Unemployment rises again

Let me help you with translation…the above means.. if you rich, conservative banking guys don’t lend money to poor people so they can buy a house under the Community Re-investment act..DOJ will take you to court.

Skandia Recluse on August 20, 2009 at 11:33 AM

Yep — because there is a history of lending discrimination dating back at least to FDR which caused and hastened the decline of inner cities.

Or, are you in favor of lending discrimination?

The mortgage crisis is stupendously larger than minority lending or sub-primes. Those vast tracts of condos standing empty in Florida, Vegas and California were built by speculators who never expected to sell them to poor people — they thought they’d flip them to suckers who would pay $400 thousand for a $200 thousand dollar house because they could sell them to the next sucker for $500 grand. And the Bush Administration loved the the bubble because it blinded people to the fact that their incomes were stagnant and their health care costs were rising.

And a de-regulated Wall Street loved it, too, taking whatever problems a cyclical downturn might have caused and blowing it up fantastically with pointless derivatives that served only to increase bonuses, approved by their lap-dogs at Moody’s. Greed was not good.

“When it collapsed, Lehman had about a 30:1 debt-to-equity ratio, meaning it had borrowed $30 for every dollar in capital it held. Morgan Stanley currently has a debt-to-equity ratio of 30:1, while Goldman Sachs has one of about 22:1.”

This is an illuminating article, as well. If you can read.

Frank Partnoy, a professor at the University of San Diego School of Law who has written extensively about the credit-rating industry, says that the conflict is a serious problem. Thanks to the industry’s close relationship with the banks whose securities it rates, Partnoy says, the agencies have behaved less like gatekeepers than gate openers. Last year, Moody’s had to downgrade more than 5,000 mortgage securities — a tacit acknowledgment that the mortgage bubble was abetted by its overly generous ratings. Mortgage securities rated by Standard & Poor’s and Fitch have suffered a similar wave of downgrades.

Bleeds Blue on August 20, 2009 at 11:46 AM

Or, are you in favor of lending discrimination?

I’m in favor of discriminating against lending to people who can’t pay it back.

Laws against lending discrimination have been around for, what, 40 years? And suddenly the real estate market and banking system as a whole collapse in 2007? You don’t think maybe there were other factors? Is having one thought, misguided though it is, enough to overwhelm your brain and force out any of the other dozens of variables that undoubtedly contributed to the collapse. Like, oh, banks not asking people to prove their income? Or the bubble mentality that was incontestably present? (keeping it simple for your)

Bleeds Blue on August 20, 2009 at 12:24 PM

lorien1973 on August 20, 2009 at 12:28 PM

I guess what I’m saying is. Be a troll if you want. But if you want to stand out, be a troll with at least a small sense of reality to make it interesting for us.

lorien1973 on August 20, 2009 at 12:28 PM

I guess what I’m saying is you might provide a semi-objective link (as I did) or something to back up your statements rather than just spewing the Party line. How many mortgages did those mean people at ACORN force on those pathetic, helpless bankers who are mere naifs in the tough old economy? You do have a number, right?

Bleeds Blue on August 20, 2009 at 12:35 PM

I’ve already posted links pointed to over-leveraging and and the failure of the rating agencies which greased the way for the sale trillions bad financial products.

Regarding the CRA, try here: Traiger & Hinckley LLP Study Shows CRA Banks Were Substantially
Less Likely Than Other Lenders to Make the High Cost Loans That Helped
Fuel the Foreclosure Crisis
NEW YORK–(Business Wire)–A Traiger & Hinckley LLP study of 2006 mortgage loan data suggests
that the Community Reinvestment Act, a federal law that requires banks
to help serve the credit needs of their local communities, including
low- and moderate-income neighborhoods, deterred banks from engaging
in the kinds of risky lending practices that are provoking the
foreclosure crisis.

Or here:Point in fact,” she said, “only one in four higher-priced first mortgage loans were made by CRA-covered banks during the hey-day years of subprime mortgage lending. The rest were made by private independent mortgage companies and large bank affiliates not covered by CRA rules.”

Or here: I’m a conservative; I believe in conservative principles. One of my complaints about conservative commentators these days is that they lack the facts. Now, there are some that do their due-diligence and have sound arguments, but others just assume certain things that are actually false.

One of these topics on which many conservative commentators are wrong is on the notion that the Community Reinvestment Act caused the mortgage crisis. This is false. The CRA did NOT cause the mortgage crisis. There have been comprehensive surveys conducted by the Federal Reserve and its member banks that have shown that CRA related loan products perform almost identically to non-CRA loan products.

Ball’s in your court.

Bleeds Blue on August 20, 2009 at 1:13 PM