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U.S. sues S&P over subprime ratings

Take with a pinch of salt some with of these titles that have been bestowed
on these lunatic proffesors.

A harvard emeritus economics professor had a 2 hour lib-athon on current TV.

I thought I'll keep an open mind and see what he has to say.

His solution ? Tax the rich at 95% because we did it after WWII.

Moron. He was a moron and a liar
 
Requiring lenders to prove that they are serving their entire community is not the same as forcing them to provide loans to every idiot who asks for one, no matter how bad their credit and work history etc.

Apparently no job and a bad credit history has become the equivalent of "up is down,' "slavery is freedom," etc. Did Orwell look into the future in 1949 when he wrote "1984?" We would have been laughed out of the bank not too many years ago had we tried this! :( Now I am reading that if the minimum wage goes up by a grand amount of $1.75 an hour, millions of people will suddenly qualify for a home loan? Okaaay.... :lamo
 
I have never argued that there should not have been a CRA or something like it. But I would also argue that unintended consequences can be just important as the intended ones.:caution:

I agree and I acknowledge that the regulating legislation and practices during the 19990s-the present may be a small factor in the crisis and should be re-examined. However, there is no evidence that the original CRA (enacted in 1977) caused the crisis or required loans to unqualified borrowers. Ending redlining and discrimination was the right thing to do and was beneficial to many people who previously faced unjustifiable discrimination.
 
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Apparently no job and a bad credit history has become the equivalent of "up is down,' "slavery is freedom," etc. Did Orwell look into the future in 1949 when he wrote "1984?" We would have been laughed out of the bank not too many years ago had we tried this! :( Now I am reading that if the minimum wage goes up by a grand amount of $1.75 an hour, millions of people will suddenly qualify for a home loan? Okaaay.... :lamo

Neither I, the CRA law, or anyone else I am aware of, said that home loans should be given to unemployed people with bad credit history.

I can imagine that some people earning minimum wage may qualify for a home loan if the home is sufficiently low-cost (perhaps a trailer), the cost of living in the region is low and there are more than one wage earners in the household.
 
I agree and I acknowledge that the regulating legislation and practices
during the 19990s-the present may be a small factor in the crisis and should be re-examined. However, there is no evidence that the original CRA (enacted in 1977) caused the crisis or required loans to unqualified borrowers. Ending redlining and discrimination was the right thing to do and was beneficial to many people who previously faced unjustifiable discrimination.

Your looking at the CRA as a static piece of legislation.

Initially CRA was just a stand alone framework of guidelines that was supposed to stop discrimination.

In 1989 under Bush one it was changed to a piece of legislation that forced banks to "prove " they were attempting to make loans accessable to their surounding communities.

In 1995 Clinton chamged to finally force banks to loan to the people in their communities and the banks were audited as "trying" wasn't good enough anymore.

Why you claim these regulations amounted to a small portion is beyond me. HUD was given regulatory oversight to force the GSEs under quota's to purchase and then bundle and sell low quality mortgages.

THAT one regulation contributed to the lions share of sub-prime debt on Govt books that was the lions share of all sub-prime debt.

The GSEs mixed good with bad and pushed those toxic securities out into the market.

A lending institution failing to lend to its community members is NOT discrimination.

Proper lending involves "discrimination". Not lending to community members because they have a darker complextion IS discrimination.
 
I agree and I acknowledge that the regulating legislation and practices during the 19990s-the present may be a small factor in the crisis and should be re-examined. However, there is no evidence that the original CRA (enacted in 1977) caused the crisis or required loans to unqualified borrowers. Ending redlining and discrimination was the right thing to do and was beneficial to many people who previously faced unjustifiable discrimination.

Fair enough. I would reply that lenders seem to have been convinced that favorable treatment under the CRA sometimes required them to offer loans to unqualified buyers.:cool:
 
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.
 
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.

Lenders ? You mean the GSEs who bought up massive amounts of debt, packaged it off with good loans and sold it to investment banks and then to investors.

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?
 
Fenton: Did Bush II ever do anything wrong re. the economy?

First sign a liberal has run out of logical points: BOOOOOOOSSSSHHHHH.

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!
 
First sign a liberal has run out of logical points: BOOOOOOOSSSSHHHHH.

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!

Fenton has very consistently put nearly all blame for the mortgage crisis on Democrats. I have been defending the CRA, and given blame for the crisis to the emergence of derivatives, but have not defended nor attacked the actions of any particular administration or party. I have acknowledged that some of regulations enacted under Clinton, such as quotas, may have caused some problems.

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.
 
Fenton has very consistently put nearly all blame for
the mortgage crisis on Democrats. I have been defending the CRA, and given blame for the crisis to the emergence of derivatives, but have not defended nor attacked the actions of any particular administration or party. I have acknowledged that some of regulations enacted under Clinton, such as quotas, may have caused some problems.

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.

But you make general statements where Fenton gives a specific account of specific actions that not only caused it but mandated it.

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 ?
 
Fenton has very consistently put nearly all blame for the mortgage crisis on Democrats. I have been defending the CRA, and given blame for the crisis to the emergence of derivatives, but have not defended nor attacked the actions of any particular administration or party. I have acknowledged that some of regulations enacted under Clinton, such as quotas, may have caused some problems.

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.

What kind of response do you want when you ask this:
Fenton: Did Bush II ever do anything wrong re. the economy?

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.

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.
 
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