Economy slow down chronology

Discussion in 'Politics' started by healthmyths, Aug 16, 2012.

  1. healthmyths
    Offline

    healthmyths Gold Member Supporting Member

    Joined:
    Sep 19, 2011
    Messages:
    15,227
    Thanks Received:
    2,044
    Trophy Points:
    245
    Ratings:
    +3,850
    Why is it that Congress and Democrats think MORE government rules and regulations HELP?
    Case in point recent economic slowdown can place it's beginning in 1977 when
    Community Reinvestment Act (CRA), was enacted by Jimmy Carter & Democrat Congress .

    Then 1995..
    1995 ACORN/with Obama as one of the attorneys sued CitiBank forcing them to make loans to people THAT would default on their properties!
    Citibank settled out of court but this laid the premise for banks to make sub-prime loans.
    So now the banks had a problem.
    Forced to make sub-prime loans to people that they were pretty sure not going to pay off the loans they had to do something because the FDIC auditors said all those loans were affecting the banks financial status.

    On one hand courts ordering bad loans and other hand loans were violating FDIC rules!

    Enter Credit Default Swaps...
    Credit default swaps have existed since the early 1990s, and increased in use after 2003. By the end of 2007, the outstanding CDS amount was $62.2 trillion,[4] falling to $26.3 trillion by mid-year 2010[5] but reportedly $25.5[6] trillion in early 2012.[

    Using CDswaps banks could unload the sub-prime loans by having Fannie/Freddie securitizing them as explained in this statement:
    Oct. 23,2008 (Bloomberg) -- Fannie Mae and Freddie Mac have an ``effective'' federal guarantee, not the "full faith and credit'' of the U.S. government, Federal Housing Finance Agency Director James Lockhart
    said after the hearing. That does give them effectively a guarantee of the U.S. government.''
    Lockhart's Fannie, Freddie Guarantee Remarks Stir Up Confusion - Bloomberg

    "Effectively guarantee of the U.S. government"!!!!

    So everything is OK as long as housing grows... but it didn't!

    NO one in 1977 or 1995 or 1990s ever thought that $8 trillion would be losses in 6 years.
    No one envisioned the dot.com bust would cost $5 trillion in market losses -- writeoffs against taxes!
    No one ever considered airplanes flying into buildings costing $2 trillion... writeoffs against taxes!
    Not one person could ever envision the WORST HURRICANE SEASONSS!!! in history $1 trillion writeoffs!

    Then NO one ever considered that this action on sept 18,2008 the economic terrorist attack that moved
    $500 billion out of USA money market fund in 2 hours and if nothing done the world economy would collapse!

    All because Congress in 1977 thought Let's do something for the poor people so they can buy homes!

    All because Congress in 1986 thought.."let's help those people with no insurance to be serviced by hospitals that take Medicare... EMTALA! Sounds compassionate. Right to do .
    As a result today we have hospitals billing Medicare for services the hospitals markup 6,000%!
    Services that cost the hospital $43 they bill Medicare $2,635 6,000% markup!

    All of the above because Congress thought they were helping!!!!
     
  2. SniperFire
    Offline

    SniperFire Senior Member

    Joined:
    Feb 28, 2012
    Messages:
    13,627
    Thanks Received:
    1,219
    Trophy Points:
    48
    Location:
    Inside Your Head
    Ratings:
    +1,223
    If you want less of something, you regulate and tax it.
     
  3. 8537
    Offline

    8537 Senior Member

    Joined:
    Aug 23, 2010
    Messages:
    7,754
    Thanks Received:
    729
    Trophy Points:
    48
    Location:
    New England's West Coast
    Ratings:
    +729
    "Then 1995..
    1995 ACORN/with Obama as one of the attorneys sued CitiBank forcing them to make loans to people THAT would default on their properties!
    Citibank settled out of court but this laid the premise for banks to make sub-prime loans."

    No bank was forced to make loans to anybody. anywhere. ever.

    In fact, depository institutions were expressly barred from writing the most toxic types of mortgages.
     
  4. SniperFire
    Offline

    SniperFire Senior Member

    Joined:
    Feb 28, 2012
    Messages:
    13,627
    Thanks Received:
    1,219
    Trophy Points:
    48
    Location:
    Inside Your Head
    Ratings:
    +1,223
    :lol::lol::lol::lol:

    They could have of course opted to close their doors and not participate in expansion or merger/acquisition.

    You know - the CRA Kiss of Death.
     
  5. 8537
    Offline

    8537 Senior Member

    Joined:
    Aug 23, 2010
    Messages:
    7,754
    Thanks Received:
    729
    Trophy Points:
    48
    Location:
    New England's West Coast
    Ratings:
    +729
    No, that's not true at all. They were not forced to make loans to any individuals at all. All lendees had to meet objective, non-race based lending criteria.
     
  6. healthmyths
    Offline

    healthmyths Gold Member Supporting Member

    Joined:
    Sep 19, 2011
    Messages:
    15,227
    Thanks Received:
    2,044
    Trophy Points:
    245
    Ratings:
    +3,850
    Absolutely correct!

    Crews’ report cites the work of economists Nicole V. Crain and W. Mark Crain, whose study of the net cost of regulations determined that in 2009 federal regulation cost businesses and consumers $1.75 trillion, or nearly 12% of America’s 2009 GDP. As a comparison, in the same year, corporate pre-tax profits for all businesses totaled about $ 1.46 trillion.

    The Hidden Cost of Regulation | FreedomWorks
     
  7. SniperFire
    Offline

    SniperFire Senior Member

    Joined:
    Feb 28, 2012
    Messages:
    13,627
    Thanks Received:
    1,219
    Trophy Points:
    48
    Location:
    Inside Your Head
    Ratings:
    +1,223

    :lol::lol::lol::lol::lol::lol::lol::lol::lol::lol::lol::lol:

    They were forced to make high-risk loans to poor people via use of 'creative lending practices' in low -income neighborhoods. Of course, you probably know this, but you are a Leftist piece of shit trying to sneak one by the less informed.


    'A key weapon in the Cisneros arsenal was the Clinton administration’s changes to the Community Reinvestment Act. The CRA was passed in 1977 and updated in 1995 to pressure lenders into making more loans to moderate-income borrowers by allowing regulators to deny merger approvals for banks with low CRA ratings. Even complaints brought by activists, such as the leftist group ACORN, were now counted against a bank’s CRA rating. The result was that banks began issuing more loans to otherwise uncreditworthy borrowers while purchasing more CRA mortgage-backed securities. As housing finance expert Peter Wallison noted, “The most important fact associated with the CRA is the effort to reduce underwriting standards. … Once those standards were relaxed … they spread rapidly to the prime market and to subprime markets where loans were made by lenders other than insured banks.”'

    The next financial meltdown- and why Andrew Cuomo should be in prison [Reader Post] | Flopping Aces financial-meltdown-and-why-andrew-cuomo-should-b e-in-prison-reader-post/
     
  8. healthmyths
    Offline

    healthmyths Gold Member Supporting Member

    Joined:
    Sep 19, 2011
    Messages:
    15,227
    Thanks Received:
    2,044
    Trophy Points:
    245
    Ratings:
    +3,850
    What is your background to make that statement?
    I sourced mine where are your sources.


    Banks have been placed in a Catch 22 situation by the CRA: If they comply, they know they will have to suffer from more loan defaults. If they don't comply, they face financial penalties and, worse yet, their business plans for mergers, branch expansions, etc. can be blocked by CRA protesters, which can cost a large corporation like Bank of America billions of dollars. Like most businesses, they have largely buckled under and have surrendered to their bureaucratic masters.

    Then of course there is the issue of the Fed's monetary policy having created the housing bubble, characterized by a spectacular escalation of real estate values in every American city over the past decade or so. This created a further problem for the financial institutions that are victimized by the CRA. They are forced to make a certain amount of bad loans, but because of the Fed-created explosion in housing prices, many thousands of subprime borrowers no longer qualified, by a long stretch, for conventional mortgages based on their incomes.

    Thomas J. DiLorenzo [send him mail] is professor of economics at Loyola College in Maryland and the author of The Real Lincoln; Lincoln Unmasked: What You're Not Supposed To Know about Dishonest Abe and How Capitalism Saved America. His latest book is Hamilton's Curse: How Jefferson's Archenemy Betrayed the American Revolution — And What It Means for America Today.




    The Government-Created Subprime Mortgage Meltdown by Thomas DiLorenzo
     
  9. Bfgrn
    Offline

    Bfgrn Gold Member

    Joined:
    Apr 4, 2009
    Messages:
    16,829
    Thanks Received:
    2,480
    Trophy Points:
    245
    Ratings:
    +3,060
    Right wing fairy tales.

    Here is what we DO know:

    1) The financial crisis was not caused by low and middle income families buying a home.

    2) It was not caused by dead beat poor people.

    3) Fannie and Freddie were not to cause.

    4) The Community Investment Act was not the culprit either.

    The crisis was caused by private lending, to mostly upper middle class and the wealthy. ONLY 6% of of all the higher-priced loans were extended by CRA-covered lenders to lower-income borrowers or neighborhoods in their CRA assessment areas. The majority of those foreclosed on were wealthy and upper middle class, plus a large segment of buyers who were wealthy home flippers looking for a fast buck. They strategically walked away from their mortgages, leaving people who bought homes to live in with lower values on their house and neighborhood.

    AND, what really sucks for the right wing propaganda of lies, all the way back to the late '90's there was one very outspoken and vocal critic of predatory lending practices, they even held protests at companies like Wells Fargo and Lehman Brothers...ACORN


    WSJ - Fed’s Kroszner: Don’t Blame CRA


    WSJ - Fed’s Kroszner: Don’t Blame CRA - The Sequel

    Reuters - UPDATE 2-Lending to poor didn't spur crisis


    Don't Blame the Community Reinvestment Act

    Business Insider - Here's Why Fannie And Freddie Are Not At Fault For The Housing Bubble

    Center for Responsible Lending - CRA is not to Blame for the Mortgage Meltdown

    Don't blame Fannie and Freddie

    Private sector loans, not Fannie or Freddie, triggered crisis


    ForeclosureS.com - ACORN - Progress in the Fight Against Predatory Lending

    Acorn Led Financial Sector With Warnings on Lending

    Biggest Defaulters on Mortgages Are the Rich

    The Millionaire Foreclosure Club

    Foreclosure double standard: Why the rich get away with defaulting

    More Rich People Default On Mortgages

    The rich bail faster on mortgages

    Biggest Defaulters on Mortgages Are the Rich

    Rich Borrowers More Likely to Default on Mortgage

    Foreclosures & Walking Away: 60 Minutes Eyes an ‘Epidemic’

    Speculation By Investors Largely Cause Of Foreclosure Crisis

    How the Foreclosure Crisis Started: Investors, Speculators, Mortgage Fraud & Lax Lending Standards


    "Eighty percent of Republicans are just Democrats that don't know what's going on"
    Robert F. Kennedy Jr.
     
  10. 8537
    Offline

    8537 Senior Member

    Joined:
    Aug 23, 2010
    Messages:
    7,754
    Thanks Received:
    729
    Trophy Points:
    48
    Location:
    New England's West Coast
    Ratings:
    +729
    No, they were not forced to make loans to anyone. I don't care what some blogger at FloppingACes says.

    The facts are that all loans had to meet objective lending criteria- which explain why the most toxic mortgages were not offered by CRA-regulated banks, why CRA-regulated banks had a far lower rate of default and why CRA-regulated loans were still purchased by the GSE's.

    I especially love folks blaming this all on poor people. As if it was poor people in the highest foreclosure areas like Naples, Miami and Vegas flipping homes.
     
    Last edited: Aug 16, 2012

Share This Page