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obvious Child · Jun 16, 2011

OpportunityCost said:
Jesus. CRA was never the same thing after the rules changes in 1995. Stop playing the false meme of 30 years of blah blah bull****. It was not the same thing AT ALL after 95.

But apparently it took more then a decade for those changes to kill the economy. Really. Try again.

Except once the CRA loans started defaulting they crapped all over market values and depressed the construction market. Which led to housing downward spiral.

Except that declining home values alone will not cause an economic recession by themselves. You seem extremely intent upon blaming just the CRA without examining other economic conditions at the time. And you appear to KEEP pretending the non-CRA reduction in obstacles to home ownership under the Bush "Ownership Society" had anything to do with it. This suggests you are nothing more then a hack.

Again....ALL of the CRA loans are essentially leveraged because so many are expected to fail.

If they are expected to fail, why did banks issue so many of them on the first place knowing they represented nothing but liabilities? The fact that banks never allocated reserves to cover such losses that as you assert would be 100% suggests your position is wrong. Even if banks were forced at gunpoint to issue a bad loan, they would allocate reserves to cover it. And since it would be a 100% loss, they would easily be able to project out the needed additional reserves. The difference between you and I (among others) is you ignore other facts, like bank reserves. Hence why it's easy to blow Jupiter sized holes in your arguments. Simple details don't support your arguments.

They are pure write off material. They are systemic asset weakness. Asset weakness that was regulatory enforced and mandated. When you have 8% margins, eating 4% of your loans(by your own numbers) means you are in a world of hurt--because losing 4% of your loans means a hit of more than 4% of your margin.

So why were there no additional reserves to cover this known loss? (hint: because your assertion is crap).

Do I really need to dig out the number of times the Bush Administration was trying to reform Fannie and Freddie from 2002 onward? There WERE signs, you are just being too pigheaded and partisan to see them. If you were into real estate, you could see by 2003 and 2004 that market prices were approaching critical mass. I certainly could.

No one is arguing that there was a problem. You arguing I'm not seeing the problem is rather dishonest considering my previous posts. I have in fact argued we were in for a correction REGARDLESS of housing. That hardly supports your idea that I'm being too pigheaded and partisan to see them.

Really? Why dont you back that assertion. Show me your evidence. My turn to pick apart your assertions without saying anything substantial.

Really? I already cited more then a few. From over leverage, to asset bubbles in real estate caused by the tech crash, to idiotic activities in CDS. Read my posts for a change. I'm not going to simply repeat my previous assertions because that's spamming.

More Job Seekers Give Up

obvious Child

Equal Opportunity Hater