Posted on 09/17/2009 5:38:20 PM PDT by Bob017
Nothing succeeds like failure.
Here's a press release from the National Community Reinvestment Coalition:
Expansion of Community Reinvestment Act Would Promote Economic Security and Financial Inclusion for
For ... whom? Can't you guys at least finish your titles? I'm imagine in your "Who? Whom?" equation, I'll end up a Whom, but I don't think the end of your sentence was going to be "for Steve Sailer's Family."
So, what's in Barney's Bill, H.R. 1479, the "Community Reinvestment Modernization Act of 2009"?
- Extension of the CRA from mortgages to small business loans. - Inclusion of credit unions (my vague impression is that credit unions screwed up less than most financial institutions, so Barney has to rectify that!) - Switch from unofficial to official inclusion of independent mortgage firms (e.g., Countrywide).
Will we ever learn? How can we learn if we aren't allowed to talk about What Just Happened to the economy?
The faggot has a lotta chutzpah.
Nothing succeeds like failure.
The political class has perpetuated itself into a state of absolute corruption as a Governmental Religion.
It seems, in the Clown Universe greatness is always bestowed upon the activities of the bunghole brigade; when its everyone else, just too bad
Hubris in the extreme!
What just happened to the economy had basically nothing to do with the CRA. Basically, Wall Street got greedy, ran out of “crap” to sell, so they bundled new forms of crap. Government sat on its butt and let it happen. Here are three links. The first two by Wall Street insiders who tell how the deal went down. (Including the “Wall Street ran out of crap” part). The third are the 25 people most to blame for meltdown.
http://www.npr.org/templates/story/story.php?storyId=102325715
Well, two links. I will send you the third.
parsy, who says the poor weren’t to blame for the meltdown
Barney, FHA is repeating FNMA and FHMC RIGHT FRIGGIN’ NOW!! You F’ing Idiot!@!!@!
Here’s the third. Includes such luminaries as Greenspan, Phil Gramm, Clinton, Bush, etc. I would add Ayn Rand to the bunch.
http://www.guardian.co.uk/business/2009/jan/26/road-ruin-recession-individuals-economy
parsy, who says this is a great article
” so they bundled new forms of crap.”
Yes, but it was the pressure by Clinton & then Bush to lower lending standards to increase minority home ownership that lead to overall standards being corrupted and the creation of a sub-prime market which turned toxic.
“Darrin West could not believe it. The president of the United States was standing in his living room.
It was June 17, 2002, a day Mr. West recalls as the highlight of my life. Mr. Bush, in Atlanta to unveil a plan to increase the number of minority homeowners by 5.5 million, was touring Park Place South, a development of starter homes in a neighborhood once marked by blight and crime.
Mr. West had patrolled there as a police officer, and now he was the proud owner of a $130,000 town house, bought with an adjustable-rate mortgage and a $20,000 government loan as his down payment just the sort of creative public-private financing Mr. Bush was promoting.
Part of economic security, Mr. Bush declared that day, is owning your own home.
A lot has changed since then. Mr. West, beset by personal problems, left Atlanta. Unable to sell his home for what he owed, he said, he gave it back to the bank last year. Like other communities across America, Park Place South has been hit with a foreclosure crisis affecting at least 10 percent of its 232 homes, according to Masharn Wilson, a developer who led Mr. Bushs tour.
I just dont think what he envisioned was actually carried out, she said.
Park Place South is, in microcosm, the story of a well-intentioned policy gone awry. Advocating homeownership is hardly novel; the Clinton administration did it, too. For Mr. Bush, it was part of his vision of an ownership society, in which Americans would rely less on the government for health care, retirement and shelter. It was also good politics, a way to court black and Hispanic voters.
But for much of Mr. Bushs tenure, government statistics show, incomes for most families remained relatively stagnant while housing prices skyrocketed. That put homeownership increasingly out of reach for first-time buyers like Mr. West.
So Mr. Bush had to, in his words, use the mighty muscle of the federal government to meet his goal. He proposed affordable housing tax incentives. He insisted that Fannie Mae and Freddie Mac meet ambitious new goals for low-income lending.
Concerned that down payments were a barrier, Mr. Bush persuaded Congress to spend up to $200 million a year to help first-time buyers with down payments and closing costs...
And he pushed to allow first-time buyers to qualify for federally insured mortgages with no money down. Republican Congressional leaders and some housing advocates balked, arguing that homeowners with no stake in their investments would be more prone to walk away, as Mr. West did. Many economic experts, including some in the White House, now share that view.”
http://www.nytimes.com/2008/12/21/business/21admin.html?pagewanted=3&_r=1
There’s a nice succinct summary here by Chairman of Blackstone Group, Stephen Schwarzman (although I think it actually started in the mid 90’s with Clinton encouraging lower lending stds):
“Its a perfect storm. It started with Congress encouraging lending to lower-income people. You went from subprime loans being 2% of total loans in 2002 to 30% of total loans in 2006. That kind of enormous increase swept into the net people who shouldnt have been borrowing.
Those loans were packaged into CDOs rated AAA, which led the investment-banking firms [buying them] to do little to no due diligence, and the securities were distributed throughout the world, where they started defaulting.
When they started defaulting, out of bad luck or bad judgment, we implemented fair value accounting
.You had wildly different marks for this kind of security, which led to massive write-offs by the commercial banking and investment-banking system.
In the face of those losses you needed to raise new equity which came from sovereign-wealth funds in part, which then caused political resistance to sovereign-wealth funds, who predictably have withdrawn from putting money into the system .It seemed pretty obvious that would happen. We now find ourselves with a liquidity crisis where fundamentally the cost of money for financial intermediaries [such as investment banks] is significantly in excess of their cost of lending it. So several institutions found themselves in a structurally impossible position. We had a series of bankruptcies, whether Bear Stearns or Lehman, or forced sales like Merrill. Goldman reverted to a banking charter for a lower cost of funds, which today is still not low enough for the business.
So thats the story of how we got there.”
http://blogs.wsj.com/deals/2008/09/24/wall-street-crisis-stephen-schwarzman-explains-it-all/
Insanity is doing the same thing over and over and getting the same results. The only cure for this is to clean house and vote all of these bozos out of office. The problem with that is many Americans would rather watch the latest “reality’ show on TV than take time to research candidates and support and vote for one that could really help this country.
Years ago, McCain and President Bush called on Congress to reign in Fannie and Freddie EVERY democrat voted NO.
And did we ALL contact our Representatives and urge them to vote NO?
Thank you for the link. I read it. But he isn’t entirely correct. What really caused the problem wasn’t just the bad loans, but the derivatives based upon them. On those two links I gave above, Steven Eismann figured this whole scheme out and started shorting this crap. The other link tells you how the “dog crap” got transmuted into AAA dog crap. And why.
CRA loans were never more than 3% of originations. Check out the Republican Congressional report by Issa. If you need link I will provide it.
The above 3 links should give you plenty to think about, but if you are still unconvinced and I will send you more. Seems like a woman named Brooksley Born tried to stop this and was shut down by Greenspan, Rubin, Summers, and Clinton. It was the derivatives gambling that really nailed us.
The reason why I am pointing this out so much is that Obama is going to try to re-regulate the derivatives market and I suspect Wall Street and the GOP will go apesh*t.
parsy, who has been reading up on this stuff
Some Republicans were also against it. Bush did try to rein in Fannie, but that is only part of the problem. The bigger part was the derivatives instruments based on the bad loans. “Wall Street” thru hedge funds, permitted gambling on whether the loans would fail, by people other than those involved in the loans. That is why this part of the derivatives market is like 500 TRILLION DOLLARS. AIG went down because of ONE PERCENT of this amount, or about 500 Billion dollars.
Another post on FR tonite discusses problems Wells Fargo is uncovering trying to sort the derivatives end of it out of crap that bought from WaMu.
parsy, who says we should be afraid, very afraid
BTW, here is the Congressional report. It is a long read, but well worth it.
http://republicans.oversight.house.gov/media/pdfs/20090707HousingCrisisReport.pdf
parsy, who says this stuff is fascinating
Barney will want to be sure the new undocumented loans are made out of the bedroom of his Capital Hill apartment, plus a bonus kiss.
“CRA loans were never more than 3% of originations.”
There’s a response to this here by John Carney, summarizing the debate:
http://www.businessinsider.com/the-cra-debate-a-users-guide-2009-6
Also, another article by Carney:
“As much as I respect Barrys formidable analytical powers, Im afraid hes taken too narrow of the view of the matter. His question is far easier to answer than he suspects. Regulations often touch those who are not directly regulated. Indeed, the regulation of one group in a marketplace will almost always wind up affecting other groups.
More concretely, there are three very specific ways in which the CRA nudged Countrywide and other mortgage companies to adopt lax lending standards.”
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