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Why Herman Cain (and Almost Everyone Else) Missed the Housing Bubble
American Thinker ^ | October 16, 2011 | Ed Braddy

Posted on 10/17/2011 9:59:53 PM PDT by neverdem

Now that Herman Cain has become a top-tier presidential candidate for the Republican nomination, he is receiving a greater degree of scrutiny than ever before. And that includes efforts by the mainstream media to do what they do best to conservative candidates: prove somehow that said candidates are unfit to serve.

First it was MSNBC's Lawrence O'Donnell playing the role of the white liberal lecturing Herman Cain on what it means to be black. Now it's Chuck Todd wondering what did Cain know and when did he know it...about housing bubbles.

During an October 11 interview (minute 4:58) on MSNBC, Chuck Todd said to Cain:

This is something you wrote in 2005, saying, arguing that there was no housing bubble. You wrote this in 2005, in Business and Media Institute, you said, "Coverage of the Bush economy reads like a collection of Democratic Party press releases, calling a strong economy everything from struggling to volatile or dicey. That kind of ignorance makes homeowners fear that their most expensive possession could turn worthless overnight. That won't happen."

Cain said he didn't know "just how bad Fannie Mae and Freddie Mac had distorted the housing market."

The implication is that Herman Cain is not fit to lead America into economic recovery because he didn't see the bubble before it burst. But if failing to recognize the housing bubble and its causes is a disqualifier, then virtually all presidential candidates would be ineligible, including President Obama.

The housing bubble was real, as the figure below of select housing markets illustrates...

(Excerpt) Read more at ...

TOPICS: Business/Economy; Culture/Society; Editorial; Politics/Elections
KEYWORDS: cain; hermancain; housingbubble
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To: org.whodat

In 2001 my husband and I were looking to buy a house. Our real estate agent took our financial information and told us that we could afford an amount twice as much as we knew we could afford. She kept trying to sell us the pricier houses while we finally fell in love with a townhouse that fit perfectly into our budget. We bought the townhouse. What saved us from the bubble was refusing to be seduced into buying a house we knew we couldn’t afford. We did get the house with no money down, though.

21 posted on 10/18/2011 2:35:20 AM PDT by wontbackdown
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To: wontbackdown

A friend of mine was looking to buy around 2005, and held off because he realized that many of the units being sold in the development were not “owner occupied” (though they were one-family units); they were being bought and rented out by speculators, and this was driving the prices. Within two years the prices had fallen 30% (and the prices were high).

22 posted on 10/18/2011 2:46:07 AM PDT by kearnyirish2
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To: kearnyirish2

Yep, owner occupied was my standard as well. I wound up buying a modest 2000 sf house built in 1940 in a safe, well established neighborhood. I am kneed underwater, but not nearly as bad as if I bought one of the McMansions or ghost town condos the realtor was pedaling. Plus, I am happy to live and grow my family here until it turns around.

23 posted on 10/18/2011 3:55:29 AM PDT by wolfman23601
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To: Polybius
The question is whether Cain was really so clueless he didn't see it, or if he was simply committed to Limbaugh-style cheerleader nonsense because "our guy" was in the White House. Was it ignorance, or just the talkradio template?
24 posted on 10/18/2011 5:20:40 AM PDT by Huck (TAX TEA NOW==SUPPORT 9-9-9!)
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To: autumnraine

I started collecting articles on the subprime crisis in mid-2007. People were aware, but Dodd-Frank refused to allow any changes to prevent the collapse.

25 posted on 10/18/2011 7:26:59 AM PDT by aimhigh
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To: neverdem
Here's my house on Zillow, the dollar sign is where I sold it (spring 2006).

And I am NO financial genius (my portfolio is sad testimony to that fact).....but I have at least a few brain cells functioning and could see that when my neighbors making $75-$100K a year were refinancing their houses at half a mill (lots of new Bimmers, boats and Harleys in the driveways in 2004-6!), we were cruising for a bruising.

Of course, since I was not making money from originating liar loans or building crapbox McMansions, that gain on my house was all I made from the bubble.

I got flak like you wouldn't believe when I advised a couple of my neighbors to sell. I was a wet blanket, a gloom and doomer, a turd in the punchbowl. These days, we mostly talk about sports and the weather, not the economy..... House Zillow 8-2010

26 posted on 10/18/2011 7:31:04 AM PDT by Notary Sojac
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To: Eyes Unclouded; Jim Robinson
It can't be denied that the housing toga party of 2002-2006 was heartily endorsed by both political parties.

I can recall no Republicans prior to 2008 warning that banks were overleveraged in housing assets and that they should not be bailed out.

And I STILL see Freepers boasting about the "booming Bush economy" who fail to realize how much of that boom was a Monopoly-money bubble.

27 posted on 10/18/2011 7:36:43 AM PDT by Notary Sojac
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To: Notary Sojac

Bush (2001)(2003)

28 posted on 10/18/2011 7:41:13 AM PDT by Cincinatus' Wife
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To: 9YearLurker
According to that graph, the worst of the bubble hadn’t yet happened in 2005.

I knew it was a bubble long before 2005. Just because the worst hadn't hit doesn't mean it didn't already exist.

29 posted on 10/18/2011 7:48:57 AM PDT by LouAvul
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To: Cincinatus' Wife
All Dubya had to say in 2005 to the banks was this:

"You are responsible for your own due diligence on the securities you acquire. If the underlying property values fall below your booked values, your bondholders will have to assume the loss. Do not even dream that the US Treasury or the Fed will take action to support insolvent investors."

I would have said that. By the end of 2005 I WAS saying that. But since I'm not the president, I don't have much of an impact.....

30 posted on 10/18/2011 8:40:53 AM PDT by Notary Sojac
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To: wolfman23601

I had bought before the bubble, in an area that was affordable; rates fell soon afterwards, so I was able to refinance a low price at a low rate. I know I was just lucky with timing, but before we bought the house we were about to move into an apartment because prices were a bit high. We got lucky in finding this one, and haven’t missed a payment in over 10 years.

31 posted on 10/18/2011 4:09:14 PM PDT by kearnyirish2
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