Craig Lamson Posted October 14, 2008 Share Posted October 14, 2008 Redlining.The practice of denying, or increasing the cost of sevices such as, Banking, insurance, health care or even food costs to residents in certain, often racially determined areas. The most devistating form of redlining refers to Mortgage discrimination, in which middle income Blacks or Hispanics are denied loans available to lower income Whites.. The CRA of 1977 required Banks to apply the same lending criteria to all communities. The CRA mandates that all Banking institutions that recieve FDIC insurance be evaluated to determine if the institution has met the credit needs of its entire community,In a manner consistent with safe and sound operations. The CRA does not list specific criteria for evaluating their performance, Rather that the evaluation process should accommodate the situation, and context of each individual institution. The Law also does not require institutions to make high risk loans that may bring losses to the institution, instead the law emphasises that an institutions CRA activities should be undertaken in a safe and sound manner There are no specific penalties for non compliance. In a 2002 study exploring the relationship between the CRA and predatory lending, Kathleen Engle and Patricia McCoy noted that Bankscould recieve CRA credit by lending, or brokering predatory loans in lower income areas. "Under the Clinton administration, federal regulators began using the act to combat "red-lining," a practice by which banks loaned money to some communities but not to others, based on economic status. "No loan is exempt, no bank is immune," warned then-Attorney General Janet Reno. "For those who thumb their nose at us, I promise vigorous enforcement." The Clinton-Reno threat of "vigorous enforcement" pushed banks to make the now infamous loans that many blame for the current meltdown, Richman said. "Banks, in order to not get in trouble with the regulators, had to make loans to people who shouldn't have been getting mortgage loans." This threat combined with the government backing of Fannie and Freddie set the stage for the current uncertainty, because the "banks could just sell the loans off to Fannie or Freddie," who could buy them with little regard for negative financial outcomes, Richman said." http://www.cnsnews.com/public/content/article.aspx?RsrcID=36048 Looks like FORCED to me.... Link to comment Share on other sites More sharing options...
John Simkin Posted October 14, 2008 Author Share Posted October 14, 2008 Craig, do you consider Bush's actions today as socialism or state capitalism? http://news.bbc.co.uk/1/hi/business/7668704.stm The US government has announced a $250bn (£143bn) plan to purchase stakes in a wide variety of banks in an effort to restore confidence in the sector. President George W Bush said the move would help to return stability to the US banking sector and ultimately help preserve free markets. US federal authorities will also temporarily insure most new debt issued by US banks. The moves echo similar steps taken by the UK and other European countries. "This is an essential short-term measure to ensure the viability of America's banking system," Mr Bush said. "This is not intended to take over the free market, but to preserve it." Mr Bush also said that the Federal Reserve would finalise work on a new programme that would make it the buyer of last resort for companies' short-term debt, known as commercial paper. Furthermore, government deposit insurance is being expanded to cover accounts used by small businesses. The money will come from the $700bn bail-out package approved by US lawmakers earlier this month. The US plan - effectively part-nationalisation - comes after the bosses of the country's largest banks were summoned to a special meeting at the US Treasury on Monday. Treasury Secretary Henry Paulson said that the lack of confidence in the financial system was a threat to the US economy. He said that taking equity stakes in banks "was objectionable to most Americans, including myself". "We regret taking these actions," Mr Paulson said. "But we must do this to restore confidence in the financial system." Mr Paulson said the government would buy stakes in a "wide variety" of banks and thrifts - financial institutions similar to building societies in the UK. Nine banks, which Mr Paulson described as "healthy institutions", have so far signed up to the deal. Federal Reserve chairman Ben Bernanke said that the US strategy would evolve and adapt to new developments: "We will not stand down until we have achieved our goals of repairing and reforming our financial system," he said. Link to comment Share on other sites More sharing options...
Craig Lamson Posted October 14, 2008 Share Posted October 14, 2008 Craig, do you consider Bush's actions today as socialism or state capitalism? http://news.bbc.co.uk/1/hi/business/7668704.stm The US government has announced a $250bn (£143bn) plan to purchase stakes in a wide variety of banks in an effort to restore confidence in the sector. President George W Bush said the move would help to return stability to the US banking sector and ultimately help preserve free markets. US federal authorities will also temporarily insure most new debt issued by US banks. The moves echo similar steps taken by the UK and other European countries. "This is an essential short-term measure to ensure the viability of America's banking system," Mr Bush said. "This is not intended to take over the free market, but to preserve it." Mr Bush also said that the Federal Reserve would finalise work on a new programme that would make it the buyer of last resort for companies' short-term debt, known as commercial paper. Furthermore, government deposit insurance is being expanded to cover accounts used by small businesses. The money will come from the $700bn bail-out package approved by US lawmakers earlier this month. The US plan - effectively part-nationalisation - comes after the bosses of the country's largest banks were summoned to a special meeting at the US Treasury on Monday. Treasury Secretary Henry Paulson said that the lack of confidence in the financial system was a threat to the US economy. He said that taking equity stakes in banks "was objectionable to most Americans, including myself". "We regret taking these actions," Mr Paulson said. "But we must do this to restore confidence in the financial system." Mr Paulson said the government would buy stakes in a "wide variety" of banks and thrifts - financial institutions similar to building societies in the UK. Nine banks, which Mr Paulson described as "healthy institutions", have so far signed up to the deal. Federal Reserve chairman Ben Bernanke said that the US strategy would evolve and adapt to new developments: "We will not stand down until we have achieved our goals of repairing and reforming our financial system," he said. Without a doubt it is socialism. State "capitalism" is a false construct. Link to comment Share on other sites More sharing options...
Len Colby Posted October 14, 2008 Share Posted October 14, 2008 Redlining.The practice of denying, or increasing the cost of sevices such as, Banking, insurance, health care or even food costs to residents in certain, often racially determined areas. The most devistating form of redlining refers to Mortgage discrimination, in which middle income Blacks or Hispanics are denied loans available to lower income Whites.. The CRA of 1977 required Banks to apply the same lending criteria to all communities. The CRA mandates that all Banking institutions that recieve FDIC insurance be evaluated to determine if the institution has met the credit needs of its entire community,In a manner consistent with safe and sound operations. The CRA does not list specific criteria for evaluating their performance, Rather that the evaluation process should accommodate the situation, and context of each individual institution. The Law also does not require institutions to make high risk loans that may bring losses to the institution, instead the law emphasises that an institutions CRA activities should be undertaken in a safe and sound manner There are no specific penalties for non compliance. In a 2002 study exploring the relationship between the CRA and predatory lending, Kathleen Engle and Patricia McCoy noted that Bankscould recieve CRA credit by lending, or brokering predatory loans in lower income areas. "Under the Clinton administration, federal regulators began using the act to combat "red-lining," a practice by which banks loaned money to some communities but not to others, based on economic status. "No loan is exempt, no bank is immune," warned then-Attorney General Janet Reno. "For those who thumb their nose at us, I promise vigorous enforcement." The Clinton-Reno threat of "vigorous enforcement" pushed banks to make the now infamous loans that many blame for the current meltdown, Richman said. "Banks, in order to not get in trouble with the regulators, had to make loans to people who shouldn't have been getting mortgage loans." This threat combined with the government backing of Fannie and Freddie set the stage for the current uncertainty, because the "banks could just sell the loans off to Fannie or Freddie," who could buy them with little regard for negative financial outcomes, Richman said." http://www.cnsnews.com/public/content/article.aspx?RsrcID=36048 Looks like FORCED to me.... It should be noted that Craig's source is run by right-wing activist L Brent Bozell http://en.wikipedia.org/wiki/L._Brent_Bozell_III and its motto is "the Right News, Right now" Link to comment Share on other sites More sharing options...
Craig Lamson Posted October 14, 2008 Share Posted October 14, 2008 Redlining.The practice of denying, or increasing the cost of sevices such as, Banking, insurance, health care or even food costs to residents in certain, often racially determined areas. The most devistating form of redlining refers to Mortgage discrimination, in which middle income Blacks or Hispanics are denied loans available to lower income Whites.. The CRA of 1977 required Banks to apply the same lending criteria to all communities. The CRA mandates that all Banking institutions that recieve FDIC insurance be evaluated to determine if the institution has met the credit needs of its entire community,In a manner consistent with safe and sound operations. The CRA does not list specific criteria for evaluating their performance, Rather that the evaluation process should accommodate the situation, and context of each individual institution. The Law also does not require institutions to make high risk loans that may bring losses to the institution, instead the law emphasises that an institutions CRA activities should be undertaken in a safe and sound manner There are no specific penalties for non compliance. In a 2002 study exploring the relationship between the CRA and predatory lending, Kathleen Engle and Patricia McCoy noted that Bankscould recieve CRA credit by lending, or brokering predatory loans in lower income areas. "Under the Clinton administration, federal regulators began using the act to combat "red-lining," a practice by which banks loaned money to some communities but not to others, based on economic status. "No loan is exempt, no bank is immune," warned then-Attorney General Janet Reno. "For those who thumb their nose at us, I promise vigorous enforcement." The Clinton-Reno threat of "vigorous enforcement" pushed banks to make the now infamous loans that many blame for the current meltdown, Richman said. "Banks, in order to not get in trouble with the regulators, had to make loans to people who shouldn't have been getting mortgage loans." This threat combined with the government backing of Fannie and Freddie set the stage for the current uncertainty, because the "banks could just sell the loans off to Fannie or Freddie," who could buy them with little regard for negative financial outcomes, Richman said." http://www.cnsnews.com/public/content/article.aspx?RsrcID=36048 Looks like FORCED to me.... It should be noted that Craig's source is run by right-wing activist L Brent Bozell http://en.wikipedia.org/wiki/L._Brent_Bozell_III and its motto is "the Right News, Right now" I'll be more than happy to see you refute the statements Len, if you can. Is is shoot the messanger the best you have? Be forwarned thats just the very tip of this iceberg... Link to comment Share on other sites More sharing options...
John Simkin Posted October 15, 2008 Author Share Posted October 15, 2008 Craig, do you consider Bush's actions today as socialism or state capitalism? http://news.bbc.co.uk/1/hi/business/7668704.stm The US government has announced a $250bn (£143bn) plan to purchase stakes in a wide variety of banks in an effort to restore confidence in the sector. President George W Bush said the move would help to return stability to the US banking sector and ultimately help preserve free markets. US federal authorities will also temporarily insure most new debt issued by US banks. The moves echo similar steps taken by the UK and other European countries. "This is an essential short-term measure to ensure the viability of America's banking system," Mr Bush said. "This is not intended to take over the free market, but to preserve it." Mr Bush also said that the Federal Reserve would finalise work on a new programme that would make it the buyer of last resort for companies' short-term debt, known as commercial paper. Furthermore, government deposit insurance is being expanded to cover accounts used by small businesses. The money will come from the $700bn bail-out package approved by US lawmakers earlier this month. The US plan - effectively part-nationalisation - comes after the bosses of the country's largest banks were summoned to a special meeting at the US Treasury on Monday. Treasury Secretary Henry Paulson said that the lack of confidence in the financial system was a threat to the US economy. He said that taking equity stakes in banks "was objectionable to most Americans, including myself". "We regret taking these actions," Mr Paulson said. "But we must do this to restore confidence in the financial system." Mr Paulson said the government would buy stakes in a "wide variety" of banks and thrifts - financial institutions similar to building societies in the UK. Nine banks, which Mr Paulson described as "healthy institutions", have so far signed up to the deal. Federal Reserve chairman Ben Bernanke said that the US strategy would evolve and adapt to new developments: "We will not stand down until we have achieved our goals of repairing and reforming our financial system," he said. Without a doubt it is socialism. State "capitalism" is a false construct. This is the most audacious conspiracy theory I have ever heard. So Bush has been a socialist all along and he has been waiting for this opportunity to introduce this foreign ideology into the United States It might be comforting for your political ideology to believe that “state capitalism” does not exist but this is what the Merriam-Webster dictionary says it means: “an economic system in which private capitalism is modified by a varying degree of government ownership and control” http://www.merriam-webster.com/dictionary/state+capitalism This is of course what the Bush administration did yesterday. This is what the Merriam-Webster dictionary says about socialism: 1: Any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods 2: a: a system of society or group living in which there is no private property b: a system or condition of society in which the means of production are owned and controlled by the state 3: A stage of society in Marxist theory transitional between capitalism and communism and distinguished by unequal distribution of goods and pay according to work done http://www.merriam-webster.com/dictionary/socialism Maybe we can now have a sensible discussion about the economic measures taken by Bush yesterday. Link to comment Share on other sites More sharing options...
Guest Stephen Turner Posted October 15, 2008 Share Posted October 15, 2008 Ben Bernanke, (well known Socialist revolutionary) 2007. "Managers of financial institutions found that these loan portfolios, IF PROPERLY UNWRITTEN AND MANAGED, could be profitable, and that the loans usually did not involve disproportionately higher levels of default. In a BANK FOR INTERNATIONAL SETTLEMENTS working paper, economist Luci Ellis, concluded that, there is no evidence that the CRA was responsible for encouraging the sub-prime lending boom. Tim Westrich Centre for American progress. Robert Gordon American Prospect Aaron Pressman Business Week and other legal, and financial experts noted that the CRA regulated loans tend to be safe and profitable, and further taht sub-prime excesses came mainly from institutions not regulated by the CRA. In the Feb 2008 House hearing, Law professor, Micheal S Barr, a Treasury Dept Official in the Clinton Administration stated that a Federal reserve survey showed that affected institutions considered CRA loans profitable, and not over risky. He also noted that approx 50% of the sub-prime loans were made by independant mortgage companies that were not regulated by the CRA, and another 25-30% came from only partially regulated Banks and affiliates, by far the worst and most widespread abuses occured in the institutions With the least Federal oversight. According to Janet Yellen, President of the federal reserve Bank San Fransisco, Independant mortgage companies made higher priced (predatory) loans at more than twice the rate of the Banks, and Thrifts, Most CRA loans were responsibly made, and were not the higher priced (predatory) loans that have massively contributed to the present crisis. CRA Banks are also less than half as likely to re-sell the loans to a third party. (Otherwise known as toxic bundles. Link to comment Share on other sites More sharing options...
Pat Speer Posted October 15, 2008 Share Posted October 15, 2008 The "CRA is to blame" argument has been totally debunked by researcher after researcher, journalist after journalist. Craig's defense of it is most disturbing, and perhaps indicative that he likes the taste of Konservative Kool-Aid...the same Kool-Aid that has led McCain to propose that the best way out of this mess is to cut taxes on the rich. Here is one such debunking by a blogger named Rick Holmes: "The intensity of blame game being waged over the financial crisis requires a constant supply of new targets. It’s been blamed on Phil Gramm, Barney Frank, Bill Clinton, Alan Greenspan, greedy bankers, spendthrift borrowers and affordable housing advocates. The latest target is a well-regarded federal law that has been on the books since 1977: the Community Reinvestment Act. According to the current line in the conservative media echo chamber, the CRA forced banks to give subprime loans to minorities in poor neighborhoods who are credit risks. Those irresponsible poor folks couldn’t keep up their payments and now the economy is going down the tubes. If you’re not turned off by the undertone of blaming the victims, you might find this explanation plausible - as long as you don’t know much about the CRA. Here are three things you should know about it: 1. The CRA doesn’t require loans to be made; it requires that the same rules apply to people seeking mortgages in poor neighborhoods as those buying in other neighborhoods. “Nor does the law require institutions to make high-risk loans that jeopardize their safety, according to the Fed’s CRA Web site, “To the contrary, the law makes it clear that an institution’s CRA activities should be undertaken in a safe and sound manner.” 2. The CRA only applies to banks and thrifts whose deposits are insured by the FDIC. Mortgage companies like Countrywide and cheapmortgage.com aren’t CRA banks. Eighty percent of subprime mortgage loans weren’t covered by the CRA. 3. The CRA only works in designated low-income neighborhoods. As Rep. Jim McGovern noted in Hopkinton Wednesday, the CRA has nothing to do with a mortgage on a $500,000 home in Hopkinton, let alone a $800,000 home. Yes, some low-income, urban neighborhoods have been especially hard hit by foreclosures, but poor families live closer to the edge and are always the first hurt when the economy turns. But because CRA banks operate under more supervision, the failure rate for those mortgages is well below that of non-CRA lenders. The CRA is declared innocent. Next target?" Another frequent target of those drinking the Konservative Kool-Aid is Freddie and Fannie, and the ties of Democrats to same. This neglects that the Republicans had control of congress for 12 of the past 13 1/2 years, and the control of the Presidency for the last 7 and a half years. Trying to blame this economic meltdown on Carter and Clinton and the Democrats is like trying to blame World War II on President Woodrow Wilson. SORRY... IT JUST DOESN'T FLY!!! That conservatives have resorted to this kind of "dog ate my homework" nonsense indicates that a wheel has come off the short bus. Time to re-think what was never properly thunk. Link to comment Share on other sites More sharing options...
Craig Lamson Posted October 15, 2008 Share Posted October 15, 2008 (edited) Ben Bernanke, (well known Socialist revolutionary) 2007."Managers of financial institutions found that these loan portfolios, IF PROPERLY UNWRITTEN AND MANAGED, could be profitable, and that the loans usually did not involve disproportionately higher levels of default. In a BANK FOR INTERNATIONAL SETTLEMENTS working paper, economist Luci Ellis, concluded that, there is no evidence that the CRA was responsible for encouraging the sub-prime lending boom. Tim Westrich Centre for American progress. Robert Gordon American Prospect Aaron Pressman Business Week and other legal, and financial experts noted that the CRA regulated loans tend to be safe and profitable, and further taht sub-prime excesses came mainly from institutions not regulated by the CRA. In the Feb 2008 House hearing, Law professor, Micheal S Barr, a Treasury Dept Official in the Clinton Administration stated that a Federal reserve survey showed that affected institutions considered CRA loans profitable, and not over risky. He also noted that approx 50% of the sub-prime loans were made by independant mortgage companies that were not regulated by the CRA, and another 25-30% came from only partially regulated Banks and affiliates, by far the worst and most widespread abuses occured in the institutions With the least Federal oversight. According to Janet Yellen, President of the federal reserve Bank San Fransisco, Independant mortgage companies made higher priced (predatory) loans at more than twice the rate of the Banks, and Thrifts, Most CRA loans were responsibly made, and were not the higher priced (predatory) loans that have massively contributed to the present crisis. CRA Banks are also less than half as likely to re-sell the loans to a third party. (Otherwise known as toxic bundles. Try again bub... And tp pop ms. Yellens bubble..most of those "indendependant" mortage companies were simply AGENTS working ofr CRA institutions. Try again next time. Memorandum to the Chairman Committee on Banking, Housing, and Urban Affairs United States Senate From: John E. Silvia, Chief Economist Linda Lord, Chief Counsel Wayne Leighton, Senior Economist Dina Ellis, Counsel July 19, 2000 Federal Reserve Report on The Performance and Profitability of CRA-Related Lending -------------------------------------------------------------------------------- Section 713 of the Gramm-Leach-Bliley Act (P.L. 106-102) requires the Federal Reserve Board to conduct a comprehensive study of the Community Reinvestment Act of 1977 focusing on 1) default rates; 2) delinquency rates; and 3) the profitability of CRA-related loans. That report was released by the Federal Reserve on July 17, 2000. Despite the acknowledged limitations of the report and its methodology (discussed below), several results are clear. Summary of the Report By every measure, CRA loans are not as profitable as non-CRA loans. No institution reported that CRA lending was more profitable than non-CRA lending for home mortgage, refinance, home improvement, or small business loans. For home purchase and refinance lending, three times as many institutions reported their CRA-related loans not profitable as compared to non-CRA-related loans. One out of three large institutions report that CRA lending in the home mortgage and refinance markets is not profitable. Three times the value of CRA home improvement loans are not profitable as compared to non-CRA loans. Delinquency rates for CRA loans in the home purchase and refinance market are twice that for non-CRA loans. Among all institutions, about 40 percent of CRA special lending programs are not profitable. For large institutions, 58 percent report that their CRA special lending programs are not profitable. This is inconsistent with the safety and soundness requirements of CRA. Methodology of the Report Although better than anecdotal information, the report falls short of being a rigorous, data-based scientific study. In its favor, it may be described as an initial exploratory effort, pointing toward a more comprehensive effort. Among the report's deficiencies: Although not required in the statute, survey data is limited to only one year, 1999. This period was characterized by an on-going economic expansion with strong employment growth and low and relatively stable inflation and interest rates. This economic background likely would produce the most favorable survey results for lending, CRA or otherwise. In a more difficult economic environment, the quality of CRA lending would be more adequately tested. Five hundred institutions were surveyed, of which only 143 institutions voluntarily responded. These institutions account for about one-half of the assets of all U.S. banking institutions. Less than a quarter, i.e. approximately 35 institutions, provided quantitative responses. Only subjective qualitative responses were taken from the remaining institutions. Moreover, the value of the data is compromised by its voluntary nature, raising the statistical problems inherent in any self-selected sample. Acknowledging the limited quantitative data, the report's authors instead gave emphasis to "qualitative results" in the report. Such "qualitative" analysis does little to contribute to a dispassionate factual review of CRA and its results. CRA discussion to date has not suffered from a lack of "qualitative results." Each of these limitations tend to bias the report toward results favorable to CRA. CRA Lending for Home Purchase and Refinancing, Home Improvement, Small Business, and Community Development Respondents provided $570 billion in home purchase and refinance loans in 1999, of which 10 percent were CRA-related; $12 billion in home improvement loans, of which 18 percent were CRA-related; $117 billion in small business loans, of which 50 percent were CRA-related; and $13 billion in community development loans. As described below, when compared to non-CRA loans, CRA-related loans were less profitable in all categories. In the home purchase and refinance market, unprofitable lending is three times greater with CRA loans as compared to other loans. Only 6 percent of non-CRA lending in this category was non-profitable, compared to 18 percent for CRA lending. When questioned on relative profitability, no banks stated that CRA loans were more profitable than non-CRA loans for home mortgage, refinance, and home improvement lending. About one out of every five banks stated their CRA loans in this market were less profitable. Two out of every five large banks reported these CRA loans to be less profitable. Delinquency rates for CRA loans are twice that for non-CRA loans in the market for home purchase and refinance (1.57 percent v. 0.79 percent). Small business lending was unique, in that the volume of CRA loans was approximately equal to non-CRA loans. The profitability of CRA loans to small business was slightly less than that for non-CRA small business loans. The study's definition of a small business loan was expansive. The study defined a CRA-related small business loan as any small business loan made within the financial institution's CRA assessment area to (1) a firm with revenues of $1 million or less (regardless of neighborhood income) or (2) a firm in a low- or moderate-income neighborhood (regardless of firm size). Accordingly, the study defined a non-CRA small business loan as only a loan made to a small business outside of the institution's CRA assessment area. CRA Special Lending Programs A large percentage of CRA special program loans are not profitable. About 39 percent of these loans are not profitable on a per program basis and 44 percent on a per dollar basis. For large institutions, 58 percent of large banks report that their CRA special lending programs are not profitable. This appears to violate the safety and soundness requirements of CRA, which require that CRA lending is to be "consistent with the safe and sound operation" of the financial institution. According to the report, compared to smaller institutions in the sample, large- and medium-sized institutions report a higher percentage of special program loans that are unprofitable and have higher delinquency rates. Financial institutions report that for their "special loan programs" they offer reduced interest rates and fee waivers or reductions for about 47 percent of the programs. They also report that they "alter their customary underwriting standards for a large majority of their special lending programs." The most frequently cited underwriting variances are lower down payments, higher debt-to-income ratios, and the acceptance of alternative measures of credit quality. These lower standards would seem to be reflected in profitability measures. According to the report, delinquency rates are higher on a per program dollar basis than on a per program basis. The study interprets this result as "suggesting that larger programs have higher delinquency rates." According to the report, "[o]btaining either a satisfactory or outstanding CRA rating is a reason mentioned for about 75 percent of the [CRA special lending] programs." (p. xiii) -------------------------------------------------------------------------------- Return to Chairman's Page Edited October 15, 2008 by Craig Lamson Link to comment Share on other sites More sharing options...
Craig Lamson Posted October 15, 2008 Share Posted October 15, 2008 Craig, do you consider Bush's actions today as socialism or state capitalism? http://news.bbc.co.uk/1/hi/business/7668704.stm The US government has announced a $250bn (£143bn) plan to purchase stakes in a wide variety of banks in an effort to restore confidence in the sector. President George W Bush said the move would help to return stability to the US banking sector and ultimately help preserve free markets. US federal authorities will also temporarily insure most new debt issued by US banks. The moves echo similar steps taken by the UK and other European countries. "This is an essential short-term measure to ensure the viability of America's banking system," Mr Bush said. "This is not intended to take over the free market, but to preserve it." Mr Bush also said that the Federal Reserve would finalise work on a new programme that would make it the buyer of last resort for companies' short-term debt, known as commercial paper. Furthermore, government deposit insurance is being expanded to cover accounts used by small businesses. The money will come from the $700bn bail-out package approved by US lawmakers earlier this month. The US plan - effectively part-nationalisation - comes after the bosses of the country's largest banks were summoned to a special meeting at the US Treasury on Monday. Treasury Secretary Henry Paulson said that the lack of confidence in the financial system was a threat to the US economy. He said that taking equity stakes in banks "was objectionable to most Americans, including myself". "We regret taking these actions," Mr Paulson said. "But we must do this to restore confidence in the financial system." Mr Paulson said the government would buy stakes in a "wide variety" of banks and thrifts - financial institutions similar to building societies in the UK. Nine banks, which Mr Paulson described as "healthy institutions", have so far signed up to the deal. Federal Reserve chairman Ben Bernanke said that the US strategy would evolve and adapt to new developments: "We will not stand down until we have achieved our goals of repairing and reforming our financial system," he said. Without a doubt it is socialism. State "capitalism" is a false construct. This is the most audacious conspiracy theory I have ever heard. So Bush has been a socialist all along and he has been waiting for this opportunity to introduce this foreign ideology into the United States It might be comforting for your political ideology to believe that “state capitalism” does not exist but this is what the Merriam-Webster dictionary says it means: “an economic system in which private capitalism is modified by a varying degree of government ownership and control” http://www.merriam-webster.com/dictionary/state+capitalism This is of course what the Bush administration did yesterday. This is what the Merriam-Webster dictionary says about socialism: 1: Any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods 2: a: a system of society or group living in which there is no private property b: a system or condition of society in which the means of production are owned and controlled by the state 3: A stage of society in Marxist theory transitional between capitalism and communism and distinguished by unequal distribution of goods and pay according to work done http://www.merriam-webster.com/dictionary/socialism Maybe we can now have a sensible discussion about the economic measures taken by Bush yesterday. You can quote Webster until the cows come home, but State "capitalism" is still a false construct and the current situation socialism. Heck, even your quotes from Webster agree... "a system or condition of society in which the means of production are owned and controlled by the state" Perfectly describes both the false construct of "state capitalism" and the current purchase of bank stock by the US govermnet. What do you have left to discuss John? Link to comment Share on other sites More sharing options...
Craig Lamson Posted October 15, 2008 Share Posted October 15, 2008 (edited) The "CRA is to blame" argument has been totally debunked by researcher after researcher, journalist after journalist. We can play tit for tat on articles that show you viewpoint and mine, if thats what you really want to do, but in the end you and the blogger you quote will lose. CRA as modifed and PUSHED by Clinton is the root cause of todays problems. Its YOU Pat who is suckling and the lib koolaid tit. Craig's defense of it is most disturbing, and perhaps indicative that he likes the taste of Konservative Kool-Aid...the same Kool-Aid that has led McCain to propose that the best way out of this mess is to cut taxes on the rich. Yes I guess showing that liberialism and wealth distribution is a fail policy IS disturbing to you. Too bad. And yes giving tax breaks to the people WHO CREATE jobs and wealth IS the road to recovery. Exactly how does giving tax breaks to the 30% of American tax payers WHO DONT PAY FEDERAL TAXES create new jobs? Oh thats right..IT WONT! Here is one such debunking by a blogger named Rick Holmes: "The intensity of blame game being waged over the financial crisis requires a constant supply of new targets. It’s been blamed on Phil Gramm, Barney Frank, Bill Clinton, Alan Greenspan, greedy bankers, spendthrift borrowers and affordable housing advocates. The latest target is a well-regarded federal law that has been on the books since 1977: the Community Reinvestment Act. According to the current line in the conservative media echo chamber, the CRA forced banks to give subprime loans to minorities in poor neighborhoods who are credit risks. Those irresponsible poor folks couldn’t keep up their payments and now the economy is going down the tubes. If you’re not turned off by the undertone of blaming the victims, you might find this explanation plausible - as long as you don’t know much about the CRA. Here are three things you should know about it: 1. The CRA doesn’t require loans to be made; it requires that the same rules apply to people seeking mortgages in poor neighborhoods as those buying in other neighborhoods. “Nor does the law require institutions to make high-risk loans that jeopardize their safety, according to the Fed’s CRA Web site, “To the contrary, the law makes it clear that an institution’s CRA activities should be undertaken in a safe and sound manner.” 2. The CRA only applies to banks and thrifts whose deposits are insured by the FDIC. Mortgage companies like Countrywide and cheapmortgage.com aren’t CRA banks. Eighty percent of subprime mortgage loans weren’t covered by the CRA. 3. The CRA only works in designated low-income neighborhoods. As Rep. Jim McGovern noted in Hopkinton Wednesday, the CRA has nothing to do with a mortgage on a $500,000 home in Hopkinton, let alone a $800,000 home. This is nothing but a really poor attempt at spin. First it's not the 1977 act that is the trigger, its the more recent amendments to the act that caused the problem...amendments that were pushed and policed by Clinton. The Clinton administration DID force banks to make loans that were risky and they came RIGHT OUT AND SAID IT! "Another lengthy video attempts to highlight the beginnings of the subprime loan disaster, and it’s well worth watching. Andrew Cuomo, then Bill Clinton’s HUD Secretary, held a press conference on April 6, 1998, explaining a settlement reached with a major bank on a lending discrimination case based presumably on the CRA. Cuomo brags about how “this administration will enforce the law”, but he also makes a very telling admission about the $2.1 billion in subprime loans that the bank would offer as a result of the settlement: They would not have qualifed but for the affirmative action on the part of the bank, yes. He then admits that there would be “higher risk”, and a higher default rate, on the loans the Clinton administration forced this bank to make. He also admits that the action forced this bank to lower its standards on loan qualification as a remedy to supposed discriminatory action in the past by relying on income and equity requirements. Cuomo describes everything wrong with subprime lending and reveals the government’s efforts to distort private lending markets to force “fairness” in outcomes." Watch the video. http://hotair.com/archives/2008/10/10/vide...n-andrew-cuomo/ Lets see if the left agrees? From the Village Voice, not just your average "right wing koolaid drinkers" "There are as many starting points for the mortgage meltdown as there are fears about how far it has yet to go, but one decisive point of departure is the final years of the Clinton administration, when a kid from Queens without any real banking or real-estate experience was the only man in Washington with the power to regulate the giants of home finance, the Federal National Mortgage Association (FNMA) and the Federal Home Loan Mortgage Corporation (FHLMC), better known as Fannie Mae and Freddie Mac. Andrew Cuomo, the youngest Housing and Urban Development secretary in history, made a series of decisions between 1997 and 2001 that gave birth to the country's current crisis. He took actions that—in combination with many other factors—helped plunge Fannie and Freddie into the subprime markets without putting in place the means to monitor their increasingly risky investments. He turned the Federal Housing Administration mortgage program into a sweetheart lender with sky-high loan ceilings and no money down, and he legalized what a federal judge has branded "kickbacks" to brokers that have fueled the sale of overpriced and unsupportable loans. Three to four million families are now facing foreclosure, and Cuomo is one of the reasons why." http://www.villagevoice.com/2008-08-05/new...nd-freddie-mac/ Yes, some low-income, urban neighborhoods have been especially hard hit by foreclosures, but poor families live closer to the edge and are always the first hurt when the economy turns. But because CRA banks operate under more supervision, the failure rate for those mortgages is well below that of non-CRA lenders. The CRA is declared innocent. Next target?" Declared Inocent my ASS! Try again Pat. Maybe another pull on what everyou are drinking might help... Another frequent target of those drinking the Konservative Kool-Aid is Freddie and Fannie, and the ties of Democrats to same. This neglects that the Republicans had control of congress for 12 of the past 13 1/2 years, and the control of the Presidency for the last 7 and a half years. Trying to blame this economic meltdown on Carter and Clinton and the Democrats is like trying to blame World War II on President Woodrow Wilson. SORRY... IT JUST DOESN'T FLY!!! You can't see the forest for the tress can you Pat? I guessed you missed part where CLINTON and his sidekick Cuomo changed the rules to allow us to get where we are. But lets look again, since you seem quite blind to reality: Andrew Cuomo, the youngest Housing and Urban Development secretary in history, made a series of decisions between 1997 and 2001 that gave birth to the country's current crisis. He took actions that—in combination with many other factors—helped plunge Fannie and Freddie into the subprime markets without putting in place the means to monitor their increasingly risky investments. He turned the Federal Housing Administration mortgage program into a sweetheart lender with sky-high loan ceilings and no money down, and he legalized what a federal judge has branded "kickbacks" to brokers that have fueled the sale of overpriced and unsupportable loans. Three to four million families are now facing foreclosure, and Cuomo is one of the reasons why." I guess it DOES fly Pat...imagine that! That conservatives have resorted to this kind of "dog ate my homework" nonsense indicates that a wheel has come off the short bus. Time to re-think what was never properly thunk. There is PLENTY of blame to go around for todays mess, but its quite clear EXACTLY where it started and who did the starting. It appears the rethinkngneeds to start with you. Oh I see your glass is empty again...time for a refill? Edited October 15, 2008 by Craig Lamson Link to comment Share on other sites More sharing options...
Len Colby Posted October 15, 2008 Share Posted October 15, 2008 (edited) Redlining.The practice of denying, or increasing the cost of sevices such as, Banking, insurance, health care or even food costs to residents in certain, often racially determined areas. The most devistating form of redlining refers to Mortgage discrimination, in which middle income Blacks or Hispanics are denied loans available to lower income Whites.. The CRA of 1977 required Banks to apply the same lending criteria to all communities. The CRA mandates that all Banking institutions that recieve FDIC insurance be evaluated to determine if the institution has met the credit needs of its entire community,In a manner consistent with safe and sound operations. The CRA does not list specific criteria for evaluating their performance, Rather that the evaluation process should accommodate the situation, and context of each individual institution. The Law also does not require institutions to make high risk loans that may bring losses to the institution, instead the law emphasises that an institutions CRA activities should be undertaken in a safe and sound manner There are no specific penalties for non compliance. In a 2002 study exploring the relationship between the CRA and predatory lending, Kathleen Engle and Patricia McCoy noted that Bankscould recieve CRA credit by lending, or brokering predatory loans in lower income areas. "Under the Clinton administration, federal regulators began using the act to combat "red-lining," a practice by which banks loaned money to some communities but not to others, based on economic status. "No loan is exempt, no bank is immune," warned then-Attorney General Janet Reno. "For those who thumb their nose at us, I promise vigorous enforcement." The Clinton-Reno threat of "vigorous enforcement" pushed banks to make the now infamous loans that many blame for the current meltdown, Richman said. "Banks, in order to not get in trouble with the regulators, had to make loans to people who shouldn't have been getting mortgage loans." This threat combined with the government backing of Fannie and Freddie set the stage for the current uncertainty, because the "banks could just sell the loans off to Fannie or Freddie," who could buy them with little regard for negative financial outcomes, Richman said." http://www.cnsnews.com/public/content/article.aspx?RsrcID=36048 Looks like FORCED to me.... It should be noted that Craig's source is run by right-wing activist L Brent Bozell http://en.wikipedia.org/wiki/L._Brent_Bozell_III and its motto is "the Right News, Right now" I'll be more than happy to see you refute the statements Len, if you can. Is is shoot the messanger the best you have? Be forwarned thats just the very tip of this iceberg... The problem with such a biased source is that the author seems to start with a thesis and fit the evidence to fit it. The article is based entirely on one source who is IDed as an "economist" but turns out is a free lance journalist with a BS in radio journalism who writes about economic issues among others and is strongly tied to a group of related "Libertarian" organizations. Thus he is hardly an objective or qualified source. http://www.fee.org/seminars/faculty/Richman.asp Richmanclaims that this is due to Carter and Clinton but fails to provide any data to back it up. So enlighten us what percentage of the bad mortgages were issued under Democratic administrations as opposed to Republican ones? If these policies were so obviously bad why didn't Reagan or the Bushes do anything. A separate issue is why did so many financial,institutions invest in the subprime market, were they coerced to do so by Clinton? If it was only Fannie Freddie and mortgage banks that were in trouble this crisis would be a lot less serious. Might this have something to do with deregulation or lack of regulation? Even your source alludes to this: Other economists reject this analysis. In a paper published this year by the Brookings Institution, economists Martin Neil Baily, Douglas W. Elmendorf, and Robert E. Litan argue that since “financial institutions are regulated and supervised by a bewildering array of federal and state authorities,” those regulators could and should have acted. “Despite the limited authority of any specific regulators,” the economists said, “more should have been done to prevent the crisis.” But lack of oversight is hardly the problem, Richman said, ... Can't your author find anyone else who agrees with him? Edited October 15, 2008 by Len Colby Link to comment Share on other sites More sharing options...
Craig Lamson Posted October 15, 2008 Share Posted October 15, 2008 (edited) Redlining.The practice of denying, or increasing the cost of sevices such as, Banking, insurance, health care or even food costs to residents in certain, often racially determined areas. The most devistating form of redlining refers to Mortgage discrimination, in which middle income Blacks or Hispanics are denied loans available to lower income Whites.. The CRA of 1977 required Banks to apply the same lending criteria to all communities. The CRA mandates that all Banking institutions that recieve FDIC insurance be evaluated to determine if the institution has met the credit needs of its entire community,In a manner consistent with safe and sound operations. The CRA does not list specific criteria for evaluating their performance, Rather that the evaluation process should accommodate the situation, and context of each individual institution. The Law also does not require institutions to make high risk loans that may bring losses to the institution, instead the law emphasises that an institutions CRA activities should be undertaken in a safe and sound manner There are no specific penalties for non compliance. In a 2002 study exploring the relationship between the CRA and predatory lending, Kathleen Engle and Patricia McCoy noted that Bankscould recieve CRA credit by lending, or brokering predatory loans in lower income areas. "Under the Clinton administration, federal regulators began using the act to combat "red-lining," a practice by which banks loaned money to some communities but not to others, based on economic status. "No loan is exempt, no bank is immune," warned then-Attorney General Janet Reno. "For those who thumb their nose at us, I promise vigorous enforcement." The Clinton-Reno threat of "vigorous enforcement" pushed banks to make the now infamous loans that many blame for the current meltdown, Richman said. "Banks, in order to not get in trouble with the regulators, had to make loans to people who shouldn't have been getting mortgage loans." This threat combined with the government backing of Fannie and Freddie set the stage for the current uncertainty, because the "banks could just sell the loans off to Fannie or Freddie," who could buy them with little regard for negative financial outcomes, Richman said." http://www.cnsnews.com/public/content/article.aspx?RsrcID=36048 Looks like FORCED to me.... It should be noted that Craig's source is run by right-wing activist L Brent Bozell http://en.wikipedia.org/wiki/L._Brent_Bozell_III and its motto is "the Right News, Right now" I'll be more than happy to see you refute the statements Len, if you can. Is is shoot the messanger the best you have? Be forwarned thats just the very tip of this iceberg... The problem with such a biased source is that the author seems to start with a thesis and fit the evidence to fit it. The article is based entirely on one source who is IDed as an "economist" but turns out is a free lance journalist with a BS in radio journalism who writes about economic issues among others and is strongly tied to a group of related "Libertarian" organizations. Thus he is hardly an objective or qualified source. http://www.fee.org/seminars/faculty/Richman.asp Richmanclaims that this is due to Carter and Clinton but fails to provide any data to back it up. So enlighten us what percentage of the bad mortgages were issued under Democratic administrations as opposed to Republican ones? If these policies were so obviously bad why didn't Reagan or the Bushes do anything. A separate issue is why did so many financial,institutions invest in the subprime market, were they coerced to do so by Clinton? If it was only Fannie Freddie and mortgage banks that were in trouble this crisis would be a lot less serious. Might this have something to do with deregulation or lack of regulation? Even your source alludes to this: Other economists reject this analysis. In a paper published this year by the Brookings Institution, economists Martin Neil Baily, Douglas W. Elmendorf, and Robert E. Litan argue that since “financial institutions are regulated and supervised by a bewildering array of federal and state authorities,” those regulators could and should have acted. “Despite the limited authority of any specific regulators,” the economists said, “more should have been done to prevent the crisis.” But lack of oversight is hardly the problem, Richman said, ... Can't your author find anyone else who agrees with him? Have you READ my other posts in this thread or is your head firmly stuck up your google? From above: Lets see if the left agrees? From the Village Voice, not just your average "right wing koolaid drinkers" "There are as many starting points for the mortgage meltdown as there are fears about how far it has yet to go, but one decisive point of departure is the final years of the Clinton administration, when a kid from Queens without any real banking or real-estate experience was the only man in Washington with the power to regulate the giants of home finance, the Federal National Mortgage Association (FNMA) and the Federal Home Loan Mortgage Corporation (FHLMC), better known as Fannie Mae and Freddie Mac. Andrew Cuomo, the youngest Housing and Urban Development secretary in history, made a series of decisions between 1997 and 2001 that gave birth to the country's current crisis. He took actions that—in combination with many other factors—helped plunge Fannie and Freddie into the subprime markets without putting in place the means to monitor their increasingly risky investments. He turned the Federal Housing Administration mortgage program into a sweetheart lender with sky-high loan ceilings and no money down, and he legalized what a federal judge has branded "kickbacks" to brokers that have fueled the sale of overpriced and unsupportable loans. Three to four million families are now facing foreclosure, and Cuomo is one of the reasons why." http://www.villagevoice.com/2008-08-05/new...nd-freddie-mac/ If you could refute any of this you would, but since you can't you instead choose your faviorote tactic to make your argument appear to have merit...you attack the source. The facts are quite clear. This started with the CRA and Clintoon. No amount of liberaltard shucking and jiving will ever change this fact. Edited October 15, 2008 by Craig Lamson Link to comment Share on other sites More sharing options...
Pat Speer Posted October 15, 2008 Share Posted October 15, 2008 The facts are quite clear. This started with the CRA and Clintoon. No amount of liberaltard shucking and jiving will ever change this fact. BINGO, Craig, you're finally beginning to see the light. The pros and cons of any policy should be constantly re-analyzed. As Clinton's presidency ended with the country in rapid ascent, HIS policies can only be judged a success. As Bush not only failed to correct these policies when they showed signs of being not-so-good, but added to it by deregulation of the financial markets, and by artificially keeping interest rates low so that he could be re-elected in 2004, he alone is responsible for what happened 7 1/2 years after his taking office. Blaming Clinton for this would be like Clinton blaming Bush I for a bad environmental policy in 2000. HUH? You've only had 7 years to correct it--what kind of incompetent are you? That said, the vast majority of these loans were made in recent years, after the tech bubble burst and, lured by artificially low interest rates, people started buying houses instead. I live in California where EVERYONE I know has seen the historic rise in housing prices when compared against income. EVERYONE I know has been discussing the impending CRASH of the housing market for at least 4 years. So why didn't Bush and his boys do something about this? Hmmm... could it be because they were hoping that the CRASH would happen on someone else's watch? It was ridiculous when Bush supporters tried to blame Clinton for 9/11, when Bush had been in office for months and had done absolutely nothing to go after Bin Laden, and it's even more ridiculous for them to try and blame Clinton for the current financial mess. Link to comment Share on other sites More sharing options...
Craig Lamson Posted October 15, 2008 Share Posted October 15, 2008 The facts are quite clear. This started with the CRA and Clintoon. No amount of liberaltard shucking and jiving will ever change this fact. BINGO, Craig, you're finally beginning to see the light. The pros and cons of any policy should be constantly re-analyzed. As Clinton's presidency ended with the country in rapid ascent, HIS policies can only be judged a success. As Bush not only failed to correct these policies when they showed signs of being not-so-good, but added to it by deregulation of the financial markets, and by artificially keeping interest rates low so that he could be re-elected in 2004, he alone is responsible for what happened 7 1/2 years after his taking office. Blaming Clinton for this would be like Clinton blaming Bush I for a bad environmental policy in 2000. HUH? You've only had 7 years to correct it--what kind of incompetent are you? That said, the vast majority of these loans were made in recent years, after the tech bubble burst and, lured by artificially low interest rates, people started buying houses instead. I live in California where EVERYONE I know has seen the historic rise in housing prices when compared against income. EVERYONE I know has been discussing the impending CRASH of the housing market for at least 4 years. So why didn't Bush and his boys do something about this? Hmmm... could it be because they were hoping that the CRASH would happen on someone else's watch? It was ridiculous when Bush supporters tried to blame Clinton for 9/11, when Bush had been in office for months and had done absolutely nothing to go after Bin Laden, and it's even more ridiculous for them to try and blame Clinton for the current financial mess. You are babbling like a child and spinning like a top Pat. Oh so typical for a dimbulbocrate. The question and area of discussion is the ORIGIN of the problem Pat. I was quite clear that there is PLENTY of blame to go around for todays condition, however that will still not change the fact that this lays right on Clintoons feet. If you had ANY intellectual honestly you would admit your now proven error. Can you do that Pat? Clinton for sure deserved the LIONs share of the blame for 9/11, unless you want to revise history. Oh wait, its pretty clare from you post its exactly what you want to do. "HIS policies can only be judged a success" ROFLMAO! Link to comment Share on other sites More sharing options...
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