Obama vs Trump economies

[Cubs79]

You just pointed out that we're finally in an era of consistent growth that isn't wildly fluctuating. Over the last 5 quarters we are averaging 3% growth which is extremely good news.

It's not healthy to have 4% GDP growth, then crash down to 1% the next quarter, and then get negative growth and flirt with recession.

But it wasn't doing that that last year and a half or so of Obama's presidency.

 

[Cubs79]

Well, we can look at it from a micro level instead of a macro level.

A person wants to buy a house worth double of what they had. They finance 100% of the value to buy it. By appearances, they are experiencing growth but their balance sheet hasn't changed. That's what we had for 7 years. We are now improving our balance sheet even though securities are finally maturing and being taken out of the economy. We are growing AND paying off debt, not floating at the status quo. Now the federal government is a totally different issue and they are not making forward progress but the country in general is.

I am asking for actual #s that support your claims. After the 08 crash 100% financing was very difficult for most people to get when purchasing a home, so just throwing out that as an example seems pretty sketchy, which is why I would like to see actual #s or studies, not just your hypotheticals.

 

[Crazyhole]

I am asking for actual #s that support your claims. After the 08 crash 100% financing was very difficult for most people to get when purchasing a home, so just throwing out that as an example seems pretty sketchy, which is why I would like to see actual #s or studies, not just your hypotheticals.

Lol, where do you think the money that was printed and loaned out went to? Banks used it to buy stocks. They were borrowing money at 0% interest and sticking it into investments.

 

[Cubs79]

Lol, where do you think the money that was printed and loaned out went to? Banks used it to buy stocks. They were borrowing money at 0% interest and sticking it into investments.

Huh? What does that have to do with someone doing 100% financing on a home?

 

[UCFWayne]

not to mention that trump has also been conducting trade wars with several countries and most notably china. and yet the trump economy is still strong.

 

[Crazyhole]

Huh? What does that have to do with someone doing 100% financing on a home?

Honestly, I can't give you a more basic metaphor. After that, If you believe that there was real growth during the Obama years then I can't really say anything that can change your mind. You may as well start counterfeiting 20 dollar bills and say your income has gone up.

 

[goodknightfl]

Exactly! right after bush cheney PLUNGED us into the worst recession ever,
President Obama had to fix it from zero. And he did it with Class.

The Clinton administration ramped up pressure on the banks to do sub prime loans. There was an article in the NY times in 1999 about it. As much as I didn't like John Mc Cain, he was warning about the mortgage mess for a year or 2 before it broke. It took a number of years for Clintons easy money make bad loans for more than the house was worth policy to cause the crash. Most blame the banks, but it was the federal gov't under Clinton that did it. Now to be honest, Bill Clinton did not start the sub prime mess, that actually dates back to Jimmy Carter. he simply doubled down on it.
I think the Gov't over reacted even at that, with bank bail outs, car bail outs, it was gov't elitist taking care of their rich buddies, Then came the federal union stimulus package that did nothing except funnel money to the public unions, to be kicked back to Democratic politicians. gov't elitist taking care of themselves.

The so called Bush crash was nothing compared to the Carter crash. And yes I went through both. At no time, did we have double digit unemployment, double digit inflation, with double digit interest rates, Home mortgage interest rates were in the high teens, gas shortages and rationing, an entire Banking industry (savings n loans) collapse, under Bush, Obama or Trump, We did under Jimmy Carter. My house had a 10.95 rate and that was only because of a Florida loan program.

https://www.nytimes.com/1999/09/30/business/fannie-mae-eases-credit-to-aid-mortgage-lending.html

 

[Cubs79]

Honestly, I can't give you a more basic metaphor. After that, If you believe that there was real growth during the Obama years then I can't really say anything that can change your mind. You may as well start counterfeiting 20 dollar bills and say your income has gone up.

I am asking you for actual #s or evidence, not metaphors. I know what QE is, I don't need your metaphors describing it. Can you actually give #s to prove your "real growth" theory? Can you at least describe what you mean by "real growth"?

 

[Cubs79]

The Clinton administration ramped up pressure on the banks to do sub prime loans. There was an article in the NY times in 1999 about it. As much as I didn't like John Mc Cain, he was warning about the mortgage mess for a year or 2 before it broke. It took a number of years for Clintons easy money make bad loans for more than the house was worth policy to cause the crash. Most blame the banks, but it was the federal gov't under Clinton that did it. Now to be honest, Bill Clinton did not start the sub prime mess, that actually dates back to Jimmy Carter. he simply doubled down on it.
I think the Gov't over reacted even at that, with bank bail outs, car bail outs, it was gov't elitist taking care of their rich buddies, Then came the federal union stimulus package that did nothing except funnel money to the public unions, to be kicked back to Democratic politicians. gov't elitist taking care of themselves.

The so called Bush crash was nothing compared to the Carter crash. And yes I went through both. At no time, did we have double digit unemployment, double digit inflation, with double digit interest rates, Home mortgage interest rates were in the high teens, gas shortages and rationing, an entire Banking industry (savings n loans) collapse, under Bush, Obama or Trump, We did under Jimmy Carter. My house had a 10.95 rate and that was only because of a Florida loan program.

https://www.nytimes.com/1999/09/30/business/fannie-mae-eases-credit-to-aid-mortgage-lending.html

The government passed laws the banks wanted, so you cannot dismiss the blame from the banks as well. They most certainly played their role by bundling subprime mortgages into bonds and things of that nature. The Fed. government did not force them to do that.

 

[UCFWayne]

Honestly, I can't give you a more basic metaphor. After that, If you believe that there was real growth during the Obama years then I can't really say anything that can change your mind. You may as well start counterfeiting 20 dollar bills and say your income has gone up.

cubs also thinks socialism works perfectly

 

[goodknightfl]

The government passed laws the banks wanted, so you cannot dismiss the blame from the banks as well. They most certainly played their role by bundling subprime mortgages into bonds and things of that nature. The Fed. government did not force them to do that.

The banks were complaining about the pressure to make sub prime loans. The banks knew those loans were going to eventually default. They knew you can't make loans of 125% of property value, often 8 to 10 times what people earned where the payments were over 1/2 their incomes without them defaulting. that is where the reif's came from, it was the banks way of bundling good and bad loans into an investment and selling them off so they would not take the total hit. Near the end of the bubble they figured out they could make money turning over the loans (refi) and yes at that point sped up the popping of the bubble. The banks were not innocent, especially towards the end, but they were not the instigators of the original mess either. Government interference and social engineering was.

 

[goodknightfl]

generally speaking we all base everything we think on our lifetime of experience, and don't look to history. In my case if you go back to my early teens, that puts you in the mid to late 1960's anything before that is hear say, I didn't really live through it. My dad used to talk about the great depression, he was a young boy when it hit, it economy really did not recover until WW2 hit he served in that war. If you look at history the recovery usually mirrors the down turn. In 1920 we had a depression, 3 years later the economy was booming... IE the roaring 20's. The Government stayed out of the way and normal market forces worked.
Then came the crash than Great Depression, The gov't got involved up to its neck, and it the economy was weak until the war hit. Weak recovery.

The next big one was carters meltdown, Reagan did more than he should by bailing out Chrysler and buying tens of thousands of repo homes, but mostly he let things run, that led to a strong recovery and growth period that basically lasted 30 years other than 1 or 2 very mild recessions. Then we had the Bush crash, we had warnings of what was coming for 12+ years but were too stupid to read them. The tech bubble popping, the oil bubble popping and others, the Mortgage bubble is the one that finally broke the dam. Had the Federal Government just helped around the edges and not went all in, the market would have adapted quickly and we would have recovered strongly like in 1920, and after Clinton. But instead we did a new version of the great deal, screwing around with every part of the economy micro managing things and we had a long painful weak recovery. I blame Nixon, Ford and Carter for the carter crash, and I blame Bush1, Clinton, and Bush2 for the Bush crash. I also blame Roosevelt, and Obama for the anemic recoveries after the Great depression and Great Recession. They were only great because the government panicked and made them great.

 

[Cubs79]

The banks were complaining about the pressure to make sub prime loans. The banks knew those loans were going to eventually default. They knew you can't make loans of 125% of property value, often 8 to 10 times what people earned where the payments were over 1/2 their incomes without them defaulting. that is where the reif's came from, it was the banks way of bundling good and bad loans into an investment and selling them off so they would not take the total hit. Near the end of the bubble they figured out they could make money turning over the loans (refi) and yes at that point sped up the popping of the bubble. The banks were not innocent, especially towards the end, but they were not the instigators of the original mess either. Government interference and social engineering was.

This simply isn't true. They were fine with subprime and ARMs, especially if they knew they were going to sell it and be off the hook if it defaulted. But beyond that, because the market was strong, they also just assumed the buyer would sell or refinance the house before they defaulted. Banks knew there was a risk, but they most certainly thought the risk outweighed the reward.

You keep saying bringing up the government, but a lot of this stuff was allowed by deregulation or less government involvement, not more. So there is certainly a lot of room to criticize the deregulation, but deregulation implies less government involvement, not more interference as you seem to be implying.

 

[Crazyhole]

generally speaking we all base everything we think on our lifetime of experience, and don't look to history. In my case if you go back to my early teens, that puts you in the mid to late 1960's anything before that is hear say, I didn't really live through it. My dad used to talk about the great depression, he was a young boy when it hit, it economy really did not recover until WW2 hit he served in that war. If you look at history the recovery usually mirrors the down turn. In 1920 we had a depression, 3 years later the economy was booming... IE the roaring 20's. The Government stayed out of the way and normal market forces worked.
Then came the crash than Great Depression, The gov't got involved up to its neck, and it the economy was weak until the war hit. Weak recovery.

The next big one was carters meltdown, Reagan did more than he should by bailing out Chrysler and buying tens of thousands of repo homes, but mostly he let things run, that led to a strong recovery and growth period that basically lasted 30 years other than 1 or 2 very mild recessions. Then we had the Bush crash, we had warnings of what was coming for 12+ years but were too stupid to read them. The tech bubble popping, the oil bubble popping and others, the Mortgage bubble is the one that finally broke the dam. Had the Federal Government just helped around the edges and not went all in, the market would have adapted quickly and we would have recovered strongly like in 1920, and after Clinton. But instead we did a new version of the great deal, screwing around with every part of the economy micro managing things and we had a long painful weak recovery. I blame Nixon, Ford and Carter for the carter crash, and I blame Bush1, Clinton, and Bush2 for the Bush crash. I also blame Roosevelt, and Obama for the anemic recoveries after the Great depression and Great Recession. They were only great because the government panicked and made them great.

That's exactly correct. The best way to handle a recession or a crash is to let values drop to where they become good investments and then recover. Monetary policy intervention keeps things from naturally correcting itself. If something is 75% overvalued then it needs to drop 75%. Screwing with the money means it may only drop by 25% but it's because they just decreased the value of the dollar to do it. Everybody loses in that scenario, not just the people who made bad investments.

 

[Crazyhole]

This simply isn't true. They were fine with subprime and ARMs, especially if they knew they were going to sell it and be off the hook if it defaulted. But beyond that, because the market was strong, they also just assumed the buyer would sell or refinance the house before they defaulted. Banks knew there was a risk, but they most certainly thought the risk outweighed the reward.

You keep saying bringing up the government, but a lot of this stuff was allowed by deregulation or less government involvement, not more. So there is certainly a lot of room to criticize the deregulation, but deregulation implies less government involvement, not more interference as you seem to be implying.

Deregulation was a secondary issue. The problem was that the government was using Fannie Mae to facilitate loans to people who couldn't afford them. Banks were making loans because they didn't have to keep them in their portfolio and could just get paid for doing the leg work. Without FM, those Banks would have only made loans they knew were secure based on market fundamentals. The whole thing was a social engineering experiment to help poor people live a lifestyle they couldn't possibly afford.

 

[Cubs79]

Deregulation was a secondary issue. The problem was that the government was using Fannie Mae to facilitate loans to people who couldn't afford them. Banks were making loans because they didn't have to keep them in their portfolio and could just get paid for doing the leg work. Without FM, those Banks would have only made loans they knew were secure based on market fundamentals. The whole thing was a social engineering experiment to help poor people live a lifestyle they couldn't possibly afford.

But banks were part of this. You guys are acting like banks didn't want and approve of looser regulations so they could potentially loan to more people. They most certainly wanted that.

 

[UCFKnight85]

This simply isn't true. They were fine with subprime and ARMs, especially if they knew they were going to sell it and be off the hook if it defaulted. But beyond that, because the market was strong, they also just assumed the buyer would sell or refinance the house before they defaulted. Banks knew there was a risk, but they most certainly thought the risk outweighed the reward.

You keep saying bringing up the government, but a lot of this stuff was allowed by deregulation or less government involvement, not more. So there is certainly a lot of room to criticize the deregulation, but deregulation implies less government involvement, not more interference as you seem to be implying.

It was the policy of the US Government to assure that we pushed as many people into homes as possible. Every bit of loan regulation and credit regulation reflected this; it was a bipartisan belief that there was no downside to the housing market and more loans to more people, the better.

Deregulation wouldn't have mattered if these banks didn't know that the entire US Government was all-in with assuring that they can loan to anyone/everyone and they'd back those securities no matter how risky or shitty they were. They had the Government to fall back on if these dogshit loans they were making ended up being a problem.

Just go back and look at what happened to banks when they dared to refuse lending to people based upon risk profiles. They got called racists since often this entangled minority borrowers, so the Government passed laws mandating that banks loan to people even with incredible default risk, to remove the perceive stench of racism. Even when it probably was just legit credit risk assessment.

 

[Crazyhole]

But banks were part of this. You guys are acting like banks didn't want and approve of looser regulations so they could potentially loan to more people. They most certainly wanted that.

Why wouldn't they want that? They were being told that they had to write loans that were poor investments so they needed to be able to get out of them. If the govt told me I had to take on jobs that I knew I was going to lose money on I would sure as hell hope that they would help me out on the back side of that deal.

 

[Cubs79]

It was the policy of the US Government to assure that we pushed as many people into homes as possible. Every bit of loan regulation and credit regulation reflected this; it was a bipartisan belief that there was no downside to the housing market and more loans to more people, the better.

Deregulation wouldn't have mattered if these banks didn't know that the entire US Government was all-in with assuring that they can loan to anyone/everyone and they'd back those securities no matter how risky or shitty they were. They had the Government to fall back on if these dogshit loans they were making ended up being a problem.

Just go back and look at what happened to banks when they dared to refuse lending to people based upon risk profiles. They got called racists since often this entangled minority borrowers, so the Government passed laws mandating that banks loan to people even with incredible default risk, to remove the perceive stench of racism. Even when it probably was just legit credit risk assessment.

I am not suggesting there isn't plenty of blame for the government. I am rejecting this idea of a pass you guys seem to be trying to give to banks almost as if they were innocent victims in all this. They weren't, they wanted to be able to loan to more people.

 

[Cubs79]

Why wouldn't they want that? They were being told that they had to write loans that were poor investments so they needed to be able to get out of them. If the govt told me I had to take on jobs that I knew I was going to lose money on I would sure as hell hope that they would help me out on the back side of that deal.

The government didn't force them to do anything. They allowed them to do it. These are completely different concepts. They weren't required to do sub prime loans, but they had the option if they wanted to.

It also isn't just about bad loans, it is also about the repeal of glass steagall and capital requirements etc etc. Again, these are things that made it possible for banks to engage in riskier behavior, but it didn't require them to.

 

[Crazyhole]

The government didn't force them to do anything. They allowed them to do it. These are completely different concepts. They weren't required to do sub prime loans, but they had the option if they wanted to.

It also isn't just about bad loans, it is also about the repeal of glass steagall and capital requirements etc etc. Again, these are things that made it possible for banks to engage in riskier behavior, but it didn't require them to.

Wrong. The CRA FORCED banks to make loans to people who would otherwise not qualify under the guise of anti-discrimination. If a minority went to a lender and was turned away they had legal standing to sue based on the CRA.

 

[Cubs79]

Wrong. The CRA FORCED banks to make loans to people who would otherwise not qualify under the guise of anti-discrimination. If a minority went to a lender and was turned away they had legal standing to sue based on the CRA.

But the market didn't crash simply because of minorities taking out loans. A lot of defaults were from middle class people who were allowed to take out more than they should have, and the government most certainly didn't force that, and that has nothing to do with the CRA.

 

[Crazyhole]

But the market didn't crash simply because of minorities taking out loans. A lot of defaults were from middle class people who were allowed to take out more than they should have, and the government most certainly didn't force that, and that has nothing to do with the CRA.

So now we are shifting the discussion? Ok, well now that we both agree that the government FORCED banks to make loans, let's discuss what caused the crash.


The CRA completely undermined the basic fundamentals of extending credit and the government then gave the banks an out for messing up their balance sheets. The banks, given this new business model that was dictated to them under penalty of law adjusted their practices. Loans became nothing more than paper-pushing so they wrote loans to pretty much anyone for any amount. That included middle class earners who saw the fact that they could borrow 100% (i.e. no risk) and ride the wave caused by the lower end of the market creeping up. I actually place more blame on appraisers than I do banks because they facilitated housing market prices inflating.

 

[Cubs79]

So now we are shifting the discussion? Ok, well now that we both agree that the government FORCED banks to make loans, let's discuss what caused the crash.


The CRA completely undermined the basic fundamentals of extending credit and the government then gave the banks an out for messing up their balance sheets. The banks, given this new business model that was dictated to them under penalty of law adjusted their practices. Loans became nothing more than paper-pushing so they wrote loans to pretty much anyone for any amount. That included middle class earners who saw the fact that they could borrow 100% (i.e. no risk) and ride the wave caused by the lower end of the market creeping up. I actually place more blame on appraisers than I do banks because they facilitated housing market prices inflating.

https://www.americanbanker.com/opinion/softer-cra-standards-would-put-borrowers-at-risk
In August the Office of the Comptroller of the Currency took the first formal step to change how it enforces the Community Reinvestment Act. That's a 1977 law designed to prevent discrimination in lending. Bank loans attributed to CRA leading up to the 2008 collapse were safe and sound. In 2005-2006, only 6% of the subprime loans that led to the Great Recession were attributed to CRA.

The CRA was only a small part of the issue and you are using it as basically an excuse to give bankers a pass.

 

[UCFKnight85]

No one is giving banks a pass, clearly they had shitheads

https://www.americanbanker.com/opinion/softer-cra-standards-would-put-borrowers-at-risk
In August the Office of the Comptroller of the Currency took the first formal step to change how it enforces the Community Reinvestment Act. That's a 1977 law designed to prevent discrimination in lending. Bank loans attributed to CRA leading up to the 2008 collapse were safe and sound. In 2005-2006, only 6% of the subprime loans that led to the Great Recession were attributed to CRA.

The CRA was only a small part of the issue and you are using it as basically an excuse to give bankers a pass.

No one is giving bankers a pass, dude. We're just saying that the many systematic issues that cumulatively led to the financial meltdown largely flowed down from DC, and the bipartisan collective agreement that the housing market MUST be supported, that it MUST only lead to higher home values, and that more people MUST be able to obtain loans to buy said higher priced homes.

When people in DC who agree on nothing all agree on this, that's a problem. Every downflow problem that was created at the bank or borrower level largely was the result of the governmental viewpoint on housing. Politicians love when people own homes and they love when home values rise and give everyone more equity.

Again, bankers did some awful, shitty things during this period but surely alot of that was due to the fact that the US Government was standing there, all but guaranteeing that they'd assure the housing market was supported and that they'd de-risk any shitty, risky loans that banks made, so long as the loans were being made.

 

[Crazyhole]

No one is giving banks a pass, clearly they had shitheads


No one is giving bankers a pass, dude. We're just saying that the many systematic issues that cumulatively led to the financial meltdown largely flowed down from DC, and the bipartisan collective agreement that the housing market MUST be supported, that it MUST only lead to higher home values, and that more people MUST be able to obtain loans to buy said higher priced homes.

When people in DC who agree on nothing all agree on this, that's a problem. Every downflow problem that was created at the bank or borrower level largely was the result of the governmental viewpoint on housing. Politicians love when people own homes and they love when home values rise and give everyone more equity.

Again, bankers did some awful, shitty things during this period but surely alot of that was due to the fact that the US Government was standing there, all but guaranteeing that they'd assure the housing market was supported and that they'd de-risk any shitty, risky loans that banks made, so long as the loans were being made.

Investment bankers, yes. Commercial banks, nope. I really hate how "banker" has become a prejorative term. And I really, really hate how small banks aren't even allowed to make home loans now if they don't have a certified mortgage officer in house, thanks to Dodd-Frank. Yeah, a guy who can make 2 million dollar commercial loans somehow now isn't qualified to make a 90,000 dollar home loan. Because muh guvment.

 

[UCFWayne]

Investment bankers, yes. Commercial banks, nope. I really hate how "banker" has become a prejorative term. And I really, really hate how small banks aren't even allowed to make home loans now if they don't have a certified mortgage officer in house, thanks to Dodd-Frank. Yeah, a guy who can make 2 million dollar commercial loans somehow now isn't qualified to make a 90,000 dollar home loan. Because muh guvment.

dodd-frank killed off small banks and most of the medium sized ones as well. it consolidated money and power into few and few hands. and yet the democrats cheered it on. i thought that was the very thing they hated?

 

[goodknightfl]

dodd-frank killed off small banks and most of the medium sized ones as well. it consolidated money and power into few and few hands. and yet the democrats cheered it on. i thought that was the very thing they hated?

Too big to fail..
People are correct the banks were complicit in what happened. But the Government started the actions and greased the skids all the way to ruin. Then stood up calling out all the people they led into the mess.

 

[beelit47]

I swear people purposely ignore that Trump and Obama had 2 different starting points and trending directions for the economy when they first got into office.

Its not that difficult, business owners started investing when trump cut taxes in red tape. If you cant see this then youre clearly not very bright or ignoring facts. My 401k averaged 5% growth under the racist democrat but 14% under trump. Sorry to provide you facts

 

[Crazyhole]

Its not that difficult, business owners started investing when trump cut taxes in red tape. If you cant see this then youre clearly not very bright or ignoring facts. My 401k averaged 5% growth under the racist democrat but 14% under trump. Sorry to provide you facts

And you don't see a problem with this? You have a diversified investment that is outpacing inflation and GDP growth by 500%. Sorry, but that isn't sustainable or healthy.

 

[sk8knight]

dodd-frank killed off small banks and most of the medium sized ones as well. it consolidated money and power into few and few hands. and yet the democrats cheered it on. i thought that was the very thing they hated?

Ah Good ole Barney Frank. Coming to the rescue. I forget, who was he sleeping with again? Was it the president of Freddie Mac?

 

[Crazyhole]

Looks like the Fed is going to lower interest rates this month. This is really really unexpected because there is no reason we shouldn't be seeing way higher inflation than we are. Every economic indicator tells us that it should be happening but it just isn't. Where is all of this money going?