New study confirms democrats crashed the economy DUH...

[Mr. Shaman]

Produce the entire study for us to examine

I purchased the study and downloaded it. However, it would be a copyright violation for me to post it on this forum.

Bullshit​

 

[francoHFW]

This is right up there with "Hitler was a socialist, the Dems had 2 years of total control, O-care is Marxist" -for moron dupes only. A disgrace.

 

[g5000]

You don't have to buy the paper: http://www.nber.org/papers/w18609.pdf?new_window=1

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[occupied]

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The CRA played a part, as did many other things and many other people.

But this disaster has been decades in the making, putting an inflated lifestyle on credit cards, and those bills are now coming due.

I'm sick of the finger-pointing. This country needs to look in the mirror. For a change.

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Add in some greed and some legal, yet unscrupulous business dealing, and I agree.

Yep, another critical piece of the puzzle.

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The biggest piece is the flood of brand new gullible billionaires in Asia breaking down the door trying to get a piece of the formerly safe and lucrative US mortgage market. Mortgage brokers wanted that money badly but there was only so many good mortgages to go around, solution? Lend to everyone, cash in, demand the taxpayers cover your ass when it all blows up.

 

[Truthmatters]

You don't have to buy the paper: http://www.nber.org/papers/w18609.pdf?new_window=1

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Did the Community Reinvestment Act (CRA) Lead to Risky Lending?

Online access to NBER Working Papers denied, you have no subscription

Sumit Agarwal, Efraim Benmelech, Nittai Bergman, Amit Seru

NBER Working Paper No. 18609
Issued in December 2012
NBER Program(s): AP CF


Yes, it did. We use exogenous variation in banks’ incentives to conform to the standards of the Community Reinvestment Act (CRA) around regulatory exam dates to trace out the effect of the CRA on lending activity. Our empirical strategy compares lending behavior of banks undergoing CRA exams within a given census tract in a given month to the behavior of banks operating in the same census tract-month that do not face these exams. We find that adherence to the act led to riskier lending by banks: in the six quarters surrounding the CRA exams lending is elevated on average by about 5 percent every quarter and loans in these quarters default by about 15 percent more often. These patterns are accentuated in CRA-eligible census tracts and are concentrated among large banks. The effects are strongest during the time period when the market for private securitization was booming.









You may purchase this paper on-line in .pdf format from SSRN.com ($5) for electronic delivery.




Information about Free Papers

 

[Truthmatters]

Go get the study

 

[bripat9643]

Add in some greed and some legal, yet unscrupulous business dealing, and I agree.

Yep, another critical piece of the puzzle.

.

The biggest piece is the flood of brand new gullible billionaires in Asia breaking down the door trying to get a piece of the formerly safe and lucrative US mortgage market. Mortgage brokers wanted that money badly but there was only so many good mortgages to go around, solution? Lend to everyone, cash in, demand the taxpayers cover your ass when it all blows up.

Bankers always want money. Explain why they weren't willing to grant mortgages to non-creditworthy borrowers before the CRA.

 

[occupied]

Produce the entire study for us to examine

I purchased the study and downloaded it. However, it would be a copyright violation for me to post it on this forum.

Bullshit​

That's actually correct, reposting material that is behind a paywall can get you sued by some very good lawyers.

 

[bripat9643]

You don't have to buy the paper: http://www.nber.org/papers/w18609.pdf?new_window=1

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Yes you do, turd. You obviously didn't read it either.

 

[g5000]

The CRA meme was invented within a matter of days after the collapse of Lehman Brothers.

Some dipshit Congressman even asked Dick Fuld during a hearing how much the CRA had to do with the collapse of Lehman.

Fuld replied, "De minimus."


There is not one single CEO of any financial institution anywhere who will tell you it was all because the government forced them to give loans to poor people.

It's a completely bullshit racist fantasy.

And don't give me any shit about you piss drinkers are talking about "low income". Not when you bring up ACORN and Jesse Jackson and other black activists whenever the CRA is mentioned.

We know you mean the negroes did this.

It couldn't possibly have anyting to do with all the white middle class dumb fucks who took out FAR, FAR, FAR, FAR MORE HELOCs and big mortages. Oh hell no!

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[Truthseeker420]

I like this graph from the article. It's extremely incriminating:

Typical you ignore the gaping hole in the article and grasp at straws.

Explain the "gaping hole" in the chart I posted.

The Gramm–Leach–Bliley Act (GLB), also known as the Financial Services Modernization Act of 1999,

Gramm

 

[g5000]

You don't have to buy the paper: http://www.nber.org/papers/w18609.pdf?new_window=1

.

Yes you do, turd. You obviously didn't read it either.

Go ahead and quote the part where they say the CRA caused the recession.

Show us where the Royal Bank of Scotland was forced to comply with the CRA.


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[Mr. Shaman]

.

The CRA played a part, as did many other things and many other people.

But this disaster has been decades in the making, putting an inflated lifestyle on credit cards, and those bills are now coming due.

I'm sick of the finger-pointing. This country needs to look in the mirror. For a change.

.

Add in some greed and some legal, yet unscrupulous business dealing, and I agree.

But greedy people have been around since.... forever.

Only one person used the power of our Federal government to force the separation of mortgage lending from credit worthiness and ability to repay.

Once the genie was out of the bottle, it was hogs to the trough.

St. Bill Cleans-Up After Daddy Bush​

"Not only was the entire national deficit eliminated after raising taxes on the wealthy in 1993, but the economy grew so fast for the remainder of the decade that many conservative economists thought that the Fed should raise the prime interest rate in order to slow it down."

​

 

[g5000]

More from the NBER report to which I linked:

In interpreting our results, it should be stressed that while we find that the Community Reinvestment Act led to increased origination rates of risky loans, it may still be an efficient policy due to other, desirable consequences.

So they clearly do not feel the CRA is so dangerous that it should be eliminated.

The results presented in figure 9(a) confirm our earlier finding that banks in the treatment group are more likely to originate mortgages relative to control group banks around CRA exams. More important, we find a differential increase in the elevated lending around the CRA exams during the 2004–2006 period and to some extent in the 2007–2009 period relative to the1999–2003 period. One reason for this behavior could be that the boom in securitized lending in the private markets during 2004–2006 and to the GSEs during 2007–2009 gave banks an avenue to park “potentially risky” loans off their balance sheets.

This is exactly what I was talking about above. If it was just about bad loans, the crisis would not have been anywhere near as severe. Derivatives allowed for the risk to be transferred well down the pipeline to the rubes like your 401k manager, and your public employee pension fund manager, and your city treasurer, and your insurance company investment manager, and your college endowment fund manager.

These were not just constructed out of CRA tracts, but all loans. Derivatives simply made it very easy to transfer the risk away from the originator of the loans.

This was driven by $70 trillion of investor demand. The financial sector marketing geniuses convinced investors to buy into derivatives and the demand was out of sight. To meet that demand, more and more and more underlying assets were needed. And when all the prime assets were used up, they had hardly put a dent into the demand. So that required more creative ways to get people to borrow money.

So of course CRA loans are going to be out of proportion. There are more poor people than rich people. It's a pyramid.

When you have gotten the top of the pyramid to borrow as much as it can, you move down the pyramid and make more loans to more people. It takes more poor people to borrow the same amount of money as a top two percenter.

And you get to take credit with the government for doing it!


.

 

[Missourian]

You don't have to buy the paper: http://www.nber.org/papers/w18609.pdf?new_window=1

.

Yes you do, turd. You obviously didn't read it either.

Go ahead and quote the part where they say the CRA caused the recession.

Show us where the Royal Bank of Scotland was forced to comply with the CRA.


.

Does the report say that the CRA was a major contributor to risky lending, foreclosure and the housing market collapse?

Then the rest could have been a domino effect.

 

[The Infidel]

Go get the study

No bitch!

 

[occupied]

More from the NBER report to which I linked:

In interpreting our results, it should be stressed that while we find that the Community Reinvestment Act led to increased origination rates of risky loans, it may still be an efficient policy due to other, desirable consequences.

So they clearly do not feel the CRA is so dangerous that it should be eliminated.

The results presented in figure 9(a) confirm our earlier finding that banks in the treatment group are more likely to originate mortgages relative to control group banks around CRA exams. More important, we find a differential increase in the elevated lending around the CRA exams during the 2004–2006 period and to some extent in the 2007–2009 period relative to the1999–2003 period. One reason for this behavior could be that the boom in securitized lending in the private markets during 2004–2006 and to the GSEs during 2007–2009 gave banks an avenue to park “potentially risky” loans off their balance sheets.

This is exactly what I was talking about above. If it was just about bad loans, the crisis would not have been anywhere near as severe. Derivatives allowed for the risk to be transferred well down the pipeline to the rubes like your 401k manager, and your public employee pension fund manager, and your city treasurer, and your insurance company investment manager, and your college endowment fund manager.

These were not just constructed out of CRA tracts, but all loans. Derivatives simply made it very easy to transfer the risk away from the originator of the loans.

This was driven by $70 trillion of investor demand. The financial sector marketing geniuses convinced investors to buy into derivatives and the demand was out of sight. To meet that demand, more and more and more underlying assets were needed. And when all the prime assets were used up, they had hardly put a dent into the demand. So that required more creative ways to get people to borrow money.

So of course CRA loans are going to be out of proportion. There are more poor people than rich people. It's a pyramid.

When you have gotten the top of the pyramid to borrow as much as it can, you move down the pyramid and make more loans to more people. It takes more poor people to borrow the same amount of money as a top two percenter.

And you get to take credit with the government for doing it!


.

Good analysis, if it had just been the actual foreclosures the crash would not have been much of a crash but leveraging all those bad mortgages up to 50:1 and getting them highly rated magnified the impact far out of proportion.

 

[Wehrwolfen]

More from the NBER report to which I linked:

In interpreting our results, it should be stressed that while we find that the Community Reinvestment Act led to increased origination rates of risky loans, it may still be an efficient policy due to other, desirable consequences.

So they clearly do not feel the CRA is so dangerous that it should be eliminated.

The results presented in figure 9(a) confirm our earlier finding that banks in the treatment group are more likely to originate mortgages relative to control group banks around CRA exams. More important, we find a differential increase in the elevated lending around the CRA exams during the 2004–2006 period and to some extent in the 2007–2009 period relative to the1999–2003 period. One reason for this behavior could be that the boom in securitized lending in the private markets during 2004–2006 and to the GSEs during 2007–2009 gave banks an avenue to park “potentially risky” loans off their balance sheets.

This is exactly what I was talking about above. If it was just about bad loans, the crisis would not have been anywhere near as severe. Derivatives allowed for the risk to be transferred well down the pipeline to the rubes like your 401k manager, and your public employee pension fund manager, and your city treasurer, and your insurance company investment manager, and your college endowment fund manager.

These were not just constructed out of CRA tracts, but all loans. Derivatives simply made it very easy to transfer the risk away from the originator of the loans.

This was driven by $70 trillion of investor demand. The financial sector marketing geniuses convinced investors to buy into derivatives and the demand was out of sight. To meet that demand, more and more and more underlying assets were needed. And when all the prime assets were used up, they had hardly put a dent into the demand. So that required more creative ways to get people to borrow money.

So of course CRA loans are going to be out of proportion. There are more poor people than rich people. It's a pyramid.

When you have gotten the top of the pyramid to borrow as much as it can, you move down the pyramid and make more loans to more people. It takes more poor people to borrow the same amount of money as a top two percenter.

And you get to take credit with the government for doing it!


.

Good analysis, if it had just been the actual foreclosures the crash would not have been much of a crash but leveraging all those bad mortgages up to 50:1 and getting them highly rated magnified the impact far out of proportion.

So accordingly it's been a big Ponzi scheme from the beginning. Who can we thank, Barney Frank and company, or the Progressive Socialist Democratic Party?

 

[Misty]

This is exactly what happened.

 

[g5000]

Yes you do, turd. You obviously didn't read it either.

Go ahead and quote the part where they say the CRA caused the recession.

Show us where the Royal Bank of Scotland was forced to comply with the CRA.


.

Does the report say that the CRA was a major contributor to risky lending, foreclosure and the housing market collapse?

Then the rest could have been a domino effect.

Nope. Not a word that it was a major contributor to the collapse.

All it says is that the CRA tends to lead to riskier lending. It says nothing about the crash.


.