Where did the middle class go?

[carlfense]

You must have missed the point where the banks were "strongly encouraged" to make these risky loans or else find themselves under increasing scrutiny........

Link?

[carlfense]

A Summary of the Primary Causes of the Housing Bubble and the Resulting Credit Crisis: A Non-Technical Paper

http://www.uvu.edu/woodbury/jbi/volume8/journals/SummaryofthePrimaryCauseoftheHousingBubble.pdf

[BigRedBuster]

Wow...that is so apples and oranges that I don't even know how to respond to that. So, pardon me if I don't.

You don't need my pardon to dodge any inconvenient analogies. I always find inconsistencies in the governmental blame game fascinating.

 

Well, instead of playing an "I got ya" game, why don't you at least find out my stance on gun laws?

 

You do understand that you actually have to prove something before you say..."Got ya"....right?

[carlfense]

Well, instead of playing an "I got ya" game, why don't you at least find out my stance on gun laws?

 

You do understand that you actually have to prove something before you say..."Got ya"....right?

I didn't say "got ya" and I don't know your stance because you chose to ignore the analogy. If you want to discuss it, let's do so. If not, let's move on.

[Comish]

A Summary of the Primary Causes of the Housing Bubble and the Resulting Credit Crisis: A Non-Technical Paper

http://www.uvu.edu/w...usingBubble.pdf

And you think a "non-technical paper" is going to attempt to wade into the political undercurrents prevalent at the time?

 

Have you visited with an actual banker? You know, not a statistic on some academic worksheet, but someone who "got" the message delivered?

[carlfense]

And you think a "non-technical paper" is going to attempt to wade into the political undercurrents prevalent at the time?

Actually, I figured that people would be more likely to actually read a relatively short non-technical paper. I'll gladly read sources provided by you regarding the political undercurrents at the time. You've made this specific assertion: "banks were "strongly encouraged" to make these risky loans or else find themselves under increasing scrutiny." Can you back that up with facts and not feelings?

 

Have you visited with an actual banker? You know, not a statistic on some academic worksheet, but someone who "got" the message delivered?

I have visited with bankers on occasion. None (that I can recall) bought into the conspiracy theory that you're peddling. Your preference for anecdotal evidence from a banker (trying to take this seriously . . . and struggling to do so) over actual research is noted.

[Comish]

And you think a "non-technical paper" is going to attempt to wade into the political undercurrents prevalent at the time?

Actually, I figured that people would be more likely to actually read a relatively short non-technical paper. I'll gladly read sources provided by you regarding the political undercurrents at the time. You've made this specific assertion: "banks were "strongly encouraged" to make these risky loans or else find themselves under increasing scrutiny." Can you back that up with facts and not feelings?

 

Have you visited with an actual banker? You know, not a statistic on some academic worksheet, but someone who "got" the message delivered?

I have visited with bankers on occasion. None (that I can recall) bought into the conspiracy theory that you're peddling. Your preference for anecdotal evidence from a banker (trying to take this seriously . . . and struggling to do so) over actual research is noted.

At least your consistent Carl............everything that doesn't fit your preordained template falls neatly into the all-encompassing "conspiracy theory"...

Unfortunately for you, those blanket denials ring hollow after all these years....

[BigRedBuster]

Simple google search brought up this commentary. It points towards the political pressure the banking industry was under at the time.

 

http://www.cnbc.com/id/25654303/How_Chuck_Schumer_Caused_the_Second_Largest_Bank_Failure_in_US_History

 

When Clinton was in office, he made a very political argument that banking was discriminating against minorities with home mortgages. He won votes by claiming he was fighting for minority home ownership. While that is all well and good and again, I would love all Americans (minorities included) to be able to own a home, that isn't reality because not everyone can afford it.

 

When I purchased our first home in 1994, I was required to put 20% down and then also have mortgage insurance. On top of that, I had to prove I had a steady income (and lack of other debt) to support the payments. THAT is what banks should do.

 

The problem is that a higher percentage of minorities in this country are poor. SO....in essence, a higher percentage of people in those groups can't afford a home. Instead of Clinton figuring out how those people could earn more money, he looked at the banking industry and played a class warfare card and claimed they were being discriminated against. This political move set in motion this entire thing. Congress took out requirements that banks were using to keep people who can't afford it from buying homes they can't afford. Banks then were being scrutinized to see if they were discriminating.

 

That opened the flood gates. Not only were poor people allowed to buy homes they couldn't afford, so were wealthy people.

 

Banks aren't stupid. They knew they were making loans that were trouble. So, they devised avenues to get rid of those loans. They were bundled with good loans and sold off.

 

All of this was preventable.Clinton started it and Bush continued it right on through his term. All for political gain.

[BigRedBuster]

Here is a very good blog entry that talks about it. Yes, it's a blog but it's dead on.

 

http://www.businessweek.com/the_thread/hotproperty/archives/2008/02/clintons_drive.html

 

Here is a quote at the bottom of the article.

 

For many potential homebuyers, the lack of cash available to accumulate the required downpayment and closing costs is the major impediment to purchasing a home. Other households do not have sufficient available income to to make the monthly payments on mortgages financed at market interest rates for standard loan terms. Financing strategies, fueled by the creativity and resources of the private and public sectors, should address both of these financial barriers to homeownership.

 

Looking back, how absolutely scary are those words in a government document?

[Comish]

Carlfense quote...

Actually, I figured that people would be more likely to actually read a relatively short non-technical paper. I'll gladly read sources provided by you regarding the political undercurrents at the time. You've made this specific assertion: "banks were "strongly encouraged" to make these risky loans or else find themselves under increasing scrutiny." Can you back that up with facts and not feelings

 

From a much larger piece on the CRA via wikipedia..............."In his statement before the same hearing, New York University economics professor Larry White stated that regulator efforts to "lean on" banks in vague and subjective ways to make loans is an "inappropriate instrument for achieving those goals."

[carlfense]

Carlfense quote...

Actually, I figured that people would be more likely to actually read a relatively short non-technical paper. I'll gladly read sources provided by you regarding the political undercurrents at the time. You've made this specific assertion: "banks were "strongly encouraged" to make these risky loans or else find themselves under increasing scrutiny." Can you back that up with facts and not feelings

 

From a much larger piece on the CRA via wikipedia..............."In his statement before the same hearing, New York University economics professor Larry White stated that regulator efforts to "lean on" banks in vague and subjective ways to make loans is an "inappropriate instrument for achieving those goals."

I tried going to the source for White's entire statement but the link doesn't work. (Here it is if you'd like to try yourself: http://financialservices.house.gov/hearing110/white021308.pdf ) Let me know if you find a working version.

 

I'm not inclined to take the Wiki masses word for it without actually checking out the sources. Also . . . didn't you just say that we should listen to bankers and not academics? Now you're citing a NYU economics professor?

[carlfense]

Have you visited with an actual banker? You know, not a statistic on some academic worksheet, but someone who "got" the message delivered?

At least your consistent Carl............everything that doesn't fit your preordained template falls neatly into the all-encompassing "conspiracy theory"...

Unfortunately for you, those blanket denials ring hollow after all these years....

All-encompassing? Pre-ordained template? Blanket denials?

 

What? Are you just stringing phrases together?

[carlfense]

Simple google search brought up this commentary. It points towards the political pressure the banking industry was under at the time.

http://www.cnbc.com/...e_in_US_History

It "points towards the political pressure?" I'm not particularly persuaded by hints and innuendo. Do you have a link with facts?

[Comish]

Carlfense quote...

Actually, I figured that people would be more likely to actually read a relatively short non-technical paper. I'll gladly read sources provided by you regarding the political undercurrents at the time. You've made this specific assertion: "banks were "strongly encouraged" to make these risky loans or else find themselves under increasing scrutiny." Can you back that up with facts and not feelings

 

From a much larger piece on the CRA via wikipedia..............."In his statement before the same hearing, New York University economics professor Larry White stated that regulator efforts to "lean on" banks in vague and subjective ways to make loans is an "inappropriate instrument for achieving those goals."

I tried going to the source for White's entire statement but the link doesn't work. (Here it is if you'd like to try yourself: http://financialserv...white021308.pdf ) Let me know if you find a working version.

 

I'm not inclined to take the Wiki masses word for it without actually checking out the sources. Also . . . didn't you just say that we should listen to bankers and not academics? Now you're citing a NYU economics professor?

I'm not a big wiki guy either, but this long article quoted both libs and conservatives and I thought it might sate you just a little....(the article was on the CRA via wiki)

And, nice attempt at twisting my words, but I did not say we should ONLY listen to one side. I simply pointed out that sometimes it helps to actually listen to the folks in the trenches.

[carlfense]

Here is a very good blog entry that talks about it. Yes, it's a blog but it's dead on.

 

http://www.businessw...tons_drive.html

 

Here is a quote at the bottom of the article.

 

For many potential homebuyers, the lack of cash available to accumulate the required downpayment and closing costs is the major impediment to purchasing a home. Other households do not have sufficient available income to to make the monthly payments on mortgages financed at market interest rates for standard loan terms. Financing strategies, fueled by the creativity and resources of the private and public sectors, should address both of these financial barriers to homeownership.

Looking back, how absolutely scary are those words in a government document?

The quote indicates a goal . . . now where is the pressure?

 

Listen, if you're arguing that government played a role in the sub-prime mortgage collapse, I agree. I'm not in any way claiming that government policies weren't a contributor. Where I see a problem is saying that government is 80% (where did that number come from, by the way?) responsible. Private business can't point their fingers at the government and say "I can't believe that you let us do this!"