This is a good place to drop general and weird news, entertainment, and general show prep material that might be interesting to air talent or producers. Hot dog threads ALWAYS welcome.
Lester wrote:Did the government put a law into place that forced banks and lenders to issue subprime loans?
It's a yes or no question.
Did this plan invoke stiff penalties for failing to issue enough subprime loans?
It's a yes or no question.
Were lenders sued for not issuing enough subprime loans?
It's a yes or no question.
There is no spin to those questions. Simple yes or no responses for simple yes or no questions.
Now, did the corporations go ape-shit? Totally. Do I think they should be stripped of the million dollar percs? ABSOLUTELY. However, had the law never been put into place to begin with (and further modified for abuse in 1995), this COULD NOT have happened.
(This would be where I would share a great news story with you about WaMu's latest chief, and his 20m buyout for 17 days of work. However, since the link is from "faux" news, it obviously didn't really happen.)
Lester, you are boiling this down to far.
The answer you want is "Yes." And you know that or you would not have asked the question.
But the government does not call it sub prime loans. They refer to it in their policies on community reinvestment as well as discrimination in lending. And from what I can tell, having a bank not issue a loan because you have a low credit score is considered "discrimination." Regardles of race religion or sex, using judgement prior to lending can lead to actions against an institution for discriminatory lending.
I call this forcing a bank to throw judgment aside and give away money. Sounds like what has created this mess.
And here is a link to a government audit of a bank that failed in all of these categories.
Current total amount of defaulted mortgages (foreclosed and 90 days or more in arrears), according to US Treasury;
144 billion. That much money, paid on these mortgages would make them all current and the result would trickle up through the system.
Senate bill 805 billion. What are they doing with the other 661 bill?
The attempt to expand home ownership in the US (by both parties) did not bring on this crisis. Un-regulated trading of mortgage portfolios by investment corporations did.
Former head of Wachovia, when asked about 2006 purchase of Golden West Financial (a "creative financing" specialist), said the deal couldn't lose....unless there was a spike in unemployment and a downturn in the value of real estate. One year later.....SURPRISE.
One of the provisions of the bill was to drop the taxes on wooden arrows used by children (I assime on play sets).
That provision may be found on page 300 of the PDF.
Bob Campbell wrote:Current total amount of defaulted mortgages ... 144 billion. That much money, paid on these mortgages would make them all current and the result would trickle up through the system.... What are they doing with the other 661 bill?
What about those of us that pay our bills.
Bob Campbell wrote:The attempt to expand home ownership in the US (by both parties) did not bring on this crisis.
Yes, it did.
Bob Campbell wrote:Un-regulated trading of mortgage portfolios by investment corporations did.
A by-product of banks trying to make money off of sub-prime loans.
Bob Campbell wrote:Former head of Wachovia, when asked about 2006 purchase of Golden West Financial (a "creative financing" specialist), said the deal couldn't lose....unless there was a spike in unemployment and a downturn in the value of real estate. One year later.....SURPRISE.
"creative financing" was required to maintain compliance with CRA.
Bob Campbell wrote:Former head of Wachovia, when asked about 2006 purchase of Golden West Financial (a "creative financing" specialist), said the deal couldn't lose....unless there was a spike in unemployment and a downturn in the value of real estate. One year later.....SURPRISE.
"creative financing" was required to maintain compliance with CRA.
Yes. And very highly desired by Wall St. to keep the stock price of financial institutions inflated.
Plus, not issuing credit to everyone who wanted it is considered "discrimatory lending." That is also a huge no-no in the realm of CRA.
Want a a bank with a strong balance sheet? Not going to happen unless the owners equity section is bloated because stock prices are inflated by overbidding by the open markets. The assets that are all supposed back the liabilities are non-existent in the modern world of banking.
The first step in a successful revolution is to defeat all competing revolutionaries.
Try B B &T. CEO pissed at bailout because his bank is solid, has used conservative lending practices and is not exposed to sub-prime problems. And yet in compliance with CRA. Amazing.
Bob Campbell wrote:CEO pissed at bailout because his bank is solid, has used conservative lending practices and is not exposed to sub-prime problems. And yet in compliance with CRA. Amazing.
Thank you. There are two banks in my area in the same boat.
Bob Campbell wrote:Want a a bank with a strong balance sheet?
Try B B &T. CEO pissed at bailout because his bank is solid, has used conservative lending practices and is not exposed to sub-prime problems. And yet in compliance with CRA. Amazing.
Sweet! I've been wanting to open a bank account and was thinking I had missed the window!
Warren Buffett was on Charlie Rose last night on PBS. Buffett is an unusually clear thinker and plain speaker. His talk provided a lot of accessible insight minus the usual economics nomenclature. "Beware of geeks bearing formulas," he warned. (Note, he supports a rapid bailout - flawed as it is - in the belief that the global economy will go cardiac in a couple weeks without it.) It was the clearest conversation I've heard yet on the topic; you may find it worth an hour if you can find a podcast.
I'm all for global cardiac arrest. Too many nations have spent too many decades wanting to see the U.S. fail. I think it would be GREAT if they got to see a little taste of that "wish"... It would be worth it to see the smug smirk quickly morph into an "Oh shit...."
The only problem with the flooding markets with cash is that it takes the already weak dollar and makes it weaker. Putting nearly a trillion dollars on this issue is going to postpone the inevitable capitulation that needs to occur.
9/11 was good because it forced a quick sharp drop in the markets. It should have taken 10 years to build back the drop that took place in 2001. Instead, creative financing created an economy of froth which is going away instead of an economy built on substance. Now it is going to take 10 more years to repair the damage that has occurred from the housing bubble and mortgage fiasco that was driving the surging real property prices. Pass this huge multi-billion dollar package and things are just going to get postponed even further out.
The first step in a successful revolution is to defeat all competing revolutionaries.
A much better solution to all of this is to just hit "reset" on the entire economy. Everybody's debts are clear, now let's all start over again and not make the same mistakes as the last time.
Of course, this will never happen because many would still lose a lot.
The fact is, we no longer have a free market now. We now have a socialist financial system, that will become even more socialist as more laws and oversights will be written to prevent something like this from happening again. The AIG bailout forever changed this. This much bigger bill cements it.
I can hear Karl Marx roaring with laughter at us from beyond the grave...
The free market system works quite well, except that it allows ample opportunity for unchecked greed with no oversights. This has forever changed in this country.
