Illegal Immigration

[Shaggy Hiker]

"You are trying to assert long term downstream causality in a chaotic system."

And then Paulsen, Bernake, et al, took that to new heights, asserting that they knew what would happen if we did not bail them out.

I would guess that the "climate change is our fault" drum beaters don't like that either.

No, they don't, nor do they, like most people, understand it.

However, I left out a key word in that. It should be long term DELAYED downstream causality. You can infer causality with considerably better confidence (better than zero, that is) if the effect happens immediately after the causal agent. After all, chaotic systems are oscillating around an irregular space known as the strange attractor. If you shift the strange attractor, you will see the same oscillations, but around a different location. The point behind climate change is that people feel that the strange attractor has been shifted.

In other words: There has always been long, short, and very short, cycles of temperature fluctuations. There are record colds, extreme colds, cold, warm, extreme heat, and record heat. These always happen. Eventually, if the strange attractor never moved, there would never be another record set, though that could take infinite time. With global warming, there will still be the oscillations that we have always had, they will just be oscillating around a different point (actually not a point, but you get the idea).

So global warming doesn't violate what I MEANT to say, had I not left out that one word, but that doesn't change the fact that very few people seem to both understand chaos, and accept the implications. Some understand it, and choose to ignore the implications as far as causality is concerned, while the vast majority don't even understand it.

[Shaggy Hiker]

No I don't. Do you really think they could predict the future of one of the most chaotic systems ever devised by man? What was a fact was that their buddies were going under if they didn't bail them out.

And before you ask, yes they should have bailed out GM, they make Corevettes.

I agree with the first part, but not the second. That car isn't worth it.

I do think we had to bail out the banks just a little, but not the way we did or to the extent that we did. Should have made them feel the pain in exchange. The way we have it now, they screwed up in a MAJOR way...and got richer for it. What did we just reinforce?


As for immigration, militarizing the border would only work if the people don't want the immigrants. Plenty of people don't, but as I tried to point out earlier, plenty of people DO, too. The business interests in this state have solidly prevented ANY action on immigration, no matter how tepid. AZ is trying to push them out, ID is trying to pretend to push them out while actually looking the other way.

[homer13j]

Sorry for the delay - been out dirtbiking in central PA all week...

The fact that things were complained about for thirty years is irrelevant to the point. You are trying to assert long term downstream causality in a chaotic system. It doesn't matter which side you stand on, saying that was the cause is simply false. Instead, you could say "I think this was the cause." or "I think this was one of the factors." Either one would be sound, but they are both weak tea.

How about the fact that the provisions in the Community Reinvestment Act were pretty much ignored by the Reagan/GHB administrations until enforcement was kicked into high gear when Clinton took office in 1993?

And yes, perhaps I should have added "this was one of the factors" but I will also go as far to say he Community Reinvestment Act was the single biggest factor and what touched the whole thing off.

Now it's perfectly true that critics of FM&FM were ignored by the powers that be on both sides of the aisle. However it is also true that FM&FM's critics only came from one side of that aisle while those who defended the system only came from the other side (I'll let you figure out which) including a certain high-ranking member of the House Banking Committee who also just happened to be involved in a homosexual relationship with a certain high-ranking Fannie Mae executive... But naw, none of that could have anything to do with it, right?

You still haven't explained how Banks around the world have become involved in the crisis, and how it has effected most of the world economy ?

The foreign banks got involved (and screwed) when Fannie & Freddie began buying up these bad loans and repackaging them as bonds on the world financial markets backed by the full faith & trust of the U.S. government. D'oh!

If the banks had been allowed to fail, because all the high street banks were involved as well, all our personal savings, mortgages, banks accounts would have gone to the wall with them.

Here in the states we have the Federal Deposit Insurance Corporation - a federal government entity which insures all bank accounts up to $250,000. Not sure how it handles mortgages if a bank fails, but I'm sure the taxpayers are on the hook for this as well.

[homer13j]

That car isn't worth it.

Blasphemy!

[NeedSomeAnswers]

The foreign banks got involved (and screwed) when Fannie & Freddie began buying up these bad loans and repackaging them as bonds on the world financial markets backed by the full faith & trust of the U.S. government. D'oh!

It was the Banks that actually created the Credit Default Swaps financial products, rather then the mortgage companies.

[Shaggy Hiker]

How about the fact that the provisions in the Community Reinvestment Act were pretty much ignored by the Reagan/GHB administrations until enforcement was kicked into high gear when Clinton took office in 1993?

No, even if this was true, which I have no idea about, it makes no difference to the point. Had you said that it was ignored until some time in the early part of the Bush administration, that would make a difference as there would be a continuity between cause and effect. Instead, it remained non-existent for some length of time then surfaced. While it makes the relationship slightly more plausible, such that it might be provable, it could only be done with multiple replicates, which you can never have in economic systems.

And yes, perhaps I should have added "this was one of the factors" but I will also go as far to say he Community Reinvestment Act was the single biggest factor and what touched the whole thing off.

You would be going too far, but you would be in good company there.

The foreign banks got involved (and screwed) when Fannie & Freddie began buying up these bad loans and repackaging them as bonds on the world financial markets backed by the full faith & trust of the U.S. government. D'oh!

That was a part of it. There was also the reason that the global pool was seeking such things due to the very low interest rates, the fact that the rating agencies were over-rating the bonds created by the banks (not just Fannie & Freddie, they are mostly being attacked by the right because they are what they are), and the bit that several groups were pumping up the bad bonds because they were betting heavily against them. There is one large bank that has been blamed fairly publicly for that, but they weren't actually the worst actors.

There was a very good way to make money on loans and a few groups took advantage of it. That's capitalism. All the rest of that is kind of silly. When you have a few funds that are saying "We will buy as much of this debt as you can create, as long as it is bad enough." Then why bother blaming the bad debt on some act of Congress? There was a willing buyer. Under capitalism, there will generally become a willing seller.

Here in the states we have the Federal Deposit Insurance Corporation - a federal government entity which insures all bank accounts up to $250,000. Not sure how it handles mortgages if a bank fails, but I'm sure the taxpayers are on the hook for this as well.

Not necessarily. It depends considerably on what the mortgage is and how it is performing. For a bank, a mortgage in good standing is income, so nobody is "on the hook" for it. If the mortgage is not in good standing...then it is not in good standing. What happens after that is pretty complicated. What does NOT happen is that the borrower doesn't get the property as a free gift just because the bank crashed. In fact, they can suffer worse.

[dbasnett]

What does NOT happen is that the borrower doesn't get the property as a free gift just because the bank crashed. In fact, they can suffer worse.

Funny you should say that. I just recently saw / read ??? a story about a woman who got her mortgage balance reduced to 0 because the bank, that bought the bank, that bought the bank, kept refusing her mortgage payments. She believe her paperwork was lost and the judge said fine, your home is yours.

[techgnome]

That's different. That didn't happen as a result of the bank going under. that's a result of a paperwork snafu. It's something that could have just as easily happened in better times.

-tg

[dbasnett]

That's different. That didn't happen as a result of the bank going under. that's a result of a paperwork snafu. It's something that could have just as easily happened in better times.

-tg

When I said bought I meant acquired the assets of the failed bank. Sorry for not being clear.

[techgnome]

It's an indirect result of the bank failing... some one lost paperwork along the way... happens. And it could still happen, even with out a failing bank. In short, the bank failed to produce documentation that the woman still owed them money. So the judge did the only logical thing.

-tg

[dbasnett]

It's an indirect result of the bank failing... some one lost paperwork along the way... happens. And it could still happen, even with out a failing bank. In short, the bank failed to produce documentation that the woman still owed them money. So the judge did the only logical thing.

-tg

It was just funny that Shaggy said what he did.

[Shaggy Hiker]

I was aware of that situation, though not of that exact case. One of the side effects of the packaging and selling of mortgages during the runup (I actually bought a house in 2003, before the rise, but while the packaging and selling was happening) was that individual mortgages could get lost. The paper had been bought and sold so many times that there were cases where people thought they held the note when they didn't, actually, and nobody could determine who really did have the note. If a non-holder demanded payment from a homeowner, they certainly can't enforce that claim (or else anybody could demand payment). If the real note holder couldn't be identified, there were cases, such as the one you cited, where the courts declared the mortgage void.

It's kind of like that old Monopoly card: Bank error in your favor. Collect one house.

Still, that has more to do with bungling than bank failures, but I do see your point. There's a worse case playing out up here. A bank failed while holding the note for a very expensive piece of property that was part of a seasonal business. The bank had recognized the seasonal nature of the business and adjusted payments accordingly (nothing in the winter, plenty in the summer). Once the bank failed, the new owner (FDIC lines up a buyer before the actual failure) refused that mortgage (for no clear reason that I can see), so FDIC called the loan.

Sometimes you win...