obvious Child

Hmmm. Glass-Steagall Act of 1933

Repealed in 1999.

Glass-Steagall Act - Wikipedia, the free encyclopedia

That's frightening the more I read it.

HOLY **** this brought about SIVs

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"Maybe God doesn't care how you say your prayers, just as long as you say them" - Jeffery Sinclair

prrriiide

The study I referenced was made in 2006-2007. I ask again: how did a segment of the banking population (banks subjected to CRA) responsible for only 10% of the sub-prime loans cause all this damage? Perhaps you could be more specific as to what reforms you are talking about.

In addition I will ask: exactly what is Sen. Obama' role in the committee votes to which you refer? He isn't on the banking committee...

JMak

Nonsense. Sub-prime lending necessarily means lending to those less likely to pay off the loaned amount. Sub-prime lending is not premised on GDP consistently growing. Sub-prime lending, as we have learned, meant relying on loans being passed on and on and payment for said loans being deferred. Well, payment came due for someone and now it's affecting us all.

The core of this problem is Fannie and Freddie, that is indisputable. Unlike what Obama and Biden claim, this mess was not caused by deregulation. It was primarily caused by government regulations - Fannie, Freddie, and the CRA which compelled lenders to lend to undeserving applicants lest they be harassed with discrimination lawsuits.

In principle? WTF does that mean? It must only mean that while in principle it could have lifted some out of poverty, but in reality sub-prime simply gave money to those who most likely could not pay it back.

If you're "in-the-know" then we're in big trouble.

JMak

This law had nothing to do with this financial mess. In fact, it's the law that has explicitly permitted banks to survive by entering the banking services sector or being swallowed up by larger banking services firms (see Lehmann).

Early on we saw the partisan politcking shoot at this bill to pin blame on McCain. But, as usual, after scrutiny we realize that this problem was borne of government regulations, Fannie/Freddie, and CRA. These are the tools, along with strict Democratic cooperation (including Barney Frank dating a Fannie executive) that permitted Fannie and Freddie operate as they had (in fact, Dems resisted any reform at all, in some cases calling it racism) and succeeded in passing the Community Reinvestment Act which formalized into law enforcement harassing lenders that failed to lend enough to underqualified minority loan applicants.

JMak

He's not but makes sure that he claims he is...at least when he's pandering to some group or another. He committed this gaffe when pandering to the Jewish vote when he claimed that his committee had voted out a bill authorizing US divestment from Iran.

Funny, that's not the only gaffe he's made pandering to Jewish voters.

PeteEU

Sub prime lending has been around forever. Sub prime lending drove in part the US growth the last 2 decades, as it pushed up house prices, which in turn made it possible for people to borrow more, and hence spend more and so on.

As for this thread... cherry picking of facts and figures to attack Obama. Funny how people tend to forget, that McCain was in congress for the last 26 years and was instrumental (along with Republicans AND Democrats) in dismantling the regulations and oversight that made the mess possible. Or is there much mention of the predatory lending practices... well that's too kind actually... criminal lending practices of some lending companies that sold loans to people they knew would not be able to meet the payments at a later date, and people who had zero clue in what they were signing up to and had no background to know so.

Sorry but no matter how you paint it, EVERYONE are to blame. And of Obama and McCain.. Obama has far far less blame since he only been in Congress in such a short time.. at least compared to McCain.

So instead of trying to find one person, one group of people.. blame them all, and move the f***** on. The last thing we want is for the US politicians to be in a partisan fight over blame, while "Rome is burning around them". The markets need fixing fast, and the people need confidence in the banks, else there will be a run on the, and that is NOT something we want.

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PeteEU

JMak

Cherry-picking seems rather tepid compared to your exaggerations here.

Um, the issue is quite the opposite. Government regulations that controlled Fannie and Freddie are at the heart of this problem. And deregulation that was enacted McCain had very little to do with, let alone being an instrumental part.

That was also driven by government regulations like the Community Reinvestment Act that harassed lenders into lending money to underserving applicants.

This is not to say that banks had no role, but the environment had been poisoned. Redlining and other discriminatory behavior would be alleged if underserving applicants didn't receive loans. President Bush pushed very hard for expanded home ownership which necessarily meant riskier loans. Banks played a major role in approving loans that exceeded an applicant's ability to pay. None of this, though, is caused by deregulation. All of this could happen whether of not that Gramm bill was enacted.

Huh? Obama, despite being in the Senate less than fur years is the third largest recipient of constributions over the last 9 years from the two real culprits in this meltdown. McCain actually proposed reform and the Democrats, without any objection from Obama, cried that such reform talk was thinly-veiled racism.

Politics os politics. Mind your own business.