Note the deep implications of that response. The government is taking over the role once provided by family. It was not so long ago that people believed that if they didn't save up money and provide for their own old age that they would be a burden on their children. And it was quite common to worry that your aging parents would need to move in with you and be economically dependent on you. Many families had a grandmother living in their home.
And now, the government has become the basis of our expectations. There's a feeling of security (especially if you don't think too hard). And there's a freedom from the bondage of family. The government is more your family than your family.
Aren't you happy? Aren't you free? Don't you love Big Brother?
***
He gazed up at the enormous face. Forty years it had taken him to learn what kind of smile was hidden beneath the dark moustache. O cruel, needless misunderstanding! O stubborn, self-willed exile from the loving breast! Two gin-scented tears trickled down the sides of his nose. But it was all right, everything was all right, the struggle was finished. He had won the victory over himself. He loved Big Brother.
***
The struggle is finished. There's nothing else to run for....
Posts
322 comments:
«Oldest ‹Older 201 – 322 of 322"They didn't care as they weren't expecting to be repaid for those mortgages...they chopped them up and packaged them up into other financial instruments and sold them to others. In other words, the lending agencies got their money back in spades and and dispensed with the loans, and those buying their worthless intruments--sold as triple A--got hosed."
And someone was forced to buy those bad loans or what?
I suppose you can try to have it both ways, that the initial people issuing the loans weren't influenced by government policies that made issuing them safe, but you've just passed it along to the next level. Why buy obviously risky loans? Were they forced to do so?
Why did anyone buy those loans? Why were the loan originators so confident they could sell them?
At some point the buck stops, and we saw exactly where that was when we bailed them all out instead of letting the assholes burn.
But I can't blame their reasoning or logic, because they were right. They were right about every little bit of how *government* would react, picking winners and losers, and they knew they'd be winners.
This was a problem of too little regulation
This is probably an issue of fundamental disagreement. If I allowed you (or someone with your political views who also had an extremely sophisticated understanding of the financial industry) to write whatever regulations you wanted, you would not end the financial shenanigans of the banks, and in all likelihood, you would make things worse. This would be particularly so if you simultaneous tried to use financial institutions for other social goals, e.g. alleviating poverty, inequality.
Whoa, 200.
"This was a problem of too little regulation, which allowed the bankers to behave as if they owned casinos."
So close. It was a problem of government not being as responsible with taxpayer money as taxpayers desire. This problem recurs with Solyndra, ACORN, the GSA million dollar conference, the Pigford settlement, KELO, and virtually every other action the government takes.
However, the bankers and other involved financial institutions chose to behave unethically and illegally; they were not required by law to do so. They did so because they knew they could get away with it.
Well that, and government regulations gave them financial incentive for that behavior. People are not angels, and will respond to that incentive.
Robert Cook said...
Patrick,
I don't deny the government was complicit in the problems that led to the financial collapse...they were complicit in that they rewrote (or removed) regulations to suit the prerogatives of Wall Street and the financial and banking industries, allowing them greater latitude to use federally-guaranteed deposits recklessly in order to maximize their revenues.
No. Government's complicity in the mortgage collapse (and ONLY government is capable of this type of mistake) is that they
decided (GW Bush, too), without any evidence whatsoever (in fact evidence to the contrary exists), that when the disparity of home ownership was 'discovered' by looking at it by Race, it 'proved' that racial discrimination MUST be to blame, and so demanded that income and ability-to-pay standards be relaxed for certain categories of people.
But the situation was never that simple, no more than would be saying that Asians must be being discriminated against by the National Basketball Association, because there are too few there.
Not all (hell, hardly ANY) disparate impact is due to racial discrimination.
But only Government can say "to hell with proof", and so among all the villains in this scandal, they were the truly essential ones.
Cookie:
Can you even define the word greed for us?
I know many people who make a lot of money and give much of it away to family and friends yet someone [President Obama] who does not know better may ask "At some point you have made enough money?"
Greed is such a moving target. One day you're a hero of the progressive cause, the next day you're an evil crook.
Why, back in March of '06 the villainous Countrywide was being hailed for its contributions to the cause of "affordable" housing:
The Pennsylvania Housing Finance Agency recognized the accomplishments of ten mortgage lending companies at a ceremony held today in the Harrisburg Hilton Hotel. These lenders were selected for their outstanding performances in 2005 by helping thousands of Commonwealth families buy homes...
Countrywide Home Loans, Inc. was second highest with 446 loans and was top producer of PHFA Keystone Home PLUS and closing cost assistance loans (primarily for families with lower incomes)....
Bob Ellison,
Let's say the French vastly overestimated the number of dead (though surely they'd have been more likely to under count in order to avoid looking like complete douchebags). So let's settle on, say, a thousand grandmeres and grandperes unnecessarily dead in their stuffy apartments because their relatives assumed government workers would check on them. It doesn't change the point. Anything that conditions humans to believe in dei ex machina isn't healthy physiologically or psychologically.
RObert,
" none of help put money back into our economy or treasury"
But earlier you said that we have our wars to control access to natural resources.
Those are mutually exclusive.
> But, the government did not require the bankers behave so recklessly
Actually, it did. Regulators told banks to "consider non-traditional income" and the like.
No, it wasn't a suggestion - there were penalties for non-compliance.
And then there's Fannie and Freddie, who were pools of such loans. F&F didn't stop there - they also lied about the loans that they held, which screwed up everyone's risk analysis.
You remember fannie and freddie, right?
Making risky loans is neither illegal nor unethical, Cookie. It is just foolish.
Repackaging "risky" loans into other financial instruments and selling them as better quality instruments than they are is fraud, which was a crime last time I looked.
There's also the recent revelations about the Barclays Bank (and allegedly other banks as well) manipulating the LIBOR rate, as well as recent reporting by Matt Taibbi and others regarding the wholesale bid-rigging of sales of bonds to municipalities, also criminal.
Have no doubt, the financial institutions have been committing criminal acts with impunity, enriching themselves and impoverishing us.
"And someone was forced to buy those bad loans or what?"
They weren't sold as junk instruments, but as Triple A rate instruments. It's as if I sold you a shit sandwich and told you it was Pâté de foie gras.
Honestly, haven't any of you people read any of the reporting on this? It goes back years. Is this all coming as of news from outer space. There was even an excellent documentary that covered part of the story, Inside Job.
There's also the recent revelations about the Barclays Bank (and allegedly other banks as well) manipulating the LIBOR rate, as well as recent reporting by Matt Taibbi and others regarding the wholesale bid-rigging of sales of bonds to municipalities, also criminal.
But you just told us that it was a problem of too little regulation. If the activities are illegal, then we do not have a problem of too little regulation.
Look, I don't have a problem prosecuting the people who violated the law. But every single time there is a financial crisis, there is an outcry for more regulation. A few of those making that cry will say "sensible" regulation.
But it fails. Every single time.
"But earlier you said that we have our wars to control access to natural resources."
That enriches the elites,(the oil companies, for example). It does nothing for the economy insofar as helping we, the proles. It's like using tax-payer money to build private sports stadiums, the revenues from which flow into the pockets of the private owners of the facility and sports teams.
No. Government's complicity in the mortgage collapse (and ONLY government is capable of this type of mistake) is that they
decided (GW Bush, too), without any evidence whatsoever (in fact evidence to the contrary exists), that when the disparity of home ownership was 'discovered' by looking at it by Race, it 'proved' that racial discrimination MUST be to blame, and so demanded that income and ability-to-pay standards be relaxed for certain categories of people.
The Bush administration wrote 10(ten)memos to fannie and freddie warning them that what they were doing was unsustainable.
So. sorry. I'm laying this at the feet of Fannie and Freddie. Everyone else down the line was trying to minimize their own risk. In fact banks were threatened with penalization for not making these loans.
So the problem wasn't too little regulation of banks(the most heavily regulated industry in the US that does not manufacture anything , but too much micro managing by F&F.
In other words: socializing the risk, privatizing the profits.
Robert Cook said...
"But earlier you said that we have our wars to control access to natural resources."
That enriches the elites,(the oil companies, for example). It does nothing for the economy insofar as helping we, the proles. It's like using tax-payer money to build private sports stadiums, the revenues from which flow into the pockets of the private owners of the facility and sports teams
How much oil do we import from Korea, Vietnam, Grenada, Panama, Iraq and Afghanistan?
I left out WW2 because that was the good war- it saved white people.
Okay, I have a question then.
What makes something a triple A something? Is it like "Choice" or "Grade A" beef where this means an outside agency inspected and gave the loan package a rating?
Or were they just lying and misrepresenting what they sold? Because I think someone could sue for buying a shit sandwich when the menu said it was tuna.
Have no doubt, the financial institutions have been committing criminal acts with impunity, enriching themselves and impoverishing us.
If they are committing these acts with impunity, they are doing so because the government, the very institution on which you rely to enforce the new regulations you'd like to see, has allowed them to do so.
Why do you think new regulations will decrease the impunity? At my most cynical, I just think you're setting up some more bureaucrats to bribe.
"In other words: socializing the risk, privatizing the profits."
Well, YES, Cook.
But you just told us that it was a problem of too little regulation. If the activities are illegal, then we do not have a problem of too little regulation."
I'm talkng about regulation under American law. The LIBOR affair is taking place in Britain.
Moreover, this is not just a matter of regulations having been removed that prohibited certain activities by financial institutions, (e.g., Glass-Steagall), but also a case of regulations still on the books simply not being enforced. At any time, the government might decide to resume active enforcement. (For example, we still have laws on the books against torture, but there has been no hint of investigation of government officials for involvement in the planning, facilitation, and participatin in torture. This doesn't mean torture is not criminal, just that we haven't enforced the law.)
As the scope of this and other financial fraud starts becomes impossible to hide or explain away, (one hopes) American legislators may look into possible prosecutions. A faint hope, at best, I'd say.
What makes something a triple A something?
Moody's Investor Services or Standard & Poor's evaluate and rate assets.
Contrary to Cook's silly fantasy, they are not self-labeled.
"...were they just lying and misrepresenting what they sold?"
Yes.
So, for the sake of argument:
By your theory, if our oil companies controlled access to an overseas oil field, that doesn't benefit our economy at all, relative to the impact on our economy if some other nation's oil companies controlled access to that same field?
For instance
And here
And yet again
Really, Robert, it's a matter of what happens when you have a large powerful government. People use that power for their own ends. Politicians use it for their own good. This will not change. The way to eliminate government's corrupting influence is to reduce its power. Nothing else works.
"Robert Cook said...
In other words: socializing the risk, privatizing the profits."
How can a company socialize risk without government?
Usually different conclusions are driven by assigning different priorities to various factors. Sometimes this is supported by emphasizing or omitting certain facts. But in RCs case he cherry picks his evidence and he still fails.
It's incomprehensible.
"How can a company socialize risk without government?"
Who says they're doing it without government?
Those who misrepresented their financial products committed crimes. According to the WSj from earlier this year, there were well over 10,000 charges of financial fraud filed since 2008. I'll look for a link when I have time.
Robert Cook said...
"How can a company socialize risk without government?"
Who says they're doing it without government?
The fool who wrote this:
"ALL the financial devastation domestically and internationally of recent years is the result of capitalism operating unchecked."
And then followed it up with asserting it as an example of socialized risk and private reward.
You know, someone should keep track of what that guys writes for you. Maybe there's an APP for that.
As your links show, Cook, the mis-evaluation by the ratings agencies was the key step in leveraging bad mortgages into bad CDOs.
They do not document criminal behavior.
This is an oft-told tale by now, so it's really pointless to keep going over it. The Big Short is pretty good at describing the Wall Street propagation mechanism (leveraging), but it overlooks the initial impulse, which was the pressure from the government to make the dodgy loans in the first place.
"Who says they're doing it without government?"
No one.
It can't be done without the active participation of government. That's the whole point.
which was the pressure from the government to make the dodgy loans in the first place.
So how did that go down exactly? Can you point to something from the government that stated to the banks that they needed to make dodgy loans?
And is that policy still in place?
Can you point to something from the government that stated to the banks that they needed to make dodgy loans?
Community Reinvestment Act
Robert Cook said...
But, the government did not require the bankers behave so recklessly, even criminally; this was a function of the greed of the bankers and their certainty they would pay no penalites...a certainty that has, so far, been borne out.
Fail.
See, all those executives at Fannie Mae (Franklin Raines received $20 million) were cooking books and taking more risks.
Fannie Mae was regulated by OFHEO and Congress.
You are still clueless.
In Kookie land, Fannie Mae didn't have stock and wasn't looking to make profits.
That's because in Kookie land the government is benevolent & wise, except when it comes to DoD or CIA.
@ I Callahan
I found this at your link:
"The law, however, emphasizes that an institution's CRA activities should be undertaken in a safe and sound manner, and does not require institutions to make high-risk loans that may bring losses to the institution"
Maybe I missed something.
garage mahal said...
So how did that go down exactly? Can you point to something from the government that stated to the banks that they needed to make dodgy loans?
You may want to read this, dumbass:
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.
...
Between 2005 and 2008, Fannie purchased or guaranteed at least $270 billion in loans to risky borrowers — more than three times as much as in all its earlier years combined, according to company filings and industry data.
...
Capitol Hill bore down on Mr. Mudd as well. The same year he took the top position, regulators sharply increased Fannie’s affordable-housing goals. Democratic lawmakers demanded that the company buy more loans that had been made to low-income and minority homebuyers.
“When homes are doubling in price in every six years and incomes are increasing by a mere one percent per year, Fannie’s mission is of paramount importance,” Senator Jack Reed, a Rhode Island Democrat, lectured Mr. Mudd at a Congressional hearing in 2006. “In fact, Fannie and Freddie can do more, a lot more.”
@garage, if you're asking your question seriously, I'll tell you that the CPSB and HUD and the Fed and probably a couple of other agencies with regulatory oversight over banks are still exerting pressure to extend credit to applicants with lousy credit scores. And not just for home mortgages, but for unsecured loans as well.
Maybe I missed something.
What you missed were the actual regulatory criteria used to implement the law.
That kind of wording is 100% ass-covering for when the shit hits the fan.
@garage, if you're asking your question seriously, I'll tell you that the CPSB and HUD and the Fed and probably a couple of other agencies with regulatory oversight over banks are still exerting pressure to extend credit to applicants with lousy credit scores
That's what I was getting at. What sort of "pressure"? Sternly worded letters? Phone calls? If it's not law, the banks would be wise to ignore the pressure.
The US gov't, like with student loans, absorbed the risk. The US gov't THANKS BARNEY! wrote the rules. And the money, like union dues, flowed back to our gov't. hmmmm.......
This is the S&L problem all over again.
Get the gov't out, put the risk back where it belongs and fewer problems.
--That's what I was getting at. What sort of "pressure"? Sternly worded letters? Phone calls? If it's not law, the banks would be wise to ignore the pressure.---
Or they get raided like Gibson, or Chuckie S. starts attacking.
Right, GM, the banks will ignore the overseers.
Money Mag featured a couple a few years ago on their cover whining about how they got snookered.
I'm supposed to feel sorry for idiots who thought they had a 30 year mortgage at about 1.5%?
SERIOUSLY? 1.5%????!!!!
These people do not work, have no lives or family. If I had a great deal like that, I would have sure talked to someone beforehand.
Marshall,
When did I ever assert capitalism unchecked was not being aided by government? In fact, they're "unchecked" because government aids them; it is government's role to check capitalism.
Robert Cooke, you are very well aware that capitalism hasn't operated unchecked since Wickard or before.
You are absolutely objectively insane.
Oh, Mr. Mahal, your bank is "ignoring the pressure?" Well, we're sorry, but you're being audited. And here's some EEOC complaints about your "discriminatory lending" you'd better check into. And we're sure your indoor air quality doesn't meet EPA regs; perhaps you'll be more cooperative after "crucifixion"...
Another liberal posting from another planet, or a rubber room.
Will someone please point me to this unchecked capitalism? Cos it certainly isn't in the US. We'd be swimming in $$$$$$.
"Will someone please point me to this unchecked capitalism? Cos it certainly isn't in the US. We'd be swimming in $$$$$$."
The capitalists, colloquially known as "the 1%," are swimming in $$$$$$$, not,we, the 99%, (or simply, the proles).
Another liberal posting from another planet, or a rubber room.
Haha. After you just posted some paranoid nonsense you just made up. Good one.
How much money does the 1% have again?
It keeps changing.
Oh I see the broccoli buffoon is pretending to want to be informed about how the government pressured banks to make risky loans.
Well here is some info on the CRA:
In 2004 Bank of America agreed to provide $750 billion in CRA loans to applicants with poor credit who had previous difficulty obtaining a mortgage. By 2008 Bank of America was reporting that CRA loans represented only 7% of its portfolio but 29% of its losses. Numerous large banks are now in the middle of enormous CRA commitments. In 2004 J.P. Morgan Chase agreed to provide $800 billion of such loans over the course of 10 years.
And note the president the broccoli buffoon voted for sued Citibank using the CRA. Why would such a super duper smart constitutional law lecturer do that if it weren't an effective tool to get banks to make loans they would not otherwise make?
Too many questions for the broccoli buffoon. He's too busy living in the comfort of sweet, sweet lies.
Robert Cook said...
The capitalists, colloquially known as "the 1%," are swimming in $$$$$$$, not,we, the 99%, (or simply, the proles).
Says someone using a PC, Internet connection, and Internet as a medium that was unfathomable 25 years ago.
At low cost and without a sense of irony, no less.
You are now going to be referred to as "opposite guy" because everything you say is the opposite of reality.
Ok, the evidence is in, and it is overwhelming.
Robert Cook = more articulate but equally intransigent Garage Mahal.
So many responses to what I wrote here, but only one on Jaltcoh's blog.
And yet the quality of that one response is better than pretty much anything here.
Robert Cook said...
Marshall,
When did I ever assert capitalism unchecked was not being aided by government? In fact, they're "unchecked" because government aids them; it is government's role to check capitalism.
RC,
You don't have to assert it separately, that's what the terms you used mean. "Capitalism" coordinating with government is called crony capitalism if small or corporatism if widespread. Unchecked means unregulated, not in collusion with. The fact that you don't know what the words you use mean certainly explains a lot.
And it is not government's role to check capitalism any more than it is government's role to check sunshine. Government's commercial role is to set the basic framework for transactions and agreements, not to side with one group over the other.
"If we're so broke, how can we keep funding these multi-billion dollar wars..."
Damned War on Poverty -- the single most expensive and utterly unwinnable "War" ever declared. Hell, even the War on Drugs has a better chance of victory, and is cheaper and less destructive of our rights to boot.
"In other words: socializing the risk, privatizing the profits."
The Democrat Party way, babeh.
The capitalists, colloquially known as "the 1%," are swimming in $$$$$$$, not,we, the 99%, (or simply, the proles).
You seriously believe that kind of drivel? Did your red diapers stain when you were a toddler?
Robert Cook said...
"Will someone please point me to this unchecked capitalism? Cos it certainly isn't in the US. We'd be swimming in $$$$$$."
The capitalists, colloquially known as "the 1%," are swimming in $$$$$$$, not,we, the 99%, (or simply, the proles).
How the hell old are you? 16.
Bank of America was threatened with congressional investigations if they did not make these dodgy loans. Also Janet Reno threatened investigations. I know because I am a Bank of America stock holder.
Garage. I urge you in the strongest possible way to stop writing on the topic of banking. Unlike many other issues this does not lend itself to winging it using three year old liberal talking points.
But if you wish to persist perhaps you can describe your take on the LIBOR manipulation flap underway in the UK. I would be keen to know your thoughts on how and why and to whose benefit the manipulation might have taken place.
"I know because I am a Bank of America stock holder."
Cripes, you poor guy.
How has your stock done since BofA did the government a favor at their request, and take over the Merrill Lynch and Countrywide portfolios?
Too bad sovereign immunity doesn't allow you to sue for damages.
"If we're so broke, how can we keep funding these multi-billion dollar wars..."
Opposite guy:
There is no dispute America is almost $16 trillion in debt. $16 trillion is a number so vast, it will never be repaid. Yes, America is broke.
But it is funny that you can never bring yourself to such questions as:
If we're so broke, how can we keep funding the department of education?
or
If we're so broke, how can we keep funding the EPA?
or
f we're so broke, how can we keep funding the AMTRAK?
And so on.
Garage. I urge you in the strongest possible way to stop writing on the topic of banking. Unlike many other issues this does not lend itself to winging it using three year old liberal talking points.
I asked for evidence of pressure from federal agencies that were forcing banks to make dodgy loans. So far, and not surprisingly, I've yet to see jack shit of this evidence.
The yapping little mongrel tried and failed. Maybe you'd like a shot at at?
"The law, however, emphasizes that an institution's CRA activities should be undertaken in a safe and sound manner, and does not require institutions to make high-risk loans that may bring losses to the institution"
"Maybe I missed something."
What you missed was the part that went...
This is risky.
Is not.
Is too.
Is not.
Is too.
No it's not.
Is.
Not.
Is.
We're the government and we say "not".
Well, if you say so. How can you prove it's not a risk?
Fanny and Freddy will buy them from you. So, not a risk.
Gotcha.
Garage, you are a time waster who is apparently willfully stupid on many topics particularly so on this one. Do your own legwork jackass. The banking industry is and has been urged to make loans to certain cohorts. At the same time they make it clear that that does not mean bad credits. This is what is known in a bureUcracy as an "out.". The "out" does not stop the pressure from the govt to produce a percentage of loans to a certain cohort which cannot pass credit requirements. The govt is thus off the hook for the outcomes when the banks stretch to make their numbers. We told you not to make bad loans. Very helpful.
If you do not now work for the govt you certainly would find a very welcoming spot in the middle level of this very kind of conundrum. You would, in fact, be perfect.
And LIBOR?
garage mahal said...
I asked for evidence of pressure from federal agencies that were forcing banks to make dodgy loans. So far, and not surprisingly, I've yet to see jack shit of this evidence.
Awwww, the broccoli bozo is so cute when he pretends to want to see evidence.
Really, you are. Dummy.
As was suggested, you commenting on anything related to banking or finance is just silly.
But you do reveal yourself to be completely ignorant of things called "CRA Scores"
Tell us broccoli idiot, which Agency enforces CRA compliance?
And if the CRA doesn't force banks to do things they wouldn't otherwise do, what, pray tell, is the purpose of the CRA?
Garage, you are a time waster who is apparently willfully stupid on many topics particularly so on this one. Do your own legwork jackass.
If I'm a time waster, just move the fuck along then. I don't care either way. If banks are "urged" to make stupid loans, and proceed to do so anyway, that proves my theory all along that bankers aren't as bright as we were lead to believe.
Would you extend a loan to someone that you felt couldn't pay it back? I wouldn't. But I'm not a banker.
Awwww, the broccoli bozo is so cute when he pretends to want to see evidence.
So nothing yet, then? I'm actually happy to concede the point. Even to a public annoyance like yourself. Be the hero Jay!
garage mahal said...
I asked for evidence of pressure from federal agencies that were forcing banks to make dodgy loans. So far, and not surprisingly, I've yet to see jack shit of this evidence.
It is hilarious that when presented with various sources and evidence that the Democrats in Congress pressured Fannie Mae to buy more risky loans, and the CRA mandates that banks offer credit throughout their entire market area, you "don't see evidence"
Of course you wouldn't.
You're an effing moron.
garage mahal said...
So nothing yet, then?
Hysterical.
Garage. Jay has given you a clue. It involves the Community Reinvestment Act. You can look it up and can see one of the many inane and contradictory ways in which our banking system is overseen by regulations and not laws. Or, stay clueless.
How about that LIBOR scandal? Now that is something.
garage mahal said...
Would you extend a loan to someone that you felt couldn't pay it back?
HA HA HA HA HA HA HA HA
HA HA HA HA HA HA HA HA
HA HA HA HA HA HA HA HA
HA HA HA HA HA HA HA HA
HA HA HA HA HA HA HA HA
You like know so much about the banking industry!
Really. You do.
Note:
But to some of the people who mattered — the ones who were buying Fannie and Freddie securities — the companies said something else entirely.
Scott Simon was one of those buyers. He works in the mortgage department at Pimco, the world's largest bond manager, and one of the biggest buyers of Fannie and Freddie securities:
"Fannie and Freddie in meetings with investors, whether it was us or anybody else, essentially just would sort of laugh and say, 'Well, you know the government will stand behind us,'"
Young people are free not to take care of their own old people, but are not free not to take care of someone else's old people.
The WWII generation was the "Greatest Generation", the baby boomer generation is the "Most Selfish Generation". The young generations, current one and those following are the most exploited generations, crummy schools, crummy job markets, crummy future prospects.
Oh, and a Democratic President did this:
In 1995, as a result of interest from President Bill Clinton's administration, the implementing regulations for the CRA were strengthened by focusing the financial regulators' attention on institutions' performance in helping to meet community credit needs.
These revisions with an effective starting date of January 31, 1995 were credited with substantially increasing the number and aggregate amount of loans to small businesses and to low- and moderate-income borrowers for home loans. These changes were very controversial and as a result, the regulators agreed to revisit the rule after it had been fully implemented for seven years. Thus in 2002, the regulators opened up the regulation for review and potential revision.
Part of the increase in home loans was due to increased efficiency and the genesis of lenders, like Countrywide, that do not mitigate loan risk with savings deposits as do traditional banks using the new subprime authorization. This is known as the secondary market for mortgage loans. The revisions allowed the securitization of CRA loans containing subprime mortgages. The first public securitization of CRA loans started in 1997 by Bear Stearns. The number of CRA mortgage loans increased by 39 percent between 1993 and 1998, while other loans increased by only 17 percent.
NO EVIDENCE!!!!
NONE!!!!
Garage. Jay has given you a clue. It involves the Community Reinvestment Act. You can look it up and can see one of the many inane and contradictory ways in which our banking system is overseen by regulations and not laws. Or, stay clueless
Ok, the CRA. Where in the CRA does it say that banks must extend risky loans? I read the link upthread, and it said something quite different from the claim being made. I'm going to have to assume you're either too lazy to find the language, or you know it's not in there to begin with.
I suspect this is much like the "rampant voter fraud!" boogeyman at this point.
Again, I'll be happy to concede the point.
Oh and here is another voice on the matter:
beginning in 1977 and even more in the 1990s and the early part of this century, Congress pushed mortgage lenders and Fannie/Freddie to expand subprime lending. The industry was happy to oblige, given the implicit promise of federal backing, and subprime lending soared.
But of course he just doesn't see all the evidence doesn't exist!
What a dummy, that Ph.D. in Economics from MIT Miron!
garage mahal said...
I read the link upthread, and it said something quite different from the claim being made
Bullshit, you liar.
Where in the CRA does it say that banks must extend risky loans?
From 1993 to 1998, CRA low income loans grew at more than twice the rate of ordinary mortgage loans.
Nowhere!
Nowhere at all!!!
No evidence!!!
In early 1993 President Bill Clinton ordered new regulations for the CRA which would increase access to mortgage credit for inner city and distressed rural communities.[5] The new rules went into effect on January 31, 1995 and featured: requiring strictly numerical assessments to get a satisfactory CRA rating; using federal home-loan data broken down by neighborhood, income group, and race; encouraging community groups to complain when banks were not loaning enough to specified neighborhood, income group, and race; allowing community groups that marketed loans to targeted groups to collect a fee from the banks.
None!
Bullshit, you liar.
I had to have read it, this is what I found and pasted from the link at 4:38:
"The law, however, emphasizes that an institution's CRA activities should be undertaken in a safe and sound manner, and does not require institutions to make high-risk loans that may bring losses to the institution"
You really are unusually full of fail today. Everything alright at home?
"encouraging community groups to complain when banks were not loaning enough"
Wowee! People against banks. That's a fair fight! LOLZ
keep em coming Jay. You're on a "roll", of sorts.
This is great. Clinton Admin Officials bragging about 'no doc' and no verification of assets loans due to changes in the CRA
MR. LUDWIG: Yes, there is a new enforcement mechanism. Where a bank is rated "needs to improve," that is not a "satisfactory," needs to improve one of the lower tests, but not the lowest test, it would have two years, two examination cycles, to improve its rating. If it did not, it would fall back into substantial noncompliance -- the lowest rating. If a bank or thrift is substantial in substantial noncompliance, the regulators for the first time will have the right to use their other regulatory enforcement tools with respect to that institution to cause it to comply with the law.
garage mahal said...
keep em coming Jay
I'm not the author, you idiot.
That came from the Clinton Admin as cited by Wiki.
garage mahal said...
I had to have read it, this is what I found and pasted from the link at 4:38:
It isn't at the link provided and even if it were, it has nothing to do with the actual facts.
Garage. There is actually a rather good entry on the CRA in Wikipedia. You will have to read the entire thing,however.
The CRA does not tell banks to make bad loans it tells them to lend to a cohort with less than satisfactory credit. If the banks do not comply they risk everything from their charters to their own ability to hit the credit window. But you should read the wiki article which will lead you to other sources if you are curious.
garage mahal said...
I had to have read it, this is what I found and pasted from the link at 4:38
Here is the text of the link provided.
The Community Reinvestment Act (CRA, , title VIII of the Housing and Community Development Act of 1977, , et seq.) is a United States federal law designed to encourage commercial banks and savings associations to help meet the needs of borrowers in all segments of their communities, including low- and moderate-income neighborhoods. Congress passed the Act in 1977 to reduce discriminatory credit practices against low-income neighborhoods, a practice known as redlining.
CRA is designed as a simple test for how financial institutions are meeting obligations to serve the convenience and needs of the local market where they are located. This principle is one that federal law governing deposit insurance, bank charters, and bank mergers had embodied long before the enactment of CRA. This hearing before the full House Committee on Financial Services examined the impact of CRA on the provision of loans, investments and services to under-served communities. In addition to exploring CRA's... More in Ask Encylopedia »
Nowhere does it say what you claim it did.
garage mahal said...
You really are unusually full of fail today.
I'm not the one ignoring evidence of what anyone with a brain knows is true.
But carry on, idiot.
In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.
OOPS.
It isn't at the link provided and even if it were, it has nothing to do with the actual facts.
It was at the link that I was asked to visit, you have to click 'More in Ask Encyclopedia' to get the full article, and it's under 'Enforcement'
First you said I didn't read the link, then you said what I pasted from the link wasn't at the link? Jesus H Christ.
So, some people want those of us in the Baby Boom age group to work until we almost die.
Well, I would love to do that,but my employer determined that although I won all kinds of annual awards, our clients loved me, and I devised some great solutions for our product, I was too old for their Corporate Image. So, I was laid off at age 55.
Try to find a job when you are 55. Even though I was completely up to date with all the then current IT solutions, no one wanted to hire someone who was 55.
So, here I am, age 59, without a real job. I'm working for myself, thanks to the money my husband and I put aside. I hope to continue working at this until I die, because working for oneself is so much more fulfilling than working for 'the man'.
We have helped our son and his family a lot because the economy sucks so bad. I hope that they will spend time with use when we are in our dotage, because we love them, not because they 'owe' us. But, in a way, children do owe parents loyalty, love and assistance - it's just the shoe on the other foot.
Clinton Administration regulations in the '90s added teeth to CRA, requiring banks to show compliance with meeting low-income loan targets or face civil actions that could assess a $500,000 penalty for each violation.
Here is a rather extensive and definitive analysis of the CRA.
The Trillion-Dollar Bank Shakedown That Bodes Ill for Cities
Nowhere does it say what you claim it did
It is indeed at I Callahan's link @ 7/11/12 4:31 PM
Seehere.
This part of the thread demonstrates why it was a great liberal leader that came up with the tactic of arguing what the meaning of "is" is.
Garage. Read the Wiki article.
I could just see the bankers telling the Fanny and Fredy guys: "Hey it says here that we don't have to make these bad loans."
That would be funny, and everyone would laugh. Good times!
Cook,
DoD budget for 2012 is about $700B. This includes operations in A-stan and Iraq. Our projected deficit for 2012 is $1.3T. Our total federal debt is about $14T. The present value of current SS/Medicare/Medicaid unfunded liabilities is conservatively $100T. You could zero out DoD and still have no money to invest to fill these gaps (in fact, the debt still grows at $600B/year and this is increasing). You could tax everyone's income at 100% over the next 20 years (assuming they would still work) and still not cover the unfunded liabilities.
We are broke, plain and simple. DoD spending is not the issue.
You are simply not talking sense.
Man proposes and God disposes. We thought, when we retired, that we would be set to live out our days in relative comfort, without becoming a burden on our children, and even thought in our hubris that we might be able to leave a little something behind for them. Obamanomics took care of that. Now we're just hoping not to be a burden, and that's looking pretty uncertain if things keep going the way they are. Because I don't think for a hot minute that Obamacare and Obamagov are going to maintain us to the end.
"SWWBO said...
So, some people want those of us in the Baby Boom age group to work until we almost die."
Yes, just like we're going to have to. Please explain the problem with evening out the benefits so there is as much left for us as there is for you.
Someone please explain this.
Repackaging "risky" loans into other financial instruments and selling them as better quality instruments than they are is fraud, which was a crime last time I looked.
It is not fraud. The contents of the mortgage securities weren't secret, and the quality of the securities was independently rated.
Never assume malice where simple incompetence is a sufficient explanatilon.
The overwhelming majority of the fraud took place at the level of individual mortgages -- people lying about their finances, or brokers lying about the quality of the borrowers.
Robert Cook. If the people that borrowed the money from the banks had done what they agreed to do, contractually, there would havebeen no meltdown. The banks made cheap money available to people who chose to not pay it back. The people, my good man, fucked the banks. Not the other way around. Or, where oh where is my bass boat?
I don't know why you guys bother with Garage, he's obviously just trolling.
[Idiot, what's the difference between him and RC?]
I can't help it, it's too funny. Sitting in the cafe, laugh out loud funny.
So, some people want those of us in the Baby Boom age group to work until we almost die.
We expect you to work until you can afford to retire.
By "afford to retire", by the way, I do not mean "vote to have the government take money from younger people and give it to you". If that's how you plan to fund your retirement, why not cut out the middle man and just rob people yourself? :)
Garage. Here is another thing you might look at re cra.
http://articles.businessinsider.com/2009-06-27/wall_street/30009234_1_mortgage-standards-lending-standards-mortgage-rates
Marshal. Garage is an idealogue, not a troll. He has zero education in economics or banking. He can learn.
Michael,
Those sets aren't mutually exclusive. He may be both, but his function is trolling.
My father was a conservative academic (a historian). About 40 years ago, when I was perhaps 11, I asked him to describe the difference between his political views and a very left wing colleague. My father's answer, quick as can be: "He believes that a major purpose of the state is to protect people from their families, and I believe that the family is the last defense against the intrusion of the state." Wise words.
You know what should piss everybody off? 911, the housing crash, the bank crisis, the bad intel in Iraq, the enormous federal debt, the enormous city and state pension shortfalls have all occurred in the last 20 years and no one has yet been held accountable or even fired for what they did wrong. Hell, Gretchen Mortenson, a NYT reporter, wrote a book which identified the prime suspects that helped cause the housing bubble and what is the result? Crickets.
"I don't see anyone objecting to the trillions of OUR dollars spent on the War Department, that destroys lives and countries around the world, and on secret spy agencies who spy on US."
I don't see much hope of a serious opinion from someone who doesn't know we haven't had a War Department since 1948.
"I don't see much hope of a serious opinion from someone who doesn't know we haven't had a War Department since 1948."
Silly boy; we not only have a War Department it is extremely active at present.
Or are you so naive as to think a cosmetic change in name transforms the essence of the thing?
"'In other words: socializing the risk, privatizing the profits."
"The Democrat Party way, babeh."
No...that's the capitalist way. All these intrepid champions of "free markets" and "open competition" are all too happy to use their influence in Washington (i.e., "graft") to insure the government steps in to assist them in erasing risk to themselves while insuring all rewards flow to them.
"Robert Cook said...
"'In other words: socializing the risk, privatizing the profits."
"The Democrat Party way, babeh."
No...that's the capitalist way. All these intrepid champions of "free markets" and "open competition" are all too happy to use their influence in Washington (i.e., "graft") to insure the government steps in to assist them in erasing risk to themselves while insuring all rewards flow to them."
__________________________________
This is a fundamental misunderstanding of free marketers.
Businesses, especially large ones, are not free marketers. They love corporatism since they believe they can use it to their advantage, and they're largely correct. It functions to keep out competition and prevent substituting. Free markets prevent corporatism. So while RC is ranting about the evils of corporatism and blaming free markets he's actually blaming the solution rather than the problem.
Free markets are not pro business, they're pro consumer. Small business tends to be free market supporters because they're the targets of corporatist barriers.
It just seems to me, Marshall, that you're redefining the facts of life to suit your preconceived (or received) beliefs.
RC,
I'm accurately describing what I'm for and against. OTOH you are insisting that others support the very elements they are actively against. You've been miseducated.
If you felt your case was strong enough you wouldn't have to hide behind weasel words and assertions that people against corporatism are actively for it. In fact, I'm not really sure why you act as you do since it only makes enemies in exchange for nothing. If you said you were against corporatism and our version of capitalism has too many elements of that I don't think too many people would disagree. Of course saying that would make one wonder if you support Obamacare, the largest step into corporatism this country has ever considered.
Instead you drank the koolaid that free marketers are devils who hate the 99% and you wonder why people think you're a nut. If you're not willing to overcome your education, own it.
I'm saying, all markets are managed to greater or lesser degree. (Proponents of a "free market" mean a market free of interference by government, free of regulatory oversight and limits placed on their actions.)
There is no such thing as a free market anywhere, and to the extent regulatory controls are removed or ignored, the wealthy and powerful are simply more free to exploit the poor and the weak. I don't see how this mythical "free market" you imagine can be a cure for the ills of capitalism or a tonic for working people.
"There is no such thing as a free market anywhere"
True but meaningless. Nothing is judged by absolutes. Freer markets are better than corporatism.
Free markets don't allow the powerful to exploit the weak, they allow the weak to say no to the powerful.
(Proponents of a "free market" mean a market free of interference by government, free of regulatory oversight and limits placed on their actions.)
****Bzzz***** wrong but thank you for playing. What you are describing is laissez-faire capitalism. Free market capitalism means a system that allows trade between nations without laws and tariffs dessigned to limit imports or exports.
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