Giving Credit Where Credit is Due on Subprime Mortgages

[BearChick]

I know it's like Christmas for Nancy Pelosi to paint this as a Bush administration issue right before the election, but let's go back to the beginning and give credit where credit is due... to the Democratic party and a certain demi-god named Bill Clinton...

The year is 1999, friends. Read along with me.



By STEVEN A. HOLMES
New York Times

Published: September 30, 1999

In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.
In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans.

''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.''

Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market.

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.''

Under Fannie Mae's pilot program, consumers who qualify can secure a mortgage with an interest rate one percentage point above that of a conventional, 30-year fixed rate mortgage of less than $240,000 -- a rate that currently averages about 7.76 per cent. If the borrower makes his or her monthly payments on time for two years, the one percentage point premium is dropped.

Fannie Mae, the nation's biggest underwriter of home mortgages, does not lend money directly to consumers. Instead, it purchases loans that banks make on what is called the secondary market. By expanding the type of loans that it will buy, Fannie Mae is hoping to spur banks to make more loans to people with less-than-stellar credit ratings.

Fannie Mae officials stress that the new mortgages will be extended to all potential borrowers who can qualify for a mortgage. But they add that the move is intended in part to increase the number of minority and low income home owners who tend to have worse credit ratings than non-Hispanic whites.

Home ownership has, in fact, exploded among minorities during the economic boom of the 1990's. The number of mortgages extended to Hispanic applicants jumped by 87.2 per cent from 1993 to 1998, according to Harvard University's Joint Center for Housing Studies. During that same period the number of African Americans who got mortgages to buy a home increased by 71.9 per cent and the number of Asian Americans by 46.3 per cent.

In contrast, the number of non-Hispanic whites who received loans for homes increased by 31.2 per cent.

Despite these gains, home ownership rates for minorities continue to lag behind non-Hispanic whites, in part because blacks and Hispanics in particular tend to have on average worse credit ratings.

In July, the Department of Housing and Urban Development proposed that by the year 2001, 50 percent of Fannie Mae's and Freddie Mac's portfolio be made up of loans to low and moderate-income borrowers. Last year, 44 percent of the loans Fannie Mae purchased were from these groups.

The change in policy also comes at the same time that HUD is investigating allegations of racial discrimination in the automated underwriting systems used by Fannie Mae and Freddie Mac to determine the credit-worthiness of credit applicants.

[Volunteer]

BC, the problem is that the vast majority of Americans have a memory that extends only about 30 minutes into the past.

[Volunteer]

Interestingly enough I'm watching American Experience on PBS. It's about Ronald Reagan and how he built up our military in order to wreck the Soviet Union. The left fought him tooth and nail. The liberals were wrong and Reagan was right. A fact that many forget.

[Limnos]

Reagan may well be the best POTUS we have ever had.

I heard Clintoon on the radio today fighting off blame for his role in the Fannie Mae failure. Slick Billy does not have it in him to acknowledge his mistakes.

[atxtraveler]

BC, the problem is that the vast majority of Americans have a memory that extends only about 30 minutes into the past.

Absolutely. 7 years after the greatest single day tragedy on American soil, close to have the country is going to vote for someone named Obama, and truly believe he is a good Christian man why... because he said so.

[Volunteer]

Reagan may well be the best POTUS we have ever had.

I heard Clintoon on the radio today fighting off blame for his role in the Fannie Mae failure. Slick Billy does not have it in him to acknowledge his mistakes.

Clinton already threw the other democrats under the bus for this problem. In a recent interview he said that he and republicans tried to get more regulations passed but his fellow dems wouldn't do it.

[The Banterer]

Absolutely. 7 years after the greatest single day tragedy on American soil, close to have the country is going to vote for someone named Obama, and truly believe he is a good Christian man why... because he said so.

Are you saying that because of September 11th and Barack Obama's name, that he should be discounted as a candidate for President of the United States?

[LordByron]

I know it's like Christmas for Nancy Pelosi to paint this as a Bush administration issue right before the election, but let's go back to the beginning and give credit where credit is due... to the Democratic party and a certain demi-god named Bill Clinton...

The year is 1999, friends. Read along with me.



By STEVEN A. HOLMES
New York Times

Published: September 30, 1999

In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.
In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans.

''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.''

Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market.

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.''

Under Fannie Mae's pilot program, consumers who qualify can secure a mortgage with an interest rate one percentage point above that of a conventional, 30-year fixed rate mortgage of less than $240,000 -- a rate that currently averages about 7.76 per cent. If the borrower makes his or her monthly payments on time for two years, the one percentage point premium is dropped.

Fannie Mae, the nation's biggest underwriter of home mortgages, does not lend money directly to consumers. Instead, it purchases loans that banks make on what is called the secondary market. By expanding the type of loans that it will buy, Fannie Mae is hoping to spur banks to make more loans to people with less-than-stellar credit ratings.

Fannie Mae officials stress that the new mortgages will be extended to all potential borrowers who can qualify for a mortgage. But they add that the move is intended in part to increase the number of minority and low income home owners who tend to have worse credit ratings than non-Hispanic whites.

Home ownership has, in fact, exploded among minorities during the economic boom of the 1990's. The number of mortgages extended to Hispanic applicants jumped by 87.2 per cent from 1993 to 1998, according to Harvard University's Joint Center for Housing Studies. During that same period the number of African Americans who got mortgages to buy a home increased by 71.9 per cent and the number of Asian Americans by 46.3 per cent.

In contrast, the number of non-Hispanic whites who received loans for homes increased by 31.2 per cent.

Despite these gains, home ownership rates for minorities continue to lag behind non-Hispanic whites, in part because blacks and Hispanics in particular tend to have on average worse credit ratings.

In July, the Department of Housing and Urban Development proposed that by the year 2001, 50 percent of Fannie Mae's and Freddie Mac's portfolio be made up of loans to low and moderate-income borrowers. Last year, 44 percent of the loans Fannie Mae purchased were from these groups.

The change in policy also comes at the same time that HUD is investigating allegations of racial discrimination in the automated underwriting systems used by Fannie Mae and Freddie Mac to determine the credit-worthiness of credit applicants.
If this was such a bad idea, I'm just wondering why our intelligent Republican friends that have controlled the White House for the last 8 years and Congress for 6 of the last 8 years didn't put a sptop to all this nonsense???

[LordByron]

Interestingly enough I'm watching American Experience on PBS. It's about Ronald Reagan and how he built up our military in order to wreck the Soviet Union. The left fought him tooth and nail. The liberals were wrong and Reagan was right. A fact that many forget.
Well, I was there at the Pentagon during those years and I was a huge fan of Ronald Reagan and I disagree with your opinion.

[LordByron]

Reagan may well be the best POTUS we have ever had.

I heard Clintoon on the radio today fighting off blame for his role in the Fannie Mae failure. Slick Billy does not have it in him to acknowledge his mistakes.
And Bush Jr does???

[LordByron]

Absolutely. 7 years after the greatest single day tragedy on American soil, close to have the country is going to vote for someone named Obama, and truly believe he is a good Christian man why... because he said so.
I believe the Galveston huricane owns that honor and we didn't rush off to fight a war and kill twice as many more Americans.

[canuckbear]

Are you saying that because of September 11th and Barack Obama's name, that he should be discounted as a candidate for President of the United States?

Barack Hussein Obama should be discounted because he doesn't know crap. I would also think this if his name was John Smith.

[Volunteer]

Are you saying that because of September 11th and Barack Obama's name, that he should be discounted as a candidate for President of the United States?

Not answering for ATX, but for me Barack simply isn't qualified and his ideas are wrong. I don't care what his name is.

Well, I was there at the Pentagon during those years and I was a huge fan of Ronald Reagan and I disagree with your opinion.

Are you saying that Reagan's build up of the military, willingness to stand up against the Soviets in places like Poland and Afghanistan and his commitment to SDI didn't ultimately result in the downfall of the USSR? If so, then we do indeed disagree.

[Bexar Fan]

I believe the Galveston huricane owns that honor and we didn't rush off to fight a war and kill twice as many more Americans.
On the outside chance that you are being serious here, which Galveston huricane are you speaking of?

[ChipOC]

If this was such a bad idea, I'm just wondering why our intelligent Republican friends that have controlled the White House for the last 8 years and Congress for 6 of the last 8 years didn't put a sptop to all this nonsense???
Because they would be labeled as racist.

[baylorles]

Yeah, there's nothing that happened during this administration that can't be blamed on Clinton, or anyone else.

[atxtraveler]

Are you saying that because of September 11th and Barack Obama's name, that he should be discounted as a candidate for President of the United States?

I am pointing out an example of people's short term memory. They will be voting for a person who is a CINO. Christian in Name Only.

[Bexar Fan]

I just received this in an email. I tried to go the snopes route, to verify but a search there resulted in no hits. Maybe they just haven't had time yet. Anyway here it is for your discussion:

SHOTINTHEFANNIEMAE
The History of a Financial Disaster
1997
Fannie Mae is a GSE (Govt. Sponsored Entity) regulated by Congress.
Fannie Mae buys mortgages from other companies.
It is backed by the taxpayers for all losses, but keeps all profits.
President Clinton loosens Home Loan Requirements.
1998
Banks begin making thousands of bad loans,0 down, no documentation, for 120%! (1998 – 2008).
Executives at Fannie receive huge bonuses if loan targets are met.
Franklin Raines and Jamie Garelick from the Clinton Administration are appointed to run Fannie Mae.
2003
President Bush proposes a new oversight committee to clean up Fannie Mae, but Democrats derail the effort.
1999-2004
Raines earns $100 million in bonuses.
Garelick earns $75 million in bonuses.
In 2004, Enron collapses, congress investigates, Executives Skilling & Lay go to jail, for fraudulent bookkeeping.
Congress responds with the Sorbanes-Oxley Act, more heavy regulation of corporations.
2004
An OMB investigation finds massive fraudulent bookkeeping at Fannie Mae.
False numbers triggered executive bonuses every year.
Congress holds no hearings, no one goes to jail, or is punished.
WHY NOT?
1999-2005
Fannie Mae gives millions to Democratic causes, examples: Jesse Jackson & ACORN.
Fannie Mae pays millions to 354 congressmen and senators, from both parties.
Who got the most money?
#1 Sen. Christopher Dodd, (D-CT) Chairman of the Banking, Housing, & Urban Affairs Committee
#2 Sen. Barack Obama, (D-IL) Federal Financial Management Committee
#3 Sen. Chuck Schumer, (D-NY) Chairman of the Finance Committee
#4 Rep. Barney Frank, (D-MA) Chairman of the House Financial Services Committe
2005
Franklin Raines & top execs are forced to resign from Fannie Mae.
They do not go to jail.
There is no media “perp. walk.”
They keeps all of their bonuses
They finally pay $31.4 million in civil fines.
None of the top 4 recipients support the legislation.
The reform act is blocked by Democrats, never even making it out of committee.
None of the politicians return any of the money, tainted by fraud.
2008
Fannie Mae & Freddie Mac go bankrupt and the govt. takes them over completely.
Lehman Brothers, goes bankrupt from investing in bad mortgages.
AIG get $85 million in loan guarantees, after insuring bad loans & projects.
Franklin Raines is now an advisor to the Obama Campaign.

Draw your own conclusions.

[The Banterer]

I am pointing out an example of people's short term memory. They will be voting for a person who is a CINO. Christian in Name Only.

I don't think that's for any man to decide.

[Limnos]

And Bush Jr does???

We weren't talking about President Bush, we are talking about Clinton, but I do love how dems ALWAYS sache their way to Bush to misdirect Clinton's weaknesses.

Implicate Slick Willie Clinton and all we hear is Bush this Bush that with a complete lack of mention or acknowledgement of the topic at hand. Like Bill, you can't acknowledge the mistakes. That's sad. At least you follow the lib manual to the letter though.

[Limnos]

Barack Hussein Obama should be discounted because he doesn't know crap. I would also think this if his name was John Smith.
Correctamundo
Because they would be labeled as racist.
Sadly, this is more truthful than many realize.
I don't think that's for any man to decide.
I can agree with that.

[The Banterer]

Barack Hussein Obama should be discounted because he doesn't know crap. I would also think this if his name was John Smith.

And John Sidney McCain probably craps his pants. ;)

Come on now, I think that if we're going to throw statements like "he doesn't know crap", that we should make some sort of effort to provide a warrant for them.

It seems to me that he knows quite a bit of crap. Maybe less military and foreign relations crap than McCain, but certainly more crap about the economy and the law. Fortunately, whoever gets elected will have lots of advisors who know all sorts of crap about different subjects. There will be entire rooms of people in the White House, just oozing with crap.

[Volunteer]

I just received this in an email. I tried to go the snopes route, to verify but a search there resulted in no hits. Maybe they just haven't had time yet. Anyway here it is for your discussion:

SHOTINTHEFANNIEMAE
The History of a Financial Disaster
1997
Fannie Mae is a GSE (Govt. Sponsored Entity) regulated by Congress.
Fannie Mae buys mortgages from other companies.
It is backed by the taxpayers for all losses, but keeps all profits.
President Clinton loosens Home Loan Requirements.
1998
Banks begin making thousands of bad loans,0 down, no documentation, for 120%! (1998 – 2008).
Executives at Fannie receive huge bonuses if loan targets are met.
Franklin Raines and Jamie Garelick from the Clinton Administration are appointed to run Fannie Mae.
2003
President Bush proposes a new oversight committee to clean up Fannie Mae, but Democrats derail the effort.
1999-2004
Raines earns $100 million in bonuses.
Garelick earns $75 million in bonuses.
In 2004, Enron collapses, congress investigates, Executives Skilling & Lay go to jail, for fraudulent bookkeeping.
Congress responds with the Sorbanes-Oxley Act, more heavy regulation of corporations.
2004
An OMB investigation finds massive fraudulent bookkeeping at Fannie Mae.
False numbers triggered executive bonuses every year.
Congress holds no hearings, no one goes to jail, or is punished.
WHY NOT?
1999-2005
Fannie Mae gives millions to Democratic causes, examples: Jesse Jackson & ACORN.
Fannie Mae pays millions to 354 congressmen and senators, from both parties.
Who got the most money?
#1 Sen. Christopher Dodd, (D-CT) Chairman of the Banking, Housing, & Urban Affairs Committee
#2 Sen. Barack Obama, (D-IL) Federal Financial Management Committee
#3 Sen. Chuck Schumer, (D-NY) Chairman of the Finance Committee
#4 Rep. Barney Frank, (D-MA) Chairman of the House Financial Services Committe
2005
Franklin Raines & top execs are forced to resign from Fannie Mae.
They do not go to jail.
There is no media “perp. walk.”
They keeps all of their bonuses
They finally pay $31.4 million in civil fines.
None of the top 4 recipients support the legislation.
The reform act is blocked by Democrats, never even making it out of committee.
None of the politicians return any of the money, tainted by fraud.
2008
Fannie Mae & Freddie Mac go bankrupt and the govt. takes them over completely.
Lehman Brothers, goes bankrupt from investing in bad mortgages.
AIG get $85 million in loan guarantees, after insuring bad loans & projects.
Franklin Raines is now an advisor to the Obama Campaign.

Draw your own conclusions.


From what I've read, this generally appears to be true. And Limnos is absolutely correct - anyone suggesting that loan applicants should be thoroughly vetted before any money is advanced would have been charged with racism.

But people don't really want to understand what happened. They just want someone to blame. We'll create another mess, and another, and another........

[ChipOC]

And John Sidney McCain probably craps his pants. ;)

Come on now, I think that if we're going to throw statements like "he doesn't know crap", that we should make some sort of effort to provide a warrant for them.

It seems to me that he knows quite a bit of crap. Maybe less military and foreign relations crap than McCain, but certainly more crap about the economy and the law. Fortunately, whoever gets elected will have lots of advisors who know all sorts of crap about different subjects. There will be entire rooms of people in the White House, just oozing with crap.
So you concede that McCain knows more about military and foreign relations. How would Obama know more about the economy and law? Where is his experience? I'd think 26 years in Congress would beat a law degree most any day no?

[The Banterer]

So you concede that McCain knows more about military and foreign relations. How would Obama know more about the economy and law? Where is his experience? I'd think 26 years in Congress would beat a law degree most any day no?

The law degree, plus being a professor of Constitutional Law for 12 years, gives Obama an edge, IMO, in executing law. McCain has basically admitted that he knows nothing about Economics of the economy, whereas Obama has worked in business consulting and has a degree from Columbia in International Relations, a study where Economics is very important.

McCain still doesn't know as much about military operations as Patreus (who's responsible for all tactics going on in Iraq), or as much about foriegn relations as Condoleeza Rice. In all of these areas of expertise (law and economics included), whoever is elected will have people who know their stuff helping to make the decisions.

[Bexar Fan]

Obama was a professor of Constitutional Law for 12 years? What specific courses did he teach? Usually Professors are required to be published in that time period. What did he publish?

What businesses did he consult?

[canuckbear]

And John Sidney McCain probably craps his pants. ;)

Come on now, I think that if we're going to throw statements like "he doesn't know crap", that we should make some sort of effort to provide a warrant for them.

It seems to me that he knows quite a bit of crap. Maybe less military and foreign relations crap than McCain, but certainly more crap about the economy and the law. Fortunately, whoever gets elected will have lots of advisors who know all sorts of crap about different subjects. There will be entire rooms of people in the White House, just oozing with crap.



First, you may be right about McCain crapping his pants. Nicely played

Second, I can only go off of what I have read and seen. I a not impressed and really think he is in over his head. He should have built up a voting record instead of "present". What has he done politically? His passion to help the poor at the expense of the rich is not appealing to me. I can help the poor a whole lot better and more efficiently then the governement, so why not let me have my money to do that.

Third, There already is rooms oozing with crap in washington that's what's scary just a new group.

[atxtraveler]

McCain has basically admitted that he knows nothing about Economics of the economy, whereas Obama has worked in business consulting and has a degree from Columbia in International Relations, a study where Economics is very important.

Ah... yet another reason why Obama wants to sit at the table with Mahmoud Ahmadinejad. They are both friends of Columbia's style of International Relations... the one where people who embrace radical Islamic principles get an equal seat at the bargaining table.

As if I needed another reason to vote against Barack Hussein Obama.

[The Banterer]

Obama was a professor of Constitutional Law for 12 years? What specific courses did he teach? Usually Professors are required to be published in that time period. What did he publish?

What businesses did he consult?

I don't know the course #'s of what he taught, but it was at the University of Chicago Law School. I have no idea what sort of scholarly papers he published, but I believe he published his book through the school.

He worked for Business International Corporation, which is a consulting group.

[The Banterer]

Ah... yet another reason why Obama wants to sit at the table with Mahmoud Ahmadinejad. They are both friends of Columbia's style of International Relations... the one where people who embrace radical Islamic principles get an equal seat at the bargaining table.

As if I needed another reason to vote against Barack Hussein Obama.


If you think that it's better to shun and disrespect foreign leaders with whose country you already have a tense relationship with, then you and I see very differently on how foreign policy should be handled.

I think diplomacy should be priority #1 in international relations, saving military action for when all other means have been exhausted. If that means putting aside American arrogance to talk a crazy dude of the button, then so be it.

[atxtraveler]

If you think that it's better to shun and disrespect foreign leaders with whose country you already have a tense relationship with, then you and I see very differently on how foreign policy should be handled.

I think diplomacy should be priority #1 in international relations, saving military action for when all other means have been exhausted. If that means putting aside American arrogance to talk a crazy dude of the button, then so be it.

See my post in the other thread... there are plenty of examples where diplomacy does not work...

Hitler, Jung Il, Hussein, are just some examples. It wasn't until Reagan landed missles in Poland and Afghanistan that Russia perked up. 50 years of cold war style diplomacy is nice, cold hard steel works a little faster.

[GigaBear]

See my post in the other thread... there are plenty of examples where diplomacy does not work...

Hitler, Jung Il, Hussein, are just some examples. It wasn't until Reagan landed missles in Poland and Afghanistan that Russia perked up. 50 years of cold war style diplomacy is nice, cold hard steel works a little faster.


Wow. If more than 1% of the population actually thinks this way, it's no wonder our country is in the shape it is today.


The bottom line is what you said yourself---"50 years of cold war style diplomacy." Sure, we eventually resorted to threats of the use of force, but not until we had exhausted every possible means of diplomacy. You are suggesting that we set aside diplomacy altogether by not speaking to these guys---that's just ludicrous and downright scary.


We are no longer in the position--either economically, militarily, or diplomatically--to have an itchy trigger finger. The number one strength of the next 2 presidents must be diplomacy, or we are going to sink our own ship with our stupidity.

[Bexar Fan]

Diplomacy can be conducted without face to face talks. Direct talks however give status to the opponent.

I don't remember who said it yesterday and I'm tool lazy to go back and look, but Iran is not a powerful nation. They are a two bit dictatorship with religious zealots in charge. On the world stage, power earns respect. They would like to be a power, and would like to participate in direct talks because they would like to portray themselves as being on the same level of power and position in the world as the US. By the way, whether our allies like us or not, the world does recognize us as a powerful nation.

[atxtraveler]

Wow. If more than 1% of the population actually thinks this way, it's no wonder our country is in the shape it is today.


The bottom line is what you said yourself---"50 years of cold war style diplomacy." Sure, we eventually resorted to threats of the use of force, but not until we had exhausted every possible means of diplomacy. You are suggesting that we set aside diplomacy altogether by not speaking to these guys---that's just ludicrous and downright scary.


We are no longer in the position--either economically, militarily, or diplomatically--to have an itchy trigger finger. The number one strength of the next 2 presidents must be diplomacy, or we are going to sink our own ship with our stupidity.

I love riling you up. My point is that in 50 years of this so called diplomacy with Russia, NOTHING happened. There is absolutely no reason to waste 50 years worth of trips to summits around the world on Ahmenijihad. He is far more loony than Gorbachev and Putin ever were, and going to meet with him somewhere only wastes the jet fuel that we are purchasing from him anyway. Every meeting is a net win for him.

Just to be clear, I am not in anyway advocating an attack on Iran. I personally think they will spin themselves into a major hole on their own. What I am suggesting is that we do not in any way have face to face talks with them, but rather let the rest of the world sort them out. Ignore, Ignore, Ignore is my strategy there.

[ChipOC]

I love riling you up. My point is that in 50 years of this so called diplomacy with Russia, NOTHING happened. There is absolutely no reason to waste 50 years worth of trips to summits around the world on Ahmenijihad. He is far more loony than Gorbachev and Putin ever were, and going to meet with him somewhere only wastes the jet fuel that we are purchasing from him anyway. Every meeting is a net win for him.

Just to be clear, I am not in anyway advocating an attack on Iran. I personally think they will spin themselves into a major hole on their own. What I am suggesting is that we do not in any way have face to face talks with them, but rather let the rest of the world sort them out. Ignore, Ignore, Ignore is my strategy there.
Diplomacy is just a waiting game to see how effective the sanctions will be on turning their economy into dogie doo. If it gets bad enough the people will revolt against them wasting all their money on trying to get a weapon to destroy Israel and bring on their version of the apocalypse.

Russia is playing a huge game against us by propping them up and giving them nuclear technology. They are in bed with them and Chavez just to keep us busy. For what, I'm not sure. I guess it is just the old KGB back in charge and they hate what they hate. It seemed they were doing better when they partnered with us on things. With their oil production booming, I guess they feel like they have the resources to make a move to be a major player again.

The key is waiting till the last minute on Iran getting nukes. If they get them and you can prove it before they launch them, you better hit them hard with everything you have, because they will use them because they are religious nut jobs.

[atxtraveler]

Diplomacy is just a waiting game to see how effective the sanctions will be on turning their economy into dogie doo. If it gets bad enough the people will revolt against them wasting all their money on trying to get a weapon to destroy Israel and bring on their version of the apocalypse.

Russia is playing a huge game against us by propping them up and giving them nuclear technology. They are in bed with them and Chavez just to keep us busy. For what, I'm not sure. I guess it is just the old KGB back in charge and they hate what they hate. It seemed they were doing better when they partnered with us on things. With their oil production booming, I guess they feel like they have the resources to make a move to be a major player again.

The key is waiting till the last minute on Iran getting nukes. If they get them and you can prove it before they launch them, you better hit them hard with everything you have, because they will use them because they are religious nut jobs.

Dang it... why does Chip have to be right so often.

[Volunteer]

If this was such a bad idea, I'm just wondering why our intelligent Republican friends that have controlled the White House for the last 8 years and Congress for 6 of the last 8 years didn't put a sptop to all this nonsense???

Pay special attention to the last 3 or 4 paragraphs.

http://query.nytimes.com/gst/fullpage.html?res=9E06E3D6123BF932A2575AC0A9659C8B 63&sec=&spon=&pagewanted=print

[Volunteer]

More info on the origin of the problem. Lack of foresight here.

http://www.bucksright.com/bush-proposed-fannie-mae-freddie-mac-supervision-in-2003-1141

[atxtraveler]

Pay special attention to the last 3 or 4 paragraphs.

http://query.nytimes.com/gst/fullpage.html?res=9E06E3D6123BF932A2575AC0A9659C8B 63&sec=&spon=&pagewanted=print

NYT allows for XML broadcast, so here is that statement:

September 11, 2003
New Agency Proposed to Oversee Freddie Mac and Fannie Mae

By STEPHEN LABATON
The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.
Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.
The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.
The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac -- which together have issued more than $1.5 trillion in outstanding debt -- is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates.
''There is a general recognition that the supervisory system for housing-related government-sponsored enterprises neither has the tools, nor the stature, to deal effectively with the current size, complexity and importance of these enterprises,'' Treasury Secretary John W. Snow told the House Financial Services Committee in an appearance with Housing Secretary Mel Martinez, who also backed the plan.
Mr. Snow said that Congress should eliminate the power of the president to appoint directors to the companies, a sign that the administration is less concerned about the perks of patronage than it is about the potential political problems associated with any new difficulties arising at the companies.
The administration's proposal, which was endorsed in large part today by Fannie Mae and Freddie Mac, would not repeal the significant government subsidies granted to the two companies. And it does not alter the implicit guarantee that Washington will bail the companies out if they run into financial difficulty; that perception enables them to issue debt at significantly lower rates than their competitors. Nor would it remove the companies' exemptions from taxes and antifraud provisions of federal securities laws.
The proposal is the opening act in one of the biggest and most significant lobbying battles of the Congressional session.
After the hearing, Representative Michael G. Oxley, chairman of the Financial Services Committee, and Senator Richard Shelby, chairman of the Senate Banking Committee, announced their intention to draft legislation based on the administration's proposal. Industry executives said Congress could complete action on legislation before leaving for recess in the fall.
''The current regulator does not have the tools, or the mandate, to adequately regulate these enterprises,'' Mr. Oxley said at the hearing. ''We have seen in recent months that mismanagement and questionable accounting practices went largely unnoticed by the Office of Federal Housing Enterprise Oversight,'' the independent agency that now regulates the companies.
''These irregularities, which have been going on for several years, should have been detected earlier by the regulator,'' he added.
The Office of Federal Housing Enterprise Oversight, which is part of the Department of Housing and Urban Development, was created by Congress in 1992 after the bailout of the savings and loan industry and concerns about regulation of Fannie Mae and Freddie Mac, which buy mortgages from lenders and repackage them as securities or hold them in their own portfolios.
At the time, the companies and their allies beat back efforts for tougher oversight by the Treasury Department, the Federal Deposit Insurance Corporation or the Federal Reserve. Supporters of the companies said efforts to regulate the lenders tightly under those agencies might diminish their ability to finance loans for lower-income families. This year, however, the chances of passing legislation to tighten the oversight are better than in the past.
Reflecting the changing political climate, both Fannie Mae and its leading rivals applauded the administration's package. The support from Fannie Mae came after a round of discussions between it and the administration and assurances from the Treasury that it would not seek to change the company's mission.
After those assurances, Franklin D. Raines, Fannie Mae's chief executive, endorsed the shift of regulatory oversight to the Treasury Department, as well as other elements of the plan.
''We welcome the administration's approach outlined today,'' Mr. Raines said. The company opposes some smaller elements of the package, like one that eliminates the authority of the president to appoint 5 of the company's 18 board members.
Company executives said that the company preferred having the president select some directors. The company is also likely to lobby against the efforts that give regulators too much authority to approve its products.
Freddie Mac, whose accounting is under investigation by the Securities and Exchange Commission and a United States attorney in Virginia, issued a statement calling the administration plan a ''responsible proposal.''
The stocks of Freddie Mac and Fannie Mae fell while the prices of their bonds generally rose. Shares of Freddie Mac fell $2.04, or 3.7 percent, to $53.40, while Fannie Mae was down $1.62, or 2.4 percent, to $66.74. The price of a Fannie Mae bond due in March 2013 rose to 97.337 from 96.525.Its yield fell to 4.726 percent from 4.835 percent on Tuesday.
Fannie Mae, which was previously known as the Federal National Mortgage Association, and Freddie Mac, which was the Federal Home Loan Mortgage Corporation, have been criticized by rivals for exerting too much influence over their regulators.
''The regulator has not only been outmanned, it has been outlobbied,'' said Representative Richard H. Baker, the Louisiana Republican who has proposed legislation similar to the administration proposal and who leads a subcommittee that oversees the companies. ''Being underfunded does not explain how a glowing report of Freddie's operations was released only hours before the managerial upheaval that followed. This is not world-class regulatory work.''
Significant details must still be worked out before Congress can approve a bill. Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.
''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''
Representative Melvin L. Watt, Democrat of North Carolina, agreed.
''I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,'' Mr. Watt said.

[Volunteer]

One more. A democrat admits (gasp) he was wrong.

http://www.bucksright.com/bush-proposed-fannie-mae-freddie-mac-supervision-in-2003-1141

After being featured on Hannity & Colmes in a damning 2004 video showing Democrats fighting tooth-and-nail against greater Fannie Mae and Freddie Mac regulations (http://www.bucksright.com/bush-proposed-fannie-mae-freddie-mac-supervision-in-2003-1141), Democrat Congressman Artur Davis admits Democrats dropped the ball (http://www.politico.com/blogs/michaelcalderone/0908/Rep_Davis_responds_to_Hannity__Colmes_.html) on reigning in the failed institutions and calls on fellow Democrats to do the same.

“Like a lot of my Democratic colleagues, I was too slow to appreciate the recklessness of Fannie Mae and Freddie Mac. I defended their efforts to encourage affordable homeownership, when in retrospect I should have heeded the concerns raised by their regulator in 2004. Frankly, I wish my Democratic colleagues would admit that when it comes to Fannie and Freddie, we were wrong. By the way, I wish my Republican colleagues would admit that they missed the early warning signs that Wall Street deregulation was overheating the securities market and promoting dangerously lax lending practices. When it comes to the debacle in our capital markets, there is much blame to go around for both sides.”
Along with President Clinton (http://www.youtube.com/watch?v=hfGWxqsKFmY), I take issue with Davis’ contention that equal blame exists on both sides. President Bush requested greater oversight in 2003 (http://www.bucksright.com/bush-proposed-fannie-mae-freddie-mac-supervision-in-2003-1141), Republicans are clearly seen in the video fighting for greater oversight in 2004 (http://www.youtube.com/watch?v=_MGT_cSi7Rs), and John McCain led the charge for greater oversight in 2005 (http://www.govtrack.us/congress/bill.xpd?bill=s109-190). All efforts were rebuffed by Democrats, who demagogued the issue with racial politics that made reform impossible to accomplish. At least they tried. I see no evidence of any push toward greater Fannie Mae / Freddie Mac oversight since the short bus rolled onto Capitol Hill in January 2007.

That said, I appreciate Congressman Davis’ candor in admitting Democrats let their ideology get in the way of what was right for the country.

[atxtraveler]

McCain - Co-sponsored Bill on Reform in 2005

S. 190 [109th]: Federal Housing Enterprise Regulatory Reform Act of 2005

Overview

Sponsor:Sen. Charles Hagel [R-NE] (http://www.govtrack.us/congress/person.xpd?id=300050)hide cosponsors (javascript:DHTML_ToggleVisible('cosponsors',%20'd htmlbuttonMonoElementm0m1m0m1m0m1m0m0m0m9m3m0m',%2 0'hide%20cosponsors',%20'show%20cosponsors%20(3)') )
Cosponsors [as of 2007-01-08]
Sen. Elizabeth Dole [R-NC] (http://www.govtrack.us/congress/person.xpd?id=300035)
Sen. John McCain [R-AZ] (http://www.govtrack.us/congress/person.xpd?id=300071)
Sen. John Sununu [R-NH] (http://www.govtrack.us/congress/person.xpd?id=300095)
Cosponsorship information sometimes is out of date. Why? (http://www.govtrack.us/faq.xpd#cosponsors)

Bill Text:Summary (http://www.govtrack.us/congress/bill.xpd?bill=s109-190&tab=summary) | Full Text (http://www.govtrack.us/congress/billtext.xpd?bill=s109-190)Status:http://www.govtrack.us/media/checkmark.gifIntroducedJan 26, 2005http://www.govtrack.us/media/box.gifReported by Committee-http://www.govtrack.us/media/box.gifVoted on in Senate-http://www.govtrack.us/media/box.gifVoted on in House-http://www.govtrack.us/media/box.gifSigned by President-This bill never became law. This bill was proposed in a previous session of Congress. Sessions of Congress last two years, and at the end of each session all proposed bills and resolutions that haven't passed are cleared from the books.
Last Action:Jul 28, 2005: Committee on Banking, Housing, and Urban Affairs. Ordered to be reported with an amendment in the nature of a substitute favorably.

[The Banterer]

Diplomacy can be conducted without face to face talks. Direct talks however give status to the opponent.

I don't remember who said it yesterday and I'm tool lazy to go back and look, but Iran is not a powerful nation. They are a two bit dictatorship with religious zealots in charge. On the world stage, power earns respect. They would like to be a power, and would like to participate in direct talks because they would like to portray themselves as being on the same level of power and position in the world as the US. By the way, whether our allies like us or not, the world does recognize us as a powerful nation.

What are we supposed to do, set up redwhitebluereport.com to talk to all of the nations who aren't good enough for a face to face meeting? If we got the Sprint Unlimited plan then we could just text the crap out of them, maybe even get on their myspace.

Should we wait for them to earn our respect with nukes? Or should we talk to them about it? The idea of legitimizing them seems absurd to me. You don't meet the President of the United States and then become the most powerful man in the world because of it.

[ChipOC]

What are we supposed to do, set up redwhitebluereport.com to talk to all of the nations who aren't good enough for a face to face meeting? If we got the Sprint Unlimited plan then we could just text the crap out of them, maybe even get on their myspace.

Should we wait for them to earn our respect with nukes? Or should we talk to them about it? The idea of legitimizing them seems absurd to me. You don't meet the President of the United States and then become the most powerful man in the world because of it.
I hear Ty has them added as a friend on facebook.

[atxtraveler]

I hear Ty has them added as a friend on facebook.

You seriously have to quit before I start laughing at politics.

[Bexar Fan]

What are we supposed to do, set up redwhitebluereport.com to talk to all of the nations who aren't good enough for a face to face meeting? If we got the Sprint Unlimited plan then we could just text the crap out of them, maybe even get on their myspace.

Should we wait for them to earn our respect with nukes? Or should we talk to them about it? The idea of legitimizing them seems absurd to me. You don't meet the President of the United States and then become the most powerful man in the world because of it.
First I realize you are being sarcastic.

There are variations of multiparty talks, neutral party communication, and yes, even diplomatic correspondnce through a mutually agreed upon third parties (neutral or not). Diplomacy is communication, but it doen't have to be direct.

[The Banterer]

First I realize you are being sarcastic.

There are variations of multiparty talks, neutral party communication, and yes, even diplomatic correspondnce through a mutually agreed upon third parties (neutral or not). Diplomacy is communication, but it doen't have to be direct.

Obama specifically (in the debate) talked about diplomacy with Iran being a process. I just think that we need to use every reasonable diplomatic out that we have to avoid military conflicts. I don't think we should refuse to talk to anyone, when said talks could prevent war.

[Bexar Fan]

Obama specifically (in the debate) talked about diplomacy with Iran being a process. I just think that we need to use every reasonable diplomatic out that we have to avoid military conflicts. I don't think we should refuse to talk to anyone, when said talks could prevent war.
Obama has specifically supported one on one talks, without condition, between the heads of state of Iran and the US if he is elected. That is not diplomacy. Are you in favor of such a summit between Iran and the US?

[atxtraveler]

Obama has specifically supported one on one talks, without condition, between the heads of state of Iran and the US if he is elected. That is not diplomacy. Are you in favor of such a summit between Iran and the US?

No.

[The Banterer]

Obama has specifically supported one on one talks, without condition, between the heads of state of Iran and the US if he is elected. That is not diplomacy. Are you in favor of such a summit between Iran and the US?

That isn't what Obama has specifically supported. When McCain tried to claim that in the debate, Obama explained that diplomacy doesn't start at the top, and has on numerous occasions stated that an agenda would need to be set for any potential meeting of this nature.

The short answer is that yes, I would support our President meeting with the Iranian President to discuss nuclear proliferation and potential future conflicts. I think it's a much better option than not meeting with them and hoping that things turn out ok.

[atxtraveler]

That isn't what Obama has specifically supported. When McCain tried to claim that in the debate, Obama explained that diplomacy doesn't start at the top, and has on numerous occasions stated that an agenda would need to be set for any potential meeting of this nature.

The short answer is that yes, I would support our President meeting with the Iranian President to discuss nuclear proliferation and potential future conflicts. I think it's a much better option than not meeting with them and hoping that things turn out ok.

Obama has in fact flip-flopped on this position then, if your statement is his most current. While debating Billary for the Dem nomination, he criticized Bush furiously for not being willing to meet with AmentoJihad without all those pre-conditions.

[Bexar Fan]

That isn't what Obama has specifically supported. When McCain tried to claim that in the debate, Obama explained that diplomacy doesn't start at the top, and has on numerous occasions stated that an agenda would need to be set for any potential meeting of this nature.

The short answer is that yes, I would support our President meeting with the Iranian President to discuss nuclear proliferation and potential future conflicts. I think it's a much better option than not meeting with them and hoping that things turn out ok.
Why would you want to elevate a declared bigot, who is a religious zealot, and leader of a rogue nation to the diplomatic status of the leader of the most powerful nation on earth, especially without condition?

[The Banterer]

Obama has in fact flip-flopped on this position then, if your statement is his most current. While debating Billary for the Dem nomination, he criticized Bush furiously for not being willing to meet with AmentoJihad without all those pre-conditions.


I believe the preconditions he was speaking of were the "Do this then we'll talk to you type", not the "This is what we're going to talk about" variety.

The idea of what constitutes a "pre-condition" was of significance in the debate on Friday. There's a difference between setting an agenda for diplomatic action and expecting a resolution before you'll engage in diplomatic action.

[The Banterer]

Why would you want to elevate a declared bigot, who is a religious zealot, and leader of a rogue nation to the diplomatic status of the leader of the most powerful nation on earth, especially without condition?

Why would you rather start a war than utilize all diplomatic means?

[Bexar Fan]

Why would you rather start a war than utilize all diplomatic means?
I wouldn't. Please answer my question.

[The Banterer]

Why would you want to elevate a declared bigot, who is a religious zealot, and leader of a rogue nation to the diplomatic status of the leader of the most powerful nation on earth, especially without condition?

I never said that. This is sort of a "do you still beat your wife" question.

I think that we should use every reasonable diplomatic strategy possible to avoid war. I don't think that's unreasonable.

I also don't believe that someone meeting with the President affords them the same diplomatic status as the President. How, specifically, do you think Ahmadinejad's power would increase by meeting with the President?

This whole argument still stinks to me of the idea that we are too good to meet with these people.

[Bexar Fan]

How, specifically, do you think Ahmadinejad's power would increase by meeting with the President?

This whole argument still stinks to me of the idea that we are too good to meet with these people.
We agree that it stinks to have to go through the diplomatic hoops, but we need to because if our president were to sit down with Ahmadinejad the third world and rogue nations of the world, with the help of Al Jazeera and other media, would create the myth that the two leaders were equal in stature.

In a way it is like negotiating with terrorists who are trying to use their potential actions a leverage. Oh wait, Ahmadinejad is one.

[LordByron]

On the outside chance that you are being serious here, which Galveston huricane are you speaking of?Why the Galveston hurricane 1900 of course. It was the greatest natural disaster ever to strike the United States. It killed between 6,000 and 12,000 people. The official count is generally ascribed to be 8,000.

http://en.wikipedia.org/wiki/1900_Galveston_hurricane

[LordByron]

We weren't talking about President Bush, we are talking about Clinton, but I do love how dems ALWAYS sache their way to Bush to misdirect Clinton's weaknesses.

Implicate Slick Willie Clinton and all we hear is Bush this Bush that with a complete lack of mention or acknowledgement of the topic at hand. Like Bill, you can't acknowledge the mistakes. That's sad. At least you follow the lib manual to the letter though.

And vice versa of course.

[LordByron]

Pay special attention to the last 3 or 4 paragraphs.

http://query.nytimes.com/gst/fullpage.html?res=9E06E3D6123BF932A2575AC0A9659C8B 63&sec=&spon=&pagewanted=print
I read it again. My question stands.

[LordByron]

More info on the origin of the problem. Lack of foresight here.

http://www.bucksright.com/bush-proposed-fannie-mae-freddie-mac-supervision-in-2003-1141Help me out here Volunteer. In 2003 Bush proposed legislation to rein in Fannie Mae and Freddie Mac and the Democrats killed it in a Republican controlled congress?

[Volunteer]

Help me out here Volunteer. In 2003 Bush proposed legislation to rein in Fannie Mae and Freddie Mac and the Democrats killed it in a Republican controlled congress?

Yes. Via House and Senate rules, filibusters and etc..., the minority party is able to negatively impact legislation. Here's an example of just one way this works.

http://www.usatoday.com/news/washington/2007-06-26-senate-unions_N.htm