when it started. Yet not only is it still going, but almost 20% of the population has participated in it at one time or another. Where is it going? Who knows, but as [Joseph Stiglitz](http://en.wikipedia.org/wiki/Joseph_Stiglitz) speaking at a conference there said: [“This is an opportunity for economic contribution social measures,” argued Stiglitz, who made a critical speech about the way authorities are handling the political exit to the crisis. He encouraged those present to respond to the “bad ideas”, not with indifference, but with “good ideas”. “This does not work, you have to change it,”](http://en.wikipedia.org/wiki/2011_Spanish_protests) So let’s get to it. ---
**Author:** ![elucidator](https://avatars.discourse-cdn.com/v4/letter/e/8edcca/32.png) [@elucidator](https://boards.straightdope.com/u/elucidator)\ **Post date:** [October 3, 2011, 8:07pm UTC](https://boards.straightdope.com/t/occupywallstreet/596851/369 "2011-10-03T20:07:53Z")
Now, as I was saying to my good buddy **Lefty** , who has exquisite taste in science fiction and can work the word “chiaroscuro” into a post… This is a remarkable thing we are witnessing. Amazing, even. No tear gas. No punk-ass anarchists wrecking shit. Labor unions coming to help. And all because a handful of young folks got together and started tweeting. You want hope, **Red**? There it is, fragile and newborn, as always. Raise a glass tonight in salute, and I will join you. Well, actually, I almost never drink any more, but I’ll find some alternative… ---
**Author:** ![RTFirefly](https://avatars.discourse-cdn.com/v4/letter/r/c77e96/32.png) [@RTFirefly](https://boards.straightdope.com/u/RTFirefly)\ **Post date:** [October 3, 2011, 8:35pm UTC](https://boards.straightdope.com/t/occupywallstreet/596851/370 "2011-10-03T20:35:55Z")
> [@Left\_Hand\_of\_Dorkness](#): > > But so far I’ve seen no signs that the protest is anything more than an angry sea anemone, lashing out blindly with tentacles but not able to move in any direction. Maybe so, but it’s still a hell of a lot better than nothing. It’s accomplished the necessary first step of simply getting attention for the general issue of the sins of Wall Street in the crash and its aftermath, at a time when it looked as if all that had been successfully papered over. (Until the next crash, anyway.) Nobody else was doing as much. Sure, a more focused protest might’ve been better. A more law-abiding protest might’ve been better. (But still: if the worst they’ve done was to inconvenience a few motorists, with not so much as a broken window as far as we can tell, that’s pretty damned good in my book.) But the alternative was nothing. How does this compare with nothing? C’mon, my friend, admit it: it may not have been the protest you’d have organized, but we’re still better off for it. ---
**Author:** ![RedFury](https://avatars.discourse-cdn.com/v4/letter/r/ec9cab/32.png) [@RedFury](https://boards.straightdope.com/u/RedFury)\ **Post date:** [October 3, 2011, 8:53pm UTC](https://boards.straightdope.com/t/occupywallstreet/596851/371 "2011-10-03T20:53:03Z")
I hear you **'luc** …and as you suggest I’ll happily raise a glass of Diet 7UP w/lime in their honor tonight. I party SMART these days. ---
**Author:** ![XT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/xt/32/456_2.png) [@XT](https://boards.straightdope.com/u/XT)\ **Post date:** [October 3, 2011, 10:20pm UTC](https://boards.straightdope.com/t/occupywallstreet/596851/372 "2011-10-03T22:20:07Z")
Been sort of watching this unfold with a sense of bemused disbelief. Reading through this thread that sense has simply gone off scale. This has got to be one of the silliest and most nebulous protest movement I’ve ever seen. It’s full of loony lefty feel good agendas which, in many cases are only peripherally related, and then mostly only in the minds of folks who would think that this is all meaningful and necessary. Can someone distill what, besides frustration, fear and ignorance, this protest movement is actually about? Global Warming? Corporate Greed? The tides? Movement of bodies in the heavens? Rage at the machine? Just general frustration and left wing wankage? There doesn’t seem (to my obviously not-left wing perceptions) any sort of guiding theme here except that this seems to be the left wing equivalent of the Tea Party (which just seems to be a catch all for all sorts of dispirit right wing wankage and groups). -XT ---
**Author:** ![The\_Understander](https://avatars.discourse-cdn.com/v4/letter/t/3da27b/32.png) [@The\_Understander](https://boards.straightdope.com/u/The_Understander)\ **Post date:** [October 3, 2011, 10:24pm UTC](https://boards.straightdope.com/t/occupywallstreet/596851/373 "2011-10-03T22:24:35Z")
My take: ya gotta start somewhere. I know we’re all spoiled by the ease by which a billionaire-funded, party-backed series of AstroTurf rallies can get on television when it has its own propaganda network relentlessly pushing them, but real grassroots movements are messy. No, there is not an mission statement, charter, logo, and marketing strategy prewrapped for us. We apologize for the inconvenience. The person in charge of public relations has been sacked. But what I don’t see how bitching and moaning about how terribly we are organized is any help. Not when compared to finding out more, spreading the word, helping set the agenda and … gasp!.. showing up. Meanwhile, at the rally on LaSalle and Jackson here in Chicago: the weather’s warm, there’s a fine-ass blonde working a hula-hoop the way Og intended, and the stuffed suits in front of the Federal Reserve are hilariously stereotypical in their indignant harrumphing. (Seriously, they all look like Thurston Howell III if he existed on a diet consisting solely of Italian Beef and caramel-and-cheese popcorn.) And no one has been pepper-sprayed yet! I’m sure there’s as much entertainment value or more in the Occupation in your town… (To the Mighty and All Powerful Jackbooted Ones: This is not a call to action. I am but a poor, humble, Gen-Xer-cum-Millennial who knows of nothing but watching the Daily Show while stoned and Let’s Playing Ironsword, in between checking for the next episode of MLP:FiM. I know nothing…) “Hello, broker? Could you put me down for $500 of Gillette shares? I hear the new National Razor line is gonna be killer…” ---
**Author:** ![The\_Understander](https://avatars.discourse-cdn.com/v4/letter/t/3da27b/32.png) [@The\_Understander](https://boards.straightdope.com/u/The_Understander)\ **Post date:** [October 3, 2011, 10:41pm UTC](https://boards.straightdope.com/t/occupywallstreet/596851/374 "2011-10-03T22:41:03Z")
> [@xtisme](#): > > Can someone distill what, besides frustration, fear and ignorance, this protest movement is actually about? Global Warming? Corporate Greed? The tides? Movement of bodies in the heavens? Rage at the machine? Just general frustration and left wing wankage? There doesn’t seem (to my obviously not-left wing perceptions) any sort of guiding theme here except that this seems to be the left wing equivalent of the Tea Party (which just seems to be a catch all for all sorts of dispirit right wing wankage and groups). > > -XT I submit that a great deal of it is frustration at the powerlessness that vox populi (or as some would style us 99-percenters, hoi polloi) has when it comes to influencing policy. Yes, ever thus and all that, but a good deal of the protestors, I would argue, feel that it is more pronounced in these times and that the string-pullers are more obvious and more grasping in their naked exercise of the collective power they possess in the social order. No, there is no ‘Contract with America’ drawn up yet. But give it time for the politicians, ever slow, to glom on to this and you may get your nightmare… er… wish. 😉 By the way, I certainly hope that you are correct that this is the left-wing equivalent of the Tea Party, though I am quite sure that you are already wrong since, unlike the post-2008 and Republican takeover of that formerly libertarian venture, this … event in process… truly is from the ground up. But did the teabaggers succeed in pulling their party to the right? Yes, they did, and I would argue that a reason is that what is being rewarded right now with disproportionate influence in today’s zeitgeist is noise. Signal is periphery; loud man wins. Therefore, as I have argued in another thread when the topic of whether we progressives want our own Bill O’ Reilly and Glenn Beck, the answer is YES. As distasteful as it is, those in the body politic who are … less-engaged … and reside in the Mushball Middle (apologies to Sen. Al Franken for stealing his phrase) are highly influenced, IMO, by noise. If nothing else, these rallies are getting attention. Would that the Iraq anti-war protests had been so amateur… they might have gotten a blurb in the daily rag … or even two! ---
**Author:** ![RedFury](https://avatars.discourse-cdn.com/v4/letter/r/ec9cab/32.png) [@RedFury](https://boards.straightdope.com/u/RedFury)\ **Post date:** [October 3, 2011, 11:00pm UTC](https://boards.straightdope.com/t/occupywallstreet/596851/375 "2011-10-03T23:00:39Z")
> [@xtisme](#): > > Been sort of watching this unfold with a sense of bemused disbelief. Reading through this thread that sense has simply gone off scale. This has got to be one of the silliest and most nebulous protest movement I’ve ever seen. It’s full of loony lefty feel good agendas which, in many cases are only peripherally related, and then mostly only in the minds of folks who would think that this is all meaningful and necessary. > > Can someone distill what, besides frustration, fear and ignorance, this protest movement is actually about? Global Warming? Corporate Greed? The tides? Movement of bodies in the heavens? Rage at the machine? Just general frustration and left wing wankage? There doesn’t seem (to my obviously not-left wing perceptions) any sort of guiding theme here except that this seems to be the left wing equivalent of the Tea Party (which just seems to be a catch all for all sorts of dispirit right wing wankage and groups). > > -XT So I take it’s out of the question to ask you to [**Back This Project**](http://www.kickstarter.com/projects/610964639/occupy-wall-street-media/comments)? ---
**Author:** ![Merijeek](https://avatars.discourse-cdn.com/v4/letter/m/f05b48/32.png) [@Merijeek](https://boards.straightdope.com/u/Merijeek)\ **Post date:** [October 3, 2011, 11:35pm UTC](https://boards.straightdope.com/t/occupywallstreet/596851/376 "2011-10-03T23:35:08Z")
> [@RedFury](#): > > So I take it’s out of the question to ask you to [**Back This Project**](http://www.kickstarter.com/projects/610964639/occupy-wall-street-media/comments)? Seeing as how they’re currently at 350% of their target and have six more days to go…I think they can do without him. -Joe ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [October 4, 2011, 12:36am UTC](https://boards.straightdope.com/t/occupywallstreet/596851/377 "2011-10-04T00:36:15Z")
The bankers crashed the economy and walked away with tax money and received full salaries and bonuses. Can you imagine that the people who are paying for that and are suffering as a result, want to make some noise ? They are sending a message to the senators, congressmen and the president. The threat is they will not work for them or vote for them if they don’t take care of those who stole us blind. The bankers will not care about the marchers. Their banks are not even on Wall Street. Obama should perp walk a few bankers and heads of the ratings agencies. ---
**Author:** ![elucidator](https://avatars.discourse-cdn.com/v4/letter/e/8edcca/32.png) [@elucidator](https://boards.straightdope.com/u/elucidator)\ **Post date:** [October 4, 2011, 12:48am UTC](https://boards.straightdope.com/t/occupywallstreet/596851/378 "2011-10-04T00:48:17Z")
Well, of course they must have a clear agenda and plan of action! Every falled political movement in our history has had a clear agenda and plan of action. Who are these punks to refuse tradition? ---
**Author:** ![Scylla](https://avatars.discourse-cdn.com/v4/letter/s/a5b964/32.png) [@Scylla](https://boards.straightdope.com/u/Scylla)\ **Post date:** [October 4, 2011, 1:45am UTC](https://boards.straightdope.com/t/occupywallstreet/596851/379 "2011-10-04T01:45:39Z")
> [@Damuri\_Ajashi](#): > > I’m still agnostic on the protests on wall street but I just wanted to call bullshit on the whole conservative narrative on the mortgage crisis. Folks seem to think they can trot out shit that was disproven a few years ago because noone will remember it was bullshit the first time it was trotted out. That’s a tall order, but let’s see what you do. > [@](#): > > Fanie Mae has been around since the Great Depression. Then the government privatized Fan Mae and created Freddie Mac to provide some competition for it. > > CRA was passed in 1977. > > They have been securitizing mortgages since the late 1960’s. > > So, as far as I can tell, the Conservative narrative is that after a 40 year incubation period, these institutions and policies led to the mortgage crisis that led to the financial meltdown. Are you fucking serious? Yes I am. I did not start my narrative with the earth cooling and Im well aware of REMICS and the securities put out by FNMA GNMA SLMA, etc etc, but I thought I could safely ignore all those, and I still think we can. I forgot the name of the law change, but it happened in 1980 and in 1983 the very first CMOs were created. Nothing before that really counted, so I was just ignoring it. If you want, I can into detail about why nothing before mattered, but the gist of it is that the creation of CMOs meant that you could actually make “bonds,” or what were very close to bonds out of mortgages. Before that you had these weird REMICS that were issued by the GSEs that could either pay off next week or linger 30 years, and really weren’t suitable for anyone looking for definition. So, yes. I was fucking serious. Next? > [@](#): > > We have had no doc mortgages for decades. When the guy that owned the car dealership (who had very little taxable income because he plowed all his profits back into his business, or just cheated on his taxes) wanted to buy a million dollar house, he went to his banker who knew he was good for it. The banker would make the loan and inventory it because noone would ever buy that mortgage from him (because Fannie and Freddie wouldn’t buy it), it simply wasn’t liquid. It wasn’t no doc mortgages per se that drove the financial crisis, it was how the market developed to overlook the fact that there was a reason that no doc mortgages were illiquid. Banks thought they understood how these mortgages performed and started buying them up and packaging them (so now the loan officer was giving his secretary a mortgage a mortgage on that million dollar house without documentation because he could flip the mortgage over to Lehman Brothers). You are partially right, or even mostly right, but what you are doing is not answering the obvious question: Which is, why did these subprime mortgages in all their different varieties become so attractive? Investment banks were buying them up and packaging them, but for who? Fannie and Freddie. They stepped into the subprime market in '95 and '96 repsectively. Hud created a rule that initially that **at least** 42% of the mortgages they purchased had to be from households that were below the median income in the area they came from. This target then went to 50% in 2000 and 52% in 2005. You can double check these statistics here, if you like: [http://online.wsj.com/article/SB122298982558700341.html](http://online.wsj.com/article/SB122298982558700341.html) in 2008 Freddie and Fannie collectively held over 5 trillion in US mortgages. This is more than half the entire mortgage market. Look it up and check my figures. This is why I throw my hands up in the air and have no idea how to respond to a retarded fucking idiot RTF who will insist that Fannie and Freddie were “late to the party.” How do you respond to some asshole is so fucking clueless that he is just stringing words together that sound good. This is what I mean when I say he is like somebody shouting “goal” at a baseball. If stupidity were terminal, he’d be dead. You on the other hand seem simply misinformed. They were the party. They started the whole thing. I was there. I was involved in CMOs, asset backed, and mortgaged back securities at the time. I never traded directly with Fannie or Freddie but I know people who did. This artificial market for low end mortgages because of The HUD mandate meant that high risk mortgages were actually more desirable than low risk mortgages. There was a ready market and a ready purchaser who was mandated by the government to buy them. In order to qualify to issue conforming mortgages banks had to meet these Hud requirements. It was very strange. In a bank, people would groan if you wanted to write a mortgage for Dr. Beeper’s million dollar house. Why? Because that was easy, and before you could do it, you needed to make sure had a mortgage on a below median income household in hand, or risk losing your status. What this also meant is that you could write a weird shitty mortgage that was totally irresponsible on the face of itself, because that would then allow you to write a nice juicy conforming loan. Maybe this was a good idea in 1995. It helped put people in houses who otherwise couldn’t afford them… but, as time went by and things started to get frothy and a little scary, instead of applying the brakes, the Government hit the throttle. > [@](#): > > After 30 years of CRA, banks had developed models on how subprime mortgages performed (faulty models as it turned out, because the default rate on a primary home mortgage of a poor black family with a steady income but bad credit and a small down payment was markedly different than a NINJA loan). In fact most subprime mortgages had been originated by financial institutions that are not subject to the CRA. They based their pricing and default assumptions based on the behaviour of a bunch of poor black families and used it to predict how a bunch of house flippers would act. I helped build CMOs and I analyzed one that already existed. While it is absolutely true that the PSA assumptions tended not to work out very well, I don’t think this had much to do on modelling as if poor black families were the same as flippers. I never heard of such a thing, and wouldn’t even know about how to go about doing such a thing. In fact, it would seem to me to be against the law. There is only certain information you are allowed to have when you are trading mortgages, or pools of mortgages. How black they are is not one of those pieces of information. So, pending some sort of cite or reclarification, this too is bullshit. > [@](#): > > Then the private label securities market took off (interest rates were really low and investors were chasing returns) and started swallowing up market share and the “crack spread” (basically the profit from taking crappy mortgages and packing them into investment securities) on these non-conforming mortgages was much higher than for conforming mortgages. Ummm, yeah. Ok. That’s pretty fair. > [@](#): > > In a famous phone call to Fannie Mae, Angelo Mozillo told Fannie Mae that they could either buy more of his subprime mortgages or he would divert his conforming mortgages to private label mortgage bundlers. Fannie mae (like Freddie Mac), driven by their profit motive and the perverse incentives provided to executives, took on more of this crap. If Fannie mae were entirely private with no government involvement at all, they are likely to have engaged in more of this sort of behaviour not less. Ahhhh, This is really complicated. There were a couple of other factors going on by this time that we haven’t discussed, and are a little hard to describe in laymen’s terms. It was like what happened with corn. The constant pressure and demand for corn in this country created a very dependable and consistent and cheap and large supply of corn. With that ubiquity, new uses and markets opened up. This happened to mortgages thanks to the steady and increasing demand of the GSEs over the previous 10 years. It turns out that like corn, you can take mortgages apart and reassemble them into all kinds of neat things. You could take subprime mortgages and reassemble and combine them with other things in ways that could make them very safe, 100% guarranteed, or pretty safe unless “X” occurs, where X stands for something so extremely unlikely that you will totally discount the possibility. A lot of these, even most of these, were pretty damn clever, pretty damn smart, and even perfectly responsible, but in these markets it does not take a lot of bad apples to spoil the bunch and sadly there a lot of bad apples in the mix. Further, it is not how safe and reliable and good something is that determines its price, it is how safe and reliable and good people believe it to be that does so, and, when the market blew up, if you were leveraged it did not matter whether your portolio was good or bad, your factually 100% securities were trading at 10 cents on the dollar if you could find a bidder and you were fucked. The other this is that the market flipped. HUD created a known ratio, demand, and relationship for noncomforming versus conforming loans, and if you were trying to stay on the right side of the line somedays you needed subprime and sometimes you needed conforming. The phone call doesn’t mean much. Consider: I know you need to buy what I have. It’s mandated that a certain percentage of what you buy has to be a form of my product. Say you own a seafood restaurant and I am a fishmonger. I know you need fish for tonight. Maybe you think my fish aren’t the best or the highest quality, but if you don’t buy my fish you still have to go out and find some other fish to buy, otherwise you won’t have anything to sell to your customers tonight. If I tell you that fish are a scarce commodity and threaten to sell my fish to somebody else if you don’t meet my price than… you and I are negotiating, or haggling. Right? This is what people do when they are buying and selling, right? I thought it was FNMA’s job to negotiate the prices of mortgages they purchased. So no, I am completely underwhelmed that negotiations occured. What would you suggest? a locked market? > [@](#): > > Everyone was making a boatload on these crappy mortgages because the default assumptions were way off (everyone was using the best available information but almost everyone at least suspected that the information was bad or at least non-predictive (and the ratings agencies were almost deliberately obtuse in failing to recognize the flaws in the models)) and this led to easy credit for crappy borrowers. No, I think I covered this, but it’s not accurate. If I’ve left something out, or it’s not clear let me know. > [@](#): > > Since the beginning of time, bad credits have wanted to borrow money for soemthing they simply couldn’t afford and lending them this money should properly be viewed as charity and not a loan. I learned this lesson on Popeye, when whimpy would constantly offer to pay Tuesday for a hamburger today. The onus of underwriting, the burden of managing credit has ALWAYS been with the lender, not the borrower. And while any fraudsters should go to jail, it is fucking retarded to try and lay the blame for the financial crisis the typical family that overborrowed for more house than it could afford in order to move into a better school disctrict for their kids or a better neighborhood away from crime. Yeah, I kind of agree with you. This is **exactly** my point. This is why I blame the government. This is why I blame Frank. They **mandated** that conforming mortgage originators make more than 50% of their loans to Wimpy or else you couldn’t work through the GSEs! This means that if conforming loans were at say 5% and you didn’t mean the median income requirement on the loans you originated than you couldn’t sell your loans back to the GSEs. You’d have to go at a higher rate to sell that loan. This means that if ABC is in compliance in the number of loans they’ve made to Wimpy than they can loan DR. Beeper $475,000 on his mortgage at 5%. However, if CDF bank didn’t give enough Wimpy loans, then they might only be able to write that loan at 6%. Which way will Dr. Beeper go? This is what I mean when I say the government set the market. > [@](#): > > It was a market failure, not a government one that led to the bubble and the financial crisis. Tell me now you see how completely untrue that is. [quote] Ginnie Mae/FHA, was largely immune from the financial crisis because it did not try to compete in an already crowded field of mortgage providers, it simply gave up market share to the point they were hardly doing anything at all. [/quote[ Fannie Mae and Freddie Mac still collectively held $5.1 trillion in mortgages in 2008, which was about 1/2 the entire mortgage market. I wouldn’t really call that “hardly doing anything at all.” Would you. > [@](#): > > If anything, The problem with Fannie Mae and Freddie Mac was not too much government it was not enough government. Subjecting them to a profit motive and competitive pressure exposed them to perverse incentives. Perhaps the problem would not have gotten quite as big if Fannie and Freddie had followed GNMA’s example, perhaps other market participants would not have been able to step in and cover the gap but it should be clear that having GSEs did not “cause” the financial crisis. Factually, you couldn’t be farther from the truth. GNMA bonds are backed by the full faith and credit of the US government, unlike Fannie and Freddie bonds, and neither they nor the department of veteran affairs (FHA) were under the same HUD requirement as Freddie and Fannie. The real point is the exact opposite of what you are trying to make. The HUD mandate is the government regulation that created the whole artificial market in the first place. Without, Fannie and Freddie might have done better than their more nationalized brethren who labored without such a mandate. * * * I know there is more to your post, but I have to stop there due to real life interfering. Hopefully I’ve helped you clear up some misconceptions. ---
**Author:** ![Scylla](https://avatars.discourse-cdn.com/v4/letter/s/a5b964/32.png) [@Scylla](https://boards.straightdope.com/u/Scylla)\ **Post date:** [October 4, 2011, 1:55am UTC](https://boards.straightdope.com/t/occupywallstreet/596851/380 "2011-10-04T01:55:12Z")
'Luce and Lefty and Red: (hi Red!) I do think it is kind of funny that the protestors let themselves get led into a corral from which there was no escape by the police (the corral being the Brooklyn Bridge,) like a herd of beef. You would have thought that somebody in that group might have googled “basic tactics,” or “crowd control,” or “police tactics” or something. Next thing we will her is the protestors complaining they’ve been attacked with tear gas when police said to them “pull my finger.” At some point you just have to shake you head. Scylla’s Rules for Committing Illegal Activities: Rule #1 “When breaking the law, do not follow the police into areas without an exit.” [Previous page](https://boards.straightdope.com/t/occupywallstreet/596851.md?page=18) [Next page](https://boards.straightdope.com/t/occupywallstreet/596851.md?page=20)