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Job growth cools slightly, recovery grinds on [W:225]

Bronson said:
The CRA = root cause. It's beyond refute. Government created a market through legislation that otherwise never would have existed. The GSEs bought a large % of the loans in an effort to expand their portfolios. They removed risk by promising investors their money was insured by the Federal Govt. Ie the taxpayer.


It was the GSEs who received bailouts far larger than any private company. Banks had to lower lending standards to comply with CRA regulations.

Did the Community Reinvestment Act (CRA) Lead to Risky Lending? by Sumit Agarwal, Efraim Benmelech, Nittai Bergman, Amit Seru :: SSRN
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But if that's true then you can't blame Greenspan.
 
poweRob said:
Holy cow. That's embarrassing.
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No, embarrassing is coming on to a public forum and twisting the truth to conform to your bankrupt ideology. Lying and posting misinformation to try and justify your agenda's mass-incompetence and destruction.

With every post you marginalize your position and with every counter rebut you receive display your ignorance by basically blaming everything on the last Republican in charge.

You make a mockery of yourself and your position daily, with every upchuck of your liberal position on almost every post. You are not the arbiter of assigning embarrassment unless your doing it from years of experience.
 
Kushinator said:
You are wrong. The CRA was about eliminating redlining. All evidence shows that default rates on CRA loans were lower than non-CRA loans.
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Oh did you do a bit of objective research ? Lemme' guess, you stopped reading where it became obvious that Bronson and my self were correct.

You have to ask your self. Why did Fannie operate for damn near 70 years with out a major hitch and without collapsing the US economy ? I say Collapse because we're still NOT safe from the damage the Democrat mandated sub-prime collapse CAUSED.

Especially with a President who's increasing taxes and regulations and adding a destructive health care law all at the same time in a shrinking economy. TARP was a band aid and there are plenty of those derivatives built, packaged, bought and sold by the GSE's who's values are impossible to assess floating around out there.

Imagine that. Liberals tried to force "fairness", tried to be the arbiter of right and wrong and forced their way into a private sector enterprise that eventually almost led to the collapse of the American economy. Where else is that being tried ?

REDLINING by the mortgage industry was supposed discrimination and under the charge of bigotry and racism banks were forced through penalties to craft a type of loan that would fit the new lenders income and credit characteristics. GET IT ?

But Freddie and Fannie committed in the early 90's to a TRILLION dollars towards the building of a secondary market that would use these new guidelines implemented by CRA and HUD regulations to build a massive secondary market and cater to those poor disadvantaged peoples with bad credit and no job.( Bush's fault )

It's nice of them huh ? To commit tax payers money like that but that's essentially what they did. The Democrat weighted fiscal commission even alluded that the REAL reason the crisis unfolded was due to government involvement and that by the year 2008 75% of ALL sub-prime loans were on the books of Fannie-Mae, Freddie Mac or other Government regulated entities.

You think a ideological bias in favor of low income, poor credit borrowers over a 16 year period was the brain child of the Republicans ? No, it wasn't. Politicians like Barney Frank needed to appeal to a certain demography and so he argued for lowering underwriting standards and regulations that stopped "discriminatory practices" by lending institutions.


Seriously, lending institutions that SHOULD discriminate based on credit, income and EMPLOYMENT history were no longer allowed to apply those standards. Liberals...If lending institutions can't DISCRIMINATE, then why didn't I get that IROC-Z when I was 17 and delivering pizza's ?

In 2001 Bush warned of the GSE's increasing size, and in 2005 a comprehensive reform of the GSE's was threatened by Chris Dodd with a filibuster...........Dodd later voted for the Bush reforms after the near collapse.....imagine that.


This nonsense you and the other liberals come up with that it started under Bush in 2002 is just the pitiful cumulative ignorance of 3 or 4 liberals. It's the best you can do.

In October 2000 HUD set new goals for affordable housing and identifies sub-prime borrowers as a market that help the GSE's achieve their goals. More Govt regulations and mandates....imagine that.
 
You can continue to spin the story as much as you like. The fact of the matter is that CRA loans were less likely to default than non-CRA loans.
 
Bronson said:
You have to be joking. That 3.1% is hilariously misleading. It's all fueled by massive govt spending and inventory accumulation. We already know that businesses are sitting on excess inventory because of a lackluster holiday shopping season.
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I knew you wouldn't acknowledge that you were wrong. At least we have you admitting that there is a 3rd quarter out there.

Bronson said:
Q3 was originally 2% (I have NP admitting I was mistaken between q2 and q3) and revised up due to massive govt spending. An increase by 10%. Consumer spending only increased by 1.4%. A total collapse of personal consumption. Personal consumption was actually revised DOWN from the initial 2% GDP projection.
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2nd quarter was not 2% before it was revised. You are rounding up for dramtic effect. Not surprising.

Bronson said:
Fixed investment was around .01%. The lowest since q1 2011. Good luck getting hired in the private sector with those kind of numbers. Finally we need to see growth rates of GDP higher than 5%. 3% is below average at best.
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And the rest of this is a dodge attempt on what was being discussed.
 
Kushinator said:
You can continue to spin the story as much as you like. The fact of the matter is that CRA loans were less likely to default than non-CRA loans.
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You were debunked like 5 posts ago yet you continue to grasp onto a laughable talking point from 2008 when Democrats were in full CYA mode

It's embarrassing

A new study concludes that the CRA CLEARLY did lead to riskier lending. It's beyond refute. That's why there was no Subprime Mortgage Market before the CRA genius. Strong lending practices were in place for a reason. It was Government Regulation that softened them, hence the seed of the 2008 Financial Crisis was the CRA. It was the root cause that created a market that never would have existed otherwise.

Your talking point was debunked years ago. You're just repeating the lies of Barry Ritholtz

A Poisonous Cocktail - Forbes.com

According to the National Community Reinvestment Coalition, in the first 20 years of the act, up to 1997, commitments totaled approximately $200 billion. But from 1997 to 2007, commitments exploded to more than $4.2 trillion. (Keep in mind this is more than four times the size of the current health bill being debated in Congress.) The burdens on individual banks can be enormous. Washington Mutual, for example, pledged $1 trillion in mortgages to those with credit histories that "fall outside typical credit, income or debt constraints," and was awarded the 2003 CRA Community Impact Award for its Community Access program. Four years later it was taken over by the Office of Thrift Supervision. In 2004 Bank of America ( BAC - news - people ) agreed to provide $750 billion in CRA loans to applicants with poor credit who had previous difficulty obtaining a mortgage. By 2008 Bank of America was reporting that CRA loans represented only 7% of its portfolio but 29% of its losses. Numerous large banks are now in the middle of enormous CRA commitments. In 2004 J.P. Morgan Chase ( JPM - news - people ) agreed to provide $800 billion of such loans over the course of 10 years.

For all the talk of unsold condos in Miami and foreclosed McMansions in California, the epicenters of the mortgage crisis are inner-city urban areas--precisely those areas where the CRA was most applicable. As the Boston Federal Reserve put it in a massive 2008 study, "In the current housing crisis foreclosures are highly concentrated in [urban] minority neighborhoods." The study found that borrowers in these areas were seven times more likely to be foreclosed on than the general population. Analysis by the Pew Research Center and another by The New York Times found that mortgage holders in these areas had foreclosure rates four times higher than the national average.

In short, the CRA is compelling banks to make trillions in loans to individuals who have poor credit and who often can't or won't make their payments.
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chart_398x249.jpg


http://www.nytimes.com/2008/10/05/business/05fannie.html?pagewanted=all&_r=0

Fannie, a government-sponsored company, had long helped Americans get cheaper home loans by serving as a powerful middleman, buying mortgages from lenders and banks and then holding or reselling them to Wall Street investors. This allowed banks to make even more loans — expanding the pool of homeowners and permitting Fannie to ring up handsome profits along the way.

But by the time Mr. Mudd became Fannie’s chief executive in 2004, his company was under siege. Competitors were snatching lucrative parts of its business. Congress was demanding that Mr. Mudd help steer more loans to low-income borrowers. Lenders were threatening to sell directly to Wall Street unless Fannie bought a bigger chunk of their riskiest loans.
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It's true that a company like CountryWide didn't necessarily make "CRA Loans" but their business practices were directly influenced by the lowered lending standards of that legislation. Not only that, but the GSE's bought up 70% of Countrywide's loans. You keep forgetting that inconvenient little fact that destroys the house of cards you keep pathetically clinging to.

The GSEs were the largest securitizers of loans on the market. Nobody else came close. They fueled the market for ALL loans and were the backbone of a bloated and distorted market their lobbyists helped create in WA.
 
Bronson, the next thing you will have to refute will be quotes and articles from Federal Depositories, that put out papers stating that the CRA was not responsible for the financial crisis. Because the government would never spin an investigation into a government policy---ever.

Ive gone round and round on this subject with a number of posters here. Its more or less a source war.
 
Bronson said:
You have to be joking. That 3.1% is hilariously misleading. It's all fueled by massive govt spending and inventory accumulation.

Consumer spending only increased by 1.4%. A total collapse of personal consumption.

Personal consumption was actually revised DOWN from the initial 2% GDP projection.

Fixed investment was around .01%. The lowest since q1 2011.

Finally we need to see growth rates of GDP higher than 5%.

3% is below average at best.
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Sure, government spending contributed a great deal, but private investment and a decline in trade deficits also played a key role.

1.6% actually, a .1 percent increase over the second quarter figures. Just how would that qualify as a total collapse?

Well, yes and no. The second revision shaved off .6 percent from the initial estimate, and the final estimate bumped it back up by two tenths.

Non residential investment ticked down by 1.8, Residential investment increased by 13.5%. Private investment as a whole saw a 6.6 percent increase.

Says who?

Nope, it's just average I'm afraid. 3.25% is the running median for gdp growth since the end of WWII.
 
Bronson said:
You were debunked like 5 posts ago yet you continue to grasp onto a laughable talking point from 2008 when Democrats were in full CYA mode

It's embarrassing

A new study concludes that the CRA CLEARLY did lead to riskier lending. It's beyond refute. That's why there was no Subprime Mortgage Market before the CRA genius. Strong lending practices were in place for a reason. It was Government Regulation that softened them, hence the seed of the 2008 Financial Crisis was the CRA. It was the root cause that created a market that never would have existed otherwise.

Your talking point was debunked years ago. You're just repeating the lies of Barry Ritholtz

A Poisonous Cocktail - Forbes.com



chart_398x249.jpg


http://www.nytimes.com/2008/10/05/business/05fannie.html?pagewanted=all&_r=0



It's true that a company like CountryWide didn't necessarily make "CRA Loans" but their business practices were directly influenced by the lowered lending standards of that legislation. Not only that, but the GSE's bought up 70% of Countrywide's loans. You keep forgetting that inconvenient little fact that destroys the house of cards you keep pathetically clinging to.

The GSEs were the largest securitizers of loans on the market. Nobody else came close. They fueled the market for ALL loans and were the backbone of a bloated and distorted market their lobbyists helped create in WA.
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President Bush pushing his "ownership society"






Bush drive for home ownership fueled housing bubble
By Jo Becker, Sheryl Gay Stolberg and Stephen Labaton
Published: Sunday, December 21, 2008


WASHINGTON — "We can put light where there's darkness, and hope where there's despondency in this country. And part of it is working together as a nation to encourage folks to own their own home."

- President George W. Bush, Oct. 15, 2002

The global financial system was teetering on the edge of collapse when Bush and his economics team huddled in the Roosevelt Room of the White House for a briefing that, in the words of one participant, "scared the hell out of everybody."

It was Sept. 18. Lehman Brothers had just gone belly-up, overwhelmed by toxic mortgages. Bank of America had swallowed Merrill Lynch in a hastily arranged sale. Two days earlier, Bush had agreed to pump $85 billion into the failing insurance giant American International Group.

The president listened as Ben Bernanke, chairman of the Federal Reserve, laid out the latest terrifying news: The credit markets, gripped by panic, had frozen overnight, and banks were refusing to lend money.

Then his Treasury secretary, Henry Paulson Jr., told him that to stave off disaster, he would have to sign off on the biggest government bailout in history. Bush, according to several people in the room, paused for a single, stunned moment to take it all in.

"How," he wondered aloud, "did we get here?"

Eight years after arriving in Washington vowing to spread the dream of home ownership, Bush is leaving office, as he himself said recently, "faced with the prospect of a global meltdown" with roots in the housing sector he so ardently championed.

There are plenty of culprits, like lenders who peddled easy credit, consumers who took on mortgages they could not afford and Wall Street chieftains who loaded up on mortgage-backed securities without regard to the risk.

But the story of how the United States got here is partly one of Bush's own making, according to a review of his tenure that included interviews with dozens of current and former administration officials.

From his earliest days in office, Bush paired his belief that Americans do best when they own their own homes with his conviction that markets do best when left alone. Bush pushed hard to expand home ownership, especially among minority groups, an initiative that dovetailed with both his ambition to expand Republican appeal and the business interests of some of his biggest donors. But his housing policies and hands-off approach to regulation encouraged lax lending standards.

Bush did foresee the danger posed by Fannie Mae and Freddie Mac, the government-sponsored mortgage finance giants. The president spent years pushing a recalcitrant Congress to toughen regulation of the companies, but was unwilling to compromise when his former Treasury secretary wanted to cut a deal. And the regulator Bush chose to oversee them - an old school buddy - pronounced the companies sound even as they headed toward insolvency.

As early as 2006, top advisers to Bush dismissed warnings from people inside and outside the White House that housing prices were inflated and that a foreclosure crisis was looming. And when the economy deteriorated, Bush and his team misdiagnosed the reasons and scope of the downturn. As recently as February, for example, Bush was still calling it a "rough patch."

The result was a series of piecemeal policy prescriptions that lagged behind the escalating crisis.

...​
 
StringBean said:
The housing bubble burst when millions of Americans went default on their mortgages. This triggered the financial crisis as the derivatives market was built like a house of cards around these mortgages. Essentially, high-risk private debt was being traded on wall street like AAA+ bonds.

The root of the problem lay in the fact that millions of people who could not reasonably afford these mortgages were receiving them. The government undeniably owes some responsibility to this, given Congressional programs to push through mortgages to high-risk lendees. Both parties applauded these programs at the time, and will foolishly continue to do so. No politician wants to be seen as "hurting poor folks." The irony of such a statement is rich, given it's apparent outcome today.

P.S. are you defending fannie and freddie? Who do you think was writing all these bogus mortgages!?
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The banksters were writing those mortgages, then dumping the toxic stuff onto Fannie and Freddie. Bank of America was just fined billions for doing just that.
 
danarhea said:
The banksters were writing those mortgages, then dumping the toxic stuff onto Fannie and Freddie. Bank of America was just fined billions for doing just that.
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Which misses the essential point. Regulation gave them somewhere to dump those mortgages. They wouldnt accept high risk loans without both government pressure to accept some of them, and a place to dump the risk.

Bankers dont just take on risk for the heck of it--examine the motivation and follow the money.

As for PeteEU, the mortgage market was heating up before Bush and all attempts to regulate it were met harshly by Dems. You cant dump it on one party or the other. Both had their hands all over this particular mess.
 
OpportunityCost said:
Which misses the essential point. Regulation gave them somewhere to dump those mortgages. They wouldnt accept high risk loans without both government pressure to accept some of them, and a place to dump the risk.

Bankers dont just take on risk for the heck of it--examine the motivation and follow the money.

As for PeteEU, the mortgage market was heating up before Bush and all attempts to regulate it were met harshly by Dems. You cant dump it on one party or the other. Both had their hands all over this particular mess.
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Actually, you have it backward. It was BREAKING THE LAW that allowed the banksters to dump their toxic crap on Freddie and Fannie. This is why Bank of America was fined so heavily. There was a law. They broke it because they are predatory criminals. They now paid the price for their actions.

Jeez, as long as you are protecting lawbreakers, I think I'll go out and steal me some money too. Will you tell me that I am also not responsible for my actions? Damn, I can be Al Capone, and people will tell me it's not my fault. What a great country. :mrgreen:
 
danarhea said:
Actually, you have it backward. It was BREAKING THE LAW that allowed the banksters to dump their toxic crap on Freddie and Fannie. This is why Bank of America was fined so heavily. There was a law. They broke it because they are predatory criminals. They now paid the price for their actions.

Jeez, as long as you are protecting lawbreakers, I think I'll go out and steal me some money too. Will you tell me that I am also not responsible for my actions? Damn, I can be Al Capone, and people will tell me it's not my fault. What a great country. :mrgreen:
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2nd paragraph is your usual grandstanding bs, but check this out: BofA settles with Fannie Mae for $10 billion

How much of the "toxic" loans were garnered from taking over Countrywide? Thats a big question mark for me and possibly why the fines were not even higher. Another story details how other firms are settling fines not on toxic lending practices but on foreclosing on those it shouldnt have. Ten banks settle foreclosure charges for $8.5 billion paper mishandling and skipping procedures enters into it as well.

I dont think the fining story is all about dumping toxic loans but about breakdowns across the entire process--paperwork, disclosure, forclosure, procedures. Which would argue for not tampering with the housing market by incentivizing loan approvals, no matter how noble the goal. It should be noted that due to favorable ratings on their CRA status allowed them to play fast and loose with other rules they should have been following more closely because regulators were focusing on that issue more than bank stability issues. Not an excuse but an explanation.
 
OpportunityCost said:
2nd paragraph is your usual grandstanding bs, but check this out: BofA settles with Fannie Mae for $10 billion

How much of the "toxic" loans were garnered from taking over Countrywide? Thats a big question mark for me and possibly why the fines were not even higher. Another story details how other firms are settling fines not on toxic lending practices but on foreclosing on those it shouldnt have. Ten banks settle foreclosure charges for $8.5 billion paper mishandling and skipping procedures enters into it as well.

I dont think the fining story is all about dumping toxic loans but about breakdowns across the entire process--paperwork, disclosure, forclosure, procedures. Which would argue for not tampering with the housing market by incentivizing loan approvals, no matter how noble the goal. It should be noted that due to favorable ratings on their CRA status allowed them to play fast and loose with other rules they should have been following more closely because regulators were focusing on that issue more than bank stability issues. Not an excuse but an explanation.
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I strongly disagree. Without regulation, it would be completely legal for BoA to defraud Fannie and Freddie the way they did.
 
apdst said:
Then why, after trillions of dollars, are we just maintaining?
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We greatly enhanced the econonies in China and the Phillipines...you know your heros corporate america
 
danarhea said:
I strongly disagree. Without regulation, it would be completely legal for BoA to defraud Fannie and Freddie the way they did.
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Yeah, no. CRA regulatory compliance became more important than any other regulatory compliance, other areas were overlooked if the CRA numbers were good.
Im for strong regulatory controls. I am not for increasing systemic risk for a social agenda.

Without a place to dump toxic loans, they never would have been made in the first place. Government regulation was hand in hand with incentivizing the risk.
 
pbrauer said:
I'm not making excuses, I'm just stating FACTS. Excuses are not needed, just read my sig. LMMFAO.Besides, we arent a socialist country, it not the president job to create jobs. we are a capitalist country.
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We are living in neither a socialist nor a capitalist country, we are living in a Predatory country. One only has to look at the explosion in the share of national income of the .1% while the rest are being left behind to see who the predators are.
 
I don't think my country is predatory.
 
danarhea said:
The banksters were writing those mortgages, then dumping the toxic
stuff onto Fannie and Freddie. Bank of America was just fined billions for doing just that.
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Dude remove the Conservative moniker from your avatar.

HUD and CRA were given regulatory control over banks in the early 90s to stop "redlining". In 1992 Fannie Mae pledged a trillion dollars to the new up and comming secondary market of sub-prime lending.

3 basic tennnts of a good lendee.

Can he pay ? ( does he have the Income)
Will he pay ( credit history )
Can I make him pay if he refuses to pay ? ( Collateral )

Those three tennants define " redlining " and those three things were ignored from the early 90s to 2008 as banks under threat of Govt mandates lowered their standards and created loans especially for low income, bad credit, questionable income history lendees.

Eric Holder went after those banks including Wells Fargo because they refused to lower their lending standards that had kept them solvent for a 100 years.

If a banks had done that, refused to offer up free and easy credit then we would not be discussing the sub prime collpase today, but you criticize them for standing firm on principles that eould have prevented all of this.

You cant mandate affirmitive action liberal policies in the market. It undermines the basic structure of our free market economy and causes bubbles and eventual collapses.
 
Bronson said:
You were debunked like 5 posts ago yet you continue to grasp onto a laughable talking point from 2008 when Democrats were in full CYA mode
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It is simply a matter of fact. CRA loans were less likely to default.

It's embarrassing
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Your lack of understanding and persistent foot-dragging is embarrassing.

A new study concludes that the CRA CLEARLY did lead to riskier lending. It's beyond refute. That's why there was no Subprime Mortgage Market before the CRA genius. Strong lending practices were in place for a reason. It was Government Regulation that softened them, hence the seed of the 2008 Financial Crisis was the CRA. It was the root cause that created a market that never would have existed otherwise.
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Did you happen to read the study? Of course not! Did you examine the econometric methods employed? Of course not! In fact, it is far more likely you just did a quick google search without considering what you were getting into. While this research does show statistical significance in the amount of risky lending around the time of CRA examinations, it does not take into consideration the magnitude of overall CRA lending. In fact, only 6% of all high priced loans were originated from CRA institutions. The other 94% fell outside of CRA jurisdiction. Secondly, this paper does not explain the existence of the parallel real estate bubble that emerged in the U.S., a.k.a. the commercial real estate bubble. Do you honestly expect us to believe that CRA mandates forced banks to make risky commercial real estate loans? :lamo

You fail, and fail miserably.
 
OpportunityCost said:
Yeah, no. CRA regulatory compliance became more important than any other regulatory compliance, other areas were overlooked if the CRA numbers were good.
Im for strong regulatory controls. I am not for increasing systemic risk for a social agenda.

Without a place to dump toxic loans, they never would have been made in the first place. Government regulation was hand in hand with incentivizing the risk.
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CRA loans only made up 6% of the entire high priced loan market.

What about the commercial bubble?
 
Kushinator said:
CRA loans only made up 6% of the entire high priced loan market.


What about the commercial bubble?
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LOL....

ITS NOT CRA loans, its the regulatory power given to CRA and HUD in the early 90s to force banks to cater to a low income, bad credit lendees and the GSEs massive origination of those loans gaurantedd by the American Tax Payer.

By the time it was too late almost 75% of all sub-prime loans were held by Govt controlled institutions.

And the liberal response to this Democrate mandated bubble ?

Spend like there is no tomorrow and raise taxes
 
It was affirmitive action lending and it tanked the economy.
 
nota bene said:
I don't think my country is predatory.
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Its not, thats just a low information voters ignorance of a sytemic policy under this administration that let the banks and forced the Corporations and Bussiness's to hold on to their capital.

We get to look forward to 2% growth for the concieavable future because the Democrats are so "smart"
 
Fenton said:
LOL....

ITS NOT CRA loans, its the regulatory power given to CRA and HUD in the early 90s to force banks to cater to a low income, bad credit lendees and the GSEs massive origination of those loans gaurantedd by the American Tax Payer.

By the time it was too late almost 75% of all sub-prime loans were held by Govt controlled institutions.

And the liberal response to this Democrate mandated bubble ?

Spend like there is no tomorrow and raise taxes
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A rather small subset of all subprime loans were CRA related (not to mention the default rate for CRA loans was lower than other non-CRA loans of similar risk). I notice you failed to mention the commercial housing bubble.

Fail!
 
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