Economic Recovery

WhoWee

Are you serious?
http://www.ffiec.gov/CRA/
http://www.federalreserve.gov/dcca/cra/

Astronuc

Yes he is serious. From the second link:
The CRA wasn't responsible for the subprime crisis. If one disagrees - please provide the evidence that supports such a view. For example, please provide the volume of subprime loans by type and year for the GSEs, and then provide the default rates. Then provide the same data for the non-GSEs, e.g, Bear Stearns, Merrill Lynch, Lehman Bros, Citibank, Goldman Sachs, AIG, . . . . .

http://www.law.cornell.edu/uscode/12...1----000-.html

The federal spending and the GSEs were part of the problem, but perhaps a bigger problem with the distressed corporate debt that exploded in the 2000s, and in conjunction with the CDOs, CLOs, and various derivatives undermined the financial markets.

Making risky subprime loans is actually in violation of the CRA.

The government didn't force, bribe or coerce anyone in making fraudulent (illegal) or risky loans. People freely chose (as in free market) to do so.

And at the moment, government spending and lack of revenue is a really big problem - and it's unsustainable.

WhoWee

Sometimes all you need is a little light along the path to go in the wrong direction.

As we've discussed in other threads, this all dates back to the S&L mess - the problem was never solved - just delayed and re-packaged.

Al68

They chose to freely accept the bribe. Demand for risky loans was artificially created by government. That's not what "free market" means. And the fact that the demand was created by government has been substantiated many times here, including recently in this thread. And the fact that banks were not forced to "take the bribe" doesn't make such an arrangement a "free market".One seventh of the entire nation's GDP collected by the federal government alone is a "lack of revenue"? On what planet?

Gokul43201

Are you saying that the entirety of the blame lies with the briber, and none of it with the bribee?

WhoWee

Welcome to PF. You might want to take a quick look at the rules.

WhoWee

Tax revenues are down - look back a page or 2 - (could be in the other thread).

Al68

No, I'm saying that government's share of the blame lies in their bribery, not in their supposed failure to adequately regulate the bribees.

Al68

Yeah, they're down from way, way, way, way, way, way, way, way, way, way too much to way, way, way, way, way, way, way, way, way too much.

mheslep

Evidence that supports your statement of fact?

Source? No the fed link doesn't state that subprime loans are prohibited by the CRA. Risky is your characterization.

I'll grant that one can argue the CRA wasn't directly responsible for the financial crisis, or at least say the evidence connecting the CRA to the subprime crisis is convoluted. I don't grant that you can just announce here that there's no connection as a statement of fact, or in other words "absence of evidence is not evidence of absence".

readaynrand

Thanks. Well, I already got two warnings. Guess I'm out of here pretty soon.

One last thing I'd like to express:Which is the bigger insult; to say "I want more government control" (i. e. "I want the you to sacrifice your interests, and I intend to imprison you if you try to control your own life"), or to say "Jesus Christ", thereby expressing my despair at this insolent attitude?

WhoWee

http://www.heritage.org/budgetchartb...ending-revenue

WhoWee

Bye-bye.

Al68

Thanks for the link to support my (unnecessarily specific ) claim above.

brainstorm

The funny thing is that bundling mortgages is exactly what Freddie/Fannie had been doing since their inception, only they weren't privatized until I forget how recently. Bundling is indeed the cause of economic overheating and meltdown, but it is something that occurs in numerous ways from stock-sales to insurance policies. Basically, anything that pools large amounts of funds and makes them available as a single large budget creates the opportunity to spend excessively and with less discipline than an individual with an individual's budget, who is responsible for their own losses. Any market can meltdown when there is sufficient capital available to drive appreciation to the point of inflation and disconnect between sellers and buyers, no?

WhoWee

Again, as we've discussed before, the CRA didn't cause all of the problems - Bill Clinton (unintended consequences) also helped.
http://2010.newsweek.com/top-10/hist...gislation.html

Gokul43201

The same planet where nearly every other other developed country collects more?