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President Donald Trump's United States of America

lenaitch

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A major factor in the GFC was the proliferation of sub-prime mortgages; a million little ticking time bombs re-packaged and sold as equity many times over. Was anyone held accountable? Has anything changed in US investment and banking rules? I recall changes were put in place later but I understand some or all have since been rolled back. So long as the financial section gets to play roulette with other people's money knowing that the government will backstop them, what has changed?

One, relatively minor, thing that bugs me about the financial section is they come up with terms and acronyms for their numerous products and processes that try to make something that is inherently complex to the average Jane or Joe seem as simple and benign as kittens.
 

jje1000

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A major factor in the GFC was the proliferation of sub-prime mortgages; a million little ticking time bombs re-packaged and sold as equity many times over. Was anyone held accountable? Has anything changed in US investment and banking rules? I recall changes were put in place later but I understand some or all have since been rolled back. So long as the financial section gets to play roulette with other people's money knowing that the government will backstop them, what has changed?
An interesting aside- the roots were planted in 1977 as the Community Reinvestment Act (a response to red-lining), which was consequentially expanded in the 90s under Clinton, and eventually spread into the private sector in the 2000s, becoming the sub-prime mortgages we all love today.

Much like the student loan time bomb, government guarantees on loans (aka money that must always be paid back) more or less created a toxic cycle where greed and politics converge.

While the mortgage crisis convulsing Wall Street has its share of private-sector culprits, they weren’t the ones who “got us into this mess.” Barney Frank’s talking points notwithstanding, mortgage lenders didn’t wake up one fine day deciding to junk long-held standards of creditworthiness in order to make ill-advised loans to unqualified borrowers. It would be closer to the truth to say they woke up to find the government twisting their arms and demanding that they do so – or else.

The pressure to make more loans to minorities (read: to borrowers with weak credit histories) became relentless. Congress passed the Community Reinvestment Act, empowering regulators to punish banks that failed to “meet the credit needs” of “low-income, minority, and distressed neighborhoods.” Lenders responded by loosening their underwriting standards and making increasingly shoddy loans. The two government-chartered mortgage finance firms, Fannie Mae and Freddie Mac, encouraged this “subprime” lending by authorizing ever more “flexible” criteria by which high-risk borrowers could be qualified for home loans, and then buying up the questionable mortgages that ensued.
Congressman (Barney) Frank (D-MA 4), of course, blamed the financial crisis on the failure adequately to regulate the banks. In this, he is following the traditional Washington practice of blaming others for his own mistakes. For most of his career, Barney Frank was the principal advocate in Congress for using the government's authority to force lower underwriting standards in the business of housing finance. Although he claims to have tried to reverse course as early as 2003, that was the year he made the oft-quoted remark, "I want to roll the dice a little bit more in this situation toward subsidized housing." Rather than reversing course, he was pressing on when others were beginning to have doubts.

For that reason, the Fannie Mae scandal is the most important political scandal since Watergate. It helped sink the American economy. It has cost taxpayers about $153 billion, so far. It indicts patterns of behavior that are considered normal and respectable in Washington.

The Fannie Mae scandal has gotten relatively little media attention because many of the participants are still powerful, admired and well connected. But Gretchen Morgenson, a Times colleague, and the financial analyst Joshua Rosner have rectified that, writing “Reckless Endangerment,” a brave book that exposes the affair in clear and gripping form.
The story centers around James Johnson, a Democratic sage with a raft of prestigious connections. Appointed as chief executive of Fannie Mae in 1991, Johnson started an aggressive effort to expand homeownership.

Back then, Fannie Mae could raise money at low interest rates because the federal government implicitly guaranteed its debt.
In 1995, according to the Congressional Budget Office, this implied guarantee netted the agency $7 billion. Instead of using that money to help buyers, Johnson and other executives kept $2.1 billion for themselves and their shareholders. They used it to further the cause — expanding their clout, their salaries and their bonuses. They did the things that every special-interest group does to advance its interests.

Fannie Mae co-opted relevant activist groups, handing out money to Acorn, the Congressional Black Caucus, the Congressional Hispanic Caucus and other groups that it might need on its side.
Fannie ginned up Astroturf lobbying campaigns. In 2000, for example, a bill was introduced that threatened Fannie’s special status. The Coalition for Homeownership was formed and letters poured into Congressional offices opposing the bill. Many signatories of the letter had no idea their names had been used.

Fannie lavished campaign contributions on members of Congress. Time and again experts would go before some Congressional committee to warn that Fannie was lowering borrowing standards and posing an enormous risk to taxpayers. Phalanxes of congressmen would be mobilized to bludgeon the experts and kill unfriendly legislation.

Perhaps even more important, Johnson’s tactics were watched closely and subsequently imitated by others in the private sector, interested in creating their own power and profit machines. Fannie Mae led the way in relaxing loan underwriting standards, for example, a shift that was quickly followed by private lenders. Johnson’s company also automated the lending process so that loan decisions could be made in minutes and were based heavily on a borrower’s credit history, rather than on a more comprehensive financial profile as had been the case in the past.

Eliminating the traditional due diligence conducted by lenders soon became the playbook for financial executives across the country. Wall Street, always ready to play the role of enabler, provided the money for these dubious loans, profiting mightily. Without the Wall Street firms giving billions of dollars to reckless lenders, hundreds of billions of bad loans would never have been made.

Again, raising the point of Bush again- who failed to resolve this issue in time before the tower of cards collapsed:
 
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Hopkins123

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All this rhetoric about Trump being too unstable and irrational to have control over the nuclear option and yet he's not the President whom started wars in seven countries, killed thousands and displaced millions of migrants; the root cause for today's border security panic to begin with.

The truly deserving recipient of a Nobel Peace Prize surely ought to be the person who's actually bringing peace to the Korean Peninsula, bringing home the troops from Iraq and Afghanistan, resolving the Israel-Palestine conflict and liberating Venezuela, among other things. History will vindicate Trump.
 

Videodrome

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You go on believing that. There won't be any resolution to North Korea so long as Kims are in power. You honestly believe they would agree to any kind of democratic changes or a capitalist economy? Dear Leader needs his steak and lobster for dinner.
 

BurlOak

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The truly deserving recipient of a Nobel Peace Prize surely ought to be the person who's actually bringing peace to the Korean Peninsula, bringing home the troops from Iraq and Afghanistan, resolving the Israel-Palestine conflict and liberating Venezuela, among other things. History will vindicate Trump.
History and other writers tend to be on the left end of the spectrum.
History may indeed vindicate Trump, but it will not be written about.
(kind of like "if a tree falls in a forest . . ")
 

jje1000

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You go on believing that. There won't be any resolution to North Korea so long as Kims are in power. You honestly believe they would agree to any kind of democratic changes or a capitalist economy? Dear Leader needs his steak and lobster for dinner.
Correction: there won't be any resolution to the North Korea problem as long as China's able to use them as a thorn in the side of South Korea and America. North Korea is a great leverage in creating economic panic at the right time.

Second fact is that the destruction of Libya and Gaddafi's lynching even after his dismantling of his country's WMD program more or less destroyed Western legitimacy in the eyes of 'the dictator'. Why do what they say if they're going to remove you anyways?
 

AlvinofDiaspar

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Second fact is that the destruction of Libya and Gaddafi's lynching even after his dismantling of his country's WMD program more or less destroyed Western legitimacy in the eyes of 'the dictator'. Why do what they say if they're going to remove you anyways?
Not that NK really ever has any inclination of honoring agreements *anyways*, given their track record. Whether Western policy is legitimate is irrelevant. Qaddafi's Libya ain't NK.

And whoever said "bring peace to Korea" really should look at history and where things stand right now. Showing up at a summit and legitimizing a rogue regime which continued all manners of BS ain't it.

AoD
 
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jje1000

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Not that NK really ever has any inclination of honoring agreements *anyways*, given their track record. Whether Western policy is legitimate is irrelevant. Qaddafi's Libya ain't NK.
They can get away with it as long as the Chinese remain their main trading partner (87% exports, 90% imports) and a large source of foreign aid. The Chinese will allow them some leeway to act out in return for the entire country being an ideological and military buffer zone.

North Korea's leaders ultimately have no skin in the global game (beyond their savings accounts) and no need to cooperate, as long as the country remains detached from the Western global economy. The point of Ghaddafi is that it proves the pitfalls of cooperating with the West, in that they can still backtrack on their word at a whim.

On the face of it, the comparison seems illogical. The North Koreans themselves view the Libyan experience as a cautionary tale: after NATO’s intervention in Libya in 2011 helped tip the civil war against Colonel Muammar Gaddafi’s regime, a North Korean official openly stated that Libya’s WMD deal with the US had been used as “an invasion tactic to disarm the country”.
 

AlvinofDiaspar

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They can get away with it as long as the Chinese remain their main trading partner (87% exports, 90% imports) and a large source of foreign aid. The Chinese will allow them some leeway to act out in return for the entire country being an ideological and military buffer zone.

North Korea's leaders ultimately have no skin in the global game (beyond their savings accounts) and no need to cooperate, as long as the country remains detached from the Western global economy. The point of Ghaddafi is that it proves the pitfalls of cooperating with the West, in that they can still backtrack on their word at a whim.

That's like saying water is wet and the sky is blue. Fundamentally - unlike Libya, the need to cooperate with the West - and the gain from doing so - so far as the leadership is concerned - is far more minimal.

AoD
 

jje1000

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That's like saying water is wet and the sky is blue. Fundamentally - unlike Libya, the need to cooperate with the West - and the gain from doing so - so far as the leadership is concerned - is far more minimal.
Well I'm glad we're on the same boat- to point I made initially- 1.) NK already has backing from China so the actual state is not teetering on the brink (the people are expendable). It's a problem from a Western perspective, but less so to the North Korean leadership.

2.) Western attempts at resolving the North Korea issue have ranged from sanctions (aka isolation, doesn't work due as North Korea is already isolated + smuggling and Chinese support) to economic incentives (integration into global economy)- yet this second, more welcoming position is undermined by prior actions in Libya that acts as a cautionary tale.
 

AlvinofDiaspar

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Well I'm glad we're on the same boat- to point I made initially- 1.) NK already has backing from China so the actual state is not teetering on the brink (the people are expendable). It's a problem from a Western perspective, but less so to the North Korean leadership.

2.) Western attempts at resolving the North Korea issue have ranged from sanctions (aka isolation, doesn't work due as North Korea is already isolated + smuggling and Chinese support) to economic incentives (integration into global economy)- yet this second, more welcoming position is undermined by prior actions in Libya that acts as a cautionary tale.
And my point is - any claims that running a presidential level summit is about "making peace with NK" is posturing BS at best, enabling and legitimizing at worst.

AoD
 

jje1000

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And my point is - any claims that running a presidential level summit is about "making peace with NK" is posturing BS at best, enabling and legitimizing at worst.

AoD
Which is an entirely legitimate point to make, and I think it depends on how one much of an impact a reliable nuclear arsenal (the reason why the West pays attention in the first place) has on the current balance of power. The status quo has held up to this point as North Korea has been fundamentally weaker than the south- would it change if North Korea uses its nuclear program as leverage? Do you think they'll use their fleet primarily for posturing- that the North Korean generals are more interested in internal affairs and staying in power?

It seems like there are no good options without upsetting the apple cart-which could knock down others in the process. Probably a reason why the status-quo of doing nothing is held so far.
 

W. K. Lis

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A point to ponder about Donald Trump.

The Roman Empire had some crazy emperors. A couple of well known ones are Nero and Caligula. See link for others.

Despite them, the Roman Empire still endured, and so should the United States of America... for now.
 

kEiThZ

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the root cause for today's border security panic to begin with.
1. Illegal border crossings actually dropped under Obama.

2. The cause for today's uptick is Trump's cancellation of security assistance to Central America.

The truly deserving recipient of a Nobel Peace Prize surely ought to be the person who's actually bringing peace to the Korean Peninsula, bringing home the troops from Iraq and Afghanistan, resolving the Israel-Palestine conflict and liberating Venezuela, among other things. History will vindicate Trump.
LOL. Delusional. Not one of those will be true. Trump doesn't have the chops to do any of that. This is a guy who can't get through his daily intelligence brief and you think he's going to accomplish Middle East peace? Not to mention massively understaffing the State Department and having a whole bunch of acting cabinet secretaries. Trump doesn't even have a permanent ambassador to Korea and you think he's going to make peace there?

The only thing Trump has accomplished is providing the world an opportunity to practice functioning without American leadership. And proving how unreliable the American voter actually is. Every country that has to make a deal with the US will now factor in elections which bring in leadership like this.
 

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