akyron

That statement is unsupported.

Was the Sub-Prime Mortgage Crisis Caused by Lack of Regulations?


"The short answer: Of course not. Nowhere close. Not a chance. Here is the long answer. "


"The government wanted more risky loans made, not fewer. For example, the Community Reinvestment Act pressured banks to make loans in poor neighborhoods. Banks (and I was a banker under the CRA) figured that making some bad loans was just another tax, a cost of doing business as a regulated company. In 1995, the Clinton administration revised the CRA to increase pressure on banks to make more loans to risky borrowers. In 1997, the first pool of subprime mortgages was securitized (by Bear Stearns!).

The law regulating Fannie Mae and Freddie Mac was rewritten to reduce their capital requirements, meaning they would become riskier. Some critics were concerned about the risk, but here is what Congressman Barney Frank had to say at the time:

"These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis," said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. "The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing." [New York Times, September 11, 2003 ]"


"Would more regulation have reduced the number of bad loans made? Most likely, more regulation would have increased the problem."

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akyron

One simple question. Will you loan me 10k knowing I will not pay it back?


Thanks up front.

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zen8114

The republican party just cannot seem to get their act straight. Rush is blaming the President for Sanford's affair. That is simply absurd. No one forced Sanford to have that affair, or any of the others he claims to have had. We all make our own choices and we have to live with the consequences. I think it's time Rush and his followers stop blamming everyone else for the GOP's problem and take a good long hard look in the mirror.

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Jessica L. Teerlinck
www.jessicateerlinck.blogspot.com

repeter

One simple question, can you bring down the entire financial sector of America if I don't give you the aforementioned money?

Thank you.

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Veni. Vidi. Vici.
-Gaius Julius Caesar
The Only Thing to Fear is Fear Itself.
-Franklin Delano Roosevelt

Caine

Last I checked Rush is a pundit with a job to attract viewers and advertisers, not a politician holding an office as a registered Republican.


Fail.

UtahBill

IF we didn't have so many crooks on Wall Street, we wouldn't need regulation. Even WITH regulation, we have periodic episodes of rampant criminal activity.
When govt prosecutors start doing their jobs and judges can start giving out minimum 25 years to life sentences, Wall Street will be considered a safe place for our money again. Until that happens, my money goes elsewhere....

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Education is expensive, ignorance is costly.

Each generation should have more opportunities than the last, but not at the expense of the next.

akyron

If the financial sector is forced via regulation to operate like this then yes. Absolutely.

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akyron

The crooks on wall steet operate hand in hand with the crooks in congress.

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UtahBill

granted, let's arrest them all as they get caught and make them do hard time in prison....it is the only way. There is no shame anymore.....

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Education is expensive, ignorance is costly.

Each generation should have more opportunities than the last, but not at the expense of the next.

akyron

Living large on the peeps.

Jefferson on trial for freezer cash Tuesday, June 16, 2009

"ALEXANDRIA, Va. (AP) -- Prosecutors say a Louisiana congressman was more than $60,000 in debt during the time he is accused of concocting a series of bribery schemes.

Opening statements started Tuesday in the trial of William Jefferson, a Democrat who represented parts of New Orleans. Federal agents found $90,000 in cash in his freezer, and he is charged with soliciting bribes, money laundering and other crimes.

Assistant U.S. Attorney Mark Lytle suggested that Jefferson's debts may have motivated him to seek bribes. In addition to $62,000 in credit card debt, Lytle said Jefferson and his wife had about $40,000 in bounced check fees and other penalties on their bank accounts.

The defense is scheduled to give its opening statement in the afternoon. The trial is expected to last about a month. "

He had the gall to say his bribes had no effect on his congressional job.

They just do not get it.

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