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Thread: U.S. sues S&P over subprime ratings

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    Re: U.S. sues S&P over subprime ratings

    Quote Originally Posted by Hard Truth View Post
    The CRA prohibited discrimination based on race and neighborhood (redlining). It did not require giving loans to people who were not qualified. It was passed in 1977. It was not until the housing bubble burst in the last decade that there was a problem with widespread defaults. The problem was largely caused by lack of regulation/enforcement of derivatives and the ridiculous notion that housing prices would never drop.

    By the way, racial discrimination in housing was/is very real. Ask an African American who tried to buy property before the CRA.

    Wells Fargo Will Settle Mortgage Bias Charges
    By CHARLIE SAVAGE
    Published: July 12, 2012

    WASHINGTON — Wells Fargo, the nation’s largest home mortgage lender, has agreed to pay at least $175 million to settle accusations that its independent brokers discriminated against black and Hispanic borrowers during the housing boom, the Justice Department announced on Thursday. If approved by a federal judge, it would be the second-largest residential fair-lending settlement in the department’s history.

    An investigation by the department’s civil rights division found that mortgage brokers working with Wells Fargo had charged higher fees and rates to more than 30,000 minority borrowers across the country than they had to white borrowers who posed the same credit risk, according to a complaint filed on Thursday along with the proposed settlement.
    http://www.nytimes.com/2012/07/13/bu...rges.html?_r=0
    WHy do you waste my time with a NYT article which is clearly biased information. CRA loads were nothing but showboating by dc politicians. We are all paying for it now.

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    Re: U.S. sues S&P over subprime ratings

    Quote Originally Posted by upsideguy View Post
    If you continue to believe the CRA was the primary contributor or even a significant contributor to the meltdown, count yourself amongst the group of poorly educated on the subject..... unless of course, you are finally ready to explain how this really works. Duly noted that you offer cites herein other than your personal expertise.

    Of course, feel free to borrow some info from some of the prevailing wisdom on the subject....

    http://www.business.cch.com/bankingf...ime_WP_rev.pdf
    Three Causes of the Subprime Mortgage Crisis - ForensisGroup.com
    Lest We Forget: Why We Had A Financial Crisis - Forbes
    Quote Originally Posted by OpportunityCost View Post
    Comedy of errors--one link thats a 404 and 2 that arent links. Try again.
    You are right.... sorry, hate to lose the form argument, especially when I own the substance. All links plus one:

    Three Causes of the Subprime Mortgage Crisis - ForensisGroup.com
    Lest We Forget: Why We Had A Financial Crisis - Forbes
    http://www.business.cch.com/bankingf...ime_WP_rev.pdf
    Community Reinvestment Act had nothing to do with subprime crisis - BusinessWeek

    ,,,and yes, the thread to which I reference...

    http://www.debatepolitics.com/govern...-218-a-17.html
    Last edited by upsideguy; 02-08-13 at 12:33 AM.

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    Re: U.S. sues S&P over subprime ratings

    Quote Originally Posted by Somerville View Post
    not that I actually think any bankster will go to prison but still - it is a step in the right direction. A direction toward correcting the fallacious notion that Wall Street cares very much about honest behaviour.



    more from Bloomberg - Default in 10 Months After AAA Spurred Justice on Credit Ratings - Bloomberg
    Wow - six ****ing years.

    Holy
    ****ing
    ****
    That's pathetic.
    A screaming comes across the sky.
    It has happened before, but there is nothing to compare it to now.
    Pynchon - Gravity's Rainbow

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    Re: U.S. sues S&P over subprime ratings

    Quote Originally Posted by OpportunityCost View Post

    Ratings agencies rated them highly because they expected GSEs to be backed by the full faith and credit of the US and in the end, they were.
    Ratings agencies rated them highly because they simply did not understand the products they were insuring. Blaming the motivations for risk management failure on F&F is a cop out.
    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. sues S&P over subprime ratings

    Quote Originally Posted by upsideguy View Post
    If you continue to believe the CRA was the primary contributor or even a
    significant contributor to the meltdown, count yourself amongst the group of poorly educated on the subject..... unless of course, you are finally ready to explain how this really works. Duly noted that you offer cites herein other than your personal expertise.

    Of course, feel free to borrow some info from some of the prevailing wisdom on the subject....

    http://www.business.cch.com/bankingf...ime_WP_rev.pdf
    Three Causes of the Subprime Mortgage Crisis - ForensisGroup.com
    Lest We Forget: Why We Had A Financial Crisis - Forbes
    Nice links. They contain the same. amount of information on sub-prime that you have offered up....zilch.

    CRA in conjunction with HUD regulations that mandated quotas on the GSEs are actually the primary cause of the sub-prime debacle.

    The GSEs which owned 60% of the total sub-prime debt by 2008 and over 70% of sub-prime debt wound up on Govt financial institutions by 2008.

    Those quotas which exceeded 50% of the GSEs total mortgae originations under Clinton.

    Clinton also green lighted securitization of that junk paper.

    Nice try anyway.

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    Re: U.S. sues S&P over subprime ratings

    Quote Originally Posted by Fenton View Post
    Nice links. They contain the same. amount of information on sub-prime that you have offered up....zilch.

    CRA in conjunction with HUD regulations that mandated quotas on the GSEs are actually the primary cause of the sub-prime debacle.

    The GSEs which owned 60% of the total sub-prime debt by 2008 and over 70% of sub-prime debt wound up on Govt financial institutions by 2008.

    Those quotas which exceeded 50% of the GSEs total mortgae originations under Clinton.

    Clinton also green lighted securitization of that junk paper.

    Nice try anyway.
    Show me one scholarly work, work of an economist or reputable banker/financier that backs up that nonsense. I want the direct work not some news article extracted from Red State, WND or other political porn site.

    http://www.fdic.gov/bank/analytical/...anykHemert.pdf

    I can sit here and post hundreds of articles (they aren't hard to find) that tell us this was a complex problem, but none will offer much, if any blame to the CRA. I don't think you can find one credible article that supports your point the CRA was the primary cause (because that is hard to find)....
    Last edited by upsideguy; 02-08-13 at 02:42 AM.

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    Re: U.S. sues S&P over subprime ratings

    Quote Originally Posted by Somerville View Post
    Slander the professor all you wish - don't make those statements true. Krugman has been more right about the financial crisis than any of your heroes
    He's been corrupted.
    "He who does not think himself worth saving from poverty and ignorance by his own efforts, will hardly be thought worth the efforts of anybody else." -- Frederick Douglass, Self-Made Men (1872)
    "Fly-over" country voted, and The Donald is now POTUS.

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    Re: U.S. sues S&P over subprime ratings

    Quote Originally Posted by upsideguy View Post
    Show me one scholarly work, work of an economist or reputable banker/
    financier that backs up that nonsense. I want the direct work not some news article extracted from Red State, WND or other political porn site.

    http://www.fdic.gov/bank/analytical/...anykHemert.pdf

    I can sit here and post hundreds of articles (they aren't hard to find) that tell us this was a complex problem, but none will offer much, if any blame to the CRA. I don't think you can find one credible article that supports your point the CRA was the primary cause (because that is hard to find)....
    I SAID....listen closely, it was CRA regulations in conjuction with HUD regulations that forced quotas on the GSEs right up until the near economic collapse.

    Quotas that forced them to increase their sub-prime debt from less than 10% to close to 50% by the time it was all said and done.

    You want me to post a legitimate a source of legitmacy but then you take up for Paul Krugman.

    A leftist who gave up on his economic aspiration to be Obama's bitch.

    Krugman a lunatic and all you have to do is Google my claims and refute them .

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    Re: U.S. sues S&P over subprime ratings

    S&P Lawsuit Portrays CDO Sellers as Duped Victims - Bloomberg

    Here’s the gist. Near the end of its 119-page complaint, the Justice Department listed about two-dozen collateralized- debt obligations issued in 2007 as examples where S&P allegedly defrauded banks and credit unions. It was important that the Justice Department be able to identify such lenders as investors, because it’s suing S&P under a 1989 statute that covers frauds against federally insured financial institutions.

    Under the government’s theory, Citigroup and Bank of America paid S&P for ratings that convinced the banks their own CDO offal was rock-solid. And because S&P deceived them into thinking the best of their own rubbish, these banks and other lenders suffered more than $5 billion of investment losses, according to the suit.
    That's the government's case. Banks who were dumb enough to create faulty securities only did so because S&P told them their pile of crap was golden. Good luck with that.

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    Re: U.S. sues S&P over subprime ratings

    Quote Originally Posted by Fenton View Post
    I SAID....listen closely, it was CRA regulations in conjuction with HUD regulations that forced quotas on the GSEs right up until the near economic collapse.

    Quotas that forced them to increase their sub-prime debt from less than 10% to close to 50% by the time it was all said and done.

    You want me to post a legitimate a source of legitmacy but then you take up for Paul Krugman.

    A leftist who gave up on his economic aspiration to be Obama's bitch.

    Krugman a lunatic and all you have to do is Google my claims and refute them .

    Still no cite.... I'll settle for an independent cite that has CRA as even a significant factor.... not that it changes the truth, but at least I would like to see a credible argument. You are free to continue with your unsubstantiated posts, but you are out of bounds in admonishing others on this issue when you can't even substantiate your own point lest you have merely proven your original assertion that its amazing how many people on this board have no understanding of this issue.

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