"It's always reassuring to find you've made the right enemies." -- William J. Donovan
I hate to ruin our bit of consensus, but.. We can't forget that the emergence of derivatives allowed lenders to package questionable loans and sell them off to buyers who were not fully aware of the risk. That removed lender's traditional reluctance to give out risky loans. Most economists (and I) feel that the derivatives were the most significant contributor to the mortgage crisis.
That securitization of sub-prime debt was allowed under Clinton by the way.
The GSEs were responsible for the very first mortgage backed security.
They had been traded for years prior.
Under federal mandate those securities had to be collateralized with Credit Default Swaps which eventually led to the bail out of AIG that Obama voted for.
Whats worse is the new Dodd-Frank Bill ties Fair Lending Practics laws to the CRA law.
So CRA didn't go away, the Law that in 1995 under a Clinton executive order was given real teeth by forcing banks to make loans to pass "lending test" has now been given DOJ enforcement.
CRA under Clinton and HUD regulations created the market that allowed for the explosion of defalted loans in the mid to late 90s.
Obama's doubled down on stupid
Fenton: Did Bush II ever do anything wrong re. the economy?
You want to start a topic aout the economy under Bush you go right ahead. Its related to this topic but to toss it in cold like you did reeks of trying to change the subject of the thread.
Survey says: Off topic!
If you want to pigeon hole my posistions, know that I am generally in favor of strong regulation of the financial sectors, but I favor routine evaluation of all regulations, deregulations and other governmental acts to determine whether they acheived the intended goals effectively without excessive collateral damage.
You blame the securities ? Why ? The GSEs invented Mortgage Backed Securities. They were a good investment before the GSEs mixed crap loans with good ones and sent them out into the market.
You blame deregulations ? Which deregulation ?
Its a poorly disguised attempt to shift the conversation away from the topic and center it on Bush. Its a crappy tactic and its so massively transparent and obvious that I think Id rather dicuss the topic at hand than digress into the larger economy question.Fenton: Did Bush II ever do anything wrong re. the economy?
If you want to talk about the economy under Bush you go ahead and start a thread, but lets stay on how the ratings companies impacted the financial crisis.