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Thread: U.S. Jobless Rate Unexpectedly Declines to 8.6%

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    Re: U.S. Jobless Rate Unexpectedly Declines to 8.6%

    Quote Originally Posted by OpportunityCost View Post
    No its a statment that you believe is refuted through using fed parsed data being presented to accomplish the desired result...covering bureaucrat ass.
    The data and conclusions they reach are carefully parsed to lie within a certain data set and cherry picked to support that conclusion, they almost never look at data as a whole or try to examine the overall impact on the market.

    I wonder why?
    Sorry, but the Fed is THE authoritative source on bank performance and you can't simply dismiss them on the basis of an unsupported, whacked out conspiracy theory. And in any case, their findings are mirrored by separate reports by the task force that investigated the financial crisis, the OCC, and independent analysts. And on the flip side, you have absolutely NO evidence to support your conclusions. Zero. Zip. Nada.

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    Re: U.S. Jobless Rate Unexpectedly Declines to 8.6%

    Quote Originally Posted by OpportunityCost View Post
    Blah blah, the percentage of loans that were covered by CRA was low, blah blah blah.

    The problem is the default rate on CRA loans was higher.
    I stopped reading once i got to this nonsense.

    Can you show the default rate for all CRA originated loans?

    Can you show the default rate for all non-CRA sub-prime loans?

    The data is quite easy to find. All you need to know is where to look!
    It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
    "Wealth of Nations," Book V, Chapter II, Part II, Article I, pg.911

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    Re: U.S. Jobless Rate Unexpectedly Declines to 8.6%

    Read up then explain to how CRA loans changed between 1999 and 2008 when they crashed and burned.

    Federal Reserve Report on "The Performance and Profitability of CRA-Related Lending"

    In short, CRA loans suck. They didnt suddenly become more solid investments or more profitable EXCEPT they became a primary target for bundling into derivatives and CDSs. As a matter of fact the more the market heated artificially off the CPI, the worse CRA loans would get because they were not designed to be less risky, they were designed to spread risk through risky securitization process AND were much less concerned with the stability of the originator or the capital in question.

    More reading : Yes, the CRA Is Toxic by Edward Pinto, City Journal Autumn 2009
    Here is the author's google since I know youre going to look anyway : Edward Pinto - Google Search

    Sorry, but the Fed is THE authoritative source on bank performance
    And the Fed's primary job is banking stability. What do you suppose they would do when banking stability is in the cellar? Think about it.
    Last edited by OpportunityCost; 12-08-11 at 02:06 AM.

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    Re: U.S. Jobless Rate Unexpectedly Declines to 8.6%

    Quote Originally Posted by OpportunityCost View Post
    Read up then explain to how CRA loans changed between 1999 and 2008 when they crashed and burned.
    Your ignorance on the subject was displayed many pages ago. While you continue to dig your feet in as opposed to admitting your error is beyond me.
    It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
    "Wealth of Nations," Book V, Chapter II, Part II, Article I, pg.911

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    Re: U.S. Jobless Rate Unexpectedly Declines to 8.6%

    Quote Originally Posted by OpportunityCost View Post
    Read up then explain to how CRA loans changed between 1999 and 2008 when they crashed and burned.

    Federal Reserve Report on "The Performance and Profitability of CRA-Related Lending"

    In short, CRA loans suck. They didnt suddenly become more solid investments or more profitable EXCEPT they became a primary target for bundling into derivatives and CDSs. As a matter of fact the more the market heated artificially off the CPI, the worse CRA loans would get because they were not designed to be less risky, they were designed to spread risk through risky securitization process AND were much less concerned with the stability of the originator or the capital in question.

    More reading : Yes, the CRA Is Toxic by Edward Pinto, City Journal Autumn 2009
    Here is the author's google since I know youre going to look anyway : Edward Pinto - Google Search

    And the Fed's primary job is banking stability. What do you suppose they would do when banking stability is in the cellar? Think about it.
    You've got to be ****ing kidding me. Your big source is guy named Pinto who is a consultant to ... the mortgage industry ... and an American Enterprise Institute (i.e. wingnut think tank) scholar? And he contradicts the Fed and OCC, and spews a bunch of different numbers, but provides absolutely no explanation as to why the Fed and OCCs numbers are wrong, or references or explanation as to where he pulled his numbers from? Why don't you just grab a crayon, scribble "CRA BAD!!!" on a knapkin, and submit that as your proof?

    As far as the 2000 Fed report, I would suggest that you read the actual report and not the one page headnote summary you linked to. Forgetting for the moment that you disregard Fed data that contradicts your argument and rely on Fed data that you think supports your argument....

    What the report actually says is, in pertinent part:

    Profitability
    Per institution analysis. Survey responses indicate that CRA-related home purchase and
    refinance lending is either profitable or marginally profitable for most respondents (82 percent,
    table 3a). About one-sixth of the respondents report that such lending is either marginally
    unprofitable or unprofitable. This pattern holds generally across banking institutions of different
    asset size, although a greater proportion of large banking institutions (assets of $30 billion or
    more) report that their CRA-related home purchase and refinance lending is either marginally
    unprofitable or unprofitable than medium- (assets between $5 billion and $30 billion) or smallersized
    (assets between $950 million and $5 billion) institutions.

    Although CRA-related home purchase and refinance lending is reported to be at least
    marginally profitable for most of the survey respondents, overall home purchase and refinance
    lending is reported to be at least marginally profitable for an even larger proportion of these
    institutions (94 percent).
    Thus it would be a gross misstatement to conclude that "CRA loans suck." In fact, 82% of the CRA loans were profitable.

    And further:

    Reports by individual banking institutions suggest that there is considerable variation in
    experiences with affordable home lending products.13 For example, both NatWest and Bank of
    America have reported that the delinquency rate was lower for loans made under their affordable
    home loan programs than for loans made under their conventional lending programs.
    14
    Of course the report did not compare CRA loans to non-CRA subprime loans, so it's essentially irrelevant to the discussion.
    Last edited by AdamT; 12-08-11 at 02:52 AM.

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    Re: U.S. Jobless Rate Unexpectedly Declines to 8.6%

    Quote Originally Posted by AdamT View Post
    You've got to be ****ing kidding me. Your big source is guy named Pinto who is a consultant to ... the mortgage industry ... and an American Enterprise Institute (i.e. wingnut think tank) scholar? And he contradicts the Fed and OCC, and spews a bunch of different numbers, but provides absolutely no explanation as to why the Fed and OCCs numbers are wrong, or references or explanation as to where he pulled his numbers from? Why don't you just grab a crayon, scribble "CRA BAD!!!" on a knapkin, and submit that as your proof?

    As far as the 2000 Fed report, I would suggest that you read the actual report and not the one page headnote summary you linked to. Forgetting for the moment that you disregard Fed data that contradicts your argument and rely on Fed data that you think supports your argument....

    What the report actually says is, in pertinent part:



    Thus it would be a gross misstatement to conclude that "CRA loans suck." In fact, 82% of the CRA loans were profitable.

    And further:



    Of course the report did not compare CRA loans to non-CRA subprime loans, so it's essentially irrelevant to the discussion.

    Of course, it compared CRA loans to all other loans which is the exact metric that should be used.
    If 82% were profitable, then 18% were not. Whats an 18% default rate look like? Looks like a housing bubble popping.
    Regarding the fed report...No Im trying to point out there are conflicting information sources, so stop being so arrogantly sure of your info and think.
    Also, Im a lot less interested in parsing reports for things that support my position than I am in taking the whole thing in and looking at the overall picture.

    Regarding Pinto...shrug, I hold your left wing sources in similar esteem, Im just not a pain about it. He was the chief credit officer of Fannie Mae in the 80s. That entails some measure of credibility. I evaluate his info and make my own decisions.


    Try this out, its a decent read and gives a lot of empirical data : http://econ.ucsd.edu/~miwhite/li-white-nber.pdf

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    Re: U.S. Jobless Rate Unexpectedly Declines to 8.6%

    Quote Originally Posted by OpportunityCost View Post
    Of course, it compared CRA loans to all other loans which is the exact metric that should be used.
    If 82% were profitable, then 18% were not. Whats an 18% default rate look like? Looks like a housing bubble popping.
    Regarding the fed report...No Im trying to point out there are conflicting information sources, so stop being so arrogantly sure of your info and think.
    Also, Im a lot less interested in parsing reports for things that support my position than I am in taking the whole thing in and looking at the overall picture.

    Regarding Pinto...shrug, I hold your left wing sources in similar esteem, Im just not a pain about it. He was the chief credit officer of Fannie Mae in the 80s. That entails some measure of credibility. I evaluate his info and make my own decisions.


    Try this out, its a decent read and gives a lot of empirical data : http://econ.ucsd.edu/~miwhite/li-white-nber.pdf
    Just because a loan isn't profitable doesn't mean that it went into default. Again, some of the biggest banks, e.g. Bank of America, had lower default rates on CRA loans than they had on non-CRA loans. Thus there was nothing inherent in CRA that caused banks to write bad loans. Don't blame the program because some banks had shoddy underwriting habits.

    In other news, I believe you've mentioned several times that there were $8 or $9 trillion in CRA loans? That is obviously a BS figure, as the total of all outstanding mortgages in the entire country was $10.6 trillion at its peak in 2006. Falling Mortgage Debt Erodes Spending as Wealth Effect Fades - Bloomberg

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    Re: U.S. Jobless Rate Unexpectedly Declines to 8.6%

    [QUOTEJust because a loan isn't profitable doesn't mean that it went into default. Again, some of the biggest banks, e.g. Bank of America, had lower default rates on CRA loans than they had on non-CRA loans. Thus there was nothing inherent in CRA that caused banks to write bad loans. Don't blame the program because some banks had shoddy underwriting habits.][/QUOTE]

    If that were the case they would have written them without CRA legislation.
    I absolutely can blame the program because the risk is higher. If the risk were not higher, banks would have been writing the loans without legislation.
    Why is that hard to understand?
    Government doesnt need to force banks to do something profitable and it WERE profitable, we wouldnt be bailing out Fannie and Freddie...again.

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    Re: U.S. Jobless Rate Unexpectedly Declines to 8.6%

    Quote Originally Posted by OpportunityCost View Post
    If that were the case they would have written them without CRA legislation.
    I absolutely can blame the program because the risk is higher. If the risk were not higher, banks would have been writing the loans without legislation.
    Why is that hard to understand?
    Government doesnt need to force banks to do something profitable and it WERE profitable, we wouldnt be bailing out Fannie and Freddie...again.
    The whole point of CRA was to encourage loans in neighborhoods that banks generally shunned (though they did not shun accepting deposits in those neighborhoods). It's not surprising that the loans were somewhat less profitable. Still it was only a difference of 12% between CRA and non-CRA on average. Certainly not enough to precipitate the financial meltdown.

    Note: I'm not saying that the CRA was a great idea, or that it was a great idea to incentivize home ownership through the tax code. I'm just saying that CRA had little or nothing to do with the real estate bubble.
    Last edited by AdamT; 12-08-11 at 04:04 PM.

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    Re: U.S. Jobless Rate Unexpectedly Declines to 8.6%

    Quote Originally Posted by Boo Radley View Post
    I think the definition of left wing is anything that disagrees with far right. At least that is my understanding.
    One should add government sources to the left wing side of the equation.

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