Originally posted by Q5echo
can't resist the urge to change the subject, huh?
This isn't about mccain. Sorry.
The best defense is a good offense...
Fir3start3r
quote:
Originally posted by Krypton
The best defense is a good offense...
Or just change the subject and hope they don't notice...
Q5echo
quote:
Originally posted by Lebezniatnikov
:haha: man, if you're not predictable. "DEFLECT!! DEFLECT!!!...LOOK AT THESE POLLS!!! DEFLECT!!!!!!"
MisterOpus1
quote:
Originally posted by Q5echo
watch this. it might open your eyes.
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There's a decent amount of bull all thrown in together with that piece. I'll just post a few sources that debunk most of the points well enough on their own:
Regarding the CRA:
quote:
Memo to Republicans: CRA Has Nothing To Do With the Current Problems
There are two huge problems with this analysis. The first one alone should dismiss this claim as a farce. The CRA was signed into law in 1977 -- almost 30 years ago. So, what do you think the possibilities of a law passed 30 years ago causing the lending problems now? That's one heck of a law to have that kind of effect.
But wait -- Clinton changed the law That was the real problem No it wasn't, regarding those changes:
quote:
In the mid-1990s, new CRA regulations and a wave of mergers led to a flurry of CRA activity, but, as noted by the New America Foundation's Ellen Seidman (and by Harvard's Joint Center), that activity largely came to an end by 2001.
http://www.prospect.org/cs/articles?article=did_liberals_cause_the_subprime_crisis
But here's the real kicker. The Community Reinvestment Act only applies to banks and thrifts:
quote:
The Community Reinvestment Act (or CRA, Pub.L. 95-128, title VIII, 91 Stat. 1147, 12 U.S.C. § 2901 et seq.) is a United States federal law that requires banks and thrifts to offer credit throughout their entire market area and prohibits them from targeting only wealthier neighborhoods with their services, a practice known as redlining. The purpose of the CRA is to provide credit, including home ownership opportunities to underserved populations and commercial loans to small businesses.
http://en.wikipedia.org/wiki/Community_Reinvestment_Act#cite_ref-7
The vast majority of the subprime loans over the last 8 years did not originate from banks or thrifts:
quote:
Second, it is hard to blame CRA for the mortgage meltdown when CRA doesn't even apply to most of the loans that are behind it. As the University of Michigan's Michael Barr points out, half of sub-prime loans came from those mortgage companies beyond the reach of CRA. A further 25 to 30 percent came from bank subsidiaries and affiliates, which come under CRA to varying degrees but not as fully as banks themselves. (With affiliates, banks can choose whether to count the loans.) Perhaps one in four sub-prime loans were made by the institutions fully governed by CRA.
http://www.prospect.org/cs/articles?article=did_liberals_cause_the_subprime_crisis
In other words, the CRA isn't even an issue. But that won't stop the the likes of Rush and his progeny from saying it over and over again until all sorts of people believe it.
While we're on the topic -- the CRA had nothing to do with the problems at Fannie Mae and Freddie Mac either:
quote:
Note, too, that Fannie and Freddie have nonpareil lobbying operations and formidable political strength, owing to their hefty donations and penchant for hiring former political operatives. Besides, the agencies claim they've landed in their current predicament through no fault of their own. As Freddie Mac Chairman and CEO Richard Syron recently put it, the GSEs have been hit by a 100-year storm in the housing market, accentuated by some higher-risk mortgages that they were forced to buy to meet government affordable-housing targets.
The latter contention is more than disingenuous. A substantial portion of Fannie's and Freddie's credit losses comes from $337 billion and $237 billion, respectively, of Alt-A mortgages that the agencies imprudently bought or guaranteed in recent years to boost their market share. These are mortgages for which little or no attempt was made to verify the borrowers' income or net worth. The principal balances were much higher than those of mortgages typically made to low-income borrowers. In short, Alt-A mortgages were a hallmark of real-estate speculation in the ex-urbs of Las Vegas or Los Angeles, not predatory lending to low-income folks in the inner cities.
http://online.barrons.com/article/SB121884860106946277.html
A simple Google search with help from Wikipedia would have revealed how clueless the CRA caused this mess claim is. But that's not the point. The entire financial system is under tremendous stress on the Republican's watch. It's their policies that are under the microscope right now. And they just don't look that good. So now the political game is to shift the blame to Democrats. And who better then to blame then ... Jimmy Carter.
Sorry, Q. Obama's squad doesn't hold a candle to the on the hands of McCain's lobbyist, err, campain squad.
Q5echo
quote:
Originally posted by St_Andrew
I don't know about all the facts in that video
google it. google all of it.
quote:
First of all, house prices has been rising in all of the world, most of the countries that did not have a CRA.
you're absolutely right, and like the video said, the CRA was not a particularly bad idea. it was what Clinton mandated that took the artificial bottom right out from underneath it.
people have been complaining about deregulation well, the entirely wrong regulation is what lit the fuse on this CRA bomb
quote:
Second, they blame democrats for stopping the bill in 2003 that would have stopped this. Wait, we had a democratic congress in 2003?!
just because you hold a majority in Congress doesn't mean you can't lose fights. most of the time the majority picks the fights they think they can win. which is also to say they don't win all of those.
affordable housing is and has always been a largely bi-partisaned issue. there is support from both sides. the problem here is that some members of the Congress succumbed to threats from Barney Frank and others claiming if anyone touched Fannie Mae there would be certain prices to pay. no one wants to look like they're against so-called low income borrowers at the expence of being called racist, especially in an election year. so Bush loses what little pull he had among House Republicans.
Q5echo
quote:
Originally posted by MisterOpus1
There's a decent amount of bull all thrown in together with that piece. I'll just post a few sources that debunk most of the points well enough on their own:
Regarding the CRA:
no one is saying that the Community re-investment act was uniquely responsible
none of this from HuffPo addresses the '95 CRA regulation's impact on the mortgage market. and when it does it fails to mention that the most banks that aren't regulated by the CRA end up selling their subprime assets to CRA regulated banks.
how did we get to 2.5% of assets backing $5+ trillion in loans? easy. the wrong regulations.
Q5echo
Barney Frank is gay
Lebezniatnikov
quote:
Originally posted by Q5echo
can't resist the urge to change the subject, huh?
This isn't about mccain. Sorry.
Changing the subject? I said they're both politicians. As such, they both have dubious ties to people.
Lebezniatnikov
quote:
Originally posted by Q5echo
Barney Frank is gay
How insightful.
Q5echo
quote:
Originally posted by Krypton
The best defense is a good offense...
i agree. changing the subject is very offensive.
Q5echo
quote:
Originally posted by Lebezniatnikov
How insightful.
yeah i thought you'd like that
jerZ07002
i have a strong feeling that many of you have no clue how investment banking actually works, and why issuers of subprime loans could not care less, at the time, about authorizing loans to subprime borrowers.
to start, companies like countrywide were issuing mortgages to borrowers and packaging those mortgages, so they didn't really care about the creditworthiness of the borrowers except to the extent it was pertinent to receiving a triple A rating for the CDO to which the mortgages were packaged under. The mortgage issuers were only left with risk of default for the short period of time it took the investment banks to package the loans under an umbrella management company and sells shares in the company to investors. The entire problem lies with the way these management companies (or CDOs) were graded by moody's and S&P. If the securities weren't receiving AAA ratings then the true risk would have been known to the purchasers of the CDOs, and they likely would have been unmarketable securities and the thirst for CDOs backed by subprime mortgages would have evaporated, resulting in the end of subprime lending. The entire blame is on moodys and S&P for bending their rating systems to fit within the desired AAA ratings the banks needed to sell the CDOs.
This crisis has nothing to do with any law enacted by either side. It has everything to do with greed by mortgage brokers, bankers, rating agencies, and borrowers. As long as the rating agencies were willing to play ball and bend their methods so that the inputs always resulted in the desired AAA ratings for the CDOs, there were bankers and mortgage brokers willing to give the agencies the bad inputs. More focus should be on the rating agencies.
