Originally Posted by
Centurion1
also these people are protesting the evil 1% and how they have all the wealth.
Doubtless some of them are exactly that stupid. However, I don't think their little movement would gain any traction at all if it were merely "eat the rich." See earlier in the thread, comments by me about "legitimate complaints" and a very well-written article reposted by Sasaki Kojiro. As unlikeable as the protesters may be, they're not reacting to a vacuum.
-edit-
A more broad-reaching series of charts can be found here.
Also, further smackdown of the idea that the Federales were the primary movers/causal agents of the mortgage meltdown can be found here and (in less detailed form) here.
The GSEs did generate large losses, but their bad investments in housing loans followed rather than led the crisis; most of those investments involved purchases or guarantees made well after the subprime and housing bubbles had been expanded by private loans and were almost about to burst.
Even then, the GSEs’ overall purchases and guarantees were much less risky than Wall Street’s: their default rates were one fourth to one fifth those of Wall Street and other private financial firms, a fact not made clear by the authors. A further review of other literature shows that Clinton’s goals to increase “affordable lending” had little to do with the risks the GSEs took. The FCIC, for example, argued that in several years these goals were largely met by the GSEs’ standard loans with traditional down payments. [...]
As noted, the GSEs bought very few subprimes in the 1990s. But it might especially surprise the inexpert reader to know that the GSEs did not own almost half of the “toxic mortgages” written by private companies, a remarkable exaggeration on the part of the authors. As usual, no source for the estimate is given, but it is likely based on the analysis of Pinto, who was a former Fannie official and is a colleague of Wallison’s at the American Enterprise Institute. To make the claim, Pinto radically redefined what qualified a mortgage to be subprime or an Alt-A, for which mortgage-holders were often not required to document their income, rejecting the conventional and widely accepted definitions. In his analysis, almost any mortgage held by Fannie and Freddie with modest above-average risk was categorized, to use Morgenson and Rosner’s term, as “toxic.”
If so, one would presume the delinquency rates suffered by the GSEs during the crisis would have been very high. But David Min, an analyst with the Center for American Progress, shows that the after-crisis delinquency rates on the large additional portion of GSE mortgages that Pinto claimed were high risk, and that was termed “toxic” by Morgenson and Rosner, was roughly 10 percent, far lower than the 25 to 30 percent default rate of true subprimes. In fact, the rate of delinquencies for all GSE securities in 2004 was 4.3 percent, compared to a delinquency rate in private industry of 15.1 percent of mortgages. In 2005, the GSE rate was 7.8 percent compared to 28.7 percent, and in 2006 and 2007, the rates reached 13.2 and 14.9 percent in the GSEs and 45.1 and 42.3 percent in the private market.
Re: Occupy Wall Street
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