Ineptocracy

[Bigfatbillsfan]

Link?

 

Here is one such link:

 

http://dallasfed.org/ca/bcp/2009/bcp0901.cfm

 

This is filled with plenty of charts and graphs to back up the information. At the end of it you will find a list of notes and links to help you track back the information they used to write the report.

 

Here is another one:

 

 

http://Traiger_hinckly_llp_cra_foreclosure_study_1-7-08.pdf

 

This also has many charts and graphs to back up the information given as well as notes at to help you track back the information.

 

Here's one from an liberal organization that you can froth over!

 

http://mediamatters.org/mobile/research/201110110011

 

Have a happy day!!

Edited December 31, 2011 by Bigfatbillsfan

[Cinga]

Here is one such link:

 

http://dallasfed.org/ca/bcp/2009/bcp0901.cfm

 

This is filled with plenty of charts and graphs to back up the information. At the end of it you will find a list of notes and links to help you track back the information they used to write the report.

 

Here is another one:

 

 

http://Traiger_hinckly_llp_cra_foreclosure_study_1-7-08.pdf

 

This also has many charts and graphs to back up the information given as well as notes at to help you track back the information.

 

Here's one from an liberal organization that you can froth over!

 

http://mediamatters.org/mobile/research/201110110011

 

Have a happy day!!

 

Fatty.... quit making a fool of yourself!!! Follow your first link, and read it carefully.... It explains fairly well, how stupid CRA is, and what the problems are, beginning with HOW REGULATORS!!!! TELL a bank what THEY MUST DO!!! to be able to keep lending MONEY!!!!...

[Bigfatbillsfan]

Fatty.... quit making a fool of yourself!!! Follow your first link, and read it carefully.... It explains fairly well, how stupid CRA is, and what the problems are, beginning with HOW REGULATORS!!!! TELL a bank what THEY MUST DO!!! to be able to keep lending MONEY!!!!...

 

I think the part you are referring to is this:

 

 

How the CRA Works

Banks’ lending records are evaluated under the CRA. If a potential borrower applies for a loan for a house, small business, small farm or other purpose, the bank is required to examine the applicant’s creditworthiness and determine if it can extend a loan in a safe and sound manner.

 

The performance context for each bank is different and is a function of the local economy and a bank’s branching structure, business plan, community needs, financial condition and other factors.

 

A bank’s compliance with CRA requirements is evaluated by its regulator, which assigns a rating of substantial noncompliance, needs to improve, satisfactory or outstanding.

 

A bank can build goodwill with the community through a strong CRA rating. But, fundamentally, a bank has an incentive to earn at least a satisfactory rating because falling below that level may result in the denial or delay of applications to open a new branch, merge with another lending institution or expand in other ways.

 

If a regulator has reason to believe that a creditor has engaged in a pattern or practice of discrimination under the Equal Credit Opportunity Act, the regulator is required by the statute to refer the matter to the Department of Justice (DOJ). Housing-related discrimination in violation of the Fair Housing Act that does not involve a pattern or practice, and is not referred to the DOJ, must be referred to the Department of Housing and Urban Development.

 

A regulator does not specify which or how many loans, investments or services a bank has to make under the CRA. It assesses local economic and market conditions that might affect the bank’s income and the geographic distribution of its lending, identifies the number and dollar amount of loans to lower-income borrowers or areas, and then judges the bank’s performance relative to its context.[7]

 

Though I don't agree completely with how the CRA works there is nothing in the regulatory language that forces the banks to make predatory loans. There is plenty of blame to go around the CRA is not to blame for the collapse.

 

This paragraph a little farther down the page explains it a little better.

 

Abuses in Subprime Housing Market

The subprime market took off in the late 1990s. By 2006, the market had surpassed $600 billion and accounted for one-fifth of mortgage originations. Independent mortgage companies made 46 percent of these loans; banks and thrifts made 29 percent. Affiliates and subsidiaries of banks and thrifts made the remaining 25 percent.[11]

 

While subprime lending existed before the 1990s, the flagrant and widespread abuses in this market did not occur until the late 1990s. The originate-to-distribute model presented the opportunity for independent lending institutions and mortgage brokers to make substantial profits. In this model, originators sell, or “distribute,” loans to the secondary market and have less incentive to scrutinize the riskiness of these loans than if they keep them. Their income and fees are based on volume of loans sold, so their focus is on quantity. Before the subprime market fell, securities backed by these loans yielded high returns and were thus appealing to many investors.

 

In this market, serious delinquencies and foreclosures began to edge up nationwide in 2006 and shot up in 2007 and 2008 (Figure 1).

 

If anything, it was the weakening of the CRA that helped lead to the crisis. However there were many other blocks that fell out of the wall before it came down.

[DC Tom]

So the total percentage of defaults was what? I am genuinely curious. One would suspect they would need to be fairly high in the US market to trigger a global collapse. These debtors that lacked personal responsibility, how many of them did it take (%wise) to crash the global economy all by themselves?

 

Look, I freely grant that the idiots should have never bought the houses. I admit that democratic policies lead to this fiasco to some degree. The banks were still the the major players. They led to the uncertainty IMO.

 

The total defaults necessary to start the collapse didn't need to be more than a few percent. Just enough to shake confidence in mortgage bonds, so that the people holding them would realize that the risk pricing was whacked, and start a run on the CMO markets.

 

Fact is, the "toxic assets", at the lows of the collapse, were priced well under any rational valuation, roughly 25-50 cents on the dollar too low. That's why it was a "crash", and not a "correction".

 

What does that have to do with the NYT article or Countrywides' behavior? I asked you a specific question,

 

Countrywide's one of a handful of special case - they were a bunch of, at best, idiotic douchebags. (At worst, criminally idiotic douchebags).

 

Lots of lenders - Wells Fargo, for one example - got whipsawed by offering subprimes without being idiotic criminal douchebags.

[Adam]

That all makes sense....until you remember Obama is President. Which means currently the entire Federal government is predicated on blaming the producers.

 

I am sorry but you cannot escape this reality, and the reality that Wall Street put their money into Obama as much if not more than Hollywood. They knew which way the wind was blowing. They pay people for that. Now, those same people are telling them the wind is blowing the other way, and, Obama decided to virtually tar and feather them, in a lame attempt to cover for his massive mistakes in governing.

 

Now, you will see what you accurately described above. Do you blame the producers for fighting in a war that was declared on them?

I don't completely disagree with you, but I see both sides (middle class and upper class) wanted more than is due to them. I don't blame either side for this either, as it is human nature. It would be easy for our politicians to fix things, if they weren't more interested in getting re-elected.

 

What we need is to cut spending (entitlesments AND military) and raise taxes. After the deficit is greatly reduced, then we need to take steps (what they are depends on who is in control) to get the economy going again.

[OCinBuffalo]

I don't completely disagree with you, but I see both sides (middle class and upper class) wanted more than is due to them. I don't blame either side for this either, as it is human nature. It would be easy for our politicians to fix things, if they weren't more interested in getting re-elected.

 

What we need is to cut spending (entitlesments AND military) and raise taxes. After the deficit is greatly reduced, then we need to take steps (what they are depends on who is in control) to get the economy going again.

I have learned, the easy way, that attacking problems in terms of pure financial considerations, as you have suggested, rarely produces improvement. Seeing the world from the limited perspective of financial statements is...limiting.

 

The reverse is also true. Any purely fiscal/monetary solution we propose, however viable, is subject to attack from those who either don't possess the ability, or refuse, to see it reasonably. We see it all the time in the media, and even on this board.

 

Politically, sure, anything can produce "change". However, simply changing how things work, as you propose, without the accompanying "chance management", fails. "Change management" is one of our buzzwords(hell we start most of them, so we are just as guilty as the finance people), and it's a nice way of saying: going around to most of the relevant client staff and convincing them of the merits of the change and how to approach it and benefit from it. If that doesn't work, it means charming, cajoling, shaming, threatening them, and it just gets worse from there.

 

We can't just cut spending and raise taxes. Really, we can't. Not without the "change management". In this case, "change management" means we have to change the culture as well. You can't get ANY spending under control unless you convince, and then worse if necessary, those that rely on it to rely on it less. You can't raise taxes on only half the citizens of the country, continue to have the other half pay nothing at all, and obtusely call that "paying their fair share". You sound like an idiot to the majority of people in the political center and you are giving the far-right exactly what it wants...just so you can make 20% of the country happy.

 

Ultimately, the best way to change the culture is: to end the tolerance of the intolerable from people in your own group. By that I mean: those on the left have to tell the socialists and environtologists, who are really unreconstructed socialists, to STFU once and for all. Same thing on the right, with all the "Jesus loves you, but I am here to affix your scarlet letter, because for all my personal claims on him, I still struggle with his most basic teachings" garbage.

[Rob's House]

Good luck trying to convince any of the righty loons that the sub-prime loan fiasco was caused by anything but liberal government do-gooderism.

 

 

 

My link

The most important sentence of the article:

The problems stemmed from a Countrywide policy that gave loan officers and brokers the discretion to alter the terms for which a particular applicant qualified without setting up any system to comply with fair-lending rules, the department said.

Not to defend Countrywide in any way, but this is a classic example of how things are often assumed to be racially motivated when other plausible explanations exist.

 

Because these deals were brokered by individual agents trying to maximize their cut it's reasonably plausible that people from historically "underrepresented" groups may not have the experience with or knowledge of mortgages to as effectively negotiate their terms. When I bought my house I ended getting a full 1% better rate than the original offer presented me because I called around and got a better deal. Of course I have parents, friends, and siblings who have experience with this.

 

The point being, one demographic group having less negotiating ability as a whole than another does not necessarily imply institutionalized racial discrimination.

[Adam]

I am just tired of the same sweet little lies from both sides- and seeing the sheep believe those lies every few years. It won't get better- EVER.

[EasternOHBillsFan]

We can't just cut spending and raise taxes. Really, we can't. Not without the "change management". In this case, "change management" means we have to change the culture as well. You can't get ANY spending under control unless you convince, and then worse if necessary, those that rely on it to rely on it less. You can't raise taxes on only half the citizens of the country, continue to have the other half pay nothing at all, and obtusely call that "paying their fair share".

 

In order for this to become a reality, those who benefit from tax breaks in the upper tax brackets must also relinquish their benefits to rely on it less as you said. The idea that you can only stimulate the economy from the top down is a failed one and exacerbates the problems we have today. Many speak of welfare or benefits as if it only applies to those who make a small income or who don't work at all, but that is untrue- if you really want to get lean, reduce ALL of the welfare/benefits across the board.

[Rob's House]

In order for this to become a reality, those who benefit from tax breaks in the upper tax brackets must also relinquish their benefits to rely on it less as you said. The idea that you can only stimulate the economy from the top down is a failed one and exacerbates the problems we have today. Many speak of welfare or benefits as if it only applies to those who make a small income or who don't work at all, but that is untrue- if you really want to get lean, reduce ALL of the welfare/benefits across the board.

Those in the upper brackets that you speak of aren't nearly as reliant on govt. perks as the bottom half are. And don't give me the corporate welfare bit b/c that **** needs to be cut out altogether and is more accurately lumped in with pork than with entitlements.

 

As far as the bit about top down economics having failed, why don't you look at demand based bottom up economics. Where has that worked? The western world has spent itself into a black hole of debt, but where is the corresponding production increase that is the second part of that theory?

[EasternOHBillsFan]

Those in the upper brackets that you speak of aren't nearly as reliant on govt. perks as the bottom half are. And don't give me the corporate welfare bit b/c that **** needs to be cut out altogether and is more accurately lumped in with pork than with entitlements.

 

As far as the bit about top down economics having failed, why don't you look at demand based bottom up economics. Where has that worked? The western world has spent itself into a black hole of debt, but where is the corresponding production increase that is the second part of that theory?

 

So long as you agree that corporate welfare needs to be cut... fair.

 

I'm saying that the trickle down theory is a failure, and that does not mean that I support the complete opposite. I won't argue for it, that's for sure.No one should bend over backwards to give away everything to corporations to stimulate the economy is my problem.

[OCinBuffalo]

In order for this to become a reality, those who benefit from tax breaks in the upper tax brackets must also relinquish their benefits to rely on it less as you said. The idea that you can only stimulate the economy from the top down is a failed one and exacerbates the problems we have today. Many speak of welfare or benefits as if it only applies to those who make a small income or who don't work at all, but that is untrue- if you really want to get lean, reduce ALL of the welfare/benefits across the board.

Hence why the word ANY was and remains in caps.

 

 

For ANY, or ALL, government spending to be reduced, it needs to be reevaluated...like Obama promised, but, actually done by someone who is both genuine and competent.

 

Or, wait, didn't Obama put together a panel of former Senators and Congressman, and various others, to study this and provide recommendations? Oh, that's right he did. But, did he act on any of them? A single one?

 

Nope.

 

We already have what you are asking for, but we don't have the person to lead it, yet. We also have the tax reform plans completed and ready to go, but we don't have the person that can lead the way on those either. The plans aren't the problem, the person in the WH is.

Edited January 10, 2012 by OCinBuffalo

[Magox]

The CRA was enacted to protect consumers in certain geographic areas that were being lumped together and denied access to credit, including business loans, based on their neighborhood, not their own credit. CRA does not require quotas to be met nor forces banks and thrifts to make high-risk loans. In fact, CRA wording specifically cautions against it.

 

This did not force the banks to lend money to the sub prime market. They did this on their own.

No, the CRA was designed as just another ¨social justice¨¨ program that helped lead to financial disaster.

 

And in regards to your comment regarding not forcing banks to lend money, thats bull ****, everyone knows that there would be blowback for those banks that didn´t comply, and it was only further reinforced in 99.

 

Good luck trying to convince any of the righty loons that the sub-prime loan fiasco was caused by anything but liberal government do-gooderism.

 

 

 

My link

Your link has absolutely 100% nada to do with what we are talkin about.

 

So you don't see that as a contributing factor? Or do you deny it happened?

Many causes are what led us to the financial shitstorm, but Youtube boy´s link is a strawman which at most played a .00001% role in the crisis.

 

So the total percentage of defaults was what? I am genuinely curious. One would suspect they would need to be fairly high in the US market to trigger a global collapse. These debtors that lacked personal responsibility, how many of them did it take (%wise) to crash the global economy all by themselves?

 

Look, I freely grant that the idiots should have never bought the houses. I admit that democratic policies lead to this fiasco to some degree. The banks were still the the major players. They led to the uncertainty IMO.

Yes, government housing policy wasn´t the sole factor, mortgage underwriters, failure of the ratings agencies, banks incessant desire to make money off of anything that moves with their insane exotic Las Vegas style betting mechanisms, low interest rate policies, repeal of GS, explosion of funds made available in mortgage bonds, greed greed greed.

 

A number of reasons, but CRA is at the heart of the problem, because anyone who has the understanding of what transpired and has the ability to deduce the unfolding of the events understands that you have to look at the core of the problem, which was housing demand. This is a bubble that had been forming for many many years, sure it didn´t translate in prices, but the demand in homes was building up relative to housing affordability. So when the **** hit the fan, all those years of unsustainable demand, fueled by government housing policies unraveled.

Edited January 10, 2012 by Magox

[GG]

Good luck trying to convince any of the righty loons that the sub-prime loan fiasco was caused by anything but liberal government do-gooderism.

 

 

 

My link

 

Right back at you with my link

 

Appears that DoJ learned statistics from esteemed PPP exiles.