What caused the financial crisis? The Big Lie goes viral.

[Sea Demon]

Originally Posted by mookiemookie

Not to mention private labels securitized more subprime loans than Fannie or Freddie ever held in their investment portfolios (as they could only securitize conforming loans)

Who writes the rules, mookie? Who gets their backing and support straight from the taxpayer? Where did the directives from lending sub-prime come from? And who tried to fix it? What people blocked it for ideological reasons? The facts vs. your facts are two different things.

[JU_88]

Originally Posted by Sea Demon

Your words give you away. You ain't foolin' anybody.

So I guess you know me better than I know myself then?
Grow up.

[Sea Demon]

Originally Posted by JU_88

So I guess you know me better than I know myself then?
Grow up.

Right back at ya'. (as you assume what my understanding is of how economics works in in my country).

[JU_88]

Originally Posted by Sea Demon

Right back at ya'. (as you assume what my understanding is of how economics works in in my country).

Actually I genuinely asked you if you could explain your understanding of it in the OWS thread, but you refused and simply assumed that i must be 'unteachable'
Your country?, when the economics of a country as largely determines the economics of the entire planet, its no longer 'club members only' where opinions are concerned.

[flatsixes]

I'll let all you economics majors argue over who shot John (the butler did it). But I'm more than a bit appalled at the license that the author of the opinion piece took with Mayor Bloomberg's statement. I don't necessarily disagree with the author's facts (once they're stripped of the author's unnecessary hyperbole). But the author tees-off on Bloomberg by opening with this:

The Big Lie made a surprise appearance Tuesday when New York Mayor Michael Bloomberg, responding to a question about Occupy Wall Street, stunned observers by exonerating Wall Street: ***8220;It was not the banks that created the mortgage crisis. It was, plain and simple, Congress who forced everybody to go and give mortgages to people who were on the cusp.***8221;

That's "The Big Lie?" that supports the author's accusations of a rewrite of history by "Wall Street" (whoever that is). Then why is this "rewrite" buried in the last few lines of the piece?

Bloomberg was partially correct: Congress did radically deregulate the financial sector, doing away with many of the protections that had worked for decades. Congress allowed Wall Street to self-regulate, and the Fed the turned a blind eye to bank abuses.

Oh! So Bloomberg was not lying? Well then, never mind.

If you can't make you points (and good ones) without resorting to the lamest form of fallacy (straw man), then I've got no more time to waste on you, Mr. Ritholtz. Get an adult to help you with your next column.

[mookiemookie]

Originally Posted by flatsixes

I'll let all you economics majors argue over who shot John (the butler did it). But I'm more than a bit appalled at the license that the author of the opinion piece took with Mayor Bloomberg's statement. I don't necessarily disagree with the author's facts (once they're stripped of the author's unnecessary hyperbole). But the author tees-off on Bloomberg by opening with this:

The Big Lie made a surprise appearance Tuesday when New York Mayor Michael Bloomberg, responding to a question about Occupy Wall Street, stunned observers by exonerating Wall Street: ***8220;It was not the banks that created the mortgage crisis. It was, plain and simple, Congress who forced everybody to go and give mortgages to people who were on the cusp.***8221;

That's "The Big Lie?" that supports the author's accusations of a rewrite of history by "Wall Street" (whoever that is). Then why is this "rewrite" buried in the last few lines of the piece?

Bloomberg was partially correct: Congress did radically deregulate the financial sector, doing away with many of the protections that had worked for decades. Congress allowed Wall Street to self-regulate, and the Fed the turned a blind eye to bank abuses.

Oh! So Bloomberg was not lying? Well then, never mind.

If you can't make you points (and good ones) without resorting to the lamest form of fallacy (straw man), then I've got no more time to waste on you, Mr. Ritholtz. Get an adult to help you with your next column.

Respectfully, I think you've misunderstood his point completely. "The Big Lie" that he mentions is defined as "that banks and investment houses are merely victims of the crash." Bloomberg did repeat that, and it is a lie that the crisis could be blamed in whole or large part on excessive government regulation - i.e. forcing banks to make loans.

When he said Bloomberg was partially right, he meant that it's correct to blame Congress. Blame them not for "forcing banks to make loans" (the motivation to make poor loans was being able to turn around and immediately sell them to securitizers, not any heavy handed federal mandate to make loans that would drive a bank out of business) and excessive regulation, but blame them for radical deregulation and ignoring the ticking timebomb of imprudent lending and allowing the things mentioned in the bullet points - repealing Glass Steagall, allowing excessive leverage, no regulation of derivatives, little to no oversight of the methodology of the ratings agencies, etc.

I see no "straw mans" there.

[flatsixes]

And with equal respect, Mookie, I don't think that I misunderstood his "point" at all. It was hammered home with tenpenny nails throughout the piece. "The Big Lie" (which, amusingly, includes any disagreement with the infallible gospels of man-made climate change or Keynesian economics) also has a Wall Street version - namely the banks are the victims, not the cause, of the financial meltdown." Got it.

Perhaps you missed my point, however. The author claims that "one group" (aka:"these people," "they" and "those whose bad judgment and failed philosophy helped cause the crisis") are exonerating themselves by "rewriting history." Ritholtz then sets up as the only example of "these people" one Michael Bloomberg, whose only apparent connection to "bad judgment and failed philosophy helped cause the crisis" is the fact that his business supplied Wall Street with the tools of its trade - namely data access and terminals.

Having thus conclusively established Mr. Bloomberg's bona fides as one of "those people," Ritholtz then bases his entire argument that a "Wall Street version of the Big Lie" exists upon a quote taken from Mayor Bloomberg stating that "It was not the banks that created the mortgage crisis. It was, plain and simple, Congress who forced everybody to go and give mortgages to people who were on the cusp.***8221; (emphasis added). (And here's the rest of Mayor Bloomberg's quote:

"Now, I'm not saying I'm sure that was terrible policy, because a lot of those people who got homes still have them and they wouldn't have gotten them without that.

"But they were the ones who pushed Fannie and Freddie to make a bunch of loans that were imprudent, if you will. They were the ones that pushed the banks to loan to everybody. And now we want to go vilify the banks because it's one target, it's easy to blame them and congress certainly isn't going to blame themselves. At the same time, Congress is trying to pressure banks to loosen their lending standards to make more loans. This is exactly the same speech they criticized them for."

Note that Mayor Bloomberg is referring to the "mortgage crisis, " and not "the financial crisis" to which nearly all of Mr. Ritholtz's article concerns itself. Granted, the two disasters are of a pair - the mortgage crisis triggering the financial collapse - but Bloomberg never said that the banks were "victims" of the financial collapse, did he? Nope.

And that's why Mr. Ritholz has to retract (a bit) from his claim to Bloomberg's contribution to the author's "Big Lie" conspiracy at the end of his piece. That's his straw man, Mook. And that's what turned me off. Using a half-truth to argue a bigger truth is no truth at all.