Actually the CRA was a very small part of the problem. The Banks invented and sold these defective loans world wide out of nothing but sheer greed.
Those same too big to fail Bankers also donated to obama and acorn and our Fed knew six months before we were let in on the secret that they crashed the world’s economy. Those same big banks got a two fer they got to wipe out a lot of their competition our small American conservative banks.
They should have been allowed to fail that’s what capitalism is all about. Instead we bailed out obama’s backers I have no sympathy for those big banks what so ever.
For instance Ireland’s whole problem is the banks.
Irelands Fate Tied to Doomed Banks
Up to 50 billionnearly $50,000 for every household in the Emerald Isle.
But unlike Greece, Ireland is a relatively wealthy country, with per capita GDP of nearly $38,000. Thats 21 percent higher than per capita GDP in Greece, and in the top third for European countries. Low corporate tax rates and a skilled workforce have made Ireland a haven for some of the worlds biggest companies. And its public debt, about 65 percent of GDP, is far below Greeces crushing load, which is 126 percent of GDP. Irelands debt levels are even lower than those in France, Germany and the United Kingdom.
A failed banking sector that Irelands government can no longer rescue on its own. Ireland is in the midst of a real estate bust that could trump even the ruinous downturns that turned parts of southern California and Nevada into suburban ghost towns, with home-grown banks stoking it all. Now, those banks are trying to manage catastrophic losses. The Irish government has effectively nationalized the nations biggest banks by guaranteeing their debt, which would be akin to the U.S. government taking over Citigroup, Bank of America, J.P. Morgan Chase and Wells Fargo.
That means the Irish government is also on the hook for the losses those banks endurewhich have risen far beyond initial estimates, and may have a lot farther to go. So far, the Irish government is obligated to cover losses amounting to 175 percent of Irish GDP
http://finance.yahoo.com/news/Why-the-Irish-Crisis-is-Going-usnews-4028366968.html?x=0
Baracks Wall Street Problem is Now Americas
http://www.noquarterusa.net/blog/2008/09/21/baracks-wall-street-problem-is-now-americas/
JPMorgan CEO Jamie Dimon Donates Serious Cash to Democrats
http://www.opensecrets.org/news/2009/07/jpmorgan-ceo-jamie-dimon-donat.html
JPMorgan Chase Asked to Stop Funding ACORN
http://nlpc.org/stories/2009/09/15/jpmorgan-chase-asked-stop-funding-acorn
Editorial: Bailed-out banks should stop funding ACORN
http://washingtonexaminer.com/opinion/2009/04/editorial-bailed-out-banks-should-stop-funding-acorn
US embassy cables: Mervyn King says in March 2008 bailout fund needed
http://www.guardian.co.uk/world/us-embassy-cables-documents/146196
Greed is inherent in all human activity.
The problem as I see it was that when the banks packaged their loans, the institutions which bought them did not properly evaluate the pools to uncover the bad loans and the bad lending practices which produced them.
Caveat emptor.
And as part of this entire process, fold in Freddie and Fannie.
I disagree that the problem is greed...because what is greed but self-interest where individual conscience has been confused or obscured.
It may all be a mess and complex derivatives may have played a large part in permitting the sale of bad loans, but ultimately it all goes back to the CRA and Freddie and Fannie and the muddying of the lending business by government interference.
BTW, Europe is another matter...and their problems are not unrelated to the influence of socialism and the unions.
That said, the growing complexities of the industry and the ignorant acceptance by buyers of shoddy lending products (including credit default swaps) did their part to contribute.
As a retired investment banker, I would tend to agree that there is a lack of exercise of conscience, but I have never known conscience to be the glue that held together business of any kind...it is the customers who must demand quality, not government or the manufacturers or sellers. It is up to a buyer to make sure that he is getting a good product. It the buyer is negligent, there will always be some con man to provide a pig-in-a-poke.
Absolutely...all we did was encourage incompetence and failure.