86 replies to this topic

[Yamato]

Merc14, on 09 October 2012 - 11:30 AM, said:

Of course they did and if you watched the first video I posted you'd see that Bush was warning about te bubble bursting and Barney Frank, who was the government watchdog, called BS and there were accusations of the racist republicans trying to keep poor people from getting homes.  It was absurd and even I saw it coming and I am far from an economist.

When did Bush warn about the bubble bursting?   I only him remember him announcing it.   Date whatever it is you're quoting here since you've brought it up.

[Tiggs]

Yamato, on 10 October 2012 - 07:40 AM, said:

And these credit ratings are a bad joke.  Does absolutely no-one realize that now?

You'd think, wouldn't you?

Quote

And who is "many people"?

The people who were awake enough to sell their houses in the mid-noughties and have been renting ever since, for starters.

[Yamato]

Tiggs, on 10 October 2012 - 08:13 AM, said:

The people who were awake enough to sell their houses in the mid-noughties and have been renting ever since, for starters.

Who?  Do the people have names?    And if they're just for starters, who's next?

[joc]

Tiggs, on 10 October 2012 - 06:18 AM, said:

Ummm. No. All banks are subject to exactly the same regulations regarding loans.

Not all banks have to make a percentage of their loans to low-income households.

See the difference?

If you think all lending institutions were subject to exactly the same regulations regarding loans, then you are mistaken.
Actually it was  the Office of Thrift Supervision not the CRA. The CRA didn't actually make the rules, the OTS did,  but yes, the rules were relaxed  on lending institutions between 250 million and one billion dollars. The OTS relaxed the burdens on banks with less than one billion dollars. But, that was in 2005 and the damage had already been done.  So, maybe a mute point.  But it just goes to show what a mess the regulatory factions created when they forced lending institutions to meet the needs of people of low income status.

Click HERE for some light reading:

Quote

B. Commenters Opposing Proposal

CRA has been effective because the
Agencies have issued regulations in a
careful and uniform manner. OTS acted
alone in making the streamlined
examination for small institutions
available to institutions between $250
million and $1 billion in assets without
regard to holding company size. They
asserted that OTS was again acting
unilaterally and without the benefit of
interagency debate, this time to weaken
the examination requirements for
institutions over $1 billion in assets.

Community Reinvestment Act—
Assigned Ratings
AGENCY: Office of Thrift Supervision,
Treasury (OTS).
ACTION: Final rule.
SUMMARY: In this final rule, OTS is
making changes to its Community
Reinvestment Act (CRA) regulations to
reduce burden, provide greater
flexibility to meet community needs,
and restore the focus of CRA to lending.
Specifically, OTS is providing
additional flexibility to each savings
association evaluated under the large
retail institution test to determine the
combination of lending, investment, and
service it will use to meet the credit
needs of the local communities in
which it is chartered, consistent with
safe and sound operations.

[Merc14]

joc, on 10 October 2012 - 09:00 AM, said:

If you think all lending institutions were subject to exactly the same regulations regarding loans, then you are mistaken.
Actually it was  the Office of Thrift Supervision not the CRA. The CRA didn't actually make the rules, the OTS did,  but yes, the rules were relaxed  on lending institutions between 250 million and one billion dollars. The OTS relaxed the burdens on banks with less than one billion dollars. But, that was in 2005 and the damage had already been done.  So, maybe a mute point.  But it just goes to show what a mess the regulatory factions created when they forced lending institutions to meet the needs of people of low income status.

Click HERE for some light reading:

Thanks for the info joc, I learned a lot and you obvuously are wel versed in what had happened.  Are you affiliated with the financial industry?

[Tiggs]

Yamato, on 10 October 2012 - 08:53 AM, said:

Who?  Do the people have names?  

Yes, People have names.
No, I'm not privvy to all of them.
Yes, I do know many people in my personal circle of friends who did so. I'm sure most people know at least one.
No, I'm not going to list my friends names on a public forum.
No, I don't care whether you believe me, or otherwise.

Quote

And if they're just for starters, who's next?

People who moved their money out of Property Asset Funds into more recession-proof instruments.

In short - those who demonstrably put their money where their mouth is.

[Tiggs]

joc, on 10 October 2012 - 09:00 AM, said:

If you think all lending institutions were subject to exactly the same regulations regarding loans, then you are mistaken.

Again. I'm not disputing your claim that there are different regulations regarding the CRA, depending on the size of the bank involved. Again, the CRA is purely a mechanism to enforce that a bank give a ratio of loans to particular income areas.

What I'm disputing is your claim that the CRA has anything to do with the fundamental regulations regarding the type of Bank Loans that are able to be offered.

Or, in short - Perhaps you'd care to cut and paste the relevant part from the article you've provided which shows otherwise?

Quote

But, that was in 2005 and the damage had already been done.  So, maybe a mute point.

And there's that, too.

Quote

But it just goes to show what a mess the regulatory factions created when they forced lending institutions to meet the needs of people of low income status.

But you're currently trying to make the argument that not forcing small lending institutions to meet the needs of people of low income status is a bad thing.

Edited by Tiggs, 10 October 2012 - 02:02 PM.

[Yamato]

Tiggs, on 10 October 2012 - 01:46 PM, said:

Yes, People have names.
No, I'm not privvy to all of them.
Yes, I do know many people in my personal circle of friends who did so. I'm sure most people know at least one.
No, I'm not going to list my friends names on a public forum.
No, I don't care whether you believe me, or otherwise.




People who moved their money out of Property Asset Funds into more recession-proof instruments.

In short - those who demonstrably put their money where their mouth is.

Since you can't produce any names of any public figures or offer any evidence for your claim, then yeah, I will have to defer to not believing you.   Best be able to back your claims up in a debate forum (best eat your own cooking you serve to others).

[Yamato]

The bottom line is that the government is encouraging and enabling bad lending practices to people who couldn't afford what they were buying, artificially propping up values that should have never existed on the market, all the long-winded details about precisely how to regulate and what bureaucrat from what party said what notwithstanding.  Oh how simple the world would be if we could fit our problems into political party shaped boxes.   And the bipartisan vote winners didn't learn their lesson and they're still at it today.  The market would never allow zero percent interest rates.  This is a fantasy bubble of reality denial we're living in today and we're going to repeat the same mistakes we have already because our money handlers haven't learned a dammed thing.   This is a bipartisan problem and anyone who tries to make partisan hay out of it obviously doesn't get the extent of it.

We have stupid policy creating catastrophic distortions in the marketplace and to compensate for their failure, they rob our people with ginormous bailouts because we're willing debt-bearing sheeple.  They'll sell our souls to the highest bidder to juice next quarter's GDP just a little bit higher (the people who matter like that).

Time for an instructional video.   Bailouts for dummies:

[Tiggs]

Yamato, on 10 October 2012 - 05:14 PM, said:

Since you can't produce any names of any public figures or offer any evidence for your claim, then yeah, I will have to defer to not believing you. Best be able to back your claims up in a debate forum (best eat your own cooking you serve to others).

I think I've made it perfectly clear that I don't particularly care whether you personally believe me, or otherwise.

I've adequately described the class of people that I'm referring to and I've also revealed that my only knowledge of them is on a purely personal basis. If you don't believe that such people exist - then feel absolutely free not to.

What I'm not going to do, however, is name my friends and ask them to make public evidence of their house sales and rental bills for your personal entertainment.

The truth is that your personal belief or disbelief in whether Schiff was the only person on the planet capable of seeing what was coming (and let's face it - Merc's hardly on my side of this debate and he's already said that he saw it coming a mile off and that it was obvious) - has absolutely no effect on what's being discussed here.

Edited by Tiggs, 10 October 2012 - 06:13 PM.

[Merc14]

Tiggs, on 10 October 2012 - 05:38 PM, said:

The truth is that your personal belief or disbelief in whether Schiff was the only person on the planet capable of seeing what was coming (and let's face it - Merc's hardly on my side of this debate and he's already said that he saw it coming a mile off and that it was obvious) - has absolutely no effect on what's being discussed here.

It's not that I am not on your side we just disagree slightly, I think, about the cause of the economic collapse.  joc taught me a great deal and you have made some valid points as well.

[joc]

Tiggs, on 10 October 2012 - 01:54 PM, said:

Again. I'm not disputing your claim that there are different regulations regarding the CRA, depending on the size of the bank involved. Again, the CRA is purely a mechanism to enforce that a bank give a ratio of loans to particular income areas.

What I'm disputing is your claim that the CRA has anything to do with the fundamental regulations regarding the type of Bank Loans that are able to be offered.
Or, in short - Perhaps you'd care to cut and paste the relevant part from the article you've provided which shows otherwise?




And there's that, too.




But you're currently trying to make the argument that not forcing small lending institutions to meet the needs of people of low income status is a bad thing..

What I'm disputing is your claim that the CRA has anything to do with the fundamental regulations regarding the type of Bank Loans that are able to be offered.

I'm not sure why you think I have made that claim.  Furthermore, I'm not sure what your definition of 'fundamental regulations' are or your definition of 'type' of Bank Loan.  As far as the types of Loans offered...I don't think I have made a claim that the CRA told lending institutions they could loan money on 'mortgages' but not 'motorcycles' or such.  As far as fundamental regulations, in my thinking, 'regulations' are 'rules of the road', 'this is how the game is going to be played', that sort of thing.  You said, Again, the CRA is purely a mechanism to enforce that a bank give a ratio of loans to particular income areas.  The problem of course was that the banks were required to give a ratio of loans to particular income areas to begin with.

But you're currently trying to make the argument that not forcing small lending institutions to meet the needs of people of low income status is a bad thing.

No, I am saying the reverse...FORCING  small lending institutions to meet the needs of people of low income status is a bad thing.  I'm not sure where you got the idea that I am a proponent of lending money to people who might have  a hard time paying it back.

Your original question was:

Quote

Perhaps you'd like to walk us all through the mechanics of how the private asset book of a company caused the collapse of the international banking system?

What I have attempted to show, and what I believe I have been successful at showing is that, one bad loan at a time, over a long period of time, snowballed into a mammoth monster of a machine that few really understood.  And that, furthermore, it was the regulating industry...ie, the government...that caused it in the first place.

[joc]

Merc14, on 10 October 2012 - 12:44 PM, said:

Thanks for the info joc, I learned a lot and you obvuously are wel versed in what had happened.  Are you affiliated with the financial industry?

I am only affiliated with the financial industry by virtue of my checking accounts.  I'm just curious about many things...this is one of them.

[Tiggs]

joc, on 10 October 2012 - 09:57 PM, said:

What I have attempted to show, and what I believe I have been successful at showing is that, one bad loan at a time, over a long period of time, snowballed into a mammoth monster of a machine that few really understood.  And that, furthermore, it was the regulating industry...ie, the government...that caused it in the first place.

The basic issue with blaming CRA lending with the crash of the subprime market is that they're not the same thing:

"...I want to make one final point.  There has been a tendency to conflate the current problems in the subprime market with CRA-motivated lending, or with lending to low-income families in general.  I believe it is very important to make a distinction between the two. Most of the loans made by depository institutions examined under the CRA have not been higher-priced loans, and studies have shown that the CRA has increased the volume of responsible lending to low- and moderate-income households." - Janet L. Yellen, President and CEO, Federal Reserve Bank of San Francisco

In short - most of the loans associated with the CRA were not subprime (higher-priced) loans, and the 6% of subprime loans that were CRA-related easily outperformed the other 94%.

Your "deregulation in 2005" argument - that banks being subject to the CRA is a bad thing and that bank's not being subject to the CRA is also a bad thing - is pure "Cake and eating it" territory.

My alternative suggestion to you is that there has been a tendency from one side of the aisle to opportunistically misdirect the blame for the economic crash onto CRA lending (and by association - low-income minority Americans) as their political scapegoat of choice.

A general lack of Government regulation regarding mortgage lending, on the other hand, is one place where we can both agree that a major part of the blame belongs.

[joc]

Tiggs, on 10 October 2012 - 11:51 PM, said:

The basic issue with blaming CRA lending with the crash of the subprime market is that they're not the same thing:

"...I want to make one final point.  There has been a tendency to conflate the current problems in the subprime market with CRA-motivated lending, or with lending to low-income families in general.  I believe it is very important to make a distinction between the two. Most of the loans made by depository institutions examined under the CRA have not been higher-priced loans, and studies have shown that the CRA has increased the volume of responsible lending to low- and moderate-income households." - Janet L. Yellen, President and CEO, Federal Reserve Bank of San Francisco

In short - most of the loans associated with the CRA were not subprime (higher-priced) loans, and the 6% of subprime loans that were CRA-related easily outperformed the other 94%.

Your "deregulation in 2005" argument - that banks being subject to the CRA is a bad thing and that bank's not being subject to the CRA is also a bad thing - is pure "Cake and eating it" territory.

My alternative suggestion to you is that there has been a tendency from one side of the aisle to opportunistically misdirect the blame for the economic crash onto CRA lending (and by association - low-income minority Americans) as their political scapegoat of choice.

A general lack of Government regulation regarding mortgage lending, on the other hand, is one place where we can both agree that a major part of the blame belongs.

Let me just state a fact that may not be obvious.  Low income  does not equal 'low credit score'.  You can be low income and have excellent credit and get a mortgage.  That six percent of CRA loans were 'good' loans doesn't really mean much to the argument.  It doesn't mean much because the banks that were making loans to low income participants were under the scrutiny of the Regulators.  They had to make good loans.  That isn't the problem.  The problem became the subprime industry.  But, and this is really my only point here...had it not been for the CRA,  the subprime lending fiasco would have never happened.  Originally the CRA  didn't really do much.  But over the years, the changes made to the CRA...one example of many being the CRA Reforms of 2005...brought about a climate where subprimes could flourish.  Yeah, it was the subprimes that were the actual 'problem', but, had it not been for the CRA, the subprime market simply would have never existed.  And the thing is, as I previously mentioned...if you had low income, but you were credit worthy, you could get a mortgage anyway...so the CRA in that regard was not even a factor.