Bigger Than Bush

[Enigma]

NYT's Krugman nails it.

http://www.nytimes.com/2009/01/02/op...n.html?_r=1&em

As the new Democratic majority prepares to take power, Republicans have become, as Phil Gramm might put it, a party of whiners. Some of the whining almost defies belief. Did Alberto Gonzales, the former attorney general, really say, “I consider myself a casualty, one of the many casualties of the war on terror”? Did Rush Limbaugh really suggest that the financial crisis was the result of a conspiracy, masterminded by that evil genius Chuck Schumer?
But most of the whining takes the form of claims that the Bush administration’s failure was simply a matter of bad luck — either the bad luck of President Bush himself, who just happened to have disasters happen on his watch, or the bad luck of the G.O.P., which just happened to send the wrong man to the White House.

Will the Republicans eventually stage a comeback? Yes, of course. But barring some huge missteps by Mr. Obama, that will not happen until they stop whining and look at what really went wrong. And when they do, they will discover that they need to get in touch with the real “real America,” a country that is more diverse, more tolerant, and more demanding of effective government than is dreamt of in their political philosophy.

[SteamWake]

[quote=Enigma]NYT's Krugman nails it.

http://www.nytimes.com/2009/01/02/op...n.html?_r=1&em

Did Rush Limbaugh really suggest that the financial crisis was the result of a conspiracy, masterminded by that evil genius Chuck Schumer?

Where in the hell did that come from? No Limbaugh hed no quarters and laid soley in the lap of the Carter Administration, compounded later by Clinton, and continued by Bush No. 1.

I dont know why I even bother to post in these kind of threads.

[mookiemookie]

[quote=SteamWake]

Originally Posted by Enigma

NYT's Krugman nails it.

http://www.nytimes.com/2009/01/02/op...n.html?_r=1&em

Where in the hell did that come from? No Limbaugh hed no quarters and laid soley in the lap of the Carter Administration, compounded later by Clinton, and continued by Bush No. 1.

I dont know why I even bother to post in these kind of threads.

The Carter Administration!? Don't tell me you buy into that CRA crap.

[SteamWake]

Sigh... as I said why do I bother...

http://www.presidency.ucsb.edu/ws/index.php?pid=30615

[mookiemookie]

Originally Posted by SteamWake

Sigh... as I said why do I bother...

http://www.presidency.ucsb.edu/ws/index.php?pid=30615

Funny. Having read that, as well as being familiar with the CRA as it's my job, I don't see anything in it that required banks to not verify income or payment history of mortgage applicants.

Also, I didn't see anything in the CRA that required banks to offer no money down mortgages.

Conspicuously absent in the CRA is the provision that required banks to make mortgages that were based on a 120% loan to value rather than the traditional 80%.

How did the CRA mandate ratings agencies to rate junk paper as AAA?

And what part of the CRA said that fund managers and investment portfolios should load up on this junk paper at a 30 to 1 leveraging ratio?

Where does the CRA say that banks had to offer interest only loans or negative amortization mortgages?

And how many of the 300+ mortgage originators that imploded were depository banks covered under CRA? Here's a hint: the answer rhymes with "hero."

And what happened between the years 1977 (when the CRA was implemented) and 2005? Why was there no credit meltdown then? And why did many other countries around the world, none of which were covered by the CRA, have a similiar housing boom and bust as the USA?

[SteamWake]

[quote=mookiemookie]

Originally Posted by SteamWake

Funny. Having read that, as well as being familiar with the CRA as it's my job, I don't see anything in it that required banks to not verify income or payment history of mortgage applicants.

That all came later during the Clinton Admin. In fact the banks were 'pressured' to do so.

In fact that is in large part what caused this whole freakin mess.

I'll be the first to admit the following administrations did nothing to improve things.

[mookiemookie]

[quote=SteamWake]

Originally Posted by mookiemookie

That all came later during the Clinton Admin. In fact the banks were 'pressured' to do so.

In fact that is in large part what caused this whole freakin mess.

I'll be the first to admit the following administrations did nothing to improve things.

I'm still not sure as to how the CRA is to blame as the CRA doesn't mandate anything except that banks use the same lending standards in every neighborhood that it does business in. If a bank lowers lending standards, it has to do it across the board. There's nothing that says the lending standards in one neighborhood have to be easier than the rest.

80 something percent of subprime loans were made by institutions not subject to the CRA. It matters not how harsh or easy the CRA was, as these mortgage originators could, and did, do what they wanted so long as Wall Street had an appetite for mortgage debt. So how can you blame CRA when a large majority of the bad debt in the credit crisis was not a result of it?

And furthermore, default rates on loans originated under CRA lenders are lower than non-CRA originators.

I am still baffled as to how people can blame the CRA when it flies in the face of facts and reality.

[Enigma]

:hmm:

[mookiemookie]

Originally Posted by tomcat

Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

Published: September 30, 1999
NYT
http://query.nytimes.com/gst/fullpag...%201999&st=cse

The GSEs were very late to the party, buying sub-prime at the top of the market. The peak of homes sales (units) were August 2005, and the peak in prices were in 2006, just a few months later. From there, it was all downhill. By the time the GSE’s were buying sub-prime debt, it was all over but the crying.

http://www.ritholtz.com/blog/2009/01...s-revisionism/