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(CNBC)   Wall Street is taking another look at our wobbly-legged economy and judging it ready to carry the mega-finance deals that knocked it down in 2004. Here we go again   (cnbc.com) divider line 61
    More: Asinine, Goldman Sachs, abs, leveraged buyouts, capital ratios, CDOs, structured finance, test market, tranches  
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1510 clicks; posted to Business » on 31 Jan 2013 at 10:55 AM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-01-31 10:06:06 AM
None of them went to jail, obviously it's not a problem
 
2013-01-31 10:44:36 AM
Politicians need another bubble to get them thru the next election cycle.
 
2013-01-31 11:01:49 AM
as long as they aren't passing any of the tranches off as AAA paper, i'm not sure it's a problem.
 
2013-01-31 11:08:04 AM

DrPainMD: Politicians need another bubble to get them thru the next election cycle.


DrPainMD:  he pays to do what I do for free.
 
2013-01-31 11:12:09 AM
And this will be Obama's major failure. He should have kicked their asses and he didn't. (Of course, the derpers on the right are busy screaming about Benghazi. Perhaps if they'd been screaming for the heads of Wall Street something would have been done.)

BTW, this was a pretty interesting retrospective of Obama's first term. It had some inside info on his early days as president and how quickly the GOP decided to just completely cockblock him.
 
2013-01-31 11:13:37 AM
This is going to create so many jobs...

/sarcasm
 
2013-01-31 11:32:28 AM

unlikely: None of them went to jail, obviously it's not a problem


Exactly. Hell the government just threw a bunch of money at them to make the problem go away.

You give your kid ice cream every time he or she throws a fit, what's going to happen?
 
2013-01-31 11:32:49 AM

thomps: as long as they aren't passing any of the tranches off as AAA paper, i'm not sure it's a problem.


They were AAA when they were passed, the problem was they quickly became much lower than that.


The banks were forced by the government to give loans to people in bad neighborhoods. In the early 2000s, home values were rising and the whole "house flipping TV shows" were hugely popular. People started buying cheap second homes, fixing them up, and reselling them. This created a surge in artificial demand for houses (people were buying houses with the intent to sell, not live in). This drove home prices up, which caused profit for house flipping, which caused more people to get interested in house flipping, which repeated the cycle.

At some point, this market saturated. People had bought a second or even third house to flip and now there was no demand to sell them off. When you're stuck with a high interest loan for an extra house, you might as well cut your losses and let the bank take the house. Banks are in the banking industry, not housing industry, so a sudden huge gain in real estate and a huge loss in cash flow from people paying mortgages is not a good thing for them.  Suddenly the banks were in danger of insolvency, because ATMs can't hand out houses in place of cash.

All of this caused prices in the housing market to plummet because you suddenly have banks selling off houses at 50% of value or less to get liquidassets on their balance sheet. This pushed people underwater on their mortgages for houses they were actually living in and happened to buy during this time of house flipping. When those people started defaulting on their mortgages, the problem became more serious because you had actual homeless people now and the banks were already having liquidity problems and the banks already had too many houses.


So no, there is no problem with packaging debt and there was little to no problem with banks pretending bad debt was good debt. Debt that was good debt just happened to quickly become bad debt because of a bunch of people doing the same thing at the same time.

Compare this to Apple stock. A bunch of morons thought Apple was worth a ton of money so they bought stock and drove the price up 25% or more over what it is actually worth. Once people realized "oh hey this is stupid" the stock price plummeted back down to fair value. The same thing happened with houses.
 
2013-01-31 11:37:47 AM

jayhawk88: unlikely: None of them went to jail, obviously it's not a problem

Exactly. Hell the government just threw a bunch of money at them to make the problem go away.

You give your kid ice cream every time he or she throws a fit, what's going to happen?


You mean gave them ice cream, and then took away a lot of their toys until the kid had repaid the ice cream with interest?
 
2013-01-31 11:44:56 AM
Who cares? Nobody went to jail, no meaningful regulation was enacted, so who the fark cares? This boom, bust cycle that makes the rich richer and farks the rest of us is just the reality we will have to live with, because 45% of the US is so farking stupid they keep voting Republican.

So, figure out who the victims of the Wall Street thieves are this time and join them, it is the only way to preserve any of your hard earned retirement assets. Besides the Boomers are not dead, I bet we can rob them of their retirement accounts at least once maybe twice more.
 
2013-01-31 11:49:00 AM

Bullseyed: The banks were forced by the government to give loans to people in bad neighborhoods.


Go fark yourself.
 
2013-01-31 11:57:26 AM

Sergeant Grumbles: Bullseyed: The banks were forced by the government to give loans to people in bad neighborhoods.

Go fark yourself.


yeah i groaned at that, but it's not worth engaging in a discussion with someone who still believes that in 2013.
 
2013-01-31 12:00:52 PM

Bullseyed: The banks were forced by the government to give loans to people in bad neighborhoods.  ...


Good lord....hasn't this point of "the whole housing mess was caused by the CRA" been debunked a million times already?
 
2013-01-31 12:01:12 PM

Sergeant Grumbles: Bullseyed: The banks were forced by the government to give loans to people in bad neighborhoods.

Go fark yourself.


collider.com
 
2013-01-31 12:10:42 PM

thomps: Sergeant Grumbles: Bullseyed: The banks were forced by the government to give loans to people in bad neighborhoods.

Go fark yourself.

yeah i groaned at that, but it's not worth engaging in a discussion with someone who still believes that in 2013.


The interesting thing is that the rest of the explanation looks mildly valid, he just decided to preface it all with an untrue, irrelevant statement which is in no way referenced in the rest of his explanation.
 
2013-01-31 12:14:59 PM

RminusQ: The interesting thing is that the rest of the explanation looks mildly valid, he just decided to preface it all with an untrue, irrelevant statement which is in no way referenced in the rest of his explanation.


it's reasonably defensible, i think it ignores the demand side of the equation though - trillions of dollars worth of sovereign and institutional funds looking for a place to park their money in an artificially low interest rate environment.
 
2013-01-31 12:15:05 PM

RminusQ: The interesting thing is that the rest of the explanation looks mildly valid, he just decided to preface it all with an untrue, irrelevant statement which is in no way referenced in the rest of his explanation.


I dunno. He said there was no problem with packaging debt. Can't really agree there. I find being able to sell debt an iffy prospect that removes too much responsibility from the lender.
 
2013-01-31 12:16:33 PM

RminusQ: thomps: Sergeant Grumbles: Bullseyed: The banks were forced by the government to give loans to people in bad neighborhoods.

Go fark yourself.

yeah i groaned at that, but it's not worth engaging in a discussion with someone who still believes that in 2013.

The interesting thing is that the rest of the explanation looks mildly valid, he just decided to preface it all with an untrue, irrelevant statement which is in no way referenced in the rest of his explanation.


Actually, not so much. There was massive demand for mortgages from Wall Street, so the investment side of banks leaned on the mortgage side to give out loans like candy. Should pepole have taken those loans? No. But in the end, it's the bank's faults for not properly underwriting their loans. Frontline had a really interesting (and enraging) episode about this very thing earlier this month.
 
RJB
2013-01-31 12:16:39 PM
Bullseyed: ...

So no, there is no problem with packaging debt and there was little to no problem with banks pretending bad debt was good debt. Debt that was good debt just happened to quickly become bad debt because of a bunch of people doing the same thing at the same time.

AAA definition
Debt that rapidly loses significant value in the face of a market shock is, by definition, not AAA.
 
2013-01-31 12:39:33 PM

cashdaddy: Bullseyed: The banks were forced by the government to give loans to people in bad neighborhoods.  ...

Good lord....hasn't this point of "the whole housing mess was caused by the CRA" been debunked a million times already?


No, it hasn't. The debunking, however, has been debunked. Repeatedly. Federal government sources claiming that the federal government didn't cause the boom/crash are not credible.
 
2013-01-31 12:42:25 PM
The trick to being a great parasite is that you have to bleed your victim over and over again, allowing it to recover in between each near-mortal feeding session.
That way the parasitism can go on indefinitely.
 
2013-01-31 12:46:30 PM

unlikely: None of them went to jail, obviously it's not a problem


Geithner became Treasury Sec. , even after tax evasion. Both parties are owned by Wall Street. Of course Martha Stewart will go to jail but no Wall Street Exec.
 
2013-01-31 12:51:42 PM

Mike Chewbacca: RminusQ: thomps: Sergeant Grumbles: Bullseyed: The banks were forced by the government to give loans to people in bad neighborhoods.

Go fark yourself.

yeah i groaned at that, but it's not worth engaging in a discussion with someone who still believes that in 2013.

The interesting thing is that the rest of the explanation looks mildly valid, he just decided to preface it all with an untrue, irrelevant statement which is in no way referenced in the rest of his explanation.

Actually, not so much. There was massive demand for mortgages from Wall Street, so the investment side of banks leaned on the mortgage side to give out loans like candy. Should pepole have taken those loans? No. But in the end, it's the bank's faults for not properly underwriting their loans. Frontline had a really interesting (and enraging) episode about this very thing earlier this month.


Yeah on further glance, it's only a very cursory treatment. Significant fault lies with the banks who clearly were not curious enough in their efforts to determine the true level of a loan. But the CRA thing is a load of horseshiat. My sister and her husband tried to fix'n'flip some houses. They weren't getting loans because the big bad federal government required banks to issue loans to people in rough neighborhoods; that explanation would be ludicrous* as they were in decent suburbs. They were getting loans because the banks thought houses could never fall so free money was free.

*-What does it say that about me and/or society that I keep thinking that's not spelled correctly, and it should be spelled more like the rapper's name.
 
2013-01-31 12:54:52 PM

RminusQ: *-What does it say that about me and/or society that I keep thinking that's not spelled correctly, and it should be spelled more like the rapper's name.


sounds like you might qualify for one of those economy-wrecking CRA mortgages, if you know what i mean
 
2013-01-31 01:04:34 PM
Bullseyed: So no, there is no problem with packaging debt and there was little to no problem with banks pretending bad debt was good debt. Debt that was good debt just happened to quickly become bad debt because of a bunch of people doing the same thing at the same time.

Holy shiat, WOW.  OK- Once more from the top:

First where you're ok- Easy lending practices did indeed provide fuel for the fire.  You're not wrong there.  But while the CRA might have been part of that, banks routinely ignored their own lending standards well beyond what the CRA asked of them to get those loans.   Hell, they violated their own record-keeping standards to boot.  That's a government problem only insofar as its a regulatory and enforcement problem.

But a collapse of the mortgage industry alone wasn't enough to crater the economy.  Don't take my word for it, take TARPs;  If it were, the problem would have been solvable by buying up underwater mortgages, not bailing out banks.

Where you went wrong:  Bundling up garbage and putting a AAA sticker on the box was and is a huge part of the problem.  That's what got institutional money onboard, like pension funds.  That's when the problem went from a push issue (collateralization of mortgage debt) to a pull issue (more loans were needed to fuel the demand for mortgage debt).  You say there was and is no problem with this.  In some cases, banks created non-existent loans out of whole cloth in order to repackage that debt for the financial community.  Understand that.  Not a bad loan, but no loan whatsoever.   You don't think that that's a problem?

It's important that you understand this.  Because people not understanding it is why it will happen again.  And it's why there is not one single person in jail for having done it.
 
2013-01-31 01:13:37 PM

DrPainMD: cashdaddy: Bullseyed: The banks were forced by the government to give loans to people in bad neighborhoods.  ...

Good lord....hasn't this point of "the whole housing mess was caused by the CRA" been debunked a million times already?

No, it hasn't. The debunking, however, has been debunked. Repeatedly. Federal government sources claiming that the federal government didn't cause the boom/crash are not credible.


Ah yes, and Business Insider is a good place to go to look for who in the business world to blame for the mess. Not business leaders you say?

I'm sure that's WAY more credible than the analyses done by the regulators.
 
2013-01-31 01:23:47 PM

Deneb81: DrPainMD: cashdaddy: Bullseyed: The banks were forced by the government to give loans to people in bad neighborhoods.  ...

Good lord....hasn't this point of "the whole housing mess was caused by the CRA" been debunked a million times already?

No, it hasn't. The debunking, however, has been debunked. Repeatedly. Federal government sources claiming that the federal government didn't cause the boom/crash are not credible.

Ah yes, and Business Insider is a good place to go to look for who in the business world to blame for the mess. Not business leaders you say?

I'm sure that's WAY more credible than the analyses done by the regulators.


You obviously didn't read the article.
 
2013-01-31 01:24:28 PM

unyon: Bullseyed: So no, there is no problem with packaging debt and there was little to no problem with banks pretending bad debt was good debt. Debt that was good debt just happened to quickly become bad debt because of a bunch of people doing the same thing at the same time.

Holy shiat, WOW.  OK- Once more from the top:

First where you're ok- Easy lending practices did indeed provide fuel for the fire.  You're not wrong there.  But while the CRA might have been part of that, banks routinely ignored their own lending standards well beyond what the CRA asked of them to get those loans.   Hell, they violated their own record-keeping standards to boot.  That's a government problem only insofar as its a regulatory and enforcement problem.

But a collapse of the mortgage industry alone wasn't enough to crater the economy.  Don't take my word for it, take TARPs;  If it were, the problem would have been solvable by buying up underwater mortgages, not bailing out banks.

Where you went wrong:  Bundling up garbage and putting a AAA sticker on the box was and is a huge part of the problem.  That's what got institutional money onboard, like pension funds.  That's when the problem went from a push issue (collateralization of mortgage debt) to a pull issue (more loans were needed to fuel the demand for mortgage debt).  You say there was and is no problem with this.  In some cases, banks created non-existent loans out of whole cloth in order to repackage that debt for the financial community.  Understand that.  Not a bad loan, but no loan whatsoever.   You don't think that that's a problem?

It's important that you understand this.  Because people not understanding it is why it will happen again.  And it's why there is not one single person in jail for having done it.


Not to mention that these "banks" were allowed to shop around for the most lax regulator.  The whole mess can be traced directly back to the repeal of Glass Steagle.
 
2013-01-31 01:24:43 PM

Deneb81: I'm sure that's WAY more credible than the analyses done by the regulators.


And, do you really think that the regulators who caused the problem are going to blame themselves or the politicians they were working for?
 
2013-01-31 01:24:43 PM
NOPE
NOPE
NOPE

i466.photobucket.com
 
2013-01-31 01:35:08 PM

Deneb81: I'm sure that's WAY more credible than the analyses done by the regulators.


OK. How about "The Atlantic" and Stanford University*?

* - From their summary: "The prime example is the Federal Reserve's pivotal failure to stem the flow of toxic mortgages, which it could have done by setting prudent mortgage-lending standards. The Federal Reserve was the one entity empowered to do so and it did not." And, "To give just three examples: the Securities and Exchange Commission could have required more capital and halted risky practices at the big investment banks. It did not. The Federal Reserve Bank of New York and other regulators could have clamped down on Citigroup's excesses in the run-up to the crisis. They did not. Policy makers and regulators could have stopped the runaway mortgage securitization train. They did not. In case after case after case, regulators continued to rate the institutions they oversaw as safe and sound even in the face of mounting troubles, often downgrading them just before their collapse."
 
2013-01-31 01:38:06 PM
Isn't it time to have a new crisis? We can never let one of those to go to waste.
 
2013-01-31 01:52:05 PM

DrPainMD: No, it hasn't.


That article is the equivalent of arguing with a chair.
Go fark yourself.
 
2013-01-31 01:57:45 PM

Bullseyed: They were AAA when they were passed, the problem was they quickly became much lower than that.


wut?

Bullseyed: The banks were forced by the government to give loans to people in bad neighborhoods ... "house flipping TV shows" ... created a surge in artificial demand for houses ... All of this caused prices in the housing market to plummet because you suddenly have banks selling off houses at 50% of value ... there is no problem with packaging debt...


Oh... you have absolutely no idea what you're talking about.

Okay, that makes more sense then.
 
2013-01-31 01:58:41 PM

Sergeant Grumbles: Go fark yourself.


NO. YOU. ITG TARD.
 
2013-01-31 02:02:52 PM

lantawa: NO. YOU. ITG TARD.


It's the only response that argument warrants.
The government did not force anyone to lend money. End of story.
 
2013-01-31 02:25:05 PM

Sergeant Grumbles: The government did not force anyone to lend money.


You're far too calm for me, and I don't know all the particulars, so I'll quietly go away now. Hey, look! Grumpy Cat!
 
2013-01-31 04:17:33 PM
there are people that think that CDS went away? huh?

also, student loan delinquencies are going parabolic. there'r cds for that too, there are cds for farking everything. this is the closest to slavery it can get without someone farking branding you.

also, government employment stats are literally, in every sense of the word, in no figurative manner whatsoever, laughable. the BLS official unemployment rate of 7.8% does not include record numbers of people on disability or those who are "discouraged" or "no longer in the labor force"

i seriously.. comeon people.. this shiat is a broad daylight right in front of you orchestrated farking scam.. it's.. it's so blatant at this point i can't even comprehend how anyone who actually took the time to look at how these numbers are formulated, and what the repercussions are for the financial community and eventually you... i just.. really?..
 
2013-01-31 04:54:51 PM

knowless: there are people that think that CDS went away? huh?

also, student loan delinquencies are going parabolic. there'r cds for that too, there are cds for farking everything. this is the closest to slavery it can get without someone farking branding you.

also, government employment stats are literally, in every sense of the word, in no figurative manner whatsoever, laughable. the BLS official unemployment rate of 7.8% does not include record numbers of people on disability or those who are "discouraged" or "no longer in the labor force"

i seriously.. comeon people.. this shiat is a broad daylight right in front of you orchestrated farking scam.. it's.. it's so blatant at this point i can't even comprehend how anyone who actually took the time to look at how these numbers are formulated, and what the repercussions are for the financial community and eventually you... i just.. really?..


do you have a news letter?
 
2013-01-31 07:19:44 PM

eynonmcwanker: knowless: there are people that think that CDS went away? huh?

also, student loan delinquencies are going parabolic. there'r cds for that too, there are cds for farking everything. this is the closest to slavery it can get without someone farking branding you.

also, government employment stats are literally, in every sense of the word, in no figurative manner whatsoever, laughable. the BLS official unemployment rate of 7.8% does not include record numbers of people on disability or those who are "discouraged" or "no longer in the labor force"

i seriously.. comeon people.. this shiat is a broad daylight right in front of you orchestrated farking scam.. it's.. it's so blatant at this point i can't even comprehend how anyone who actually took the time to look at how these numbers are formulated, and what the repercussions are for the financial community and eventually you... i just.. really?..

do you have a news letter?


If he does I hope he hires an editor.
 
2013-01-31 08:22:32 PM

DrPainMD: Deneb81: I'm sure that's WAY more credible than the analyses done by the regulators.

OK. How about "The Atlantic" and Stanford University*?

* - From their summary: "The prime example is the Federal Reserve's pivotal failure to stem the flow of toxic mortgages, which it could have done by setting prudent mortgage-lending standards. The Federal Reserve was the one entity empowered to do so and it did not." And, "To give just three examples: the Securities and Exchange Commission could have required more capital and halted risky practices at the big investment banks. It did not. The Federal Reserve Bank of New York and other regulators could have clamped down on Citigroup's excesses in the run-up to the crisis. They did not. Policy makers and regulators could have stopped the runaway mortgage securitization train. They did not. In case after case after case, regulators continued to rate the institutions they oversaw as safe and sound even in the face of mounting troubles, often downgrading them just before their collapse."


None of that summary says that the government forced banks to give out bad loans via the CRA. It says that they did not stop the banks from giving out bad loans.

i.imgur.com

From here:

http://www.ccc.unc.edu/cra.php
 
2013-01-31 08:26:03 PM

Sergeant Grumbles: DrPainMD: No, it hasn't.

That article is the equivalent of arguing with a chair.
Go fark yourself.


You make a strong case and support your position with facts and logic.
A+
 
2013-01-31 08:30:12 PM

dsmith42: DrPainMD: Deneb81: I'm sure that's WAY more credible than the analyses done by the regulators.

OK. How about "The Atlantic" and Stanford University*?

* - From their summary: "The prime example is the Federal Reserve's pivotal failure to stem the flow of toxic mortgages, which it could have done by setting prudent mortgage-lending standards. The Federal Reserve was the one entity empowered to do so and it did not." And, "To give just three examples: the Securities and Exchange Commission could have required more capital and halted risky practices at the big investment banks. It did not. The Federal Reserve Bank of New York and other regulators could have clamped down on Citigroup's excesses in the run-up to the crisis. They did not. Policy makers and regulators could have stopped the runaway mortgage securitization train. They did not. In case after case after case, regulators continued to rate the institutions they oversaw as safe and sound even in the face of mounting troubles, often downgrading them just before their collapse."

None of that summary says that the government forced banks to give out bad loans via the CRA. It says that they did not stop the banks from giving out bad loans.

[i.imgur.com image 335x270]

From here:

http://www.ccc.unc.edu/cra.php


Check the first link I posted. It has links to, among other things, a transcript of a speech given to bankers by a FED official saying that giving no-down-payment loans will make them look good and may keep them from being put under the CRA (which Clinton had threatened all banks with).
 
2013-01-31 08:33:12 PM

thomps: Sergeant Grumbles: Bullseyed: The banks were forced by the government to give loans to people in bad neighborhoods.

Go fark yourself.

yeah i groaned at that, but it's not worth engaging in a discussion with someone who still believes that in 2013.


Agreed.  That claim is like hoisting a flag with "I UNDERSTAND NOTHING ABOUT ECONOMICS, BUT I LISTEN TO RUSH AND HANNITY AND THEY TELL ME WHAT TO REPEAT."

It's a BIG flag.
 
2013-01-31 08:37:54 PM

DrPainMD: dsmith42: DrPainMD: Deneb81: I'm sure that's WAY more credible than the analyses done by the regulators.

OK. How about "The Atlantic" and Stanford University*?

* - From their summary: "The prime example is the Federal Reserve's pivotal failure to stem the flow of toxic mortgages, which it could have done by setting prudent mortgage-lending standards. The Federal Reserve was the one entity empowered to do so and it did not." And, "To give just three examples: the Securities and Exchange Commission could have required more capital and halted risky practices at the big investment banks. It did not. The Federal Reserve Bank of New York and other regulators could have clamped down on Citigroup's excesses in the run-up to the crisis. They did not. Policy makers and regulators could have stopped the runaway mortgage securitization train. They did not. In case after case after case, regulators continued to rate the institutions they oversaw as safe and sound even in the face of mounting troubles, often downgrading them just before their collapse."

None of that summary says that the government forced banks to give out bad loans via the CRA. It says that they did not stop the banks from giving out bad loans.

[i.imgur.com image 335x270]

From here:

http://www.ccc.unc.edu/cra.php

Check the first link I posted. It has links to, among other things, a transcript of a speech given to bankers by a FED official saying that giving no-down-payment loans will make them look good and may keep them from being put under the CRA (which Clinton had threatened all banks with).


PSSSST! Look up thread two posts. It has this image:

i.imgur.com
 
2013-01-31 10:03:14 PM

DrPainMD: Deneb81: I'm sure that's WAY more credible than the analyses done by the regulators.

OK. How about "The Atlantic" and Stanford University*?

* - From their summary: "The prime example is the Federal Reserve's pivotal failure to stem the flow of toxic mortgages, which it could have done by setting prudent mortgage-lending standards. The Federal Reserve was the one entity empowered to do so and it did not." And, "To give just three examples: the Securities and Exchange Commission could have required more capital and halted risky practices at the big investment banks. It did not. The Federal Reserve Bank of New York and other regulators could have clamped down on Citigroup's excesses in the run-up to the crisis. They did not. Policy makers and regulators could have stopped the runaway mortgage securitization train. They did not. In case after case after case, regulators continued to rate the institutions they oversaw as safe and sound even in the face of mounting troubles, often downgrading them just before their collapse."


So the cops that the drug dealers bribed to look the other way while the drug dealing was going on are responsible for drug overdoses? I guess, that's true but on the other hand where did the bribe money come from?
 
2013-01-31 10:21:04 PM

Zombie Butler: So the cops that the drug dealers bribed to look the other way while the drug dealing was going on are responsible for drug overdoses? I guess, that's true but on the other hand where did the bribe money come from?


Don't bother. These types of moron have the same answers for everything. The banks had no idea. The banks knew better. They were tricked. They were forced. The banks bear no responsibility.

They say the government forced them to give bad loans. They say the government regulators rated the loans as good. The Fed could have halted the toxic mortgages at any time and didn't. It was all just a massive funnel of money to poor minorities, and every step of the way the government was covering its own ass to get it done.
Even when the poor widdle banks weren't fooled by the big bad regulators slapping AAA stamps on junk mortgages, the CRA was still forcing them to hand out cash to every ni*bong* who thought he was entitled to the American Dream.
CRA mortgages didn't default in greater numbers because all that free money floating around devalued all the hard working Americans' property, putting them underwater while the poors paid it off their mortgages with your tax money.

And yet this all hinges on the utterly debunked rumor that the CRA forced banks to lend money. It didn't. It made it so you couldn't deny loans to perfectly good credit risks just because they were going to spend it on the Black side of town. Zero, zilch, nada to do with the bad loans that tanked the banks.
 
2013-01-31 10:58:02 PM

Sergeant Grumbles: Zombie Butler: So the cops that the drug dealers bribed to look the other way while the drug dealing was going on are responsible for drug overdoses? I guess, that's true but on the other hand where did the bribe money come from?

Don't bother. These types of moron have the same answers for everything. The banks had no idea. The banks knew better. They were tricked. They were forced. The banks bear no responsibility.


And yet this all hinges on the utterly debunked rumor that the CRA forced banks to lend money. It didn't. It made it so you couldn't deny loans to perfectly good credit risks just because they were going to spend it on the Black side of town. Zero, zilch, nada to do with the bad loans that tanked the banks.

My favorite myth is "Fannie and Freddy were the innovators of CDOs" the other banks just copped them.  It's my favorite because I believed it even though I am a fairly well informed person.  Amazing what can creep  in when you are watching the news.

I think I'm going to treat the news like new medication from here on out.   Yes, I see that pill you are offering and you say it's safe but I think I'll wait until the side effects come to light before I swallow it.
 
2013-01-31 11:02:40 PM
If you think of this last decade as a correction back to what it would have been had they not done the things they did that caused the collapse, you won't get your blood pressure so high about it. Of course, it's those same things that made people wildly rich and successful during the boom, so all of that growth was an illusion made possible by their actions. Bubbles are like that.

So, I ask you: do you want years of stagnation or another boom/bust cycle, and if the answer is neither how do you propose we create economic growth in a way that won't cause so much damage when we come to the next cyclical recession?
 
2013-01-31 11:12:00 PM

Adolf Oliver Nipples: If you think of this last decade as a correction back to what it would have been had they not done the things they did that caused the collapse, you won't get your blood pressure so high about it. Of course, it's those same things that made people wildly rich and successful during the boom, so all of that growth was an illusion made possible by their actions. Bubbles are like that.

So, I ask you: do you want years of stagnation or another boom/bust cycle, and if the answer is neither how do you propose we create economic growth in a way that won't cause so much damage when we come to the next cyclical recession?


Oh gods no.  This last boom/bust almost did me in.
I can think of one solution right off the top of my head, enforce the Reserve Ratio. Also Glass Steagal reinstated.
 
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