It's always heartwarming to see someone joyed the same DOJ who walked guns into Mexico that ended up killing hundreds, who has sued a number of states because they were enforcing federal laws and who fails to act when the black panthers are offering bounties on fellow citizens, sues S & P for a downgrade. Yep! Tells me all is well!
Here is a little article on CDS, no mention of them being a regulatory requirement, didn't come up when I googled it.
Credit Default Swaps - The New York TimesSwaps also became something traded in and of themselves, as a form of speculation. That kind of trading also landed investment banks in multiple and seemingly conflicted roles, as when Goldman Sachs helped sell bundles of mortgage-backed securities and then used swaps to bet that they would go belly up.
It is CLEAR here that Goldman bought the CDS NOT AS A REGULATORY REQUIREMENT, rather they bought the CDS because they thought the instrument they just sold, the MBS, would go bad and they wanted to profit from its failure.
Then you have no proof that CRA was a main driver in the financial crisis, while I have posted several creditable studies that state CRA was NOT a main driver in the financial crisis, accounting for only 25% of the subprime loans written, and with a substantially smaller default rate. I have shown the main problem issuer of subprime debt were Countrywide, New Century, Option One, etc. which were independent mortgage issuers that were not regulated by CRA.
You have no proof so it appears you want to forget your statement about CRA which I have refuted with supported posts, and change the subject and wave your hands about the GSE's.
Admit it, you have conceded this point and lost, or show your proof.
Last edited by finebead; 02-10-13 at 03:49 PM.
Do you think banks should be allowed to go into areas, pick up their deposits and then not give loans to anyone in the area, i.e. red line them. That is damaging to the area, they can't improve themselves.
In the south we used to have "separate but equal schools" which were not equal, this was deemed unfair, and the schools down here were integrated by force. That was the right thing to do. It was worth paying a price to correct this institutionalized mistake. Same with banks opening, siphoning out deposits and refusing to grant loans. The social cost to the area was too high, and the price the banks had to pay to fix it was, well they didn't pay anything since the vast majority of CRA loans were profitable.
So, what's your point?
Your freedom to swing your arm stops before you hit my face. Freedom is not unlimited.
Whether you like it at the individual bank level is another manner, but it was not a major factor in the financial crisis, unless you have some facts that show different results than the ones I've already posted.