CRA Did Not Cause Financial Crisis - Fed

[dilloduck]

So he's posting a Federal Reserve link to prove a point?

And, of course, the CRA is nothing more than coercive credit allocation on behalf of politically favored groups. Nearly 10% of the bad loans (~8%) are due to the CRA. That a BIG problem.

Something doesn't add up here.

Your damn right it doesn't add up but unfortunately that's ALL the public will ever be allowed to know.

 

[Paulie]

So he's posting a Federal Reserve link to prove a point?

I don't understand it either. I'm not sure how much credibility they really have anymore.

Reminds me of when Greenspan blamed dereg a few months ago and all the liberals jumped on the bandwagon because it furthered their cause. Nevermind the fact that Greenspan was responsible for the artificially low rates that spurred all the excessive lending to BEGIN with.

 

[dilloduck]

I don't understand it either. I'm not sure how much credibility they really have anymore.

Reminds me of when Greenspan blamed dereg a few months ago and all the liberals jumped on the bandwagon because it furthered their cause. Nevermind the fact that Greenspan was responsible for the artificially low rates that spurred all the excessive lending to BEGIN with.

Anyone who doesn't think that the money cartels don't play the world like a big game of RISK really needs to take another look.

 

[Paulie]

Anyone who doesn't think that the money cartels don't play the world like a big game of RISK really needs to take another look.

They couldn't pull it off completely without our war machine.

 

[xsited1]

Your damn right it doesn't add up but unfortunately that's ALL the public will ever be allowed to know.

Maybe Toro is really a Fed Insider!

 

[dilloduck]

They couldn't pull it off completely without our war machine.

Which they own too. And now China---??

 

[Toro]

Let me get this straight... You're actually on the side of the Federal Reserve???

If you don't trust the Fed (and most thinking people DO NOT), read this:

Abolish the Federal Reserve

H.R. 2755: Federal Reserve Board Abolition Act (GovTrack.us)

This is a common tactic amongst ideologues. When confronted with empirical facts that discredit either their ideology or their argument, they try to discredit those who are contradicting their worldview because they have no factual counter-argument. This is the type of anti-intellectualism that is so prevalent in our political dialogue today.

What I think of the Federal Reserve as an institution is irrelevant. What I know is that the Fed hires really smart people, almost all of whom are smarter than the dogmatic ideologues who attempt to discredit any argument based on association.

The Federal Reserve is not a monolithic organization. It produces some great economic research, and the professionals who work at the Fed usually move in and out of the Fed banks and the private sector and academia.

Of course, not everything the Fed publishes is correct. No institution or individual has a monopoly on truth. But "thinking" people know that each argument is to be assessed on its own merit, not discredited at the outset simply because ideologues do not like the institution.

 

[dilloduck]

This is a common tactic amongst ideologues. When confronted with empirical facts that discredit either their ideology or their argument, they try to discredit those who are contradicting their worldview because they have no factual counter-argument. This is the type of anti-intellectualism that is so prevalent in our political dialogue today.

What I think of the Federal Reserve as an institution is irrelevant. What I know is that the Fed hires really smart people, almost all of whom are smarter than the dogmatic ideologues who attempt to discredit any argument based on association.

The Federal Reserve is not a monolithic organization. It produces some great economic research, and the professionals who work at the Fed usually move in and out of the Fed banks and the private sector and academia.

Of course, not everything the Fed publishes is correct. No institution or individual has a monopoly on truth. But "thinking" people know that each argument is to be assessed on its own merit, not discredited at the outset simply because ideologues do not like the institution.

Well apparently hiring smart people wasn't really great for America. I would assume a smart person would know what side of their bread is buttered too.

 

[Toro]

Well apparently hiring smart people wasn't really great for America. I would assume a smart person would know what side of their bread is buttered too.

As Paul stated above, I think the Federal Reserve Open Market Committee - the group that sets the interest rates - and particularly Alan Greenspan, royally fucked up.

But what has that got to do with research staffers in the Federal Reserve Bank of Richmond and the Brookings Institution?

Do we dismiss every single thing that comes out of Germany because of the Nazis? Only if you're a fool.

 

[Paulie]

Geithner is an OMC member.

I'm not very optomistic about the future.

 

[DeadCanDance]

FRB: Speech--Kroszner, The Community Reinvestment Act and the Recent Mortgage Crisis--December 3, 2008

In other words, 8% of subprime loan losses were CRA-covered.

So for all those who are blaming the CRA for the financial melt-down, you will have to find another culprit.

And no credible, non-partisan economic group or academic group has disputed these numbers.

CRA had almost nothing to do with the meltdown. That's an empirical fact by now. Freddie Mac and Fannie Mae had their problems, but they were only small fish in the subprime market, and relatively late to the game.

The thing about rightwing partisans and bush apologists, is that they'll hear something on rightwing talk and they'll cling to it for years Regardless of the facts and empirical evidence (e.g., they kept claiming for years that Saddam was an ally of al qaeda, contrary to all credible evidence).. They'll have no credible counter argument against demonstrable facts, as you cite here. Its the deep anti-intellectual strain that runs throughout the extreme rightwing. The only counter argument you'll hear is "The fed sucks!".

Poor people didn't cause this meltdown. And Fannie Mae was only a small time player as the meltdown occurred. It was a failure of the rightwing ideology that claimed free, unregulated markets will police themselves.

 

[dilloduck]

As Paul stated above, I think the Federal Reserve Open Market Committee - the group that sets the interest rates - and particularly Alan Greenspan, royally fucked up.

But what has that got to do with research staffers in the Federal Reserve Bank of Richmond and the Brookings Institution?

Do we dismiss every single thing that comes out of Germany because of the Nazis? Only if you're a fool.

Those who own the central banks play with money. These economic yahoos and all their economic formulae are so out of touch with Mainstreet it may as well not even exist. Why does America outsource it's banking ?

 

[xsited1]

This is a common tactic amongst ideologues. When confronted with empirical facts that discredit either their ideology or their argument, they try to discredit those who are contradicting their worldview because they have no factual counter-argument. This is the type of anti-intellectualism that is so prevalent in our political dialogue today.

What I think of the Federal Reserve as an institution is irrelevant. What I know is that the Fed hires really smart people, almost all of whom are smarter than the dogmatic ideologues who attempt to discredit any argument based on association.

The Federal Reserve is not a monolithic organization. It produces some great economic research, and the professionals who work at the Fed usually move in and out of the Fed banks and the private sector and academia.

Of course, not everything the Fed publishes is correct. No institution or individual has a monopoly on truth. But "thinking" people know that each argument is to be assessed on its own merit, not discredited at the outset simply because ideologues do not like the institution.

You're the ideologue if you think any truth comes out of the Fed. Have fun drinking your Kool-aid.

 

[TR_GOP]

Guess I'll have to read that next but I don't need to read it to know we were fucking screwed by these assholes. Greedy world family clans. Americans should be screaming for the truth.

Who's going to provide it to them? Three major corporations that control just about every channel on the TV? Even C-Span has been acting like there's invisible strings in the production booth.

A few weeks ago a C-Span interview went like this;

"We'll like to welcome so&so, free trade economist adviser to the think-tank study group funded by the powers that be (short economic politcy sales pitch speech follows) "

"First caller?"

"Yes, I'll like to know exactly when are we going to enjoy the benefits of free trade other than cheaply made goods in the dollar store? All the factories are leav..."
(guest frowns)

"Hello? Looks like we lost that caller. Next?"

"Your guest is patently issuing false information in order to continue fooling the Americ..."
(guest frowns and shakes head side-to-side )

"Hello? Hello? Lost that caller too. Next?"

Me:

 

[Ravi]

And no credible, non-partisan economic group or academic group has disputed these numbers.

CRA had almost nothing to do with the meltdown. That's an empirical fact by now. Freddie Mac and Fannie Mae had their problems, but they were only small fish in the subprime market, and relatively late to the game.

The thing about rightwing partisans and bush apologists, is that they'll hear something on rightwing talk and they'll cling to it for years Regardless of the facts and empirical evidence (e.g., they kept claiming for years that Saddam was an ally of al qaeda, contrary to all credible evidence).. They'll have no credible counter argument against demonstrable facts, as you cite here. Its the deep anti-intellectual strain that runs throughout the extreme rightwing. The only counter argument you'll hear is "The fed sucks!".

Poor people didn't cause this meltdown. And Fannie Mae was only a small time player as the meltdown occurred. It was a failure of the rightwing ideology that claimed free, unregulated markets will police themselves.

A lot of what you say is true...wall street saw an opportunity to make huge profits and the opportunity was taken. That everyone is surprised by that fact surprises me.

 

[Kevin_Kennedy]

We're seriously surprised that the Fed found that it was not responsible for the crisis?

 

[Paulie]

A lot of what you say is true...wall street saw an opportunity to make huge profits and the opportunity was taken. That everyone is surprised by that fact surprises me.

No one's surprised by it, Rav. It's not like Wall st. hasn't been trying to make huge profits since its inception. It exists for people to make a profit, and there's nothing wrong with its existence. I think the fact that anymore, its health seems to be dependent on our monetary policy should tell you that the Federal Reserve controls the market's actions and performance.

What I'm surprised about, is how you haven't been able to figure it out yet in the face of so much factual evidence.

 

[editec]

but WHO? WHO made the big bucks while America went down the tubes.

Well the banks, obviously...until it all crashed down around them.

But remember that those low rates did not JUST effect mortgage loans.

It also effected ALL debt, public, private and corporate. PLUS the stock market thrives on CHEAP MONEY.

So who made the big bucks?

The very same people who ALWAYS make the big bucks when credit is cheap and the economy is humming.

 

[Toro]

More

More CRA Idiocy | The Big Picture

 

[gonegolfin]

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More CRA Idiocy | The Big Picture

I certainly agree that CRA was not the cause of the housing bust (the Fed was the root cause). Fannie and Freddie, for example, hold very few sub-prime mortgages. Alt-A is their big problem. And it is the private mortgage/investment banks that accumulated the really toxic debt. I do not know whether the CRA even contributed to the problem (it may have in some small degree). But all of this does not mean that the CRA is or is not a good thing either (this is a separate question).

I do get irritated when folks use the CRA in the blame game as it distracts people from the real root cause. Which dooms us to create the same mistakes again.

Brian